ARCHIVÉ -  Transcription

 

 

 

 

 

 

 

              TRANSCRIPT OF PROCEEDINGS BEFORE

             THE CANADIAN RADIO‑TELEVISION AND

               TELECOMMUNICATIONS COMMISSION

 

 

 

 

             TRANSCRIPTION DES AUDIENCES DEVANT

              LE CONSEIL DE LA RADIODIFFUSION

           ET DES TÉLÉCOMMUNICATIONS CANADIENNES

 

 

                       SUBJECT/SUJET:

 

 

 

VARIOUS BROADCASTING APPLICATIONS /

PLUSIEURS DEMANDES EN RADIODIFFUSION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

HELD AT:                              TENUE À:

 

Membertou Trade and                   Membertou Trade and

Convention Centre                     Convention Centre

Maillard Street                       rue Maillard

Sydney, Nova Scotia                   Sydney (Nouvelle-Écosse)

 

April 16, 2007                        le 16 avril 2007

 

 

 

 

 

 

Transcripts

 

In order to meet the requirements of the Official Languages

Act, transcripts of proceedings before the Commission will be

bilingual as to their covers, the listing of the CRTC members

and staff attending the public hearings, and the Table of

Contents.

 

However, the aforementioned publication is the recorded

verbatim transcript and, as such, is taped and transcribed in

either of the official languages, depending on the language

spoken by the participant at the public hearing.

 

 

 

 

Transcription

 

Afin de rencontrer les exigences de la Loi sur les langues

officielles, les procès‑verbaux pour le Conseil seront

bilingues en ce qui a trait à la page couverture, la liste des

membres et du personnel du CRTC participant à l'audience

publique ainsi que la table des matières.

 

Toutefois, la publication susmentionnée est un compte rendu

textuel des délibérations et, en tant que tel, est enregistrée

et transcrite dans l'une ou l'autre des deux langues

officielles, compte tenu de la langue utilisée par le

participant à l'audience publique.

                 Canadian Radio‑television and

                 Telecommunications Commission

 

              Conseil de la radiodiffusion et des

                 télécommunications canadiennes

 

 

                   Transcript / Transcription

 

 

 

              VARIOUS BROADCASTING APPLICATIONS /

              PLUSIEURS DEMANDES EN RADIODIFFUSION

 

 

 

 

 

 

 

 

 

 

 

 

BEFORE / DEVANT:

 

Elizabeth Duncan                  Chairperson / Présidente

Andree Noel                       Commissioner / Conseiller

Ron Williams                      Commissioner / Conseiller

 

 

 

ALSO PRESENT / AUSSI PRÉSENTS:

 

Donna Shewfelt                    Secretary / Secrétaire

Shari Fisher                      Legal Counsel /

Conseillère juridique

 

 

 

 

 

 

HELD AT:                          TENUE À:

 

Membertou Trade and               Membertou Trade and

Convention Centre                 Convention Centre

Maillard Street                   rue Maillard

Sydney, Nova Scotia               Sydney (Nouvelle-Écosse)

 

April 16, 2007                    le 16 avril 2007

 

             TABLE DES MATIÈRES / TABLE OF CONTENTS

 

 

                                                    PAGE / PARA

 

PHASE I

 

 

PRESENTATION BY / PRÉSENTATION PAR:

 

Barry Maxwell Martin                                   6 /   26

 

Newcap Inc.                                           81 /  578

 

Andrew Newman                                        145 /  874

 

HFX Broadcasting Inc.                                228 / 1519

 

 

 

PHASE II

 

(No interventions)

 

 

 

PHASE III

 

 

INTERVENTION BY / INTERVENTION PAR:

 

Frank Bruleigh                                       299 / 1967

 

Mayor John Morgan                                    304 / 1989

 

ABBACO Clothing                                      310 / 2025

 

Maritime Broadcasting Ltd.                           315 / 2050

 

 

 

PHASE IV

 

 

REPLY BY / RÉPLIQUE PAR:

 

HFX Broadcasting Inc.                                352 / 2301

 

Andrew Newman                                        360 / 2347

 

Newcap Inc.                                          365 / 2373

 

Barry Maxwell Martin                                 373 / 2409

                                  Sydney, Nova Scotia

‑‑‑ Upon commencing on Monday, April 16, 2007

    at 0930 / L'audience débute le lundi 16 avril

    2007 à 0930

LISTNUM 1 \l 11                THE CHAIRPERSON: Good morning ladies and gentlemen, and welcome to this public hearing.  My name is Elizabeth Duncan, and I'm the CRTC Regional Commissioner for the Atlantic.  I will be presiding over the hearing.  Joining me on a panel are my colleagues, Andre Noel, Regional Commissioner for Quebec, and Ronald Williams, Regional Commissioner for Alberta and the Northwest Territories.

LISTNUM 1 \l 12                The Commission team assisting us includes Hearing Manager, Lynn Cape, who is also Manager of Radio Applications and Policy, Sherry Fisher, Legal Counsel, Donna Shewfelt, Hearing Secretary and Manager of our Atlantic Regional Office.

LISTNUM 1 \l 13                Please speak with Mrs. Shewfelt if you have any questions with regard to hearing procedures.

LISTNUM 1 \l 14                The panel will begin by considering four proposals to operate an English language FM commercial radio station in the Sydney, Nova Scotia market.  We will then examine two applications presented by Newcap to convert radio station CHVO Carbonear, Newfoundland from an AM to an FM, and to operate a new English‑language FM station in Kentville, Nova Scotia.

LISTNUM 1 \l 15                We will study the proposals in light of the cultural, economic and social objectives defined in the Broadcasting Act, and the regulations growing from it.  The panel will base its decisions on several criteria, including the state of competition and the diversity of editorial voices in the market, as well as the quality of the applications.  It will also look at the ability of the market to support new radio stations, the financial resources of each applicant, and proposed initiatives for Canadian Content Development.

LISTNUM 1 \l 16                With respect to the radio applications for Sydney, we will examine the proposals in the order of items one, two, four and five, presented in the Broadcasting Notice of Public Hearing, CRTC 2007‑2.

LISTNUM 1 \l 17                We will then review the application by Newcap to convert radio station CHVO Carbonear from the AM to the FM band.  The proposed FM station would continue to offer CHVO's current country music format, and would operate on the 103.9 megahertz frequency.  The applicant is seeking permission to simulcast the new station's programming on CHVO for a period of six months from the date it begins operation.

LISTNUM 1 \l 18                Finally, we will examine Newcap's application for a license to operate an English language FM commercial radio station in Kentville to serve the Annapolis Valley.  The new station would operate on the frequency 89.3 megahertz.  The applicant is proposing a classic hits music format.

LISTNUM 1 \l 19                With regards to the application by the Canadian Broadcasting Corporation, the consideration of the application presented by the Canadian Broadcasting Corporation, which is item three in the Notice of Public Hearing, has been moved to the non‑appearing phase of this public hearing.

LISTNUM 1 \l 110               I will now invite the hearing Secretary, Mrs. Shewfelt, to explain the procedures we will be following.  Mrs. Shewfelt?

LISTNUM 1 \l 111               THE SECRETARY:  Thank you, Madame Chair.

LISTNUM 1 \l 112               Before beginning, I would like to go over a few housekeeping matters to ensure the proper conduct of the hearing.

LISTNUM 1 \l 113               When you are in the hearing room, we would ask that you please turn off your cellphones, beepers, Blackberrys and other text messaging devices.  They can be a distraction for participants and Commissioners, and they can interfere with the internal communication system used by our translators.

LISTNUM 1 \l 114               We would appreciate your co‑operation.

LISTNUM 1 \l 115               We expect the hearing to take approximately two days.  Today we expect to finish around 6:00 or 6:30, and Tuesday we will begin at 9:00 a.m. and finish by early afternoon.

LISTNUM 1 \l 116               Today we will take an hour for lunch, and a break in the morning, and in the afternoon, and we will let you know of any schedule changes that may occur.

LISTNUM 1 \l 117               The Great Hall will serve as the examination room, where you can examine the public files of the applications being considered at this hearing.  The telephone number of the examination room is 902‑562‑1389.

LISTNUM 1 \l 118               There is a verbatim transcript of this hearing being taken by the court reporter sitting across from me.  If you have any questions on how to obtain all, or part of this transcript, please approach the court reporter during a break.  Please note that the full transcript will be made available on the Commission's website shortly after the conclusion of this hearing.

LISTNUM 1 \l 119               Simultaneous translation is available during the hearing.  You may obtain a translation receiver through the technician at the back of the room.  The English interpretation is on Channel 5, and the French is on Channel 6, and the floor channel is on Channel 4.

LISTNUM 1 \l 120               For the record, we wish to inform you that the applicants, Barry Maxwell Martin, on behalf of a corporation to be incorporated, and Halifax Broadcasting, a corporation, have filed additional information relating to their Canadian Content Development commitments on which they will be questioned at this Hearing, pursuant to the Commission's letter dated March 6, 2007.  These documents can be viewed on their respective application files in the examination room.

LISTNUM 1 \l 121               We will now proceed with the presentations in the order of appearance set out in the agenda.  Each party will be granted 20 minutes to make its presentation.  Questions from the Commission will follow each presentation.

LISTNUM 1 \l 122               Phase I are the applicants' presentations.

LISTNUM 1 \l 123               And now, Madame Chairman, we will proceed with item one on the agenda, which is the application by Barry Maxwell Martin, on behalf of a corporation to be incorporated, for a license to operate an English language commercial FM radio programming undertaking in Sydney.

LISTNUM 1 \l 124               The new station would operate on frequency 103.5 megahertz, Channel 278B, with an effective radiated power of 26,500 watts, non‑directional antenna, antenna height of 169.6 meters.

LISTNUM 1 \l 125               Appearing for the applicant is Mr. Jay Bedford who will introduce his colleagues.  You will then have 20 minutes to make your presentation.

PRESENTATION / PRÉSENTATION

LISTNUM 1 \l 126               MR. BEDFORD:  Thank you very much.

LISTNUM 1 \l 127               First of all, welcome to Cape Breton Island.  National Geographic Traveller magazine indicates that this is the number two travel destination in the world, and Conde Nast Travel magazine this is the most scenic island in the world.  We're proud of your island.  We're glad you're here.  We hope that you come back during the summer season, when it's a little bit warmer, and you enjoy your, an opportunity to travel around the island.

LISTNUM 1 \l 128               And also welcome to the Membertou Trade and Convention Center.  This facility has been opened for about three years now.  It's an incredible facility, and of course, quite a compliment to the people of the Membertou community.  As a matter of fact, I was very proud to be the MC of the very first function that was held in this facility.

LISTNUM 1 \l 129               Good morning, Madame Chair, Members of the Commission, Staff of the Commission, ladies and gentlemen.  My name is Jay Bedford.  I am one of three principals of the FM radio station proposed by the applicant, Barry Maxwell Martin, on behalf of a company to be incorporated.

LISTNUM 1 \l 130               I am pleased to have this opportunity to review with you the highlights of our application, but before I address our application, I'd like to take a moment to introduce the three principals involved in this application.

LISTNUM 1 \l 131               Barry Martin will serve as President, and will be in charge of all financial operations.  He has a tremendous background in the financial community.  He's a former bank manager, he's a certified internal auditor, and he is the President and Owner of the Meridian Hotel in Sydney, as well as other holdings.

LISTNUM 1 \l 132               Barry Martin is the gentleman seated to my immediate right, and to your left.

LISTNUM 1 \l 133               Alex Morrison is on my far left, your far right.  Alex been, has been involved in the broadcast business for over 20 years.  He worked at C99 FM here in Membertou, along with CHER radio in Sydney.  He worked at CJCB, and CKPE in Sydney, and also worked at Y95 FM in Hamilton Ontario.  He has probably MC'd more concerts on this island than just about anyone else.  He is a very sports‑oriented individual.  He was the voice of the Canadian Little League Championships, he's a baseball umpire, a hockey coach, and a referee.

LISTNUM 1 \l 134               My name is Jay Bedford.  My background is extremely varied.  I have spent a lot of time in the media ‑‑ over 35 years, 15 stations from Alberta to Newfoundland.  I've been an assistant general manager, a program director.  I've been on air, I've been involved in promotions, and also been sales manager of five radio stations.  I also owned my own newspaper at one point in time, and I was the only Canadian writer that ever wrote freelance for Country Weekly, the number one selling country music magazine in the world.  I've also been involved in business training and other things, as you can see on the screen and on the sheets of paper in front of you.

LISTNUM 1 \l 135               My remarks this morning will highlight the major strengths of our application.

LISTNUM 1 \l 136               The first is the overwhelming desire in this community for a locally‑owned station such as ours, as evidenced by the responses to our market survey, and by the letters of support, and affirmative interventions on behalf of our application.

LISTNUM 1 \l 137               The second is the financial responsibility of the station as confirmed by conservative financial projections for the first seven years of operation.

LISTNUM 1 \l 138               The third is our station's programming mix, with its focus on the special needs and interests of the local radio audience.

LISTNUM 1 \l 139               Let me begin by identifying the benefits of local ownership that our station will bring to this community.

LISTNUM 1 \l 140               Point number one: Like many of our prospective listeners, we have long been aware of the need for a fresh, independent local voice for our community.

LISTNUM 1 \l 141               Point two: Ours will be the only truly independent commercial station.  The other applications are for stations that would be operated by non‑resident owners, and off‑island owners, or merely one of a group of stations.

LISTNUM 1 \l 142               We will provide the highest possible level of local news, weather and information about athletic, musical and other community events.

LISTNUM 1 \l 143               Because our station is locally owned, it would be an integral part of our community.  We know the local listening audience.  We live here.  We know local musicians personally.  We meet them, and talk with them regularly, and we actively support them.  We know the local advertisers.  We have worked with them for many years, and we are familiar with their special interests and preferences.

LISTNUM 1 \l 144               In addition, we, ourselves, are members of the local business community.  We sit on local boards, we chair local functions, we host local concerts, and we coach local sports teams.

LISTNUM 1 \l 145               We are personally committed to our community because our friends and family live here, and because we know the significant economic and cultural impact that our station will have.  For us, this radio station is about much more than just the bottom line.

LISTNUM 1 \l 146               Our application has overwhelming local support from local individuals, from businesses and not‑for‑profit organizations, as demonstrated by their letters of support in the original application, and the positive interventions that were filed over the last month and a half.

LISTNUM 1 \l 147               From the Municipal Council of the CBRM, the Cape Breton Regional Municipality, as demonstrated by their unanimous resolution of support, and the appearance of Mayor Morgan at these hearings.

LISTNUM 1 \l 148               The market survey submitted with our application reveals widespread and outspoken dissatisfaction with the perceived negative effects that consolidation has had on local radio ‑‑ the high repetition of music, the lack of local news and community information, especially in the evenings and on weekends, and the lack of live announcers, accessible staff and community engagement.

LISTNUM 1 \l 149               More than three‑quarters of the market survey respondents reported wanting a greater choice of local stations, and when asked about the importance of different aspects of their ideal radio station, 89 percent reported that community information was either important, or very important to them; 86 percent said local news; 84 percent said a locally‑owned station; 83 percent said having live announcers; and 79 percent said interviews with local guests.

LISTNUM 1 \l 150               Turning to the financial side of our application, our revenue and expense estimates are based upon our own experience.  The soundness of these estimates have been confirmed with radio advertising reps in our community, and other similar communities.  These projections are realistic.

LISTNUM 1 \l 151               One of us, the majority investor, Mr. Martin, is a certified internal auditor, a former bank manager, and a successful local businessman.  Two of us have more than 50 years combined experience in a local commercial radio, involving station management, advertising, sales, programming and promotion.

LISTNUM 1 \l 152               We understand the other applicants are projecting substantially higher revenues than we have, however, for the first seven years of operation, we have chosen conservative estimates, number one, to be prudent, and number two, to avoid overstating the station's potential.  But on the other hand, based upon our knowledge of advertising clients in this community, we anticipate but do not assume the station's revenues could be higher than the projections shown.

LISTNUM 1 \l 153               This slide shows our projections of PBIT, profit before interest and tax, as a percentage of total revenue.  We expect our PBIT percentage to rise slightly, and then remain relatively constant at about 20 to 22 percent as we reinvest in our staff, add to our staff, and expand our service to the community.

LISTNUM 1 \l 154               Referring to net return on investment, we expect the net return on investment to increase steadily from 13 percent, in the first year of operation, to 36 percent in the seventh year.

LISTNUM 1 \l 155               Our station will not have an undue financial impact on the existing three commercial stations in the CBRM market.  The retail stations to station ratio for the CBRM market is greater than for other Atlantic Canadian markets, except Halifax and St. John's, all of which have four or more stations.  For example, the ratio for the CBRM market is substantially greater than the ratio for the Charlottetown market, which has four commercial radio stations.

LISTNUM 1 \l 156               With the addition of the station that we are proposing, the retail sales to station ratio for the CBRM market, and that's indicated by CBRM, plus one, will be comparable with the ratio in the Fredericton and Moncton markets, which has five and six commercial stations, respectively; somewhat greater than the ratio for the Saint John market, which is supporting five commercial stations; and still significantly greater than the ratio for the Charlottetown market, which, with its four commercial radio stations.

LISTNUM 1 \l 157               For seven years, the commercial radio market in the CBRM has been a monopoly.  The introduction of competition will improve the quality of radio service to our community in both programming, and advertising rates for local businesses.

LISTNUM 1 \l 158               Our financial projections assume that our station would achieve a 20 percent share of the local radio advertising market.  This slide shows that the CBRM market can easily support an additional commercial station.

LISTNUM 1 \l 159               The Financial Post's 2007 projection of retail sales growth in the CBRM market shows that the corresponding ratio of retail sales per station will grow about 4.7 percent over the next five years.  This growth in the retail sales to station ratio for the CBRM is shown for three stations.  That's the existing situation.  CBRM, that's the blue curve.  And for four stations, that's CBRM, plus one new station, that's the turquoise curve.

LISTNUM 1 \l 160               Even if the presently projected growth rate in the CBRM market were not to increase, the ratio in the Charlottetown market ‑‑ that's the red curve ‑‑ would take almost eight years to catch up to the ratio for four stations in the CBRM market, at the Charlottetown market's current projected growth rate.

LISTNUM 1 \l 161               But the growth rate of retail sales in the CBRM market is almost certain to increase.  Major retailers such as Home Depot, Canadian Tire and WalMart have been demonstrating their confidence in the local economy with very large investments in new facility.  Most building supply centers, supermarkets and automobile dealerships are investing in large, new facilities, and The Mayflower Mall, the largest shopping center on the island, will complete, this year, its largest expansion project since its original construction, in order to accommodate new national retailers like Home Sense, Winners, Future Shop, and Sport Check.

LISTNUM 1 \l 162               In addition, a new high‑tech sector is replacing the CBRM's old resource‑based industries.  A $340,000,000 real estate development by German investors is already under construction near Louisbourg.  The $400,000,000 Tar Ponds cleanup is scheduled to start this spring.  Two studies are under way for massive development of the Port of Sydney, and XSTRATA is close to bringing the Donkin coal mine into production.

LISTNUM 1 \l 163               These large‑scale initiatives will have an immediate and direct positive impact on the CBRM economy, as well as a long‑term, indirect impact through the development of new infrastructure, and new economic activities.

LISTNUM 1 \l 164               In a competitive environment, the critical success factors for any station will be, one, understanding the local audience and the local advertising market, and two, the quality of local programming.  We have listed below other factors that will ensure our stations financial success ‑‑ our advertising sales experience; advertising rates affordable to small, local business; station profits will remain in the community, and be reinvested in expanded services; and the principals' personal commitment, Barry, myself and Alex, to the station's success and the local community.

LISTNUM 1 \l 165               Our radio station will appeal to listeners who bring, who long for the traditional days of radio, with well‑known local announcers, community involvement interactivity and enthusiasm.  Our station will feature live announcers for 113 hours of the 126 hour broadcast week.  Our goal is to return radio to the days of involvement, enthusiasm and fun, and in return, to attract a loyal audience who will make our station a part of their daily life.

LISTNUM 1 \l 166               Our commitment to the people of the CBRM includes local news coverage, with a news hotline 24 hours a day, 24‑hour accessibility for all emergencies, daily contact with local police, fire and transportation departments, local weather and sports seven days a week, the promotion and coverage of community events, air time for volunteer organizations, including interviews, public service announcements, and informal announcer mentions as we often refer to as "jock talk".  Though its ongoing promotion of local events, our station will be an essential part of the community fabric.

LISTNUM 1 \l 167               Our music will feature a mix of 80 percent classic rock, and 20 percent current and recent rock, providing familiar music to the older listeners, and a fresh and diverse collection of recent rock, mixed with emerging Canadian artists.  The results of our market survey suggests that 39.7 percent of potential listeners would be likely, or very likely to listen to a new FM station broadcasting this music mix.

LISTNUM 1 \l 168               We were rather pleased to see that other survey results from other applicants indicate that 76.5 percent of the 18 to 24‑year olds in the CBRM market are likely, or very likely to listen to a station that plays classic rock, and 90.6 percent of the 18 to 24‑year olds are likely, or very likely to listen to current rock.  Even though this is not our target audience, we feel rather excited that we will be able to attract a younger audience, as well.

LISTNUM 1 \l 169               The percentage of musical selections featuring emerging Canadian artists will be 11 percent.  Every time we feature an emerging Canadian artist, we will billboard the selection with a promotional description of the artist and the song, including some biographical information, website location, and where the selection can be purchased, and/or downloaded.

LISTNUM 1 \l 170               We fully support FACTOR, and will allocate all of our financial contributions to FACTOR.  We will consistently meet and/or exceed our Canadian content levels.  We will promote local music events with announcer mentions, and interview features, and our no‑cost promotion will guarantee that Cape Breton artists will receive high‑profile advertising of any and all new recordings, regardless of their genre.  Once again, that's a no‑cost promotion package.

LISTNUM 1 \l 171               Our station will broadcast more news, weather and sports than any of the other applicants.  We will broadcast the highest amount of news of any of the applicants.  We are the only applicant broadcasting regular news updates between 9:00 a.m. and 12:00 noon, and 1:00 and 4:00 in the afternoon.  We are the only applicant broadcasting hourly news on Saturdays and Sundays, and on Sundays from 5:00 p.m. to 6:00 p.m., we will broadcast a news hour.  It will feature a review of the week's top local news stories, along with good news stories from the business community, and interviews with local newsmakers.

LISTNUM 1 \l 172               In addition, we will be broadcasting over three and a half hours of community and local event information through interviews, announcer talk, and pre‑recorded public service announcements.

LISTNUM 1 \l 173               The crucial distinction between our application and other applications is that we actually do live in the CBRM, and we have the support of the community.  We also have the financial means, the understanding of the local market, experience in the broadcast business, and personal engagement with our community, to ensure that our station thrives, and that it reflects the new spirit of optimism that is now emerging in the CBRM.

LISTNUM 1 \l 174               In conclusion, our station would be locally owned, locally managed, and locally programmed.  We will take radio to the community, and bring the community back to radio.

LISTNUM 1 \l 175               Thank you very much. (Applause) Thank you.

LISTNUM 1 \l 176               THE CHAIRPERSON:  Thank you, Mr. Bedford.

LISTNUM 1 \l 177               I'd like to begin first with some questions with respect to your programming.

LISTNUM 1 \l 178               MR. BEDFORD:  Mmm hmm.

LISTNUM 1 \l 179               THE CHAIRPERSON:  In your response February the 1st, you indicated that your station will broadcast 13 hours and two minutes of spoken‑word programming, and I'll just go through the breakdown that I have here.

LISTNUM 1 \l 180               The newscasts were going to be four hours and 50 minutes, a sports cast three hours and seven minutes, weather, two hours, community announcements, PSA's and current event promotion, two hours and five minutes, and the one‑hour programming, program on Sunday, which you just mentioned, for a total of 13 hours and two minutes.

LISTNUM 1 \l 181               And first of all, with respect to announcer talk, you indicate there will be an additional coverage of community events through jock mentions, in‑studio interviews, phone interviews, plus occasion remote coverage.  How much time should be added to your spoken‑word commitment for this coverage, and for announcer talk, in general, if it hasn't been included in those totals?

LISTNUM 1 \l 182               MR. BEDFORD:  If you would look at the slide that's on the screen in front of you, we have broken it down in a pie‑like format.

LISTNUM 1 \l 183               Public service announcements, either pre‑recorded, or read live, or featuring members of the community would account for 125 minutes.

LISTNUM 1 \l 184               THE CHAIRPERSON:  Mmm hmm.

LISTNUM 1 \l 185               MR. BEDFORD:  Local event promotion would account for about 94 minutes, and that would be a combination of interviews, announcer talk, and so forth.  The rest is on that chart, as well.  Sports, 187 minutes, weather, 129.5 minutes, the 60‑minute news review program, and the news content, which is 290 minutes, and that's news conten‑, pure news content.  That is not a newscast that includes news, weather and sports.  That's the actual news content, itself.

LISTNUM 1 \l 186               THE CHAIRPERSON:  Okay.

LISTNUM 1 \l 187               MR. BEDFORD:  We broke them down individually.

LISTNUM 1 \l 188               THE CHAIRPERSON:  Okay, so that's slightly different than what we have, and that does take, then, into account the announcer talks?

LISTNUM 1 \l 189               MR. BEDFORD:  Yes, it does.

LISTNUM 1 \l 190               THE CHAIRPERSON:  Okay.  Thank you very much.  I just make a note here.

LISTNUM 1 \l 191               In regards to the healthy lifestyle segments, which you indicate will include messages and content from environmental groups, nutritionists, the anti‑smoking lobby, the Regional Health Authority, and non‑profit community groups, you indicate these segments will be aired throughout, through announcer input, and pre‑recorded announcements.  What is the minimum amount of time per week allotted to your healthy lifestyle segments?

LISTNUM 1 \l 192               MR. BEDFORD:  That would be included in our, those two segments that I referred to ‑‑ the 94 minutes, and the 125 minutes.

LISTNUM 1 \l 193               There is a fair amount of concern in this community over numerous health issues, so we decided we would include that in our news program, and also promote healthy lifestyle, healthy living, nutritional things.  And as a result, we will encourage our radio announcers to do some research into that, so that we can include that in our, on our, in our on‑air patter, if I can use that expression.

LISTNUM 1 \l 194               THE CHAIRPERSON:  What was it again?  It would be included in the 94‑minute segment, and the ‑‑

LISTNUM 1 \l 195               MR. BEDFORD:  That would be part of our community involvement commitment, yes.

LISTNUM 1 \l 196               THE CHAIRPERSON:  Okay.  I thought you mentioned ‑‑

LISTNUM 1 \l 197               MR. BEDFORD:  It would, it ‑‑

LISTNUM 1 \l 198               THE CHAIRPERSON:  ‑‑ two segments for ‑‑

LISTNUM 1 \l 199               MR. BEDFORD:  ‑‑ would be part of the mix.

LISTNUM 1 \l 1100              THE CHAIRPERSON:  Okay.

LISTNUM 1 \l 1101              MR. BEDFORD:  That would be part of the PSA's, as well, obviously.

LISTNUM 1 \l 1102              THE CHAIRPERSON:  Oh, okay.  That was fine.  Yes, thanks.

LISTNUM 1 \l 1103              MR. BEDFORD:  I'm sorry.

LISTNUM 1 \l 1104              THE CHAIRPERSON:  That's alright.  That's alright.  Thanks.  So as far as the duration of each segment vary, I suppose, depending?  Am I not ‑‑ you can't give me ‑‑

LISTNUM 1 \l 1105              MR. BEDFORD:  It'll obviously vary in terms of the content.

LISTNUM 1 \l 1106              THE CHAIRPERSON:  Mmm hmm.

LISTNUM 1 \l 1107              MR. BEDFORD:  Exactly.

LISTNUM 1 \l 1108              THE CHAIRPERSON:  Alright.  And when will they be presented?  Daytime, evenings, weekends, week nights?

LISTNUM 1 \l 1109              MR. BEDFORD:  We ‑‑ the ‑‑ since we are proposing to have live announcers on the air for 113 hours of the broadcast week, that will be included as part of their on‑air prep for each of those announced shifts, and then in addition to that, local organizations will be allowed to use the public service time to help promote healthy lifestyles, and healthy living.

LISTNUM 1 \l 1110              THE CHAIRPERSON:  Okay.  Is the public service time assigned specific slots, or again, that'd be more flexible?

LISTNUM 1 \l 1111              MR. BEDFORD:  We're going to be more flexible with that, if it's allowed.

LISTNUM 1 \l 1112              THE CHAIRPERSON:  Thank you.  In regards to news, how much of the four hours and 50 minutes, or 290 minutes of newscasts ‑‑ make sure I have the same numbers now ‑‑ will provide ‑‑ I'm sorry ‑‑ will be devoted to local news stories?

LISTNUM 1 \l 1113              MR. BEDFORD:  We will endeavour to provide as much local news as at all possible.  Obviously a lot of that's based on exactly how busy the news day itself is.  Our newscasts will be led with local news at all times, and our news staff will be ‑‑ we will obviously, in consultation with them, promote the fact that we want as much local news as at all possible.

LISTNUM 1 \l 1114              I ‑‑ with today's world, with the CNNs, and the News Worlds, and the ‑‑

LISTNUM 1 \l 1115              THE CHAIRPERSON:  Yeah.

LISTNUM 1 \l 1116              MR. BEDFORD:  The national and the international news has ‑‑ there's so many avenues available for the listener, and the viewer to get that kind of information, so we want to be as local as at all possible.

LISTNUM 1 \l 1117              THE CHAIRPERSON:  So you wouldn't care to put even a minimum amount of time on it, because, again, you want to be flexible, or could you put a minimum?

LISTNUM 1 \l 1118              MR. MORRISON:  What she's saying is what percentage of the 290 minutes would be, would ‑‑

LISTNUM 1 \l 1119              MR. BEDFORD:  No.

LISTNUM 1 \l 1120              MR. MARTIN:  No, you would ‑‑ it's ‑‑ it would all depend on, again, on the flow of the news.  I mean, you can't judge by how much local news is going to be available.  We can commit to two minutes, I would suppose.

LISTNUM 1 \l 1121              MR. BEDFORD:  I think that ‑‑ yeah.  Again, I've worked in newsrooms before, and I know what a news day is like, and I know there are days that you are bombarded with local stories.

LISTNUM 1 \l 1122              THE CHAIRPERSON:  Yeah.

LISTNUM 1 \l 1123              MR. BEDFORD:  There are days that there aren't that many stories.  You're doing as much research as at all possible, you're trying to develop and cultivate as many stories as possible, you're possibly take, picking up an old story to find out if there's a new twist to it, and so forth, and you're calling out, making a lot of outgoing calls to base your story on to make sure the story is balanced and objective.  I would say that if ‑‑ I would say that it ‑‑ out of every newscast, at least 50 percent of it's going to be local, if not more.

LISTNUM 1 \l 1124              THE CHAIRPERSON:  Okay.  Thank you very much.

LISTNUM 1 \l 1125              MR. BEDFORD:  Is that the ‑‑

LISTNUM 1 \l 1126              THE CHAIRPERSON:  That's fine.

LISTNUM 1 \l 1127              MR. BEDFORD:  ‑‑ answer you were looking for?

LISTNUM 1 \l 1128              THE CHAIRPERSON:  Yes, yeah, that's fine.

LISTNUM 1 \l 1129              In your supplementary brief, you indicate you will provide 24, a 24‑hour day news hotline, and 24‑hour accessibility for all Emergency Measure organizations, which I think you touch on here, too, today.  In your brief, you refer to live announce shifts, 18 hours a day, Monday through Friday, 14 hours on Saturday, and a minimum of ten hours on Sunday.  Will your news hotline be manned 24 hours a day?

LISTNUM 1 \l 1130              MR. BEDFORD:  Yes, it will be.  While there are live announcers in the building, and people in the newsroom, obviously those calls will be directed at that parti‑, at, to those phones.  During the all‑night span of time, when we don't have ‑‑ or during the evenings on Sunday, when we don't necessarily have a live announcer on the air, those phone calls will be forwarded to The Meridian Hotel, and they will answered by a live voice, and information will be taken, and proper people will be contacted.

LISTNUM 1 \l 1131              THE CHAIRPERSON:  And that would be the same with the Emergency Measures organizations?

LISTNUM 1 \l 1132              MR. BEDFORD:  No.  With the Emergency Measures, what we are proposing is we will have a series of cellphones, and each of our staff members will be allotted different weeks of the month, in which case that they will be on call 24 hours a day. It could be our news editor, it could be Alex Morrison, it could be myself, it could be Mr. Martin, but we will have a cellphone.  All of the Emergency Measures organizations will have that phone number available to them at all times.

LISTNUM 1 \l 1133              THE CHAIRPERSON:  Now if you wanted to input into your programming, when you got an emergency announcement, how would you do that?  Remotely, or would somebody have to go into the station, or ‑‑

LISTNUM 1 \l 1134              MR. BEDFORD:  We can use both methods.  Primarily, with as much live content as we will have, it should not be a problem, however if something is required, we will be there as quickly as possible to make sure that it's, that it happens.

LISTNUM 1 \l 1135              THE CHAIRPERSON:  Okay.  So sometimes, of course, weather might prevent that, but you say you can do it remotely?

LISTNUM 1 \l 1136              MR. BEDFORD:  Yes.

LISTNUM 1 \l 1137              THE CHAIRPERSON:  Okay.  With respect to live versus automated programming, in your response February 1st, you indicated a minimum of 123 of the 126 broadcast hours will originate from your local studios and/or local remote broadcast locations.  The breakdown on page four of your response adds to a total of 113 hours, and I just turned to that myself.

LISTNUM 1 \l 1138              MR. BEDFORD:  No, you're right.

LISTNUM 1 \l 1139              THE CHAIRPERSON:  I just thought perhaps it was a typo.

LISTNUM 1 \l 1140              MR. BEDFORD:  Yes, it was.

LISTNUM 1 \l 1141              THE CHAIRPERSON:  Was it?  Okay.  Thanks.

LISTNUM 1 \l 1142              MR. BEDFORD:  It was.

LISTNUM 1 \l 1143              THE CHAIRPERSON:  Yeah.  Okay.  So that answers that.  So the 113 is the correct number?

LISTNUM 1 \l 1144              MR. BEDFORD:  Yes.

LISTNUM 1 \l 1145              THE CHAIRPERSON:  Can you ‑‑ okay, so three hours will be reserved for the possible purchase ‑‑ no, I guess ‑‑

LISTNUM 1 \l 1146              MR. BEDFORD:  The possible purchase and/or barter.

LISTNUM 1 \l 1147              THE CHAIRPERSON:  How many hours is that?

LISTNUM 1 \l 1148              MR. BEDFORD:  Three hours.

LISTNUM 1 \l 1149              THE CHAIRPERSON:  Three hours.  Okay.

LISTNUM 1 \l 1150              MR. BEDFORD:  And we're not intending to do that, but we wanted to leave that option available to us, in case a nationally‑produced program becomes available that suits the sound of the station.

LISTNUM 1 \l 1151              THE CHAIRPERSON:  Okay.  And does that, is that type of programming fairly frequently come available, or ‑‑ it's possible.

LISTNUM 1 \l 1152              MR. BEDFORD:  We've only reviewed one that we thought was even had the potential of ‑‑

LISTNUM 1 \l 1153              THE CHAIRPERSON:  Okay.

LISTNUM 1 \l 1154              MR. BEDFORD:  ‑‑ being included.

LISTNUM 1 \l 1155              THE CHAIRPERSON:  Okay.

LISTNUM 1 \l 1156              MR. BEDFORD:  We are going to ‑‑ you know, our intent to stay as local as much as possible.  We just wanted to leave that window of opportunity in there.

LISTNUM 1 \l 1157              THE CHAIRPERSON:  I appreciate that.  Okay.

LISTNUM 1 \l 1158              MR. BEDFORD:  We didn't want you to come back and say, "Where'd that come from?"

LISTNUM 1 \l 1159              THE CHAIRPERSON:  Yeah, okay.

LISTNUM 1 \l 1160              MR. BEDFORD:  Right?

LISTNUM 1 \l 1161              THE CHAIRPERSON:  Yeah, alright.  Thanks.  Can you confirm the hours of the live programming will be as set out in your response April 4th, '06?  It said Monday to Friday, 6:00 to midnight, Saturday, 7:00 to 9:00, Sundays, 8:00 to 5:00.

LISTNUM 1 \l 1162              MR. BEDFORD:  That is correct.

LISTNUM 1 \l 1163              THE CHAIRPERSON:  Okay.  And in your April 6 response, you indicated 55 hours would be automated, and I'm just wondering what your intention is with respect to automation, and if there will always be somebody in the studio that's able to interject comments?

LISTNUM 1 \l 1164              MR. BEDFORD:  The only part of our broadcast week that will be automated is the all‑night show.

LISTNUM 1 \l 1165              THE CHAIRPERSON:  Yes.

LISTNUM 1 \l 1166              MR. BEDFORD:  Saturday evening, from 9:00 until midnight, as far as our current plans are concerned.

LISTNUM 1 \l 1167              THE CHAIRPERSON:  Mmm hmm.

LISTNUM 1 \l 1168              MR. BEDFORD:  And Sunday, of course, from six in, from 5:00 in the afternoon, on, we will endeavour to put live people in there as soon as we can afford to do that.

LISTNUM 1 \l 1169              THE CHAIRPERSON:  And so the automation, it's prepared in your studios through ‑‑

LISTNUM 1 \l 1170              MR. BEDFORD:  It'll be prepared in our ‑‑

LISTNUM 1 \l 1171              THE CHAIRPERSON:  ‑‑ and it's ‑‑

LISTNUM 1 \l 1172              MR. BEDFORD:  ‑‑ studio ‑‑

LISTNUM 1 \l 1173              THE CHAIRPERSON:  ‑‑ played at ‑‑

LISTNUM 1 \l 1174              MR. BEDFORD:  Yeah.

LISTNUM 1 \l 1175              THE CHAIRPERSON:  ‑‑ night, automatically.  Okay.

LISTNUM 1 \l 1176              MR. BEDFORD:  The news program, the two‑hour Atlantic Canadian music show, the two‑hour blues program will all be put into the system, and available for broadcast on Sunday night.

LISTNUM 1 \l 1177              THE CHAIRPERSON:  Okay.  So the voice tracking, then, what was that?  I've just ‑‑

LISTNUM 1 \l 1178              MR. BEDFORD:  There ‑‑ the only voice tracking that'll occur, in terms of regular music mix, will be the all‑night show, and pri‑, that's primarily just weather forecasts.

LISTNUM 1 \l 1179              THE CHAIRPERSON:  So you're using voice tracking and automated synonymously?

LISTNUM 1 \l 1180              MR. BEDFORD:  Oh, I'm sorry.

LISTNUM 1 \l 1181              THE CHAIRPERSON:  Is that what you mean?  I ‑‑

LISTNUM 1 \l 1182              MR. BEDFORD:  Yes.

LISTNUM 1 \l 1183              THE CHAIRPERSON:  ‑‑ just want to make sure I understand.

LISTNUM 1 \l 1184              MR. BEDFORD:  Yes.

LISTNUM 1 \l 1185              THE CHAIRPERSON:  Yes?  That's correct?  Okay.

‑‑‑ Pause

LISTNUM 1 \l 1186              THE CHAIRPERSON:  Now we're going to deal with the CCD, so it's ‑‑

LISTNUM 1 \l 1187              UNIDENTIFIED:  With what?

LISTNUM 1 \l 1188              THE CHAIRPERSON:  It's a bit repetitive, but we ‑‑

LISTNUM 1 \l 1189              MR. BEDFORD:  Canadian contact development.

LISTNUM 1 \l 1190              THE CHAIRPERSON:  ‑‑ want to get it on the record, so in March 2007, the Commission sent you a letter.  I'll let you get to your place, if you like.

-‑‑ Pause

LISTNUM 1 \l 1191              THE CHAIRPERSON:  Okay.  In March 2007, the Commission sent you a letter advising that it would want to review, at this public hearing, your proposed contributions to Canadian content development to ensure that these are in line with the new contribution regime outlined in the Commercial Radio Policy, 2006.

LISTNUM 1 \l 1192              We note that you have submitted a written reply to our letter, and that a copy of your reply is available on the public examination file for your application.

LISTNUM 1 \l 1193              For the purpose of the public record, I will take a few minutes, and go through the questions that we had sent you, and summarize your replies in order to ensure that we have a clear understanding of your CCD commitments.

LISTNUM 1 \l 1194              We had asked you to confirm your understanding that if licensed, your station will have to contribute a basic annual CCD contribution imposed by regulation, based on the station's total annual revenues, and the amounts set out in paragraph 116 of the new radio policy, Public Notice CRTC 2006, 158.

LISTNUM 1 \l 1195              You have stated, in your reply, that you would make basic annual CCD contributions in accordance with the radio regulations.  According to my calculations, based on your financial projections, this would represent an annual CCD contribution of $500 in year one to three, years one to three, increasing to $1,000 in years four to seven.  Is this correct?

LISTNUM 1 \l 1196              MR. BEDFORD:  This is correct.

LISTNUM 1 \l 1197              THE CHAIRPERSON:  We had asked you to confirm your understanding that no less than 60 percent of the station's basic annual CCD contribution must be allocated to either FACTOR or music action, and the remaining amount of any may be directed to any eligible CCD initiatives, at your discretion.

LISTNUM 1 \l 1198              I note you have indicated that the full amount of the basic annual CCD contribution will be allocated to FACTOR.  Is this correct?

LISTNUM 1 \l 1199              MR. BEDFORD:  This is also correct.  Mr. Morrison has MC'd many ‑‑ well, probably more CCD release projects than just about anybody.  I'm a former booking agent, and I'm a former manager of an aboriginal rock band.  We have seen the value of the FACTOR organization, and as a result, we would like to see all of our contributions go to a FACTOR.

LISTNUM 1 \l 1200              THE CHAIRPERSON:  Excellent.

LISTNUM 1 \l 1201              As set out in the new Commercial Radio Policy, the new annual basic CCD contribution will be imposed on all commercial radio licenses by regulation.  The Commission will impose a transitionary condition of license reflecting the new basic annual CCD until such time as the regulations come into force.  Once the regulation is in place, the COL would expire.

LISTNUM 1 \l 1202              You have indicated that you would adhere to such a condition of license.  Is that correct?

LISTNUM 1 \l 1203              MR. BEDFORD:  We confirm that.  We'd be happy to.

LISTNUM 1 \l 1204              THE CHAIRPERSON:  Thank you.

LISTNUM 1 \l 1205              As was the case with the previous Canadian talent development policy, an applicant or licensee may choose to exceed the minimum annual basic CCD contribution.  As part of the application now before us, you are proposing to contribute additional annual funding to CCD that would be over and above the basic required CCD.

LISTNUM 1 \l 1206              In your reply, you indicated that the over and above contributions would be $1,900 in years one to three, decreasing to $1,400 in years four to seven.  Is this correct?

LISTNUM 1 \l 1207              MR. BEDFORD:  That is correct.

LISTNUM 1 \l 1208              THE CHAIRPERSON:  We had also asked that you confirm your understanding that under the new policy, not less than 20 percent of this annual over and above CCD contribution must be allocated to FACTOR, or a music action.

LISTNUM 1 \l 1209              In your reply, you confirmed your understanding that no less than 20 percent of the annual over and above CCD would have to be directed to FACTOR, however, you indicated that you wished to contribute 100 percent of the over and above amount to FACTOR.  Is that correct?

LISTNUM 1 \l 1210              MR. BEDFORD:  That is correct.  I confirm that.

LISTNUM 1 \l 1211              THE CHAIRPERSON:  Please confirm that you will adhere to the over and above CCD condi‑, contributions as a condition of license.

LISTNUM 1 \l 1212              MR. BEDFORD:  We will adhere to that.

LISTNUM 1 \l 1213              THE CHAIRPERSON:  In light of this, could you confirm you will not pursue your talent search contest, as a CCD initiative?

LISTNUM 1 \l 1214              MR. BEDFORD:  We are going to ‑‑ no, we would continue to do that as a ‑‑ yeah ‑‑ as a local initiative, as something that the station wants to ‑‑

LISTNUM 1 \l 1215              THE CHAIRPERSON:  Okay.

LISTNUM 1 \l 1216              MR. BEDFORD:  ‑‑ pursue on its own.

LISTNUM 1 \l 1217              THE CHAIRPERSON:  Alright.  Thank you.  Not as a CCD?

LISTNUM 1 \l 1218              MR. BEDFORD:  No.

LISTNUM 1 \l 1219              THE CHAIRPERSON:  Thank you.  Now, with respect to emerging Canadian artists ‑

LISTNUM 1 \l 1220              MR. BEDFORD:  Mmm hmm.

LISTNUM 1 \l 1221              THE CHAIRPERSON:  ‑‑ I wanted to review your definition of emerging Canadian artists which you describe in your response February the 1st, '07 as:

"We consider a performer to be an emerging Canadian artist for the 12‑month period from the time they promote their first release to us directly, through a promotion firm and/or through an existing record company.  We will consider new material from these artists based on appropriateness to our format [of classic rock and] of current rock and classic rock."

LISTNUM 1 \l 1222              With respect to your promotional material, would it have to include an audio sample, or would it consist of written material, only?  The promotional material that comes in to you, would it have to include an audio sample, or would you ‑‑

LISTNUM 1 \l 1223              MR. BEDFORD:  Would ‑‑

LISTNUM 1 \l 1224              THE CHAIRPERSON:  ‑‑ accept it if it was just written material?

LISTNUM 1 \l 1225              MR. BEDFORD:  We'll accept anything, but obviously we're looking for the audio sample.

LISTNUM 1 \l 1226              THE CHAIRPERSON:  Okay.  And would you consider airing a promotional CD or single that has not been released for purchase by the public?

LISTNUM 1 \l 1227              MR. BEDFORD:  Alex?

LISTNUM 1 \l 1228              MR. MORRISON:  We've talked about we wanted a full‑length CD, or EP.

LISTNUM 1 \l 1229              MR. BEDFORD:  No, this is the actual airing of emerging Canadian artists.

LISTNUM 1 \l 1230              MR. MORRISON:  No, we want that commercially published, only, or do you?  I mean, it's totally ‑‑ it's your call.

LISTNUM 1 \l 1231              MR. BEDFORD:  For artists that we are familiar with ‑‑ in other words, Cape Breton‑based artists, Atlantic Canadian artists ‑‑ if it was a well‑produced piece of music, and we considered it appropriate for our sound, and they fit within our definition of emerging Canadian artists, they would be, even though it was my, maybe not a commercially available piece of music at that point in time, we would play it.

LISTNUM 1 \l 1232              For other artists across the country who we would not be as familiar with, we would have to take that into consideration.

LISTNUM 1 \l 1233              THE CHAIRPERSON:  Okay.  Thank you.

LISTNUM 1 \l 1234              What type of system would you put in place to accurately cor‑, record and track the date of the, the promotional material is received in order to be able to apply the 12‑month period, including in your, concluded in your proposed definition?

LISTNUM 1 \l 1235              MR. BEDFORD:  Well, obviously we would rely on a computer program, and we'd rely on a good manual system, as well.

LISTNUM 1 \l 1236              THE CHAIRPERSON:  (Laughing) Okay.

LISTNUM 1 \l 1237              MR. BEDFORD:  There's nothing wrong with a good file drawer.

LISTNUM 1 \l 1238              THE CHAIRPERSON:  Okay, good.  So you're planning to track it.  Okay, thank you.  That's good.

LISTNUM 1 \l 1239              MR. BEDFORD:  There is controversy over the definition of emerging Canadian artists, anyway.

LISTNUM 1 \l 1240              THE CHAIRPERSON:  Yes, no, and we're trying, we're still trying to develop it.

LISTNUM 1 \l 1241              MR. BEDFORD:  And I know the CAB have theirs.

LISTNUM 1 \l 1242              THE CHAIRPERSON:  Yes.

LISTNUM 1 \l 1243              MR. BEDFORD:  And we decided to tighten ours up a little bit, because we thought it was a little too wide spaced, a little too ‑‑

LISTNUM 1 \l 1244              THE CHAIRPERSON:  It's an evolving ‑‑

LISTNUM 1 \l 1245              MR. BEDFORD:  It is.

LISTNUM 1 \l 1246              THE CHAIRPERSON:  ‑‑ definition, and ‑‑

LISTNUM 1 \l 1247              MR. BEDFORD:  It's going to continue to evolve.

LISTNUM 1 \l 1248              THE CHAIRPERSON:  Well, yes, and probably your comments'll influence the outcome, so that's fine.  Thank you.

LISTNUM 1 \l 1249              You're proposing ‑‑ I'm going to talk about your music format, and as I understand it, you're proposing a rock music format, which will consist of 80 percent classic rock, 1963 to 1990, 20 percent new rock, 1991 to date, to current.  How will your proposed rock format contribute to musical diversity in the market?

LISTNUM 1 \l 1250              MR. BEDFORD:  The three existing stations in the market cover off three of the more acceptable formats in Canadian radio.  One station's country, one station has a classic hit format.  The third station is primarily current, with a, with some late '80s and '90s mixed in, as well.

LISTNUM 1 \l 1251              Those formats tend to be rather diverse, 'cause they're trying to reach people from eight to 80.  I think with the addition of another station in the market, we can be a little bit more focused.  I think that the ar‑, the people of this area have always loved cla‑, rock music.  The older listeners certainly will identify with the classic rock.  The younger listener will certainly identify with the more recent rock, as well as the current rock, and the emerging Canadian artists.  And I think the mix of that familiar music, the music that they've heard in the past, plus some new material mixed in, will keep the station at, with a fresh sound, and I think that that combination will provide something that this area's not getting, at the moment.  I think it will compliment what's already here.

LISTNUM 1 \l 1252              THE CHAIRPERSON:  And how will your proposal, then, differ from the yet to be launched SHARE FM, which we understand is going to launch in May, and the classic rock mainstream rock station being proposed by Newcap?

LISTNUM 1 \l 1253              MR. BEDFORD:  The distinct different between ours and Newcap is obviously the fact that we're going to play more recent rock, and current rock.  The difference in terms of what we would be playing versus CHER‑AM, which is flipping to FM, with their classic hits format, there will be some overlap, but that overlap will be primarily in terms of artists, not in terms of the actual songs played.

LISTNUM 1 \l 1254              I anticipated that question, and I did write down a couple of, a couple of examples here.  For example, when referring to classic rock, and when referring, for example, to Canadian artists like Trooper or April Wine, CHER would obviously be playing some of that material.  So would we.  We would go further into the, into their catalogue of music, and play those songs with a little more edge than the current stations are playing.

LISTNUM 1 \l 1255              THE CHAIRPERSON:  So can you ‑‑ I'm curious, can you give me a percentage that your playlist might be duplicate, dupli‑, a duplicate of CHER's?

LISTNUM 1 \l 1256              MR. BEDFORD:  In terms of CHER, and we did air check them recently, because they have changed their music mix dramatically over the past year, maybe in anticipation of these applications.  We noticed a shift, and we did another survey of their music about a week and a half ago.  We anticipate somewhere between 19 to 21 percent overlap in terms of artists, but not ‑‑

LISTNUM 1 \l 1257              THE CHAIRPERSON:  Right.

LISTNUM 1 \l 1258              MR. BEDFORD:  ‑‑ necessarily in terms of songs played.

LISTNUM 1 \l 1259              In regard to CKPE FM, the overlap that we see would probably be a little bit less than 19 percent, and it would also be primarily in terms of recent or current artists, where they might pick up on a rock song that ‑‑ by a current, that we would also play.

LISTNUM 1 \l 1260              THE CHAIRPERSON:  And what about, then, Newcap's?  What percentage overlap do you think you'd have with that application, with their playlist?

LISTNUM 1 \l 1261              MR. BEDFORD:  Well, the fact that we're going to play 80 percent classic rock, and they're going to play 100 classic rock, if, the overlap would be a lot more apparent.  I would think that having had the opportunity of listening to their stations in Halifax, their stations in Charlottetown, and in Fredericton, I believe ‑‑ one of the things that was indicated in our market survey, one of the things we already knew ‑‑ all that happened was the market survey confirmed it for us, is the local people are tired of the high repetition of music.

LISTNUM 1 \l 1262              THE CHAIRPERSON:  Mmm hmm.

LISTNUM 1 \l 1263              MR. BEDFORD:  So we an‑, you know, we're proposing to launch a format with a minimum of 25‑‑ or 300‑thou‑, 3,000 songs, 2,500 to 3,000 songs, and continuously refresh that every three months.  The people in the area want a variety of music.  We're going to provide a variety of music.  So, therefore, I think the overlap with the Newcap organization, which tends to play a little tighter playlist, we're not going to be a, have as tight a playlist as they will have.

LISTNUM 1 \l 1264              THE CHAIRPERSON:  I don't know if you had a chance to look at their application.  They ‑‑ I think as they refer to it as classic rock, mainstream rock.

LISTNUM 1 \l 1265              MR. BEDFORD:  Mmm hmm.

LISTNUM 1 \l 1266              THE CHAIRPERSON:  So does that still apply, then?  Are you still considering that?  You said yours would be 80 percent classic rock, and theirs was 100 percent classic, 100 percent.

LISTNUM 1 \l 1267              MR. BEDFORD:  Mmm hmm.

LISTNUM 1 \l 1268              THE CHAIRPERSON:  So would your answer change any, if I, if you take into consideration they've said they will have a classic rock, mainstream rock hybrid?

LISTNUM 1 \l 1269              MR. BEDFORD:  That sounds a lot more like what we're proposing.

LISTNUM 1 \l 1270              THE CHAIRPERSON:  Does it?  Okay.  Alright.  And you did anticipate my next question, because I was wondering about the 2,500 songs in rotation, and ‑‑

LISTNUM 1 \l 1271              MR. BEDFORD:  And may I reiterate, a minimum of ‑‑

LISTNUM 1 \l 1272              THE CHAIRPERSON:  Yes.

LISTNUM 1 \l 1273              MR. BEDFORD:  ‑‑ 2,500.

LISTNUM 1 \l 1274              THE CHAIRPERSON:  I wrote it down, minimum.

LISTNUM 1 \l 1275              MR. BEDFORD:  Alright.

LISTNUM 1 \l 1276              THE CHAIRPERSON:  (Laughing) I had minimum.  I'm just wondering what would you say the rotation in the market is now?

LISTNUM 1 \l 1277              MR. BEDFORD:  Rotation on current hits in this market right now is probably running around four hours, four and a half hours.

LISTNUM 1 \l 1278              THE CHAIRPERSON:  Okay.  So percentage?  Can you give me a percentage?  Like if you're going to have a 2,500 songs in rotation ‑‑

LISTNUM 1 \l 1279              MR. BEDFORD:  We anticipate our, the rotation will be anywhere from four and a half to five and a half days.

LISTNUM 1 \l 1280              THE CHAIRPERSON:  So if I'm listening to your radio station ‑‑

LISTNUM 1 \l 1281              MR. BEDFORD:  The emerging Canadian artists ‑‑ oh, I'm sorry, I interrupted you.  I ‑‑

LISTNUM 1 \l 1282              THE CHAIRPERSON:  No, that's okay.

LISTNUM 1 \l 1283              MR. BEDFORD:  I apologize.

LISTNUM 1 \l 1284              THE CHAIRPERSON:  Go ahead.  That's alright.

LISTNUM 1 \l 1285              MR. BEDFORD:  The emerging Canadian artists would be on a higher rotation than that ‑‑

LISTNUM 1 \l 1286              THE CHAIRPERSON:  Okay.  If ‑‑

LISTNUM 1 \l 1287              MR. BEDFORD:  ‑‑ obviously.

LISTNUM 1 \l 1288              THE CHAIRPERSON:  ‑‑ I'm listening to your radio station, though, are you saying it would be four and a half days before I'd hear that same song again?

LISTNUM 1 \l 1289              MR. BEDFORD:  Yes, it would, and it would be in a different time slot.

LISTNUM 1 \l 1290              THE CHAIRPERSON:  This is a very new concept (laughs).

LISTNUM 1 \l 1291              MR. BEDFORD:  We ‑‑ Mr. Morrison was the architect of the ‑‑

LISTNUM 1 \l 1292              THE CHAIRPERSON:  Yes.

LISTNUM 1 \l 1293              MR. BEDFORD:  ‑‑ sound that the Membertou radio station had, when we went on air.  It was a 50‑watt radio station.  I worked with Alex at the station here in Membertou for about 16 months, and it was a very different concept.  We had 8,500 songs in rotation, and ‑‑

LISTNUM 1 \l 1294              THE CHAIRPERSON:  8,500?

LISTNUM 1 \l 1295              MR. BEDFORD:  There was 8,500 songs in the system at any one point in time.  I'd say the rotation was probably in the range of 5,500 of the 8,500.  It was interesting to note that we became the talk of the town over that 16‑month span of time, with a little 50‑watt radio station that only reached 55 percent of the market area.

LISTNUM 1 \l 1296              THE CHAIRPERSON:  You know, it's interesting because it's sort of annoying to listen to the radio at the same time every day, and ‑‑

LISTNUM 1 \l 1297              MR. BEDFORD:  The same song.

LISTNUM 1 \l 1298              THE CHAIRPERSON:  ‑‑ hear the same songs.

LISTNUM 1 \l 1299              MR. BEDFORD:  You can ‑‑

LISTNUM 1 \l 1300              THE CHAIRPERSON:  But ‑‑

LISTNUM 1 \l 1301              MR. BEDFORD:  ‑‑ brush your teeth by it.

LISTNUM 1 \l 1302              THE CHAIRPERSON:  Yes, correct.

‑‑‑ Laughter / Rires

LISTNUM 1 \l 1303              THE CHAIRPERSON:  So when you say 2,500 songs in rotation, that means you have a library of 2,500 songs that you're currently playing, but further to that, you're saying that it wouldn't repeat for four and a half days?

LISTNUM 1 \l 1304              MR. BEDFORD:  We are ‑‑ we have designed a program grid, and we will put eno‑, inject enough music into that system that the repeat on the classic rock, and the recent rock will be four and a half to five and a half days.

LISTNUM 1 \l 1305              THE CHAIRPERSON:  And how do you ‑‑

LISTNUM 1 \l 1306              MR. BEDFORD:  The current rock and the emerging artists will be a little faster rotation than that.

LISTNUM 1 \l 1307              THE CHAIRPERSON:  Yeah, okay.  Okay, so that probably takes into my ‑‑

LISTNUM 1 \l 1308              MR. BEDFORD:  And that's of songs, not artists.  The rotation of songs, not artists.  Obviously you could hear a Rolling Stones' song today, and you could hear a Rolling Stones' song again tomorrow afternoon, but it would be two different songs.

LISTNUM 1 \l 1309              THE CHAIRPERSON:  Oh, so ‑‑ yeah, no, I realized you meant that.

LISTNUM 1 \l 1310              MR. BEDFORD:  Yeah.

LISTNUM 1 \l 1311              THE CHAIRPERSON:  Yeah.  So ‑‑ and that was going to take, answer my next question, because I know that if there's a song that's popular at the moment, you don't want to wait four and a half days to hear it again, so ‑‑

LISTNUM 1 \l 1312              MR. BEDFORD:  Exactly.

LISTNUM 1 \l 1313              THE CHAIRPERSON:  So that's the way you've got it?  Okay.

LISTNUM 1 \l 1314              MR. BEDFORD:  So the current, and the recurrent, the very recent rock would be on a higher rotation.

LISTNUM 1 \l 1315              THE CHAIRPERSON:  Okay.  That's great.

LISTNUM 1 \l 1316              With regards to the blues show ‑

LISTNUM 1 \l 1317              MR. BEDFORD:  Yes?

LISTNUM 1 \l 1318              THE CHAIRPERSON:  ‑‑ you're proposing a two‑hour weekly show, and just ‑‑ did I understand you say earlier that that's going to be in your pre‑recorded section?

LISTNUM 1 \l 1319              MR. BEDFORD:  We hope to do it live.

LISTNUM 1 \l 1320              THE CHAIRPERSON:  Yeah.

LISTNUM 1 \l 1321              MR. BEDFORD:  But we want the option to be able to pre‑record it.

LISTNUM 1 \l 1322              THE CHAIRPERSON:  Okay.  And so I was wondering when that show will be presented.  That was ‑‑

LISTNUM 1 \l 1323              MR. BEDFORD:  8:00 to ‑‑

LISTNUM 1 \l 1324              THE CHAIRPERSON:  ‑‑ my first question.

LISTNUM 1 \l 1325              MR. BEDFORD:  ‑‑ 10:00 on Sunday night.

LISTNUM 1 \l 1326              THE CHAIRPERSON:  8:00 to 10:00?

LISTNUM 1 \l 1327              MR. BEDFORD:  8:00 p.m. to 10:00 p.m. Sunday night, following the Atlantic Canadian show, which will be on from 6:00 to 8:00, following our news hour at 5:00.  That's working backwards.

LISTNUM 1 \l 1328              THE CHAIRPERSON:  Yeah, that's good.  I think like that sometimes.  Why do you feel this blues show will be of interest to the listeners of your proposed rock format?

LISTNUM 1 \l 1329              MR. BEDFORD:  I think blues and rock are so closely aligned, so closely ‑‑ they fit so well together.  There are no blues programs on current radio in this market.  You know, I ‑‑ the CBC blues show is extremely well done, the one that comes in nationally, and I have listened to it many, many a time, and they have given exposure to people, for example, like Matt Minglewood.

LISTNUM 1 \l 1330              Matt Minglewood is ‑‑ we were there when we ‑‑ I was there when the ‑‑ I was the MC when the local musician's union gave him an award back in 1997, and he is commonly referred to as Cape Breton's Rock and Roll Road Warrior.  But Matt also is a very wonderful blues singer, and as a matter of fact, he ‑‑ I can quote him from a, an article that was written two days ago in Toronto, Ontario, about the fact he's not getting the air play that he deserves, or that he thinks that he deserves, and then if you go through our application, you'll see there's one heck of a strong letter of support for our application, not only because of the blues show, but because his regular rock music will be part of our classic rock music segments.

LISTNUM 1 \l 1331              THE CHAIRPERSON:  Because what rock music?  Sorry.

LISTNUM 1 \l 1332              MR. BEDFORD:  His older ‑‑

LISTNUM 1 \l 1333              THE CHAIRPERSON:  His ‑‑

LISTNUM 1 \l 1334              MR. BEDFORD:  ‑‑ hits from ‑‑

LISTNUM 1 \l 1335              THE CHAIRPERSON:  Oh, yes, okay.

LISTNUM 1 \l 1336              MR. BEDFORD:  ‑‑ the '70s and '80s ‑‑

LISTNUM 1 \l 1337              THE CHAIRPERSON:  Mmm hmm.

LISTNUM 1 \l 1338              MR. BEDFORD:  ‑‑ will be part of our music mix, along with other Cape Breton artists, like Sam Moon, and Ian Acker, and The Field Battery, and ‑‑ these are artists that we have played in the past, and we want to play them again.  They deserve the air play.

LISTNUM 1 \l 1339              Other examples would be the Glamour Puss Blues Band out of Moncton.  They don't get any air play here.  We will play them.  I ‑‑ excuse me, I will correct myself.  I know that Bill MacNeil's sitting in the audience.  Coastal Radio, the community station, does play that, 'cause I have worked for them, and I know that for a fact.

LISTNUM 1 \l 1340              THE CHAIRPERSON:  Can you confirm your un‑, that you understand that the minimum level of Canadian content for music selections from sub‑category 34, which is the jazz and blues category, was increased from ten to 20 percent in the 2006 Commercial Radio Policy?

LISTNUM 1 \l 1341              MR. BEDFORD:  We have every intention to have a minimum of 35 percent CanCon in that two‑hour show.

LISTNUM 1 \l 1342              THE CHAIRPERSON:  35?

LISTNUM 1 \l 1343              MR. BEDFORD:  35 percent.

LISTNUM 1 \l 1344              THE CHAIRPERSON:  Okay.

LISTNUM 1 \l 1345              MR. BEDFORD:  A minimum of, yes.

LISTNUM 1 \l 1346              THE CHAIRPERSON:  Okay.

LISTNUM 1 \l 1347              MR. BEDFORD:  The same applies, obviously, our Atlantic Canadian show's going to be 100 percent Canadian content.

LISTNUM 1 \l 1348              THE CHAIRPERSON:  Okay.  So, so ‑‑

LISTNUM 1 \l 1349              MR. BEDFORD:  My math has always been very good.

LISTNUM 1 \l 1350              THE CHAIRPERSON:  It has?  Oh, I see.  Okay.

‑‑‑ Laughter / Rires

LISTNUM 1 \l 1351              THE CHAIRPERSON:  So then I ‑‑ just for the record, you, can you confirm that you will adhere to this higher 20 percent level of Canadian content by condition of license until such time as the regulations are amended?

LISTNUM 1 \l 1352              MR. BEDFORD:  Absolutely.  No problem at all.

LISTNUM 1 \l 1353              THE CHAIRPERSON:  Thank you.

LISTNUM 1 \l 1354              I'm just turning to the economic section.  You were projecting year one revenues of 470,000, increasing to 788,400 in year seven, and you have projected advertising revenues will go, grow by 20 percent in year two, 15 percent in year three, five percent in years four through seven.

LISTNUM 1 \l 1355              What sources of data did you use to assess the future growth potential of the Sydney, and to arrive at your revenue forecast for year one, and subsequent annual increases in your revenue?

LISTNUM 1 \l 1356              MR. BEDFORD:  We came up with a thought process and/or a formula that would allow us to make a projection for year one that we thought was extremely conservative.  Obviously, at the time that we did that, we had not seen any of the other applications.

LISTNUM 1 \l 1357              We were ‑‑ when we first approached Mr. Martin, Alex and I, we had already written a complete business plan.  That business plan was presented to Barry.  Barry is a numbers man.  Barry is a former bank manager, he's an entrepreneur, he's a business person, he's a, an auditor.  He took one look at the business plan, and he was extremely pleased with what he saw.  He did not, for a moment, question our projections.  He looked at us, and said, "You think the same way I do", and I said, "What do you mean by that, Barry?"  He said, "You're very conservative in your approach".  I said, "Yes.

LISTNUM 1 \l 1358              Obviously we hope to do more than that, and obviously the other three people that have applied for this, at this hearing, are projecting much higher revenues than we do.  I hope that we can achieve higher revenues, but we have ba‑, built the radio station's financial projections on a decent cash flow, enough working capital in there, and a high enough revenue level to make sure that we can operate at a half million dollars a year.

LISTNUM 1 \l 1359              I was part of CHER back in 1979, when we were doing almost $800,000 a year, and that's ancient history, so we know the market can substantiate, can sustain our projections.

LISTNUM 1 \l 1360              THE CHAIRPERSON:  Okay.  I notice in your, some of your submissions that you estimated the ‑‑ you went, you go through your thinking on the formula, and estimate that the market is $3,000,000, and that your share will be at 20 percent I think is how you did it.

LISTNUM 1 \l 1361              MR. BEDFORD:  Yes.

LISTNUM 1 \l 1362              THE CHAIRPERSON:  So if ‑‑ and because you don't have access to the market numbers, can I assume if it was $10,000,000, you'd still think your share would be ‑‑ that's a figure out of the air, as you know.

LISTNUM 1 \l 1363              MR. BEDFORD:  Oh, God ‑‑

LISTNUM 1 \l 1364              THE CHAIRPERSON:  But ‑‑

LISTNUM 1 \l 1365              MR. BEDFORD:  ‑‑ that'd be wonderful.

‑‑‑ Laughter / Rires

LISTNUM 1 \l 1366              THE CHAIRPERSON:  But you'd still expect to get 20 percent ‑‑

LISTNUM 1 \l 1367              MR. BEDFORD:  Yeah.

LISTNUM 1 \l 1368              THE CHAIRPERSON:  ‑‑ of that?

LISTNUM 1 \l 1369              MR. BEDFORD:  We know the radio revenue in this market's over 3,000,000.  We just pegged it at that figure.

LISTNUM 1 \l 1370              THE CHAIRPERSON:  Okay.

LISTNUM 1 \l 1371              MR. BEDFORD:  And we know that we didn't have access to it, and we know that you do.

LISTNUM 1 \l 1372              THE CHAIRPERSON:  Okay.  The projected revenues from the four applicants, as you know, range from a low of 470 to a high of 915,000 in year one, to a low of 649,000 in year three, to a high in year three of 1,208,000.  Over the seven‑year period, projected revenues from the other applicants are 38 to 91 percent higher than your projected revenues.

LISTNUM 1 \l 1373              You indicate in your supplementary brief, and again here today, that your estimates are conservative.  How conservative do you feel your estimates are?

LISTNUM 1 \l 1374              MR. BEDFORD:  Whoa (laughs).

LISTNUM 1 \l 1375              THE CHAIRPERSON:  It's not a condition of license, so it's your best guess (laughs).

LISTNUM 1 \l 1376              MR. BEDFORD:  I, I really ‑‑

LISTNUM 1 \l 1377              MR. MARTIN:  Well, if we looked at it, we could always build in, you know, 25 percent.  I, I think that 25 percent would be a safe percentage.

LISTNUM 1 \l 1378              MR. BEDFORD:  I think in year one we're going to do at least 25 percent more than that.

LISTNUM 1 \l 1379              THE CHAIRPERSON:  Okay.  Okay.  That's ‑‑

LISTNUM 1 \l 1380              MR. BEDFORD:  And that's Mr. Martin speaking.  I think we're going to do 50 percent, personally.

LISTNUM 1 \l 1381              THE CHAIRPERSON:  So I should put down 25?

LISTNUM 1 \l 1382              MR. BEDFORD:  Easy, big guy.  Easy, big guy.

‑‑‑ Laughter / Rires

LISTNUM 1 \l 1383              THE CHAIRPERSON:  Okay.

LISTNUM 1 \l 1384              MR. BEDFORD:  I noticed in the paper this morning they used the term, "Local and national broadcasters will fight for a spot on the FM radio dial in Sydney at a CRTC hearing today".  I rather like the idea I got Big Alex, and Big Barry with me.

LISTNUM 1 \l 1385              THE CHAIRPERSON:  To look after you.  (Laughing) Yeah.

LISTNUM 1 \l 1386              The ‑‑ I'm just wondering are ‑‑ I notice there's a considerable difference, as well, among the applicants with respect to capital expenditures.

LISTNUM 1 \l 1387              Are you confident your estimated capital expenditures are sufficient, or would you ‑‑ and would ‑‑ also, would you like to offer any additional comments with respect to your estimate of 220,000?

LISTNUM 1 \l 1388              MR. BEDFORD:  We did a lot of research on that.  We brought a consultant in, an engineering consultant in from Montreal, and an engineering consultant in from the Valley, who have worked on numerous radio applications.

LISTNUM 1 \l 1389              We told them that we wanted to make sure that our start‑up costs were reasonable.  We wanted to make sure all along that the whole cost of our operation jived with the size of the community, and so forth.  And as a result, we ‑‑ again, we have ‑‑ if ‑‑ we have chosen an extremely good transmitter.  We have chosen an extremely good antenna system, because we know that's of prime importance.  We've been a little bit more moderate in our choice of studio gear, and so forth, but we know that we can do it at that rate, know, and it's been confirmed by our engineers.

LISTNUM 1 \l 1390              The total investment that we're looking at, if you include our line of credit, and the hotel's leasehold improvements, borders on $400,000.

LISTNUM 1 \l 1391              THE CHAIRPERSON:  So the hotel's contributing that, in effect, then?

LISTNUM 1 \l 1392              MR. BEDFORD:  Oh, yeah.  That's all leasehold improvements that the hotel's going to carry.

LISTNUM 1 \l 1393              THE CHAIRPERSON:  I'm just wondering about the li‑, if you buy more moderately priced equipment, which is what I understood you to say, would you be looking at replacing that ‑‑ or maybe the nor‑, in the norm, you'd be replacing it anyway, after year three, or ‑‑

LISTNUM 1 \l 1394              MR. BEDFORD:  One of the ‑‑ yeah, one of the ‑‑

LISTNUM 1 \l 1395              THE CHAIRPERSON:  Have you given that any thought?

LISTNUM 1 \l 1396              MR. BEDFORD:  One of the points that I made when I was speaking originally was the re‑investment in our staff, and the re‑investment in the station, and re‑investment in the community.

LISTNUM 1 \l 1397              One of the things that I rather enjoyed was the fact that, at one point in time, when you were erecting AM transmitter sites, it required a lot of land, expensive towers, and so on, and so forth.  With FM, of course, we're able to collate, locate on the Global TV tower, and of course we have a letter of agreement with them.  And that certainly keeps the costs down, and it certainly makes it a much more affordable venture.

LISTNUM 1 \l 1398              THE CHAIRPERSON:  Yeah.  So I didn't hear ‑‑ I know you're going to re‑invest, but did I hear you say re‑invest in capital expenditures, as well?

LISTNUM 1 \l 1399              MR. BEDFORD:  With ‑‑ over time, yeah.

LISTNUM 1 \l 1400              THE CHAIRPERSON:  As needed?

LISTNUM 1 \l 1401              MR. BEDFORD:  As needed.

LISTNUM 1 \l 1402              THE CHAIRPERSON:  Okay.

LISTNUM 1 \l 1403              MR. BEDFORD:  I don't think that will apply to our antenna and transmitter combination ‑‑

LISTNUM 1 \l 1404              THE CHAIRPERSON:  No.

LISTNUM 1 \l 1405              MR. BEDFORD:  ‑‑ which is the most expensive purchase anyway.

LISTNUM 1 \l 1406              THE CHAIRPERSON:  The 200 and ‑‑ okay.  The 100, the 175,000 transmitting ‑‑

LISTNUM 1 \l 1407              MR. BEDFORD:  That ‑‑

LISTNUM 1 \l 1408              THE CHAIRPERSON:  ‑‑ is what you're referring to?

LISTNUM 1 \l 1409              MR. BEDFORD:  That's ‑‑ yeah, exactly.

LISTNUM 1 \l 1410              THE CHAIRPERSON:  Okay.

LISTNUM 1 \l 1411              MR. BEDFORD:  We have the quotes ‑‑

LISTNUM 1 \l 1412              THE CHAIRPERSON:  So that's ‑‑

LISTNUM 1 \l 1413              MR. BEDFORD:  ‑‑ from those companies, and yes, they may have gone up five percent since those quotes ‑‑

LISTNUM 1 \l 1414              THE CHAIRPERSON:  Yeah.

LISTNUM 1 \l 1415              MR. BEDFORD:  ‑‑ were issued.

LISTNUM 1 \l 1416              THE CHAIRPERSON:  But that's about a ten‑year life, then, is it, or ‑‑

LISTNUM 1 \l 1417              MR. BEDFORD:  We want to amortize that over seven years, max.

LISTNUM 1 \l 1418              THE CHAIRPERSON:  Seven?  Okay.  Now I ‑‑ in year one, you're forecasting a positive profit before interest and taxes beca‑, and if ‑‑ I'm wondering if the results aren't as forecasted, because it's probably optimistic.  Oftentimes, in a new start‑up business, you're not going to see a profit in the first year, but at any rate, if it ‑‑ that's a general statement, so it doesn't necessarily mean it applies to radio, but if the results are not as forecasted, are you prepared to invest additional funds for as long as it takes for the station to turn a profit, and if necessary, to cover any unforeseen capital expenditures?

LISTNUM 1 \l 1419              MR. MARTIN:  Yes.  I'm a businessman, and if the station is hemorrhaging, then obviously, you know, I may not be prepared to put in the levels that it would take.  If for some unforeseen reason it was a collapse, I will be monitoring the numbers extraordinarily close, but, yeah, I have sufficient resources at my disposal to allow the station any reasonable time, and reasonable losses until it achieves profitability.

LISTNUM 1 \l 1420              You know, in my experience, in most endeavours, you're lucky to see positive profitability after three to five years, and you know, I feel our numbers are so conservative going into this, that I believe we will achieve a small profit the first year.  If not, I fully expect that it will be there in years two and three.

LISTNUM 1 \l 1421              THE CHAIRPERSON:  Okay.  Thank you.

LISTNUM 1 \l 1422              MR. BEDFORD:  It was interesting.  I asked the, one of the people at, in Gatineau.  I said Mr. Martin's more than willing to bring a personal net worth statement with him for the confidential ‑

LISTNUM 1 \l 1423              THE CHAIRPERSON:  Mmm hmm.

LISTNUM 1 \l 1424              MR. BEDFORD:  ‑‑ perusal of ‑‑

LISTNUM 1 \l 1425              THE CHAIRPERSON:  Yes.

LISTNUM 1 \l 1426              MR. BEDFORD:  Of you three individuals, and I was told it was not necessary; that the financial analysis had already been completed.

LISTNUM 1 \l 1427              THE CHAIRPERSON:  Yeah.  My question isn't directed more to net worth, it's directed to willingness, but I got my answer.  (Laughing) That's fine.

LISTNUM 1 \l 1428              MR. BEDFORD:  Yeah, okay.

LISTNUM 1 \l 1429              THE CHAIRPERSON:  Thank you.  Yeah, thanks.

LISTNUM 1 \l 1430              I notice in your long‑range planning, you indicate you would consider applying for another license, if the local economy would support it, and that's sort of in the context of recognizing that that there's efficiencies in that.  And I'm just wondering how many years out you think that might be.

LISTNUM 1 \l 1431              MR. BEDFORD:  Well, this station, first of all, is a dream.  That's a ‑‑

LISTNUM 1 \l 1432              THE CHAIRPERSON:  Dreams do come true, so if it wa‑, ‑‑

LISTNUM 1 \l 1433              MR. BEDFORD:  Dreams do come ‑‑

LISTNUM 1 \l 1434              THE CHAIRPERSON:  If it came true ‑‑

LISTNUM 1 \l 1435              MR. BEDFORD:  Dreams do come true.

LISTNUM 1 \l 1436              THE CHAIRPERSON:  ‑‑ what would be your next dream, then?

‑‑‑ Laughter / Rires

LISTNUM 1 \l 1437              MR. BEDFORD:  And I ‑‑ the fact that we would even anticipate another station, yes.  We wanted you to realize that we are, even though we keep talking about being conservative, we're also aggressive.  I know that they're at odds with one another, those two terms, but we are conservative, but we're also aggressive, and if at any one point of time the market could sustain another station, we would certainly investigate, and maybe ‑‑

LISTNUM 1 \l 1438              THE CHAIRPERSON:  So when ‑‑

LISTNUM 1 \l 1439              MR. BEDFORD:  ‑‑ pursue that.

LISTNUM 1 \l 1440              THE CHAIRPERSON:  When you made this statement, you didn't have a particular timeframe in mind.  Just if the time was right?

LISTNUM 1 \l 1441              MR. MARTIN:  I think within ten years.

LISTNUM 1 \l 1442              MR. BEDFORD:  I would ‑‑ yeah, I was looking at seven years, and Barry says within ten years.

LISTNUM 1 \l 1443              MR. MARTIN:  Seven to ten years.

LISTNUM 1 \l 1444              MR. BEDFORD:  Seven to ten years.

LISTNUM 1 \l 1445              THE CHAIRPERSON:  Okay.  How many new entrants do you think the Sydney market could sustain, at this time?

LISTNUM 1 \l 1446              MR. BEDFORD:  Based on the information that we've presented to you, based on our own research ‑‑ this is our consultant, Dr. Paul Patterson, who's sitting with us.  I do apologize.

LISTNUM 1 \l 1447              THE CHAIRPERSON:  Okay.  Thank you.

LISTNUM 1 \l 1448              MR. BEDFORD:  I should have introduced him at the beginning, and I didn't.

LISTNUM 1 \l 1449              Dr. Patterson is a very well‑respected local individual.  He has three PhD's.  He's written a book on the economic development of Cape Breton Island.

LISTNUM 1 \l 1450              MR. MARTIN:  Answer the question.

‑‑‑ Laughter / Rires

LISTNUM 1 \l 1451              MR. BEDFORD:  Yes, I got sidetracked there, because I did for‑, ‑‑

LISTNUM 1 \l 1452              THE CHAIRPERSON:  I was thinking I was relieved you hadn't told me he had three HB, PhD's first, or I'd have been intimidated, so that's a good ‑‑ it came at the end.

LISTNUM 1 \l 1453              MR. BEDFORD:  What was your question, again, please?

‑‑‑ Laughter / Rires

LISTNUM 1 \l 1454              MR. BEDFORD:  Oh, according to the material that we've presented, and also according to our own thought process, and the work that we've done with Dr. Patterson, we believe the market's large enough to sustain one and a half radio sta‑, one and a half more radio stations.

LISTNUM 1 \l 1455              THE CHAIRPERSON:  So at this ‑‑ if we were to ‑‑ two and a half, then?

LISTNUM 1 \l 1456              MR. BEDFORD:  One and a half more ‑‑

LISTNUM 1 \l 1457              THE CHAIRPERSON:  Including your ‑‑

LISTNUM 1 \l 1458              MR. BEDFORD:  ‑‑ new stations.

LISTNUM 1 \l 1459              THE CHAIRPERSON:  ‑‑ your application?

LISTNUM 1 \l 1460              MR. BEDFORD:  Yeah.

LISTNUM 1 \l 1461              THE CHAIRPERSON:  Okay.

LISTNUM 1 \l 1462              MR. BEDFORD:  We ‑‑ it's just borderline for two.

LISTNUM 1 \l 1463              THE CHAIRPERSON:  Okay.

LISTNUM 1 \l 1464              MR. BEDFORD:  And there's certainly more than enough in terms of retail sales per station, and population per station to sustain one, and it's very close to two, so I'd like to use the expression one and a half.

LISTNUM 1 \l 1465              MR. MARTIN:  Could be more.

LISTNUM 1 \l 1466              MR. BEDFORD:  And based upon our positive approach towards the new investment coming into the market, like XSTRATA, the German $400, $400,000,000 development in Louisbourg, the Tar Ponds project, the retailers in the area expanding their properties, and building new facilities, if that all comes to be, obviously, it could sustain more than one station.  It could be two, or even three.  Especially seven to ten years from now, when we start our next one.

LISTNUM 1 \l 1467              UNIDENTIFIED:  (Laughing) Your guys are getting carried away.

LISTNUM 1 \l 1468              THE CHAIRPERSON:  Now just going back and looking at your slide 11, and you talk about the potential new developments, and I'm just sort of ‑‑ it's hard to put a timeframe.  The Tar Ponds is actually going to start this spring?  That's a definite, now, is it?

LISTNUM 1 \l 1469              MR. MARTIN:  May, I believe.

LISTNUM 1 \l 1470              THE CHAIRPERSON:  May?

LISTNUM 1 \l 1471              UNIDENTIFIED:  May, yeah.

LISTNUM 1 \l 1472              THE CHAIRPERSON:  Next month?

LISTNUM 1 \l 1473              MR. MARTIN:  Yes.

LISTNUM 1 \l 1474              THE CHAIRPERSON:  Oh, that's excellent then.

LISTNUM 1 \l 1475              And ‑‑ but some of these other things, like, how long before you'd see jobs from some of these other initiatives?

LISTNUM 1 \l 1476              MR. BEDFORD:  Mr. Patter‑, ‑‑

LISTNUM 1 \l 1477              DR. PATTERSON:  Yes, but let me look at the list so we can ‑‑

LISTNUM 1 \l 1478              THE CHAIRPERSON:  Oh, sure, yeah.  It's slide 11.

LISTNUM 1 \l 1479              DR. PATTERSON:  Already because of the major retailers that are coming into town, there have been not only new jobs, but new ways of bringing jobs in.  Many local people who have experience, say, in home building are being hired by Home Depot under special circumstances where they continue to do their work, but they work evenings, or something, so it, it's sort of a graduated thing.

LISTNUM 1 \l 1480              The Mayflower Mall, as we indicate, will be expanding ‑‑

LISTNUM 1 \l 1481              THE CHAIRPERSON:  Mmm hmm.

LISTNUM 1 \l 1482              DR. PATTERSON:  ‑‑ and I understand from local economists that ‑‑ or people who know the local economy, including some of the retailers we've talked to, they expect retail sales to be increasing in their areas.

LISTNUM 1 \l 1483              The concern that some people have is whether it's going to be local businesses that expand, or whether these big boxes who come in and take their profits out.

LISTNUM 1 \l 1484              THE CHAIRPERSON:  Mmm hmm.

LISTNUM 1 \l 1485              DR. PATTERSON:  And so there's an issue there about how much of the money is going to be staying the community for re‑investment, but if their intentions are realized, why, it will be staying in investment.

LISTNUM 1 \l 1486              The new high‑tech sector is a sort of a hidden but very important sector here, and two or three companies have really started to take off.  The glass, Advance Glazings, Dynagen has become a world player when it comes to alternative energy sources.  There are new companies with regard to wind energy.  We have a small company that's just starting out who I, which has a revolutionary approach to plumbing your house.  You order something, and it come‑, it gets sent in a box, and a plumber sticks it in, in two hours, and you're done.  It's a very ‑‑

LISTNUM 1 \l 1487              THE CHAIRPERSON:  Is the plumbing for your ‑‑

LISTNUM 1 \l 1488              DR. PATTERSON:  ‑‑ modern ‑‑

LISTNUM 1 \l 1489              THE CHAIRPERSON:  ‑‑ whole house?  Is it for ‑‑

LISTNUM 1 \l 1490              DR. PATTERSON:  Pardon me?

LISTNUM 1 \l 1491              THE CHAIRPERSON:  For new construction?

LISTNUM 1 \l 1492              DR. PATTERSON:  Your whole house ‑‑ heating, potable water, everything.  Now you have these ‑‑ what do you call ‑‑ tube‑in‑tube is ‑‑ it's not the traditional copper piping, and it's not the traditional plastic piping, or steel piping.  It's this new tube‑in‑tube which is used very widely in Europe.  And so they, they've got a group of little, of young engineers and inventors who've come up with this beautiful panel that you put ‑‑ in fact, the funny part is people don't want to put it in the basement.  They want to put it in the garage, so they can bring in their neighbours, and show it off, 'cause it, it's brass and chrome and dials.  It looks like a Boeing 707.  They're bec‑, they are about to take off.

LISTNUM 1 \l 1493              It's hard to know what the Tar Ponds spinoffs will be.  Everybody's waiting breathlessly, and the Province and the Feds are basically keeping their cards close to their chest, but it's very clear that there are going to be major improvements in salaries, and people being hired there, and unemployment.

LISTNUM 1 \l 1494              This morning at noon, around noon time, they're going to announce the expansion of a call center right down in Sydney River.  That's been growing, not as rapidly it was initially, but it's still growing.

LISTNUM 1 \l 1495              Finally, the biggy is XSTRATA.  Although we've alluded to the closure of the coal mining industry in Cape Breton, there is a major mine which was prepared before that closure.  It was called the Donkin Mine.  And XSTRATA has been given permission by the Province to mine that, and there have been recent articles pointing out that they've opened it up, that they're getting close to installing the equipment necessary to start producing coal on a very big scale.  I mean, they're ‑‑ we're talking about $100,000,000 or so investment right off the bat, and that should be a major source of new income, new jobs in the area.

LISTNUM 1 \l 1496              THE CHAIRPERSON:  And so what would be the timing, would you expect, of something like that with ‑‑

LISTNUM 1 \l 1497              DR. PATTERSON:  I'm only ‑‑ I mean, that's up to them.  They're not going to ‑‑

LISTNUM 1 \l 1498              THE CHAIRPERSON:  Yes.

LISTNUM 1 \l 1499              DR. PATTERSON:  ‑‑ release that, but the way the sort of momentum is gathering, I would say people are expecting to be hired within the next two years.  They, they'd certainly be hiring people to do some of the pre‑, the electrical and the pre‑development work of the faces, and then, of course, they'll be hiring on a fu‑, several hundred people to do the full production.

LISTNUM 1 \l 1500              THE CHAIRPERSON:  And is coal considered environmentally friendly?  Is, is not ‑‑ is it going to be a environmental issue, or is it an, a ‑‑

LISTNUM 1 \l 1501              DR. PATTERSON:  Oh, it, it's a ‑‑

LISTNUM 1 \l 1502              THE CHAIRPERSON:  ‑‑ environmentally friendly.

LISTNUM 1 \l 1503              DR. PATTERSON:  It's an environmental issue, but there's still an enormous demand for it around the world.  Those are ‑‑ we haven't addressed those issues, but for example ‑‑

LISTNUM 1 \l 1504              THE CHAIRPERSON:  It's sort of out of our purview here, but I was just interested in trying to co‑, understand what that ‑‑

LISTNUM 1 \l 1505              DR. PATTERSON:  Until the closure of the coal and steel industries here, Sydney Harbour was one of the most highly, high‑traffic ports in the world, because we had so much coal going out, and so much ore coming in.  The two studies that we've talked about going on, about the development of the port, or city, this is ‑‑ there's been a strategic plan in place since at least 1993, and right now it's gaining some interest by Federal Government, and the Provincial Government.

LISTNUM 1 \l 1506              That has another possibility for developing, and that would be all positive.  There's no environmental concerns about that, because it would be basically imported.  We wou‑, we hope to become ‑‑ this is the western abutment for a bridge to the rest of the world.  Sydney has the shortest ‑‑ if you look on a globe, it has the shortest great circle routes from Sydney to Europe, Africa and South America.  Surprisingly South America.  So it's very, very positive, and the Chinese, I un‑, I've read, have insisted that Nova Scotia will be the place where they start bringing in their big super Panamax ships from, that come through the Gibraltar Straits.  So Sydney is hoping to, and has for a long time, been working on developing both the old Sysco waterfront, where they have two massive ‑‑ I think 720 long, feet long wharves.  They have the international pier which can, for, can take in and send out massive amounts of coal, or any other aggregate, and they're also talking about developing the western side, Westmount side of the harbour all the way out to Point Edward with investments by major companies in New Jersey ‑

LISTNUM 1 \l 1507              THE CHAIRPERSON:  Okay.  Thank you, Mis‑, ‑‑

LISTNUM 1 \l 1508              DR. PATTERSON:  ‑‑ in container ports.

LISTNUM 1 \l 1509              THE CHAIRPERSON:  Thank you, Dr. Patterson.  That gives us a better understanding of the potential.  Thank you.

LISTNUM 1 \l 1510              Just one last question that I have for you.  What impact would the licensing of more than one new entrant today have on your business plans?

LISTNUM 1 \l 1511              MR. BEDFORD:  The diversity of formats in the market is certainly going to play a big part in that.  We think that we have picked a combination of ‑‑ our format mix is combined in such a way to have broad appeal, but still be very targeted towards that 25 to 55 age bracket that we're shooting for.

LISTNUM 1 \l 1512              I think with the addition of if there were two stations, it's just improved quality for the community, and with the improved quality, and with the fact that ‑‑ up until this point in time, there's been on FM station, one commercial ‑‑ excuse me ‑‑ FM radio station.  If CBC gets their flip, if one of us get a license ‑‑ hopefully us ‑‑ if even a second station's licensed, all of a sudden the FM band is going to have such a high profile in this community that I do believe that, you know, it'll be a not only benefit to the community, but each of the radio stations, in turn, will enjoy that synergism that's caused by all of these stations being on the air, on the FM band at the same time.

LISTNUM 1 \l 1513              THE CHAIRPERSON:  That's great.  Thank you.

LISTNUM 1 \l 1514              MR. BEDFORD:  And also, the advertising costs for the small advertiser, for the small business operator, there have be‑, there ‑‑ when we were in Membertou, we were selling radio ads for $8 a holler, and it'd be, you'd be amazed the number of small operators.  It was the first time they ever had the opportunity of using radio, and they were extremely impressed with the results.

LISTNUM 1 \l 1515              So if you come on with a commercial radio station ‑‑ and yes, the rates are higher than that, obviously ‑‑ they're probably still going to be able to afford it, and the end result will be that they're going to be able to enjoy the immediacy, and the point of purchase type effects of radio advertising.

LISTNUM 1 \l 1516              THE CHAIRPERSON:  Okay.  Thank you very much.  Commissioner Noel has a question ‑

LISTNUM 1 \l 1517              COMMISSIONER NOEL:  Just the one ‑

LISTNUM 1 \l 1518              THE CHAIRPERSON:  ‑‑ for you.

LISTNUM 1 \l 1519              COMMISSIONER NOEL:  ‑‑ short question.  If we decide, in our wisdom, to license two new applicants in the Sydney market, and if we decide that you are one of the lucky winners, which other applicant will be less damagable to your business plan?

LISTNUM 1 \l 1520              UNIDENTIFIED:  (Inaudible).

LISTNUM 1 \l 1521              COMMISSIONER NOEL:  Choose your partner, he says.

‑‑‑ Laughter / Rires

LISTNUM 1 \l 1522              MR. BEDFORD:  Oh.

LISTNUM 1 \l 1523              MR. MARTIN:  In what sense?

LISTNUM 1 \l 1524              MR. BEDFORD:  Are you referring to market share, or do you mean like the economic impact upon us?

LISTNUM 1 \l 1525              COMMISSIONER NOEL:  Well, I'm ‑‑ the audience.

LISTNUM 1 \l 1526              MR. BEDFORD:  The audience is a listening audience ‑

LISTNUM 1 \l 1527              COMMISSIONER NOEL:  Yeah.

LISTNUM 1 \l 1528              MR. BEDFORD:  ‑‑ versus an advertising audience.

LISTNUM 1 \l 1529              COMMISSIONER NOEL:  Listening audience.  Who would be your worst adversary?

LISTNUM 1 \l 1530              MR. BEDFORD:  The worst adversary?

LISTNUM 1 \l 1531              COMMISSIONER NOEL:  Or who would be the ‑‑

LISTNUM 1 \l 1532              MR. BEDFORD:  The one that would be ‑‑

LISTNUM 1 \l 1533              COMMISSIONER NOEL:  ‑‑ less dangerous adversary?

LISTNUM 1 \l 1534              MR. BEDFORD:  The less dangerous adversary?

LISTNUM 1 \l 1535              COMMISSIONER NOEL:  Well, one ‑‑ you know, give me an answer.  If ‑‑ I'm just asking you to ‑‑

‑‑‑ Laughter / Rires

LISTNUM 1 \l 1536              COMMISSIONER NOEL:  To get your feet wet here.  Would it be Newcap?  Would it be HFX?  Would it be Newman?

LISTNUM 1 \l 1537              MR. BEDFORD:  I could get, give answers to all three of those, but I think I'll zero in on one, in particular ‑‑ the Evanov application, which is very, very youth‑oriented.  Demographically in this marketplace, there's not a lot of youth.

LISTNUM 1 \l 1538              A lot of it has moved away, especially the 20‑‑ to 30‑year olds.  In addition to that, there have been surveys included in these four applications which prove that the younger people in this market happen to like rock, classic rock, as well as current rock, so as a result, I think that if we had that ‑‑ if we were one of the recipients of a license, we think that we would be able to attract not only our target audience, but also a younger audience, as well, because Cape Breton youth do like rock and classic rock music.

LISTNUM 1 \l 1539              So, therefore, the least damaging would probably be the Evanov one.

LISTNUM 1 \l 1540              The second least damaging would probably be the Andy Newman application, 'cause he's going adult contemporary, and probably the most damaging is the fact that we'd be head‑to‑head with Newcap on a classic rock and/or classic rock, plus mainstream, or classic rock, plus current rock type approach.

LISTNUM 1 \l 1541              COMMISSIONER NOEL:  And do you think that the local aspect of your applications please in favour of the pertinence of your ‑‑ as opposed to Newcap's, which is based ‑‑

LISTNUM 1 \l 1542              MR. BEDFORD:  A large corporation.

LISTNUM 1 \l 1543              COMMISSIONER NOEL:  It's not already, is not already based in Cape Breton, or ‑‑

LISTNUM 1 \l 1544              MR. BEDFORD:  Oh, no, they're a large corporation.

LISTNUM 1 \l 1545              COMMISSIONER NOEL:  Nor Evanov who was in, on the west side of Toronto.

LISTNUM 1 \l 1546              MR. BEDFORD:  Yeah.  No, I mean, they're both ‑‑ all three applications are well done.  All three applicants are good broadcasters, and they want to expand, and I can't blame them for that.

LISTNUM 1 \l 1547              We live in this market.  We've been listening for years to, and years to what people really want in their radio.  They would like to return to the days of radio with good local news coverage, and in addition to that, some enthusiasm, some energy, some fun, some good community involvement, and so on, and so forth, and that's what we want to deliver.

LISTNUM 1 \l 1548              COMMISSIONER NOEL:  Thank you.  I have no other questions.

LISTNUM 1 \l 1549              MR. BEDFORD:  Thank you very much.

LISTNUM 1 \l 1550              THE CHAIRPERSON:  You have any more?

LISTNUM 1 \l 1551              UNIDENTIFIED:  No.

LISTNUM 1 \l 1552              THE CHAIRPERSON:  No?  Well, thank you, Mr. Bedford and Mr. Martin, Mr. Morrison and Dr. Patterson.  We appreciated your comments.  Thank you very much.

LISTNUM 1 \l 1553              MR. MARTIN:  Thank you for the opportunity.

LISTNUM 1 \l 1554              MR. BEDFORD:  Thank you very much for the opportunity.

LISTNUM 1 \l 1555              THE CHAIRPERSON:  And we're going to ‑‑

LISTNUM 1 \l 1556              MS. FISHER:  Sorry, Madame Chair, I have a question.

LISTNUM 1 \l 1557              THE CHAIRPERSON:  Oh, certainly.  Sorry.

LISTNUM 1 \l 1558              MS. FISHER:  Sorry.

LISTNUM 1 \l 1559              THE CHAIRPERSON:  Sorry.

LISTNUM 1 \l 1560              MS. FISHER:  In reply to Madame Chair's question on the Canadian content level of your blues show, you have stated that you would adhere to the higher level of Canadian content of 20 percent which will be required by the regulations by condition of license, until such time as the regulations are amended.

LISTNUM 1 \l 1561              You have stated that, in fact, you plan to offer 35 percent Canadian content in this show.  Please comment on whether you adhere to this 35 percent Canadian content in sub‑category 34 ‑‑  that's the jazz and blues ‑‑ as an exception to the minimum regulatory requirement by condition of license.

LISTNUM 1 \l 1562              MR. BEDFORD:  We would willingly accept as condition of license a minimum of 35 percent in that category, and then during that blues show.

LISTNUM 1 \l 1563              MS. FISHER:  Thank you.  Thank you, Madame Chair.

LISTNUM 1 \l 1564              THE CHAIRPERSON:  Thank you.  Madame Secretary?

LISTNUM 1 \l 1565              THE SECRETARY:  Yes.  Thank you, Madame Chair.  Perhaps this may be a time for our morning break.

LISTNUM 1 \l 1566              THE CHAIRPERSON:  We'll adjourn, then, until 11:15.  Is that ‑‑

LISTNUM 1 \l 1567              MS. FISHER:  That's great.

LISTNUM 1 \l 1568              THE CHAIRPERSON:  Thank you.

LISTNUM 1 \l 1569              MR. BEDFORD:  Thank you very, very much.

LISTNUM 1 \l 1570              MR. MARTIN:  Thank you.

LISTNUM 1 \l 1571              MR. MORRISON:  Thank you.

‑‑‑ Upon Recessing at 1052 / Suspension à 1052

‑‑‑ Upon Resuming at 1129 / Reprise à 1129

LISTNUM 1 \l 1572              THE CHAIRPERSON:  Okay.  Sorry for the delay.  Madame Secretary?

LISTNUM 1 \l 1573              THE SECRETARY:  Thank you, Madame Chair.

LISTNUM 1 \l 1574              We will now proceed with item two on the agenda which is the application by Newcap Inc. for a license to operate an English language FM commercial radio programming undertaking in Sydney.

LISTNUM 1 \l 1575              The new station would operate on frequency 101.9 megahertz, Channel 270C, with an average effective radiated power of 57,000 watts, maximum effective radiated power of 100,000 watts, antenna height of 122.7 meters.

LISTNUM 1 \l 1576              Appearing for the applicant is Mr. Rob Steele who will introduce his colleagues.

LISTNUM 1 \l 1577              You will then have 20 minutes to make your presentation.

PRESENTATION / PRÉSENTATION

LISTNUM 1 \l 1578              MR. STEELE:  Thank you.

LISTNUM 1 \l 1579              Good morning, Madame Chair, Members of the Commission, and Commission staff.

LISTNUM 1 \l 1580              I'm Rob Steele, President and the Chief Executive Officer of Newcap Radio, and before we begin our presentation, I'd like to introduce our team.

LISTNUM 1 \l 1581              Seated in the front row furthest to my left is Glenda Spenrath, Newcap's Director of Operations, and next to Glenda is Brad Muir, the Program Director and Operations Manager for our Fredericton FM rock station, CFRK FM, known as "Fred FM", which was launched in 2005.  Beside Brad is Mark Maheu, Executive Vice‑President and Chief Strategist for Newcap, and seated next to me is Jennifer Evans, the General Manager of our Charlottetown stations, including our recently launched rock station, CKQK FM, known as "K‑Rock 1055".

LISTNUM 1 \l 1582              We're here today to present our application to provide a new radio‑listening choice to the Cape Breton Regional Municipality.  It's a new choice in many ways.

LISTNUM 1 \l 1583              First, by bringing a missing radio‑listening option to the listeners of Cape Breton, and one that is available to most other communities of the size, the rock format.

LISTNUM 1 \l 1584              Secondly, by providing a new and distinct editorial voice to Sydney and area, one with the expertise to provide a credible choice to commercial radio that is clearly missing.

LISTNUM 1 \l 1585              And finally, by providing advertisers in the area with an alternative and an effective way to reach an audience not currently served by radio.

LISTNUM 1 \l 1586              The question that has been raised about this market is how much additional service can it sustain?  The image that most Canadians have of Cape Breton is that it is economically challenged, despite its wonderful music, its culture, and its lifestyle.  With the closing of mines and mills being the only news about the area that most outside Nova Scotia receive, no wonder there is a gross misunderstanding about this market.

LISTNUM 1 \l 1587              But in fact, while Cape Breton is not the economic hotspot that Alberta is, it has lots of economic activity, and it is rapidly re‑establishing its economy, and I'd like to ask Glenda Spenrath to start our presentation by outlining the strong economic case for a new station in this area.

LISTNUM 1 \l 1588              Glenda?

LISTNUM 1 \l 1589              MS. SPENRATH:  Thank you, Rob.  Thank you, Rob, and good morning, Madame Chair, and Members of the Commission.

LISTNUM 1 \l 1590              When we first considered applying for a new FM station here in Cape Breton, we knew that there was an appetite for additional radio choices here.  With only three commercial radio stations to serve Sydney and area now known as the Cape Breton Regional Municipality, with a population of 103,000, the region is definitely under‑radioed.

LISTNUM 1 \l 1591              Cities of similar size have both more stations and more owners, giving both format and editorial diversity beyond what is available here.

LISTNUM 1 \l 1592              The market of Quinte in Ontario made up of Belleville, Trenton and the surrounding area, with a population of 100,000, has five commercial radio stations, with two different owners.

LISTNUM 1 \l 1593              Fredericton, with a population of 90,000, now has four radio stations.  Before the launch of our classic rock station, Fred FM there, the radio market was also a closed shop, with one owner controlling three stations.

LISTNUM 1 \l 1594              Kamloops, B.C., a market of about 82,000, has five local radio stations, with two different ownership groups.

LISTNUM 1 \l 1595              The Cape Breton County Economic Development Authority put into place an economic development strategy in the mid‑1990s to transform the local economy from a resource‑based one to one sustained by services, health and financial, and both the Atlantic Canada Opportunities, and the Government of Nova Scotia have made diversification of the local economy a priority.  The results have been encouraging.

LISTNUM 1 \l 1596              For example, the employment rate has increased substantially over the past ten years.  The value of building permits in Cape Breton increased from 50.5 million in 2003 to $91.6 million in 2004, and again, to 98.2 million in 2005.  Cape Breton Regional Municipality's totals incomes are projected to increase by 12 percent over the next five years.

LISTNUM 1 \l 1597              The Radio Bureau of Canada indicates that on average in Canada, the total advertising spin is three percent of retail sales, and that radio gets about 12 percent of this.  Using this analysis, we believe that the projected retail sales for 2007 for the Regional Municipality of 1.14 billion should result in an advertising revenue pie of about 34,000,000, with radio getting about 4,000,000.  And given that the Sydney area is the shopping center for the whole island, we believe that the potential is a bit higher than this.

LISTNUM 1 \l 1598              Now to tell you a bit about our research, and the format we propose, here is Brad Muir.

LISTNUM 1 \l 1599              MR. MUIR:  Thanks, Glenda, and good morning.

LISTNUM 1 \l 1600              At Newcap, we operate successful rock radio stations in many cities around Atlantic Canada, and the Maritimes ‑‑ Charlottetown, Moncton, Fredericton and St. John's.  Our involvement in the local music scene, and the East Coast Music Awards tell us there is a strong interest in rock throughout the region.

LISTNUM 1 \l 1601              Up to now, this interest in rock is not reflected in Sydney radio, with a country station, an AC, and a classic hit station.

LISTNUM 1 \l 1602              To test what kind of radio station we should propose, we asked Kroeger Media Research to examine the market for us.  Kroeger conducted 250 detailed interviews with Sydney and area residents, testing what they listen to now, their satisfaction with their radio choices, their preferred music styles, their perception of the availability of music styles in Sydney radio, as well as a number of other questions about features on what they would like to hear on a new radio station.

LISTNUM 1 \l 1603              Kroeger tested six formats with the respondents to determine the degree of interest in the format, which he translated into "P1 listeners", and their perception as to whether the format was available, which he calls "P1 unfilled".  What emerged was very interesting to us, and confirmed our perception of this market.

LISTNUM 1 \l 1604              Mainstream rock had a medium to high level of interest, but was considered to be almost not available in the market.  Classic rock had a very high level of interest, and was perceived to be not available to any extent.  Classic hits also had a fair amount of interest, and was not perceived as being available.

LISTNUM 1 \l 1605              Knowing that CHER‑AM was planning to go for a classic hits format, when converted to the FM band, Kroeger recommended that we provide a classic rock format, with a strong sampling of mainstream rock.  He also suggested that the station provide a significant amount of local news, and local information.

LISTNUM 1 \l 1606              We took Kroeger's suggestions, and started to build our concept for a rock station based in Sydney, which we call Rock 1019.  The format is one that we know very well, since this is the kind of format we offer in a number of markets across the region, and across the country, but just as Fred FM in Fredericton has its own flavour, and K‑Rock 1055 in Charlottetown has a very distinct approach, Rock 1019 will have a Cape Breton personality of its own; one distinct from the other stations in the market, and from other rock stations.

LISTNUM 1 \l 1607              The station will marry the greats of classic rock from the past 40 years from artists like The Rolling Stones, Neil Young, Sloan, Bruce Springsteen, and The Who, with compatible current mainstream rock artists like U‑2, Sam Roberts, Tom Petty, Nickelback, the Foo Fighters, and The Trews.

LISTNUM 1 \l 1608              And our own breaking artists will have a special place on our airwaves.  At Q104 in Halifax, C103 in Moncton, and K‑Rock 1055 in Charlottetown, we have had amazing success with our Atlantic music shows ‑‑ "Route 104", "Action Atlantic" and "Sonic Source", respectively.  Meanwhile, in St. John's, the long‑running "Home Brew" program has nurtured new careers and preserved the heritage of Newfoundland and Labrador music.

LISTNUM 1 \l 1609              The dedication that Atlantic Canadians have to home‑grown talent is evident in the popularity of these programs.  It is also witnessed by the success of The East Coast Music Awards, of which Newcap is a major supporter and sponsor.

LISTNUM 1 \l 1610              There is a strong history of rock music in Atlantic Canada, from the 1970s blues rockers like Matt Minglewood, Sam Moon and Dutch Mason, to independent rockers like Sloan, through to today's stars, like Matt Mayes and El Torpedo.  Dutch Mason's son, Garrett, and the Joel Plaskett Emergency, and there are many bands bubbling under, ready for that next step.

LISTNUM 1 \l 1611              For example, Cape Breton's Slow Coaster will be a future regular on Canadian rock radio, as will bands like Faded Blue, Air Traffic Control and the Contact from Nova Scotia, Age of Daze from New Brunswick, and Brothers in Stereo from Newfoundland.

LISTNUM 1 \l 1612              We intend to reflect the history, and present of Atlantic rock with "Rocking the Cape", a nightly feature that showcases what's going on in our region.  While the emphasis will be on new and emerging Cape Breton artists, we won't forget the heritage artists from our area, as well as emerging rock artists from around Atlantic Canada.  This will not be a re‑broadcast of other radio stations' programs, but it will benefit from our on‑the‑ground presence in all four provinces.

LISTNUM 1 \l 1613              Exposure of new artists in the major markets around the region will give their careers a real boost.

LISTNUM 1 \l 1614              At Newcap, we know it takes more than music to make a great radio station.  As you may have heard us say at other hearings, we believe that in an environment with an expanding number of music options, whether it be satellite radio, cell downloads or iPods, radio's major advantage is to be live, and to be local, providing information that these other sources can't.

LISTNUM 1 \l 1615              Cape Breton deserves live, local Cape Breton newscasts, focusing on Cape Breton issues, and events, all day, every day.  This is not available in this market, at present.

LISTNUM 1 \l 1616              The Kroeger research told us that there is a taste for a new source of news and information in the market.  80 percent of respondents said that they would listen to a radio station that provides more local news and information.  We intend to be an additional editorial voice in the community, providing an alternative voice to the three MBS stations, and the CBC.

LISTNUM 1 \l 1617              Rock 1019 will bring a new journalistic voice to Sydney and Cape Breton.  Three journalists will provide 79 newscasts per week, with major newscasts on the hour from 6:00 a.m. to 6:00 p.m. seven days a week, with shorter newscasts on the half hour in‑morning drive.

LISTNUM 1 \l 1618              We will also provide a complete service of weather, traffic and marine reports, community, emergency announcements and PSA's.  This essential information will be provided in a timely fashion when it is needed, and updated frequently.

LISTNUM 1 \l 1619              Now one of the best times for rock radio is in the evening, so we've developed a new concept.  It's called the late night breakfast show.  This will bring a new and exciting kind of radio to Sydney listeners, whether they are shiftworkers with a schedule out of sync with the regular morning shows, rock fans that just don't want to watch T.V., or folks who are running errands, shopping or on the job in the evening.  This program will provide news and information in a more informal, less structured format.

LISTNUM 1 \l 1620              We will have details on the Screaming Eagles junior hockey scores of that evening, and information about clubs and other entertainment venues around the region, and of course, all the breaking news, weather and other surveillance information.

LISTNUM 1 \l 1621              While Sydney may be the largest center in Cape Breton, there's lots of interest about what's going on around the island, and to tap into this interest, we intended to trek around Cape Breton on Friday afternoons with a show called "Hit the Road, Jack", which will originate from different towns and villages.  While it will play lots of great rock, it will also invite local people in to talk about what's going on in their community.

LISTNUM 1 \l 1622              The show will give us a particular opportunity to reflect the different cultures around Cape Breton, whether the Acadians in Cheticamp, The First Nations community at Eskasoni, or the Gaelic speakers at The College of Cape Breton.  In all, we will provide five hours and 45 minutes of newscasts each week, and a total of 12 hours of Spoken Word.

LISTNUM 1 \l 1623              And now to speak to you about the launch of Rock 1019, here's Jennifer Evans.

LISTNUM 1 \l 1624              MS. EVANS:  Thank you, Brad, and good morning.

LISTNUM 1 \l 1625              At Newcap, we have had a lot of experience in the Maritimes at launching new rock stations into markets where we are the newcomers.

LISTNUM 1 \l 1626              When the Commission granted the conversation of CHTN in Charlottetown to the FM band, and a new licence for K‑Rock, the market was definitely dominated by MBS.  They had their AM/FM combo, and an FM station coming in from Summerside.  Similarly, in Fredericton, we launched Fred FM into a market with a three‑station grouping.

LISTNUM 1 \l 1627              In both cases, we were immediately successful.  Fred FM debuted with a 17 share of tuning, and was number one in 12 plus tuning, and number on in its target demographic of man 18 to 49. In Charlottetown, K‑Rock 1055 debuted as the number one station in the market according to the BBM survey.

LISTNUM 1 \l 1628              In both cases, we have grown radio's share of advertising revenue by attracting new advertisers, and bringing back former radio users to our medium.  Why the success?  Well, clearly our research was accurate.  There was a pent‑up demand for classic rock‑base music, and despite the dominance of the existing three‑station operations, the incumbents could not be all things to all people, and had focused on a limited number of broad formats.  Men and women who like rock just felt they were settling for the radio stations they listened to, or were, in fact, ignoring radio altogether.

LISTNUM 1 \l 1629              We have to take some credit for launching exciting and fun radio stations attuned to the markets which we serve.  They are unique and individual stations, customized to the needs of the market, and they have benefitted from Newcap's programming expertise.  We have learned both from our successes, and from the setbacks we have had elsewhere, to make sure we do things right.

LISTNUM 1 \l 1630              In Charlottetown, we provide news on the hour, all day, all week, and a renewed focus on community service that our market was missing.  One great example was just last week on Easter Sunday, when a spring blizzard hit Prince Edward Island, shutting down all Easter celebrations.  We were the only ones live in studio to bring that information to listeners across P.E.I.

LISTNUM 1 \l 1631              And, finally, advertisers are pleased to have a new choice to place their commercials.  We do not battle with the existing players by cutting price.  In the long run, that would be bad for radio, and bad for us.  We do provide value‑added advertising, targeting demographic groups that have not been reached efficiently in the past, and we price accordingly.

LISTNUM 1 \l 1632              We intend to bring this same approach to Sydney.  Good research, good people, community involvement, pro‑active and targeting sales opportunities.

LISTNUM 1 \l 1633              And now to talk about Canadian Content Development is Mark Maheu.

LISTNUM 1 \l 1634              MR. MAHEU:  Thanks, Jennifer.

LISTNUM 1 \l 1635              As we usually do, we have proposed a strong package of Canadian Content Development initiatives ‑‑ $406,000 over the first seven years of operations.

LISTNUM 1 \l 1636              Our approach is to fund national initiatives with over $80,000 going to FACTOR, and $70,000 to Canadian Music Week.  But we have a local focus, as well.  We will provide the Cape Breton‑Victoria Regional School Board with $210,000 to help budding musicians further their studies and their careers.

LISTNUM 1 \l 1637              We had originally proposed just under $45,000 in our application to Radio Starmaker fund, but after a discussion with Vice‑Chair Arpin at a recent hearing to discuss applications for Sudbury, we decided that we should probably revise our approach, and we've done so.  We intend to divert this money to the Membertou First Nations Elementary School for the purchase of musical instruments, and for music lessons for promising young students.

LISTNUM 1 \l 1638              Madame Chair, Members of the Commission, we believe that we have an exciting proposition for the people of the Cape Breton Regional Municipality.  For the first time in many years, they will have real diversity in music, in editorial voice, and in advertising options.

LISTNUM 1 \l 1639              With only three radio stations in this market, it is impossible to cover all the major programming groups without significant compromises.  Clearly, the missing element is rock, rock music, and we propose to fill that void with a combination of the best classic rock, and today's rock successes.  Our research is clear ‑‑ that this is, by far, the largest unserved programming niche in the market.

LISTNUM 1 \l 1640              We also propose to provide a complete radio service ‑‑ newscasts on the hour until 6:00 p.m. seven days a week, with a three‑person newsroom, and this will be supplemented by a more informal approach to news in the evenings on our late‑night breakfast program.  A quality program service with $4.6 million in programming expenses over the first seven years.  That's more than $2,000,000 higher than the next closest applicant.

LISTNUM 1 \l 1641              We will also reach out to the larger Cape Breton community with a travelling Friday afternoon show to bring attention to smaller communities, and create some buzz for Cape Breton music and events.

LISTNUM 1 \l 1642              And we will contribute significantly to the development of Canadian content, with $406,000 in spending over the first seven years of our license.  That's over $100,000 more than the next closest applicant.

LISTNUM 1 \l 1643              Most importantly, perhaps, we bring the expertise and resources to effectively compete with a well‑established radio monopoly.  We have launched new radio stations into single‑owner dominated markets before, most recently in Fredericton and Charlottetown, and have been successful in growing listening and radio's share of advertising.

LISTNUM 1 \l 1644              For these reasons, we ask you to grant us a license here in Sydney.

LISTNUM 1 \l 1645              We thank you, and we look forward to answering any questions you may have about our application.

LISTNUM 1 \l 1646              THE CHAIRPERSON:  Thank you.  Commissioner Williams will be doing the questioning.

LISTNUM 1 \l 1647              MR. MAHEU:  Great.

LISTNUM 1 \l 1648              COMMISSIONER WILLIAMS:  Good morning, Mr. Steele, and the panelists from Newcap.

LISTNUM 1 \l 1649              It's a pretty nice place here, Cape Breton.  I haven't been out here forever, and I'm really impressed by how friendly and how pleasant this community is right from my taxi ride into town to the various people that helped me with my breakfast, and getting here, and it's a nice part of Canada.

LISTNUM 1 \l 1650              I'm going to begin my area in, my area of questioning in the programming section, and then, and work our way through.

LISTNUM 1 \l 1651              I guess I'd like to determine how much of your programming would be live, or if some will be automated, or voice‑tracked, and if some is automated and voice‑tracked, how much, and during what time of the day and week.

LISTNUM 1 \l 1652              MR. MAHEU:  Commissioner Williams, one of the big key benefits we believe Newcap is bringing forward to the, our application for a new radio station here in Sydney is the fact that our proposal for a new radio station here would have the radio station be live and local on a 24/7, 365 basis. This is part of what Newcap has been doing in a number of markets across Canada.

LISTNUM 1 \l 1653              We mentioned earlier in our application about the other listening choices that many people who listen to radio have ‑‑ pre‑recorded music on iPods, MP3's, satellite radio, and so on.

LISTNUM 1 \l 1654              And corporately and collectively, we've taken a look at these trends, and we are in the radio business in a way big way in a lot of small and medium‑sized markets like Sydney, and we've determined through the research we've done, the anecdotal evidence we've seen, that one of the differentiating factors for us is the company has to be more than just music, and we feel that live and local service is a way that we can differentiate ourselves in many different communities, stand out from the pack, and really ingratiate ourselves with radio listeners.

LISTNUM 1 \l 1655              We're in a fight with a lot of other mediums that are unregulated, so we have to do what we can with our transmitters and the people power that we have in all of our local markets to build strong, sustainable franchises, and we've come to the conclusion that it will cost a little more money, and it's going to be more work, but our focus as a company, as it would be here in Sydney, on a local radio station basis, is to have somebody in this radio station 24/7, 365.

LISTNUM 1 \l 1656              It doesn't cost that much more to do it right, so what we're proposing for our radio station is that no voice tracking is going to be on the radio station.  We're going to have live announcers on the radio station 24/7, 365, and we've budgeted for that.

LISTNUM 1 \l 1657              COMMISSIONER WILLIAMS:  Thank you, Mr. Maheu.

LISTNUM 1 \l 1658              You've stated that you have five hours and 45 minutes of newscasts, however, there seems to be some additional news presented to seven to ten hours on your very, very late breakfast show.

LISTNUM 1 \l 1659              I guess I'd like to confirm the total hours of news over the broadcast week, and determine whether the 7:00 to 10:00 p.m. period is a Monday to Friday thing, or a seven day a week event, and perhaps give us some ideas on the other content of this very, very late breakfast show.

LISTNUM 1 \l 1660              MR. MAHEU:  Sure.  Just to clarify, so there's no misunderstanding, we've provided a quick reference sheet that breaks down the amount of news and Spoken Word.

LISTNUM 1 \l 1661              But to answer your question specifically, and then I'm going to ask Brad Muir to talk about the late night breakfast show to give you a sense of what that'll be about, but in terms of the news commitment that we're making, as a guaranteed minimum, we're looking at five hours and 45 minutes a week of what we would call traditional, regularly‑scheduled newscasts, the kind of newscasts that you would hear presented at the top of the hour, or in some cases, at the bottom of the hour.  So five hours and 45 minutes a week.  Some of the ‑‑

LISTNUM 1 \l 1662              COMMISSIONER WILLIAMS:  Excuse me, excuse me, Mr. Maheu, for a sec.  Would that five hours and 45 minutes be pure news, excluding say sports and other surveillance material?

LISTNUM 1 \l 1663              MR. MAHEU:  The ‑‑ how we break it down, Commissioner Williams, is in our five‑minute newscasts Monday through Friday, of that five minutes, four minutes would be news, 30 seconds would be devoted to sports, and 30 seconds would be devoted to weather, but we count sports news and weather news as news, but to break it out more specifically, four minutes, 30 and 30, for a total of five minutes in those newscasts.

LISTNUM 1 \l 1664              And our focus here, as it is in all the other local markets that we operate in, is that we want to have a real focus on local news and information.  So, you know, our preference and our goal is to always lead with local news, or localize the lead, if possible.  So if there's something happening around the world, obviously if there are events happening in Afghanistan, or so on, they affect everybody, but we, what we would try to do, as we do in our other local markets, is try to find a perspective on that story of how it impacts people in the local marketplace.  So our credo is kind of lead local, or localize the lead.

LISTNUM 1 \l 1665              Our late night breakfast show, we talk about it in terms of news.  It's ‑‑ there's a lot of Spoken Word, a lot more than normal, and I'll let Brad elaborate a little bit.  When we talk about news in that 7:00 'til 10:00 p.m. hour, it's more informal and less structured, and you won't hear it as a top hour newscast, per se.  And I'll let Brad talk a little bit about the kinds of things you can expect to hear between 7:00 and 10:00 at night.

LISTNUM 1 \l 1666              MR. MUIR:  Yeah, thanks, Mark.

LISTNUM 1 \l 1667              This late night breakfast show is a concept that we're really excited about, because in ‑‑ we've seen over the last number of years that, traditionally, the 6:00 to 10:00 a.m. morning time, so that gets all the entertainment, gets all the goodies, gets all the prizes, gets all the great guests.  We're trying to reverse that trend, because we know that there's a lot of people who still listen to radio at night, and they deserve to be entertained, and to have all of the offerings that the regular, traditional morning shows offer, as well.

LISTNUM 1 \l 1668              So in that, you know, the music might be slightly different, because people listen to the radio differently in the morning than they do at night.  They're a little more open to maybe rocking out a little more at night than they are at 6:10 with their coffee, and getting the kids ready for school.  So the concept, musically, might be slightly different in the evening.  Maybe a little harder, but the content and our attitude about involving the listeners, having fun, and getting out, seeing people, inviting people into the radio station, and taking the radio station out to people.

LISTNUM 1 \l 1669              So it's, it speaks more to the content, and the energy, and the vibe, and the things that we'll be talking about.

LISTNUM 1 \l 1670              MR. MAHEU:  I think if I could just supplement what Brad said, as well, that in terms of, you know, Spoken Word in that evening show, I think we, we're going to spend a little more time talking about area bands, concerts, movies, movie reviews, DVD releases, and things like that.  Entertainment news and such, that kind of falls into that Spoken Word/news category.  It's definitely Spoken Word, but we don't consider it news like we would a top hour newscast, where we're reporting on current events, and things that are happening around the world.

LISTNUM 1 \l 1671              But there is, there's definitely much more Spoken Word being proposed by Newcap for this evening show than there would be on a normal rock radio station that tends to be, at that hour of the day, very music‑intensive, and more music, and less talk.  But we think there's an opportunity there for us to be a little bit different, and build a brand by doing something a little bit different at night.

LISTNUM 1 \l 1672              COMMISSIONER WILLIAMS:  Speaking of your news, and you've referred to equivalent news people, three full‑time equivalent news persons.  Can ‑‑ what is ‑‑ what are the roles and responsibilities of each of these persons, and in light of the significant amount of news to be broadcast, would this news staff be sufficient to produce not only the local level that you speak of, but to ensure high quality newscasts?

LISTNUM 1 \l 1673              MR. MAHEU:  Yeah, we're very confident that we can deliver high quality local news content, and meet or exceed the commitments that we've put forward with the three full‑time equivalent news people.  Is, it's a practice that we employ in a number of radio stations.

LISTNUM 1 \l 1674              I'm going to ask Jennifer, in just a moment, to maybe give you a, kind of an equivalent example of what we've done with K‑Rock 1055 in Charlottetown ‑‑ a market of similar size, and how many news people we have, but our approach in Sydney, with the three full‑time equivalents, would likely be two full‑time, plus two part‑time news people.

LISTNUM 1 \l 1675              And each person is going to be multi‑tasking.  Who's ever doing morning news will also, will likely be the news director of the radio station.  The afternoon news person will supplement their on‑air news run with some reporting, and we'll employ part‑time reporters, and part‑time news people that work for us in the late afternoon, and on the weekends.

LISTNUM 1 \l 1676              So, you know, we do this in a number of locations.  It works very well, and with technology the way it is today, we also have a big assist from technology where we can use the internet, we can use webcasting, we can use digital transmission to get phone interviews, or high quality audio interviews with other people, so we can do a lot of stuff from the radio station, and cover events without necessarily being there, at times.  But there are going to be times at City Hall, or whatever, where we're going to need a reporter on site, and we'll do that.

LISTNUM 1 \l 1677              Jennifer, if you can maybe just very briefly give the Commissioners a sense of how we do it at K‑Rock?

LISTNUM 1 \l 1678              MS. EVANS:  Sure.  The operation, the way we work in Charlottetown, we actually have the largest private newsroom in the entire province.  We have a five‑person newsroom, and how that breaks down, that's five full‑time employees dedicated to our newsroom.  How that breaks down, of course, we have a morning show, a news host, we have an afternoon news host, and then we have a full‑time reporter and weekend news announcer.

LISTNUM 1 \l 1679              From time to time, we're also required to use part‑time employees to cover additional events.  We'll be heading into ‑‑ all indicators are we're heading into a spring provincial election which is going to be a time that we will require additional part‑time reporters to help us for those very news‑intensive periods.

LISTNUM 1 \l 1680              The system works very well, and one thing that we have certainly received several compliments on in our new operation is our local news coverage, and people have really responded to the fact there is local news on your local radio station seven days a week, every single hour, on the hour.

LISTNUM 1 \l 1681              So it's been very well received in our market, and looking at the similarities between Charlottetown and Sydney, I can see that a full‑time news complement of three would work very well here, as well.

LISTNUM 1 \l 1682              COMMISSIONER WILLIAMS:  Okay.  Thank you for that.

LISTNUM 1 \l 1683              Can you talk a bit about your other Spoken Word elements ‑‑ traffic, sports, the community calendar, announcer talk, that sort of thing, and maybe kind of give me an idea of the total amount of spoken‑word programming to be offered during the broadcast week, and then perhaps you could finish up with some examples of the programming topics that might flow from your program entitled "Hit the Road, Jack", where you'll be broadcasting from various parts of the region.

LISTNUM 1 \l 1684              I'm particularly interested in that part, so if we can cover the first two areas, and then spend maybe a bit more time on the "Hit the Road, Jack" portion.

LISTNUM 1 \l 1685              MR. MAHEU:  Sure, and I'll give you a sense of our total Spoken Word and news commitment, and then maybe I'll ask Brad to elaborate a little bit on some of our special programming features, like "Hit the Road, Jack" which we're quite excited about.

LISTNUM 1 \l 1686              When you add up our commitment to news, regularly‑scheduled newscasts, and then take into account the additional Spoken Word, or enriched Spoken Word that we're proposing on the radio station, it adds up to just over 12 hours a week.  We're committing to 12 hours and ten minutes a week of Spoken Word, as defined by the broadcast week, of which, of that 12 hours and ten minutes, five hours and 45 minutes would be what we would call regularly scheduled traditional newscasts that take place at the top, or the bottom of the hour.  The rest of it is supplementary enriched Spoken Word, announcer talk, surveillance information, et cetera.

LISTNUM 1 \l 1687              Some of that Spoken Word in the 12 hours and ten minutes will be taken up by things like the "Hit the Road, Jack" program, which is going to include music, but extended amounts of Spoken Word, and Brad, maybe you could elaborate a little bit on what we're trying to accomplish there, and what it might sound like on the radio.

LISTNUM 1 \l 1688              MR. MUIR:  Sure.  "Hit the Road, Jack", to really sum it up, it's about taking the radio station out to the people.  For a long time, radio stations have been kind of hidden away in a closet, and nobody sees the people, nobody sees the radio station, and they don't get a chance to interact with people.

LISTNUM 1 \l 1689              So part of the goal is to get out there and to meet the community, find out really what is going on.  So within "Hit the Road, Jack", the plan and our goal is to hit as many festivals as we possibly can, all the events, all the concerts.  It might even be a kitchen party that we show up at.  You're really just kind of not going to know week to week to week where we're going to show up, and that kind of brings a bit of excitement to people, as well.

LISTNUM 1 \l 1690              And the goal is to get the people on the radio with us, so that it's not necessarily just about us talking about what we think is important.  We want to hear what they think is important, and that's how we're going to wrap that ‑‑ is to get out, and to meet the people, see the people, and bring them on the air with us.

LISTNUM 1 \l 1691              MR. MAHEU:  And if I may, Commissioner Williams, our approach on this, especially in this area, there are so many smaller communities, and every one of these communities has some great stories to tell, and some real characters that are in these communities.  And our goal with "Hit the Road, Jack" is to get out there, find these stories, and find these people, and get them on the radio, and have those stories be told.

LISTNUM 1 \l 1692              You know, we're confident, in terms of the format that we've selected, that rock is a format that this market will embrace rather quickly.  There is a huge vacuum here for a rock station, so musically, that's not an issue.  People will listen to our radio station because we're playing the kind of music that they want to hear.

LISTNUM 1 \l 1693              But if we want to keep the listening, and keep them engaged, and kind of keep re‑inventing what they're hearing on the radio every day, we think things like "Hit the Road, Jack" are going to be those extra elements that go above and beyond to kind of set us apart, and to help us make a name for ourself in a market where we're going to be the newcomers.

LISTNUM 1 \l 1694              So ‑‑ and inside of that, we think there's going to be some great Spoken Word, and a lot of fun on the radio that's going to be a little bit different.

LISTNUM 1 \l 1695              COMMISSIONER WILLIAMS:  In your opening remarks, and in this section dealing with "Hit the Road, Jack", you said:

"This show will give us a particular opportunity to reflect the different cultures around Cape Breton, whether the Acadians in Cheticamp, First Nations, community Eskasoni, or the Gaelic speakers at the College of Cape Breton".

LISTNUM 1 \l 1696              Can you give me a sense of what a ‑‑ one of ‑‑ a program reflecting one of these three groups you'd be likely ‑‑ how ‑‑ what would your approach be?

LISTNUM 1 \l 1697              MR. MAHEU:  Really what we're going to try to do is we're going to try to be as topical as we possibly can.  In other words, we're going to try to schedule these out rather as far as in advance as we can, and get prepared for them appropriately.

LISTNUM 1 \l 1698              We're going to be looking for opportunities, say, in any one of those areas.  If there is a festival, an anniversary celebration, something specifically interesting about the community that's happening that week, we would pick that community to be featured on "Hit the Road, Jack" on that Friday.  We'd also be pre‑promoting it during the week, as well, so that community enjoys a little bit of the spotlight on the radio station leading up to the Friday.

LISTNUM 1 \l 1699              But we're going to be looking for opportunities to be there with something specific to bring to the listeners in Sydney, on Rock 1019.  So in other words, if it's the 100th anniversary of a community, or they've just received an interesting award; if something innovative and unique is being developed in that community, or has happened; if one of them is a finalist in the Hockeyville Contest, or whatever it happens to be.  If there's a reason for us to be there, that's why we want to be in there in a topical, meaningful way.

LISTNUM 1 \l 1700              And inside of the broadcast, if that's the premise for us being there, inside of that, with interviews with local people on the air as part of the program, we think this is where the unique stories about the community, the people who live there, the things that you didn't know about the community will start to come out on the radio.  And I think there are a lot of communities with a great story to tell that are looking for an opportunity to get the word out about what they're famous for, and why people should come and do business with them, or visit there, or just drop in.

LISTNUM 1 \l 1701              So we think, in a way, we can perform a great community service for some of the small, smaller communities in the outlying area, as well, at the same time, creating great radio programming for people to listen to here in Sydney, and make a difference.

LISTNUM 1 \l 1702              COMMISSIONER WILLIAMS:  Thank you, Mr. Maheu.

LISTNUM 1 \l 1703              I'm going now move into the area of questions relating to the Commission's new CCD contribution regime as outlined in the 2006 policy, and we're certainly encouraged that you took the initiative, based on Vice‑Chair Arpin's remarks to make some changes.

LISTNUM 1 \l 1704              Could you please confirm your understanding that if licensed, your station will have to contribute a basic annual CCD contribution imposed by regulation on the station's total annual revenues in an amount as set out in paragraph 116 of the new radio policy, Public Notice CRTC 2006‑158?

LISTNUM 1 \l 1705              Based on your financial projections, this would represent a basic annual contribution.  Over seven years, this would represent total contributions of $8,490 under the basic annual CCD requirement.

LISTNUM 1 \l 1706              And could you please confirm your understanding that no less than 60 percent of the station's basic annual contribution must be allocated to either FACTOR, or music action, and the remaining amount, if any, may be directed to any eligible CCD initiatives, as per your direct discretion?

LISTNUM 1 \l 1707              MR. MAHEU:  Yes, Commissioner Williams, we can confirm.  We've read 2006‑158.  We understand what it means.  We have provided you with a quick chart here, so for the record, we are prepared to abide by 2006‑158 as it relates to the minimum amount of CCD that the station will be required to do.

LISTNUM 1 \l 1708              And then further confirm, on top of that, that what we're proposing in Sydney ‑‑ the $406,000 in supplementary CCD will be over and above what's required by 2006‑158.

LISTNUM 1 \l 1709              We also confirm, and understand that 60 percent of our minimum contribution required by 2006‑158 will be devoted to FACTOR, and we'd like to reserve the opportunity to look at what the options might be for the other 40 percent of that money, and either direct it to FACTOR, or some other deserving, qualifying endeavour under 2006‑158.

LISTNUM 1 \l 1710              COMMISSIONER WILLIAMS:  Thank you, Mr. Maheu.

LISTNUM 1 \l 1711              As set out in the new Commercial Radio Policy, the new annual basic CCD contribution will be imposed all commercial radio licensees, per regulation.  The Commission could impose a transitionary conditional license reflecting the new basic annual CCD, until such time as the regulation comes in force.

LISTNUM 1 \l 1712              Once the regulation is in place, the COL, of course, would expire.  Do you have any comments regarding the Commission imposing such a described COL?

LISTNUM 1 \l 1713              MR. MAHEU:  We would not have a ‑‑ we've made the commitment to do this, so we would not have a problem with a transitionary condition of license, or a condition of license requiring us to contribute the $406,000 over and above the basic amount required by 2006‑158.  So it would not be a problem for us.

LISTNUM 1 \l 1714              COMMISSIONER WILLIAMS:  As was the case with the previous Canadian talent development policy, an applicant or a licensee may choose to exceed the minimum annual basic CCD contribution.

LISTNUM 1 \l 1715              Under the old CTD policy, it was clear that your funding proposal exceeded the minimum planned requirements.

LISTNUM 1 \l 1716              As part of this application, you are proposing to contribute additional annual funding to CCD that would be over and above the basic required CCD contribution.  Can you confirm for us the total annual amount of this over and above contribution to CCD?

LISTNUM 1 \l 1717              MR. MAHEU:  The total over and above amount that we're committing to during the first seven years of operation totals $406,000, and we consider that to be over and above the basic CCD contribution that we'll be required to do as a condition of license.  So the entire amount toward FACTOR, Canada Music Week, the School Board, Membertou School, will all be over and above during the first seven years, totalling $406,000.

LISTNUM 1 \l 1718              COMMISSIONER WILLIAMS:  Could you also please confirm ‑‑ and I recognize you've given us documents ‑‑ can you please confirm your understanding that under the new policy, not less than 20 percent of this annual over and above CCD contribution must be allocated to fe‑, FACTOR, or music action?

LISTNUM 1 \l 1719              MR. MAHEU:  Yes, we understand that, and we've decided, we've put forth that 20 percent of that $406,000 will be directed to FACTOR of the over and above money.

LISTNUM 1 \l 1720              COMMISSIONER WILLIAMS:  Okay.

LISTNUM 1 \l 1721              THE CHAIRPERSON:  Mr. Maheu, can I just ask a question on this point, before we move on?

LISTNUM 1 \l 1722              On the schedule included with your package this morning, it appears there might be a typo in year one.  You're showing the CCD required in year one as 1,000.  That actually should be $500.  We were just wondering if you could re‑submit the schedule so it would be $500 required, and then the 60 percent, if you wouldn't mind?

LISTNUM 1 \l 1723              MR. MAHEU:  Sure, no problem.

LISTNUM 1 \l 1724              THE CHAIRPERSON:  Thank you.

LISTNUM 1 \l 1725              MR. MAHEU:  We'll do that.  Thank you.

LISTNUM 1 \l 1726              THE CHAIRPERSON:  And I guess we'd need to have that by phase three, if that's not a problem?

LISTNUM 1 \l 1727              MR. MAHEU:  No problem at all.

LISTNUM 1 \l 1728              THE CHAIRPERSON:  Thank you.  Thanks, Ron.  Sorry.

LISTNUM 1 \l 1729              COMMISSIONER WILLIAMS:  Thank you, Madame Chair.

LISTNUM 1 \l 1730              I guess we want to now explore the area on how your proposed classic rock, mainstream rock hybrid would, music format would contribute to musical diversity in the marketplace, and I guess in ‑‑ when you're preparing your response to this, maybe if you could consider, determine how the proposed format will differ from the yet to be launched CHER FM classic hits station, and the rock station being proposed by Barry Maxwell Martin.

LISTNUM 1 \l 1731              And spend a bit of time on the percentage of duplication of station playlists that would have with both CHER FM's and Barry Maxwell's proposed Sydney station.

LISTNUM 1 \l 1732              And just to make this a really long question, you can then wrap up with telling us why you, rather than the others, and maybe put forward your opinion as to, if we were to license more than one, who would be the least harmful to your application, and who would be the most harmful.

LISTNUM 1 \l 1733              So that's a pretty long question, but it's ‑‑ basically, we want to learn about your music format, and how it differs, and where it's the same, and ‑

LISTNUM 1 \l 1734              MR. MAHEU:  Sure, Commissioner Williams.

LISTNUM 1 \l 1735              So if I understand what you're saying, you'd like to get a sense from us how Rock 101.9 will be different than the classic hits being proposed by the FM conversion on CHER, and the proposal we just heard from the Barry Maxwell Martin group, and our opinion on how many stations the market could potentially support, and the station mix or combination that potential works best or worst with our proposal?

LISTNUM 1 \l 1736              COMMISSIONER WILLIAMS:  Right, and ‑

LISTNUM 1 \l 1737              MR. MAHEU:  Okay.

LISTNUM 1 \l 1738              COMMISSIONER WILLIAMS:  ‑‑ I know it was a long question, so ‑‑ and then a bit of a commentary on the, an estimate, say, on the percentage of duplication playlists.

LISTNUM 1 \l 1739              MR. MAHEU:  Sure.  Yeah.  Fantastic.

LISTNUM 1 \l 1740              I'm going to give you a brief overview.  I may ask Brad Muir to also help supplement and explain how we're different, but first of all, to give the Commission and everybody in attendance a very good sense of the kind of music that you're going to hear on the station that we're proposing.

LISTNUM 1 \l 1741              The previous applicant, I listened to their answer about how they perceived what our music was going to be like, and their perception of what we propose to do is not quite accurate, so I'm, I'd like us, if we could, to kind of set the record straight.

LISTNUM 1 \l 1742              Our research conducted in this marketplace was a very complete and comprehensive research study.  We came back with the same answer that the previous applicant did, and that is that there is a huge hole and an opportunity here for a rock radio station.  That is clear, in terms of the percentages.

LISTNUM 1 \l 1743              The recipe, so to speak, of what this rock station will sound like, and what it would be comprised of is different from what we're, they're proposing to what we're proposing.  What we are proposing is really a hybrid maintstream rock station.  50 percent of the music that you would hear on Rock 101.9 would be what we would call traditional classic rock, some of the best rock from the last 35 or 40 years ‑‑ The Rolling Stones, Led Zepplin, The Who, and Springsteen, and April Wine, and people like that from the '70s, '80s and '90s.  50 percent of the music would be current and recurrent music, and we break it down this way ‑‑ 20 percent of the music on the radio station would be what we call current mainstream rock.  These are new releases, songs that have been out for the past six months.  They're new, they're current, and they're today.  The next 30 percent of the music you would hear on the radio station would be what we call recurrent music, or young gold.  This music is anywhere from six months to two years old, so they could be hits that have just fallen off the chart, so to speak.  The rotation on these songs is slower, but in essence, the radio station is 50 percent current or recent, and 50 percent traditional classic rock.

LISTNUM 1 \l 1744              'Cause what we found in the research is that there was a strong call for classic rock in the market, and there was a real strong call for mainstream rock in the market, and we found that the best way to kind of, to serve this rock constituency, and not be too narrow, because there is no rock station in the market, is to do a li‑, a hybrid.  It's very similar to what some stations in other bigger markets do.  Standard with their bare format, is pretty much 50/50; half new rock, half classic rock, and we're doing that same type of approach in Charlottetown, where, on K‑Rock 1055, it's about half current and recent, and the other half is classic rock.  So that is what the radio station will sound like.

LISTNUM 1 \l 1745              It will also give us an opportunity to play some of those emerging Canadian artists, and we've made a commitment to do that, and having a current component on the radio station.

LISTNUM 1 \l 1746              In terms of duplication, this is where it gets a little bit subjective, but I'll try to be as objective as possible here, to give you a sense.

LISTNUM 1 \l 1747              Let's first talk about the potential of duplication between Rock 1019 and a classic hits format.  Classic hits is a format that really blends ‑‑ I should say this ‑‑ classic hits, as a format in general ‑‑ I can't speak to the specifics of what CHER is proposing, but classic hits is a format, tends to blend the very best of top‑40 popular music from the past 30 years, mostly from the '80s and '90s.  A little bit from the '70s, but it tends to blend the best popular top‑40 songs with some of the popular rock songs from the past 30 years.

LISTNUM 1 \l 1748              And there are different flavours of classic hits, depending on the size of market, and where you are in the competitive environment, the recipe, how much gold, how much current, how much '70s, how much rock, or how much pop and top‑40 varies, depending on the market.

LISTNUM 1 \l 1749              So in this particular case, if the classic hits format follows the tried‑and‑true method of being largely popular top‑40, combined with some rock, the duplication between Rock 101 and that radio station would be somewhere probably in the area of 20 percent.  There would be very little or no duplication on 50 percent of the music, the current and recurrent part of our format proposal, and there would be some duplication on the gold portion, and we're estimating that to be around 20 percent.

LISTNUM 1 \l 1750              Now in terms of the duplication for Rock 1019, as we propose it, with the previous applicant's proposal, I listened with interest that they talked about having a playlist that was somewhere in the neighbourhood of 3,500 songs, and that they would have very low turnover, and very low repeat factor.  If that, in fact, is the case, then there is not going to be very much duplication between our proposal and theirs.  There will be some, but it sounds to me like they're going to be playing a lot of songs that we aren't going to be playing.

LISTNUM 1 \l 1751              Our focus with rock, we do an awful lot of research in markets, when we put a radio station on the air, and we do extensive music testing in markets.  And what we found is that by going into the markets, doing music research with potential listeners to the format, we have a very good sense of the kinds of songs, and specifically the songs that they want to hear most, and the songs they don't want to hear, because our experience and our research has shown us very clearly that giving them a great variety of songs they don't like is not perceived as being good variety.  But do, people do want a variety of sounds, and options.

LISTNUM 1 \l 1752              So what we found is that, on most of our radio stations, that we can have a playlist on mainstream rock stations in the neighbourhood of 800 to 1,000 songs, and do very well, and the ratings that we have on these radio stations in these markets is normally very, very good, because we're giving people a steady diet of what they need, and what they want to hear from a radio station.

LISTNUM 1 \l 1753              So if the previous applicant is proposing potentially 3,500 songs, and we would be playing considerably fewer than that, I would say they're playing a lot of songs we won't be playing, so the duplication goes down.  So I would anticipate that the duplication between that proposal and ours is probably in the neighbourhood of 25 to 30 percent, and that would be about where it stops.

LISTNUM 1 \l 1754              We're talking ‑‑ if ‑‑ to pick up the next part of your question, in terms of how many radio stations the Sydney marketplace could potentially support ‑‑ new services.

LISTNUM 1 \l 1755              We've looked at that very carefully.  We based our business plan, the one we submitted with our application, on one radio station being licensed.  As mentioned by the previous applicant, we do the same thing.  We take a rel‑, what we believe is a relatively prudent and conservative approach based on our experience in markets of this size, and we have quite a bit of collective experience in markets of this size, and even smaller, in situations where we've received a license, or put a station on, and we, we've got a kind of a good database, and a good pool of experience to know how quickly ‑‑ yeah ‑‑ how you can ramp up revenues, and where listenership comes from, and where revenue comes from.

LISTNUM 1 \l 1756              So our business plan, although it was based on one, as we got into this, and discovered more about the market, we're really of the opinion that the market could support anywhere from one and a half to two, depending on what it was.  We certainly think there's room for one, and potentially two radio stations in this market.  The proposal from the previous applicant, in terms of total revenues, is rather low, and even that application, that revenue projection, combined with ours, would still leave, we believe, plenty of room for the incoming broadcaster to do quite well in this market.

LISTNUM 1 \l 1757              It was interesting to hear the economist on the panel of the previous group talking about the economic activity in the area.  We share that.  We believe that Cape Breton, and Sydney, in specific, their best days are still very much ahead of them.  They're on the comeback.  Things are getting better here.  There's an optimism here that hasn't been around for quite awhile.  Things are happening, and economic activity is picking up, and all of the data from FP markets or anecdotal conversations with business people tell us that things are getting better.  And we believe that there's definitely room for one, and possibly two to be able to provide additional service to this market, and not have an undue impact on the incoming broadcaster, MBS.

LISTNUM 1 \l 1758              In terms of why our proposal?  I think that was the final part of your question.

LISTNUM 1 \l 1759              COMMISSIONER WILLIAMS:  Well, yours, and who would be least harmful and most harmful, if there were two licensed.

LISTNUM 1 \l 1760              MR. MAHEU:  Yeah.  I guess ‑‑ I don't want this to come off the wrong way, but we are of the opinion that if we were licensed in this marketplace, and the Commission saw fit to license another broadcaster, for a total of two new services, we could certainly live with, and work with any other applicant that you decided to license.

LISTNUM 1 \l 1761              Definitely the HFX and Newman applications are quite different that ours, and target different audiences, and have different business plans.  It might, on the surface, seem kind of strange that we could live with another rock station, but the ‑‑ it's not very different here in terms of the competitive environment as it is in a couple of other markets that we're in.

LISTNUM 1 \l 1762              For instance, when we put a classic rock station in Fredericton a couple years ago, Fred FM, there was a mainstream rock station in the market owned by Estrow(Sp).  And they did a really good job.  There was just room for another radio station in the market.  The research showed that even though there was a rock station in the market, there was still room for another one.  It was a real rock and roll market, and we launched Fred FM into that market.  There's two rock stations there, and they both do very well.

LISTNUM 1 \l 1763              Same thing in Charlottetown.  We proposed a new mainstream rock station, we launched it.  The market was so big on rock that MBS changed the format of their Summerside station from country, the week after we launched, to classic rock, so we went from having a market with no rock station to a market with two rock stations.

LISTNUM 1 \l 1764              And I think Sydney, if it was in the mind and the wisdom of the Commission to license two, could support two new services, even if they were both rock.

LISTNUM 1 \l 1765              Markets have a funny way of sorting themselves out, when new entrants come in, too, because for ‑‑ like the law of physics ‑‑ for every action there's an equal and opposite reaction, and when new stations come on the air, incumbent stations adjust to the market niches, and the needs and wants of listeners, as all good broadcasters do, and the market slowly changes and evolves.

LISTNUM 1 \l 1766              The same thing would happen here, I believe, we believe, with two rock stations being licensed.  There's a large appetite for rock.  The rock being proposed by Newcap and by Barry Maxwell Martin are substantively different.  The Spoken Word and the approach on the radio stations are substantively different, and over time, each one would evolve and find their niche, and I think there's probably room for that.

LISTNUM 1 \l 1767              But to specifically answer your question, we wouldn't have a problem if you were to license two.  If we were one of them, we could live with any other additional license that you licensed.

LISTNUM 1 \l 1768              COMMISSIONER WILLIAMS:  Thank you, Mr. Maheu.

LISTNUM 1 \l 1769              Your application, and your supplementary brief, and your presentation in chief this morning, you've been very, very thorough and clear, so you've clarified many of the questions that I had, so I have one question remaining, though, and Newcap does not appear to have commissioned a third party economic assessment of the Sydney market, so I'm just looking back to your presentation this morning, and you quote the Cape Breton County Economic Development Authority, and we've heard earlier in this hearing of some of the other economic events of a positive nature that are starting to come down the road, or certainly on the horizon.

LISTNUM 1 \l 1770              Can you give us some idea of what other sources of data that you used to arrive that, at your economic conclusions, and given the economic outlook of the market, determine what assumptions Newcap made to arrive at the conclusion that only 30 percent of its projected revenues would be, would come from the incumbent radio services, while 70 percent would come from other sources?

LISTNUM 1 \l 1771              So how did you come to these conclusions?  What type of research did you do?  And I guess, give some substantiation to your conclusions.

LISTNUM 1 \l 1772              MR. STEELE:  Sure.  It's a, it's an excellent question, and a fair question.

LISTNUM 1 \l 1773              What we did in Sydney, and how we came to our economic conclusions about the marketplace was in a very similar vein to what we've done in other situations where we've surveyed, and taken a look at what we believe the opportunity is.  We rely a lot on third‑party sources for information, like FP markets.  We took a look at what ACOA is proposing for the area.  We extensively looked at what the Chamber of Commerce had to say about the marketplace.  We use the internet extensively.  We have some other data from ‑‑ for the region, from TD and RBC on what their projections for this area are, and we kind of put that all together, and get a sense to ourselves of what the economic activity in the future might look like in the marketplace.

LISTNUM 1 \l 1774              To supplement that, we also had people from Newcap spend some time in the marketplace who are familiar with the Sydney market, have relationships with some business people here, and do a little bit of work on the ground in terms of talking to some business people about the economic environment, what they feel their, the future, immediate, and short‑term, and long‑term future is in Sydney, and we kind of put that altogether.

LISTNUM 1 \l 1775              We didn't commission a third‑party professional, economic study.  We rarely do that, but in most cases, when we, when we've done our homework like we've done in Sydney, we're normally pretty accurate, and, in assessing what the potential for the marketplace is.

LISTNUM 1 \l 1776              It was encouraging to hear the previous applicant, the economist talking about some of the exciting things.  The XTRATA news is rather big.  That is, that's something that could have a profound impact on employment and prosperity in the area for a number of years to come, with the re‑introduction of coal mining for high‑efficiency clean coal power generation, which will be, you know, a lot of jobs and a lot of investment in the area.

LISTNUM 1 \l 1777              In terms of taking a look at what we believe the economy's going to do, and where we're, where our revenues will come from, we're proposing that 30 percent of the money that we're going to bill in the first year will come from the incoming broadcaster, and that's just ‑‑ no matter what you do, when you put a new radio service on, some of that money is going to come from the existing broadcaster.

LISTNUM 1 \l 1778              But we do believe that the other 70 percent ‑‑ and in our particular case, that's a little less than $700,000 in the first year ‑‑ is going to come from new advertisers to radio that are not on radio right now, and those who are currently spending, but can expand their budgets.

LISTNUM 1 \l 1779              And I'm going to ask Jennifer to talk, in just a moment, very briefly on a pretty good example of how that happens, but we know from other situations we've been in, as a company, that when we launch a new radio station in the market, an interesting thing happens.  Total radio spending in almost every case goes up, because there are just more people on the street knocking on doors, having conversations with potential advertisers about the benefits of radio.

LISTNUM 1 \l 1780              And radio, as a medium, has a higher profile when new stations come on, so advertising spending always tend to go up beyond the level it would have gone up anyhow.  So, in effect, it kind of grows the market by itself.  So when we increase the market, by having more people talking about radio, and selling radio, it's not that far of stretch to think that we can take a pretty good share of some of that new money, 'cause we're going to be out there knocking on doors.

LISTNUM 1 \l 1781              There are also a number of advertisers that we believe, in this marketplace, will do business with us for the first time, and use radio, who are not using radio, because we have a format and a product on the air that fits their service, and it fits the target group of consumers that they're trying to reach.  Jennifer's got a great example of that we just ran into Charlottetown, and in 45 seconds, if you could give them a sense, that'd be great.

LISTNUM 1 \l 1782              MS. EVANS:  Sure.  I guess one of the things that we're seeing in Charlottetown, with the launch with K‑Rock 1055 being a brand new music format to P.E.I., we're seeing ‑‑ three things happen.  Advertisers have increased their budget to some extent, to include K‑Rock in their mix.  We're seeing advertisers come back to radio, because finally there's a music format that will, in fact, reach their target audience, and the final item we're seeing is people coming to radio for the first time, because we have a format that was never available in P.E.I. before.

LISTNUM 1 \l 1783              A great example, and it's been very rewarding for our team, when a leading business person in P.E.I., that's huge in the hospitality industry, with over 12 different restaurants and bars, has never used radio to any extent before, because there wasn't a music format in P.E.I. to reach his demographic, and since K‑Rock has launched, we've really developed a partnership with this particular business.  And since then, they've actually signed on for an annual contract with us.  That is brand new revenue for radio in Prince Edward Island.

LISTNUM 1 \l 1784              And we're seeing that example, and there's many others that are coming.  All of a sudden, these new businesses are coming, and wanting to be partners with us, because we have a product that just has not been available before, and certainly Sydney is going to be another great example of seeing new businesses come to use radio as their advertising medium.

LISTNUM 1 \l 1785              COMMISSIONER WILLIAMS:  Well, thank you, Mr. Steele, Ms. Evans, Mr. Maheu, Mr. Muir, and Ms. Spenrath.  That's ‑‑ I have a good, clear understanding of your application.  I think ‑

LISTNUM 1 \l 1786              MR. STEELE:  Thank you.

LISTNUM 1 \l 1787              COMMISSIONER WILLIAMS:  ‑‑ those are all my questions, Madame Chair.

LISTNUM 1 \l 1788              COMMISSIONER NOEL:  Maybe one little question for Monsieur Maheu, and I'm calling you "Maheu", because it's a French name from the Prescott Russell area.

LISTNUM 1 \l 1789              Would you say that it's like ‑‑ I'm going to make a little analogy with telephone, which I'm more familiar with, as you may or may not know, but in the good old days of the ROE, Return on Equity, we had black phones with dials, and then we changed, and we opened telephone inter‑competition, and we now have all sorts of things, so could you ‑‑ do you think it's a reasonable analogy if you have only one incumbent and one market, it will cater to a very definite part of the population?  If you bring some newcomers, it will broaden the spectrum?

LISTNUM 1 \l 1790              MR. MAHEU:  I would agree with that, Madame Noel.  I think any time competition enters a business cycle, the consumer always benefits.

LISTNUM 1 \l 1791              There's inevitable disruption in the short term, whenever competition has been introduced into a closed environment, and that's one of the hiccups that businesses do have to deal with.  We face it in our business.  We're in situations where ‑‑ we're in markets where new competition's been introduced, and it's ‑‑

LISTNUM 1 \l 1792              COMMISSIONER NOEL:  Saint John's.

LISTNUM 1 \l 1793              MR. MAHEU:  Pardon me?

LISTNUM 1 \l 1794              COMMISSIONER NOEL:  Saint John's.

LISTNUM 1 \l 1795              MR. MAHEU:  Oui.  And all of a sudden, you know, we have to react to that, and in the short term, it causes a hiccup.

LISTNUM 1 \l 1796              But what we found, and I think other broadcasters would say the same thing, that competition in any marketplace always serves the consumer best, as long as its reasonable competition.  If you were to license ten new stations here, it would be very difficult for anybody to be successful, but reasonable competition ‑‑ consumers benefit by more choice.  It makes the competitors also sharper, too, because there's a focus back on service, responsiveness.

LISTNUM 1 \l 1797              With the telephone companies, when you didn't have a choice of where you got a phone, or what colour of phone you could have, I think we all know that the level of service may have been here, but the introduction of new competition, new options for consumers has provided more choice, and made the companies providing those choices a lot more sensitive and responsive to consumers.  And radio is a consumer product, like any other one, and the advertisers in this marketplace we believe deserve some more choice, and options.  We believe that there's enough of an economy to support the incumbent, and new opportunities.

LISTNUM 1 \l 1798              So I would agree with you that more competition, although a little uncomfortable in the early going, in the long run, serves the constituency of consumers well.

LISTNUM 1 \l 1799              COMMISSIONER NOEL:  And you're convinced that there's room for one, or more than one?

LISTNUM 1 \l 1800              MR. MAHEU:  Definitely convinced there's room for one, and depending on who it was, potentially two.

LISTNUM 1 \l 1801              One of the reasons ‑‑ we are confident if it were two, if we were one of them ‑‑ is that we do have the experience, and we have the financial depth and wherewithal that if things do not go as, go well as quickly as we had thought, that we have the staying power to be able to stay with it.  And one thing we have learned in our experience, and we work in a lot of small and medium sized markets like Sydney, is that in spite of our best intentions ‑‑ and we have examples in Fredericton and even in Charlottetown; they're going well ‑‑ but it always tends to cost a little more than we thought it was going to cost, and it always takes a little longer than we thought it would take.  And ‑

LISTNUM 1 \l 1802              COMMISSIONER NOEL:  It's like renovations.

LISTNUM 1 \l 1803              MR. MAHEU:  (Laughing) Exactly.

‑‑‑ Laughter / Rires

LISTNUM 1 \l 1804              MR. MAHEU:  So, you know, consistently, although we're conservative, it always takes a little longer than we think, and it always costs a little more, and things don't always go your way as quickly as you think they will.