ARCHIVÉ -  Transcription de l'audience

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 /

Diverses demandes de radiodiffusion

HELD AT: TENUE À:

Hermitage Ballroom Hermitage Ballroom

Best Western Mariposa Inn Best Western Mariposa Inn

400     Memorial Avenue 400, avenue Memorial

Orillia, Ontario Orillia (Ontario)

January 29, 2009 Le 29 janvier 2009

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 /

Diverses demandes de radiodiffusion

BEFORE / DEVANT:

Rita Cugini Chairperson / Présidente

Suzanne Lamarre Commissioner / Conseillère

Peter Menzies Commissioner / Conseiller

Candice Molnar Commissioner / Conseillère

Marc Patrone Commissioner / Conseiller

ALSO PRESENT / AUSSI PRÉSENTS:

Lynda Roy Secretary / Secretaire

Francine Laurier-Guy Hearing Manager /

Gérante de l'audience

Eric Bowles Legal Counsel /

Conseiller juridique

HELD AT: TENUE À:

Hermitage Ballroom Hermitage Ballroom

Best Western Mariposa Inn Best Western Mariposa Inn

400     Memorial Avenue 400, avenue Memorial

Orillia, Ontario Orillia (Ontario)

January 29, 2009 Le 29 janvier 2009

- iv -

TABLE DES MATIÈRES / TABLE OF CONTENTS

PAGE / PARA

PHASE I (Cont.)

PRESENTATION BY / PRÉSENTATION PAR:

Evanov Communications Inc. 867 / 5620

PHASE II

INTERVENTION BY / INTERVENTION PAR:

Muskoka-Parry Sound Broadcasting Ltd. 933 / 6016

William Wrightsell (OBCI) 948 / 6096

PHASE III

INTERVENTION BY / INTERVENTION PAR:

Redhead Media Inc. 957 / 6159

Scott Dibble 980 / 6275

Debi Sander Walker 982 / 6286

- iv -

TABLE DES MATIÈRES / TABLE OF CONTENTS

PAGE / PARA

PHASE IV

REPLY BY / RÉPLIQUE PAR:

Evanov Communications Inc. 1001 / 6398

Bayshore Broadcasting Corporation 1006 / 6427

William Wrightsell (OBCI) 1007 / 6436

PHASE I

PRESENTATION BY / PRÉSENTATION PAR:

Quinte Broadcasting Company Limited 1016 / 6475

PHASE II

No interventions / aucune intervention

PHASE III

REPLY BY / RÉPLIQUE PAR:

Quinte Broadcasting Company Limited 1061 / 6790

Gatineau, Quebec / Gatineau (Québec)

‑‑‑ Upon commencing at on Thursday, January 29, 2009

at 0832 / L'audience débute le jeudi 29

janvier 2009 à 0832

5615     THE SECRETARY: Good morning, everyone.

5616     Before we start, Madam Chair, for the record I wish to inform you that the applicant Instant Information Services Inc. has submitted in response to undertaking a letter confirming its Canadian content development contribution for both markets Orillia and Gravenhurst.

5617     And we will now proceed with item 15 on the agenda, which is an application by Evanov Communications Inc. on behalf of a corporation to be incorporated for a licence to operate an English‑language FM commercial radio programming undertaking in Gravenhurst.

5618     The new station would operate on frequency 102.3 MHz (channel 272A) with an average effective radiated power of 2,484 watts (maximum effective radiated power of 6,000 watts with an effective height of antenna above average terrain of 92 metres).

5619     Appearing for the applicant is Bill Evanov. Please introduce your colleagues and you will have 20 minutes to make your presentation.

PRESENTATION / PRÉSENTATION

5620     MR. EVANOV: Thank you. Good morning, Madam Chair, Members of the Commission, Commission staff.

5621     My name is Bill Evanov, President of Evanov Communications. Before I introduce my staff I would just like to mention something. For most of my life I grew up in the Toronto area. I moved to Penetanguishene near Midland, which was founded by Samuel de Champlain back in the 1600s, 15 years ago. However, since I was a teenager, I guess since the late 1970s or 1980s, I have been going as a teenager to Muskoka every summer and spending quite a considerable time there.

5622     And recently, a few years back, I purchased a very small cottage there, so I spend a lot of my summers there, so I am basically familiar with the market, which encouraged us to make this application even before the call came out. Just a little bit of background there.

5623     So my team consists of, to my left, Carmela Laurignano, Vice‑President, Group Manager. To Carmela's left is Ky Joseph our Vice‑President of Sales, and Jennifer Marczak our Community Liaison. To my right is Ted Silver, Program Director for Ottawa and former Program Director for CHAY Barrie and Q92 Montreal. And to Ted's right, Gary Gamble, Program Director for The Jewel in Newmarket.

5624     In the back row seated to my far left is Rob Malcolmson of Goodmans, our legal counsel. Next to Rob is Sean Moreman, the architect of our CCD. And finally, there is Debra McLaughlin of Strategic Inc.

5625     When I looked back at our first application for The Jewel in Ottawa I was struck by two things; how much our company has grown since then, and how much more relevant this format has become, even in the short time period since we were first licensed.

5626     In Newmarket, Hawkesbury, Ottawa and soon in Winnipeg, variations of The Jewel format fills an appetite for mature programming and provides a real listening option to the growing audience that is 40 plus. We call it today's new easy listening.

5627     The format is a blend of vocals and some instrumentals. It covers several genres of music and draw from many eras. We have always described it as timeless, because of the high appeal and quality of the music. I would like to focus on one element of the playlist, that being instrumental music.

5628     It is a critical element in our music mix that allows a listener to The Jewel to immediately identify the station to which they are tuned. In an increase in cluttered radio spectrum the opportunities to sound different are infrequently found.

5629     Instrumental music sets us apart from other applicants in most proceedings and, in fact sets us apart from the vast majority of broadcasters. Instrumental music is one of the most underrepresented genres of music on radio today. It has slipped from a place of prominence on at least one station in every market in the 1970s to near extinction.

5630     This is a gross oversight in our estimation because the volume of production and sales in Canada alone should suggest to more than just us that there is a market for this genre. And so we are proposing a playlist that will contain 15 per cent instrumental music at which the majority will be derived from popular music, including adult contemporary, standards, light classical, country classic, smooth jazz, folk and even world music.

5631     These reinterpretations of vocal hits and standards will cover a variety of eras, styles and composers. This broad variety of instrumental music could include a Strauss Waltz performed by Andrew Rieu or Penny Lane performed by Boston Pops, it could be Richard Clayderman's rendition of Lady in Red or a version of Offenbach's la Barcarolle performed by Richard Abel or David Foster.

5632     You could hear James Last playing in Midnight in Moscow or Zorba's Dance by Roberto Delgado, or even an Argentinean tango.

5633     MR. SILVER: As Bill mentioned, we have come a long way from that first application, and yet the guiding principles of the format remain unchanged. We play only great songs and we play a variety of music genres which gives listeners tired of the usual mix of pop rock and Hot AC something new and different to listen to.

5634     The vocal elements of The Jewel playlist will come from a broad blend of music styles that include classic pop, American songbook standards and Soft AC, but will also include light classical, jazz and folk roots blended throughout the broadcast day.

5635     There is clearly a huge demand for the softer side of popular vocal music of old styles and lyrics and melodies that listeners can connect with no matter what the era. We will include pop recordings from the past five decades, while keeping current with new artists or new selections that will represent 20 per cent of our playlist.

5636     If we were only AC it would be too narrow. So one of the elements that separates The Jewel from the other applicants is that we offer a greater music variety that can serve a larger portion of the population of Gravenhurst.

5637     We will offer not only the soft AC proposed by other applicants but, in addition, contemporary artists such as Rod Stewart, Carly Simon, Michael Bublé and Linda Ronstadt singing selections from the American songbook. It includes legends like Frank Sinatra, Tony Bennett and Dinah Washington singing unforgettable songs written greats like Cole Porter, Sammy Cahn, Irving Berlin and Jimmy van Heusen.

5638     We will introduce new classic pop and lounge vocals to radio in the area playing Bocelli, Il Divo, Sarah Brightman, Nana Mouskouri, Julio Iglesias and Sophie Milman.

5639     And finally, we will give the residents of Gravenhurst something they have no opportunity of hearing anywhere else, the compelling sounds of instrumental artists like David Foster, Richard Abel, Becker Cavanagh, Rick Wilkins and André Gagnon.

5640     The choices of music on The Jewel are unlike any other in the marketplace. Our duplication analysis shows that we have no overlap with the Moose from Bracebridge and very little from any of the spill stations that dominate the listening hours in the market. This is an important consideration because we are both aware of and sensitive to the challenges of smaller market stations.

5641     Our proposal appropriately balances the desire of consumers to have better variety in their music choices with a need to provide complimentary and not competitive formats in smaller markets.

5642     MR. GAMBLE: Our spoken word component will also reflect a mature contemporary listener that will make up The Jewel audience. News was described by respondents in a demand survey we conducted as being one of the key programming elements, so we will feature 13 traditional newscasts each Monday through Friday. On weekends we will provide five broadcasts per day.

5643     Local news, in particular, was described as being of great importance in the research and that will be a major component of The Jewel's spoken word. Fifty per cent of all news content will be local in nature. So very many times the headlines are all that is reported and not what listeners are keenly interested to hear how does that impact me?

5644     Our news presentations will cover the breaking news, provide coverage of local stories, events and issues, but as well it will inform listeners as to how what is happening elsewhere will affect the communities in which they work, live and play.

5645     Our commitment is to five hours and 22 minutes of news that will be relevant and timely to our listeners. Because news and information are not strictly headline driven, we have created several features that will run throughout the week and provide with updates on matters and subjects that are important to them. Twice a day Monday through Friday we will summarize the day in business through our business reports.

5646     Health watch, an important issue for the 40 plus demo, will cut through the often confusing reports on health matters and at a two‑minute feature at noon, Monday through Friday, address new studies and provide tips on staying in prime health.

5647     Several times daily throughout the week The Jewel will update its active listeners on ski, marine and golf conditions. Since our core audience has moved beyond the young family stage and will be finding more time for leisurely pursuits in life, The Jewel will keep them abreast of conditions that affect their outdoor activities.

5648     Similarly, the community calendar feature will keep our listeners up‑to‑date on cultural happenings in the Muskoka/Haliburton region. Once on each of Friday, Saturday and Sunday our movie and book of the week feature will expand our listeners' knowledge of new releases both in the theatres and on paper. We will produce reviews as well as invite listeners to make suggestions on popular books and movies that are must‑sees.

5649     MS LAURIGNANO: Our proposal is to provide 40 per cent Canadian content throughout the broadcast day and to provide new and emerging artists with an opportunity for meaningful exposure. Twelve per cent of our overall schedule will be opened up to allow for the showcasing of new artists.

5650     Rotation throughout the day parts, including the peak listening periods of morning and evening drive, will ensure maximum exposure and a real opportunity for reaching a new audience.

5651     Another key feature of our proposal is our coverage area. We have configured our signal so that it focuses first and foremost on Gravenhurst. Our commitment to Gravenhurst will give town residents their own local voice, provide an outlet for local advertiser and respect Mr. Grossman's home market of Bracebridge by not putting a 3 millivolt signal into that market.

5652     MS JOSEPH: Gravenhurst is a market that has come of age. While most frequently included in the umbrella area of Muskoka/Haliburton, it is in fact a town with a unique identity. It has an estimated retail sales volume of over $140 million annually and an average annual household spend of close to $31,000.

5653     Looking forward, retail sales are expected to grow by 3.1 per cent by 2011 and by a further 4.6 per cent by 2014. Estimates of household income show that the market is somewhat lower than the Canadian average, however this does not reveal the whole picture. Disposable income is close to $50,000 per year and discretionary income is close to $17,000.

5654     This is typical of a market where the median age is significantly higher than the Canadian average and where more than half the population, 52.7 per cent, is 45 years of age or older. This is the characteristic of a market where the retiree population outnumbers the population who are under the age of 25. This demographic skew speaks to a need for specific types of goods and services which, of course, includes radio.

5655     Our demand study showed a clear interest in the format with seven out of 10 people between the ages 25 and 70 stating they liked the music. When asked their intention to listen, eight out of 10 responded positively. What this means is that advertisers looking to efficiently reach the residents of Gravenhurst would find a place for The Jewel in their media buy.

5656     Despite the presence of a station in Bracebridge, advertisers felt that there was not a good option in terms of using radio to reach their primary customers. We spoke to a range of advertisers from within Gravenhurst, Port Severn, Bala, Port Carling and Port Sandfield and determined from these discussions that there were a solid advertising base to construct a business plan.

5657     We reviewed retail sales levels to confirm the findings from our interviews and we were pleased to see that Gravenhurst should be supporting radio revenues in the area of $655,000. Based on available data, we estimate that we will be able to develop revenues that account for 80 per cent of our total proposed first‑year revenue from the town alone, surrounding areas will account for the remainder.

5658     MR. MOREMAN: With each application we present to the Commission we give our investment in Canadian content development careful consideration, appraising all options from two perspectives; does it have meaningful impact and will we be able to stimulate truly local content development?

5659     We are very pleased to state that we have accomplished both of these objectives again with The Jewel application. Our contribution of $700,000 will be used to develop local initiatives as well as support national programs.

5660     In addition to FACTOR, we are proposing funding for the Gravenhurst Opera House, Music on the Barge, Muskoka Lakes Music Festival and the Muskoka Children's Choir. These are all important local initiatives that will create new opportunities, incent new artists and expose talent in an area where funding for these types of endeavours is in very short supply.

5661     Additionally, we have proposed funding for the catalogue of Canadian instrumental music, which operates nationally, and the Aboriginal Media Education Fund. We are proud of our involvement in both of these organizations. In our opinion, both provide opportunities to groups who are significantly underrepresented in the current radio spectrum.

5662     Our investment is significant, the largest in fact of any before you and the return to the system, tangible.

5663     MR. EVANOV: In summary, The Jewel is the right choice for Gravenhurst. Of all the applicants, our proposal offers the greatest variety in music and by far the lowest level of duplication, as the attached duplication analysis demonstrates.

5664     We are giving a new life to instrumental music, an underrepresented genre in desperate need of radio airplay. With a signal configuration focused on Gravenhurst and an older target demographic we will have little or no impact on Mr. Grossman's Bracebridge Hot AC. And our clear focus on Gravenhurst and not Bracebridge will give residents their own local voice and first originating service.

5665     Our commitment to new and emerging artists is by far the highest, 12 per cent of our schedule. Our commitment to CCD is also the highest of all the applicants before you at $700,000. Our programming expenditures also lead all applicants. This commitment to programming will provide our audience with a superior and sustainable listening experience.

5666     We are able to do all this because we are a well‑funded, debt‑free and experienced broadcaster.

5667     Madam Chair, Commissioners and staff, ECI is committing to a substantial investment in Gravenhurst. This commitment will result in new jobs, new choices in music, improved local reflection and new opportunities for advertisers.

5668     I am a part‑time resident of this market who knows Gravenhurst to be a vibrant community with a bright future. Gravenhurst has a lot of reasons to be excited by the future and we at ECI would like to make a lasting contribution to that community.

5669     Thank you, and we are pleased to answer any questions.

5670     THE CHAIRPERSON: Thank you very much, Mr. Evanov and your colleagues. I hope both yours and Ms Laurignano's cottages are winterized and you are able to enjoy them during this week.

‑‑‑ Laughter / Rires

5671     MS LAURIGNANO: I can speak for myself, it is thoroughly.

5672     THE CHAIRPERSON: Okay.

5673     MR. EVANOV: Mine is not.

5674     THE CHAIRPERSON: I will ask Commissioner Menzies to start the questioning.

5675     COMMISSIONER MENZIES: Thank you.

5676     I will get one thing out of the way right away. How soon would you be prepared to launch?

5677     MR. EVANOV: Well, we would discuss it with the Commission. I mean, we as a company are ready and prepared to launch probably in eight months, nine months after a decision.

5678     However, if you felt it would be wise maybe for us to take our time to allow the Bracebridge station to gather more resources or to plan for it or to resell, I don't know, we would accommodate that.

5679     But as a company we are prepared, within the year for sure, to be able to launch.

5680     COMMISSIONER MENZIES: Okay. So you are saying that if we actually told you that you can have a licence but you need to wait that that would be okay with you?

5681     MR. EVANOV: It would be okay with us in terms of accommodating the other broadcaster in town.

5682     COMMISSIONER MENZIES: Okay, thank you.

5683     I just wanted to talk about local programming here for a minute. You have got 100 hours of local programming. I know you mentioned some things in your presentation that you are going to do. I am just trying to get a more specific idea of what the other 26 hours look like. There is five hours and 20 minutes of news, three hours and 20 minutes of miscellaneous, how do the remaining 17 hours breakdown?

5684     MR. EVANOV: Okay. The news and what you mentioned are probably within the 100 hours of live programming.

5685     COMMISSIONER MENZIES: Okay. So the remaining 26 hours?

5686     MR. EVANOV: It is the remaining 26 hours, which will be local programming for the best part, but we have left it open in case there is some emergency down the road or something that we may want to carry. We just wanted to have an open option should we want to pick‑up a program or to do something. At the present time there are no plans to utilize that other than local programming. But seven years is a long time, things change, conditions change and we may want to adapt.

5687     COMMISSIONER MENZIES: Sure. I understand that, and flexibility makes sense. But what will it look like ‑‑ what does plan A look like? Just to give us some idea of how you would break it ‑‑ how that would look for the week.

5688     MR. EVANOV: In terms of local programming or ‑‑

5689     COMMISSIONER MENZIES: In terms of local programming, yes.

5690     MS LAURIGNANO: Well, as Bill mentioned, it would be 100 per cent local programming originating from Gravenhurst. There are no concrete plans per se of any programming at the present time other than local.

5691     The cushion there between 100 and the 126 was left for us because, as we know, seven years is a long time. We wanted to have the flexibility should we be able to, for example, put a program in place that would make sense on a synergy level. And for us with other Jewel type stations we could put that in there, we could have, you know, maybe a syndicated program come in that could be specifically targeted for that area or that could have national appeal.

5692     We could perhaps introduce a program that we could put across our stations at the same time for Canadians to have sort of a meeting place on the airwaves.

5693     But as far as a concrete program per se, we don't know what that is. But in any case, those would not be in any primetime, it would be maybe something like ‑‑ and I am speculating now, our program people know ‑‑ but something maybe like a special instrumental program, you know, where we would target like a specific audience and a specific time which would be more towards the fringe times.

5694     But we would never sacrifice the primetimes or the drive times for any programming other than just a live local.

5695     MR. EVANOV: If I could just add to that. We have asked for the same condition for every station, Hawkesbury, Ottawa, and in all this time we have only done local programming, nothing has ever arisen where we would not do local programming, so it is 100 per cent local programming.

5696     You asked what it consisted of and I think I will ask Gary to answer that. Other than music it is ‑‑

5697     MR. SILVER: Our live schedule, if I can just run you through a day, would be live in the morning from 6:00 right through until 9:00 at night with some voice tracking a little bit later on. Included in that broadcast day is our news and spoken word of course.

5698     So the amount of times, if what you are asking is, are we live or are we recorded within that particular time, for the majority of the time we are live right through the weekends. Of course, with our spoken word and everything else in there to make up that 100 hours, with 19 hours being of spoken word content.

5699     COMMISSIONER MENZIES: Okay. I understand all that and I know you have made the same presentation before and you got kind of the same question too, but what I am looking for primarily is an understanding of to what extent that that time would be used when you mentioned synergies, that it would be local and/or ‑‑ need to know if it would be local or sort of retransmission or access to existing program elsewhere within your network.

5700     MS LAURIGNANO: It could be a combination of all those. It is only 26 hours a week, which is if there is a program that is instituted Monday through Friday it would only represent a small portion of the broadcast day in relative number of hours.

5701     We have not gone down that path and actually do not have a vision, as we don't have concrete plans. So I am not trying to be difficult, but I am just suggesting that it is this possibility that we have left open where it is possible, we imagine, that there could be something that could come up and it would save us and you having to come back and ask for maybe a different condition of licence or something like that.

5702     As I said, it could be any number of programs that could fit, what they are, we don't know. However, in any case, the 100 hours per week would always be local, as a minimum.

5703     COMMISSIONER MENZIES: Okay, I think I got my answer in there somewhere. I wasn't trying to be difficult either.

5704     MS LAURIGNANO: No.

5705     COMMISSIONER MENZIES: I was just trying to understand. But if you have no plans, it is obviously very difficult for you to describe them.

5706     MR. EVANOV: Can I mention just something? And it may touch on this slightly.

5707     We had one of our announcers go to the inauguration in Washington, D.C. and he did basically live reports from there and they were fed to all our stations, because it was of interest to the audiences in all the markets. So it wasn't locally produced, it was actually produced in Washington, D.C. by one of our staff.

5708     And the other thing we have talked about is coverage of the Olympics from Vancouver, where that would be fed to all the particular stations. So we thought it might fit under that umbrella in terms of reports, one report that would be fed to all the stations.

5709     COMMISSIONER MENZIES: Sure, thanks. Back to news, you have got a considerable amount of time dedicated to it. How are you going to fill that time with quality information?

5710     MR. GAMBLE: If I can just run you through ‑‑

5711     COMMISSIONER MENZIES: Locally.

5712     MR. GAMBLE: Locally. If I can just run you through kind of sketch of what it would look like.

5713     We have five hours and 22 minutes of news per week. Now, that is local news, specifically to Gravenhurst itself. And out of that 50 per cent of those newscasts is strictly local Gravenhurst. Twenty‑five per cent of that five‑minute newscast at the top of the hour of which we run 13 a day would be of a regional flavour.

5714     For example, the G8 Summit is coming to Gravenhurst, that would obviously be included on our reports and updates on that. Fifteen per cent of that newscast would of a national flavour and 10 per cent would be of world news

5715     Also, specifically within those Gravenhurst ‑‑ I mentioned 50 per cent of those newscasts would be Gravenhurst‑specific ‑‑ any local news could be affected because of something that is federal or provincial. For example, the budget, that would affect Gravenhurst residents specifically, we would include that within those five‑minute newscasts. So once again 50 per cent completely local just to the Gravenhurst area.

5716     COMMISSIONER MENZIES: Okay.

5717     MR. GAMBLE: Besides that, our spoke word package ‑‑ you will notice that we are running a lot of features, for example, as we mentioned, the community calendar, heath watch, those are all news‑based and information features that are designed to ‑‑ they are not just fluff to throw in there for the sake of having a feature. Health watch, for example, is a 90‑minute feature that will run twice a day, updates on what is happening in the world in health.

5718     And especially in our demographic, that is very important, people want to know what the latest news is or that there is a shortage of doctors in Gravenhurst, for example. So that is an information base feature that we have.

5719     The community calendar, which is just absolutely huge of course in this are, we intend to promote various aspects of what is going on in the community seasonally and we are getting involved in various other things that are going on in the community, we want to be able to report that.

5720     And besides that, our announcers will be encouraged to let people know through their announcer talk throughout the day and through interviews of people who are involved in these community events to get them on the air and to let people know what is going on.

5721     We also have six times a day our ski, marine and all‑seasons report as we call it, So depending on the season we will have what could be a ski report, a snowmobile report, golf conditions, anything that would be of particular interest to people in this area.

5722     We know that people tune in at certain times in this area, specifically for certain reports for activities that they are going to be trying to take that day or planning for the week, so that is of importance.

5723     COMMISSIONER MENZIES: Do things like the community calendar and snowmobile reports, et cetera, do they fall within your allotment for miscellaneous information or is that part of your news package?

5724     MR. GAMBLE: It is rolling information throughout the day and if it is specific, then it should be handled on the news, of course we will get it into the news.

5725     Also, if I can just add, for the 50 per cent local, besides what I already described to you, of course there is local other sources of news that we intend on covering. Town council meetings are held bi‑weekly in this area, so we would have a reporter out at those to fill up that local content and keep it rolling.

5726     MS LAURIGNANO: Commissioner, if I just might add, the calculation for the community calendar and those other features that have, you know, news, information and content are not part of the calculation to what Gary has referred as pure news, those are above and beyond the pure news.

5727     The other thing that I wanted to add to what Gary said is that Gravenhurst, as all our stations, will have its own local newsroom that is going to be staffed by its own compliment of staff and that will entail three positions in the news department that will be dedicated strictly to the news.

5728     COMMISSIONER MENZIES: Thank you. That segways to my next question, which was about the staffing for this station.

5729     Can you give me as concise a rundown as you can of the number of staff, what their positions are and what they would do? You could maybe start with those three news people.

5730     MS LAURIGNANO: Yes, I can. We will have a total of 10 people in our program department, three of which will be the news people that I have just mentioned. And in addition to that, the station will employ another six people in various capacities in fulltime and two more in freelance or contract positions, for a total of 18 for the whole operation.

5731     COMMISSIONER MENZIES: Okay. Of those 10 three are news people.

5732     MS LAURIGNANO: Yes.

5733     COMMISSIONER MENZIES: And those are three fulltime news people?

5734     MS LAURIGNANO: They are three fulltime news people.

5735     COMMISSIONER MENZIES: What are the six in various positions?

5736     MS LAURIGNANO: The six in various positions would be a program director/announcer, a music director/announcer, a morning show host, a drive show host, a midday host and a swing announcer.

5737     COMMISSIONER MENZIES: Okay. And who is selling the ads?

5738     MS LAURIGNANO: Selling the ads are some people that Ms Joseph will speak about.

5739     MS JOSEPH: There will be a total of five people, actually six people, excuse me, in the sales department; one sales manager, a sales coordinator and sales reps.

5740     COMMISSIONER MENZIES: Okay. So that is 15 accounted for. I am assuming the 10th FTE that you were talking about was a compilation of the freelancers and that. So that is 16. You have administration and is there anybody else that I am missing?

5741     MS LAURIGNANO: (off microphone) Oh, I am sorry, the microphone.

5742     I have a sales manager, sales secretary, three sales people, a promotions person and then we have another administrative person.

5743     COMMISSIONER MENZIES: Math was never my strong suit. What does it all add up to now?

5744     MS LAURIGNANO: Okay. It should add to 16 fulltime positions and two part‑time/freelancers.

5745     COMMISSIONER MENZIES: Seventeen fulltime equivalents?

5746     MS LAURIGNANO: Yes.

5747     COMMISSIONER MENZIES: Okay, thank you.

5748     How much of your programming will be live‑to‑air? I think you already answered that, but I am not sure I remember.

5749     MR. EVANOV: The live‑to‑air would be 100 hours a week. The voice tracking would be approximately 26 hours a week. It is very similar to the local situation.

5750     COMMISSIONER MENZIES: Okay.

5751     MR. EVANOV: Our reason for that is ‑‑

5752     COMMISSIONER MENZIES: So there is nothing syndicated?

5753     MR. EVANOV: No. No syndicated programming. The real reason for voice‑tracked programming is we take advantage of voice‑tracked programming when we train interns, because we would never put an intern live on the air. So we will train them, they will do voice tracks, we will listen to them and, if they are good enough, then we put them on the air.

5754     COMMISSIONER MENZIES: That seems like a reasonably full staff locally. I guess they will be using your cottage in the summertime.

5755     But in terms of corporate synergies, where are those placed primarily for you?

5756     MR. EVANOV: Number one, we will share music. We have an extensive library of 5,000 titles that we use, so that we will share with the station. We will basically share contacts with new emerging artists. If we meet a new emerging artist and put him on the air in Hawkesbury or in Ottawa, we will make that available for Gravenhurst.

5757     All the stations will contribute to some of the features, like book of the week and the health report and various stations ‑‑ it is on a rotation basis as to who produces what. But if there is a particular doctor in Gravenhurst that has come up with something or a chemist somewhere else, then depends where they are located and, you know, so we all contribute to the reports. So they may not always be locally produced, those features, but they will contribute to the feature.

5758     The only other areas will be in the area of engineering, IT and I guess overall corporate will oversee the station to help get it running and that type of thing. But for all intents and purposes, it is local staff running the local station with a local manager.

5759     COMMISSIONER MENZIES: Just an additional question on the music. Fifteen per cent instrumental, is that 40 per cent Canadian content too or..?

5760     MR. EVANOV: Yes, it is part of our Canadian content commitment of 40 per cent in the broadcast day.

5761     COMMISSIONER MENZIES: Okay, thank you. I have an administrative question. Your application did not indicate whether your station would adhere to the new Equitable Portrayal Code. So, for the record, would you adhere by condition of licence to the new Equitable Portrayal Code that replaced the Sex‑Role Portrayal Code? And you say..?

5762     MR. EVANOV: Yes, we will.

5763     COMMISSIONER MENZIES: Thank you.

5764     In terms of the business plan, do you plan to solicit advertising from Bracebridge?

5765     MR. EVANOV: The answer is we are not drilling there for oil, but some advertising, if we are really honest, will come from there. But our concentration is Gravenhurst and our business plan was based on Gravenhurst. But we won't turn anything down from whether it is Bracebridge or any other area, but we are not deliberately seeking or drilling for oil there.

5766     I will ask Ky to really tell you where the money is coming from.

5767     COMMISSIONER MENZIES: Okay, tell me where the money is coming from.

5768     MS JOSEPH: I will tell you where the money is from.

‑‑‑ Laughter / Rires

5769     MS JOSEPH: We consider five calculations when creating our projections for our revenue, year 1 $500,000. We first estimated the potential revenue for the market. And because there is no data available, we use the RMB formula for figuring that amount out.

5770     And the Gravenhurst retail sales market at time of filing was valued at $156 million, so using that formula created by RMB, commonly used to assist broadcasters when there is no data available, the formula links retail sales to advertiser spend and radio typically garners 10 to 12 per cent of that revenue. So we, at the time of filing, forecasted $710,000.

5771     But in today's economy, the retail sales are down 8 per cent, therefore it is now $654,000 available for radio advertising in the Gravenhurst market.

5772     We then did a retail demand study, which we always do when we are going into a market. We deploy several teams. First, we look at the market, we create a P1 category list of advertisers that fit the lifestyle of the listeners that we are going to be attracting. We create all those categories, then we solicit those businesses.

5773     We have discussions with either the business owners or the managers in those stores. And we get very specific with them, we play them a sample of the music, we give them literature to read, we tell them what the station is going to sound like and we try to get from them where they currently advertise, what they think of the station, would they be interested in advertising on the station when we came to this market, and a calculation is done based on that.

5774     We then also look at the national component, which in this case is very minimal, but nonetheless it certainly serves $25,000 of our estimates. And a calculation of our sell out rate in combination with our spot rate is also calculated.

5775     So would you like me to go into detail with regards to ‑‑

5776     COMMISSIONER MENZIES: First of all, I would just like to ask you about your experience with using the RMB data.

5777     MS JOSEPH: M'hmm.

5778     COMMISSIONER MENZIES: What would you say would be the margin of error on that? In your experience, how frequently have you used it in the past in making estimates for markets and how accurate has it turned out to be?

5779     MS JOSEPH: Based on today, advertising dollars in Gravenhurst being $655,000, we projected only $400,000 of those dollars, 80 per cent of our revenue, will come out of the Gravenhurst market. So there is actually a lot of allowance for error in that case.

5780     And also, it then speaks to your direct question, which was the impact on the Bracebridge station. And we project that 5 per cent of our revenue or $25,000 will come out of Bracebridge. If you then take that margin of error, then there is really no impact, because there is plenty of dollars for ‑‑

5781     COMMISSIONER MENZIES: You built a margin of error into your business plan with a 40 per cent estimate on Gravenhurst, right?

5782     MS JOSEPH: Yes.

5783     COMMISSIONER MENZIES: And you have got 20 per cent national and 5 per cent for..?

5784     MS JOSEPH: No, 5 per cent ‑‑

5785     COMMISSIONER MENZIES: Five per cent national?

5786     MS JOSEPH: ‑‑ 5 per cent of our revenue will be coming from national, 5 per cent impact, 60 per cent new business and 30 per cent from other media.

5787     COMMISSIONER MENZIES: Okay, tell me about the new business.

5788     MS JOSEPH: Okay.

5789     COMMISSIONER MENZIES: Where are you getting that from?

5790     MS JOSEPH: Okay. Our new business, $300,000, primarily from Gravenhurst, Port Carling, Port Severn. We estimated that 90 per cent or $270,000 would come directly out of Gravenhurst. Again, it takes us back to the street‑level research that we did, so that was our main factor in looking ‑‑ well, it is not our main factor, it is one of the calculations that we did, as I said, we did five.

5791     One of them that I did not mention is our experience in Hawkesbury. Hawkesbury is a great comparison because the market population size is the same as Gravenhurst, as well the median age is older as is this market. The difference is that you don't have the seasonal swell in the summertime in Hawkesbury that you do here. So the potential for advertising revenue in Gravenhurst is a lot better than Hawkesbury.

5792     So if I could just take you through, because ‑‑

5793     COMMISSIONER MENZIES: I just have one additional question before I forget.

5794     MS JOSEPH: Yes?

5795     COMMISSIONER MENZIES: Going back to Gravenhurst, you are looking at 40 per cent of revenue from there. Who is getting the other Gravenhurst revenue? You are looking at tapping into ‑‑ you had an estimate on the amount of money available in Gravenhurst ‑‑

5796     MS JOSEPH: Yes, it is 80 ‑‑ 80 per cent of our revenue, of our total revenue, will come ‑‑

5797     COMMISSIONER MENZIES: Right. Okay, sorry. Eighty per cent of ‑‑

5798     MS JOSEPH: Which is ‑‑ yes.

5799     COMMISSIONER MENZIES: Who is getting the rest of that? What is your share of the Gravenhurst advertising market?

5800     MS JOSEPH: $400,000 will come from Gravenhurst, so there is $100,000 remaining, 5 per cent will be impact on the Bracebridge station ‑‑

5801     MS LAURIGNANO: I believe the question, if I can just ‑‑ the potential, according to the formula that we have calculated, is just over $650,000 of available revenue. Then we intend to have revenues in our first year projected of $500,000, of which 80 per cent or $400,000 will come from Gravenhurst. So that means that there is a difference between the $400,000 and the $650,000, roughly which is $250,000 leftover.

5802     I believe your question was who gets to that?

5803     COMMISSIONER MENZIES: No.

5804     MS LAURIGNANO: I am sorry.

5805     COMMISSIONER MENZIES: No. Let me excuse myself for that, for confusing us all.

5806     What I am trying to get a sense of is ‑‑ I think it is fair for us to assume that the Bracebridge incumbent is getting some revenue from Gravenhurst.

5807     MS LAURIGNANO: Yes.

5808     COMMISSIONER MENZIES: And I want to know how much of that money you are going to take.

5809     MS JOSEPH: So that number is $25,000.

5810     COMMISSIONER MENZIES: And that is Gravenhurst only?

5811     MS JOSEPH: That is money coming out of Bracebridge ‑‑ it is an impact of 5 per cent, which is $25,000, which accounts for $25,000 of our revenue projections.

5812     COMMISSIONER MENZIES: Okay. Let me must go onto that. The station CFBG has a pretty decent reach within this 45 to 64 year old group. And I am not sure that you are not underestimating the amount of people that you might draw away from them within that age group.

5813     If this plan is that appealing to that group, why wouldn't more of those migrate to your new station than you have estimated?

5814     MS JOSEPH: I am going to hand it over to Bill Evanov in just one second.

5815     COMMISSIONER MENZIES: Yes.

5816     MS JOSEPH: But the best comparison that I can possibly give you is what happened in Halifax. So although the demographics are different, you know, you had C100 which owned every demographic number 1 in every demographic.

5817     And so you would think that a station coming in would impact that station. It didn't impact it at all. We came in with a different demographic, which is what we are doing in Gravenhurst. It is a completely different audience that we are going after. And so we are drilling for new business, we are drilling for new categories of business.

5818     And so we do feel that the impact ‑‑ and just based on history of launching other stations, the impact will be minimal.

5819     But I will pass that on ‑‑

5820     COMMISSIONER MENZIES: So you are getting 45 to 64 year olds who aren't pretending they are younger anymore?

‑‑‑ Laughter / Rires

5821     MS JOSEPH: Well, I am not going to say that.

5822     MR. EVANOV: Just to add to that, the Bracebridge format is totally totally different. We did a duplication of the playlist we submitted and what the Bracebridge station played last week and there was zero duplication. Not one or two titles, but zero.

5823     And I will have Ted explain their format, which is a very Hot AC format, and we are both at opposite ends of the spectrum in terms of listeners. They are the only station locally, so if you want to listen to a local there are three Moose stations you can listen to, everybody else is out of town from Barrie, like CHAY or ROCK 95.

5824     MR. SILVER: Just to answer your question, this is my own personal opinion, but when you are talking about the Bracebridge station and basically the demographic, which was I think 45‑64, they do have listenership from that demographic, but these are 45‑64 people who for whatever reason are choosing to listen to that radio station and some of them may like the music even though the music isn't what would be typical for that demographic.

5825     I think that we will attract audience, perhaps a few from the Bracebridge station, but I think there are other people within that demographic who are either listening to other stations, fill stations that come into the market, CHAY in Barrie would be an example, which is a mainstream AC station and probably closer to that demo's musical taste or perhaps they are listening to iPods or have given up on the radio altogether and in terms of their musical choice.

5826     So I don't think it is as clear cut as, well, you are in this demo and so they are all going to migrate somewhere else.

5827     In terms of the difference in programming between the Bracebridge station, the Moose and what we are proposing, they are what I would define as a Hot AC rock hybrid which is probably a reasonable choice, but they are very broad for what they are. But they target a fairly young audience with artists like Stained, Chad Kroeger who is the lead vocalist with Nickelback, famous Canadian band, no doubt Smashing Pumpkins, Pink and that kind of music.

5828     Whereas what we will be proposing will be Neil Diamond, Whitney Houston, Rod Steward, Michael Bublé, Barbara Streisand, a marked difference between the two stations, entirely different musical taste.

5829     COMMISSIONER MENZIES: Right, which kind of brings me back to the news point a little bit. Everybody, and particularly in markets of this size, talks local local local and says that is what radio is all about, is your ability to serve locally.

5830     So based on the assumption that the primary appeal for people is the local news and information they can get, not necessarily the music entirely, because these days you can get music in a variety of places, but it is going to be that local connection. Why wouldn't your reasonably significant news commitment have a more significant impact on the CFBG than you have estimated?

5831     MS LAURIGNANO: Well, I would like to say that we have used RMB very very successfully in Halifax, in large markets, Hawkesbury which is a smaller market, and it has never come back where it wasn't fairly accurate. In fact, we were able to out perform even the predictions in most cases.

5832     But we went into Gravenhurst because we believed that we had a business plan, not because we were going to take anything away from Bracebridge.

5833     But we believed based on the indicators that I have just talked about, plus the survey that Ky has talked about with the advertisers, plus what the consumer research indicated, plus personal experiences that we have, Bill being a resident part‑time of the area. Gravenhurst is extremely underdeveloped in terms of a radio market and the potential is there.

5834     So in terms of impact, as I said, even if you take the $650,000 as a starting point, and we are counting on 80 per cent of that or $400,000 of our budget is coming from that, then that leaves $250,000 for the Bracebridge station and for others to come drill for oil there. And we would welcome it, because the competition would be good.

5835     We are going after two types of demographics as well two streams of revenue that are different because, clearly, some of the advertisers would be distinct and would have an appeal for that older demographic.

5836     COMMISSIONER MENZIES: Don't get me wrong, I am just trying to get a sense of this.

5837     MS LAURIGNANO: Yes.

5838     COMMISSIONER MENZIES: And if there is more local news and you happen to be the one providing it, there is more competition, that is not a bad thing, competition. But just to clarify one thing maybe just for a moment with yourself or Ms Joseph, is what assumptions did you make about the incumbent's revenue profile? What assumptions did you make about how much money he gets from Bracebridge and how much he gets from Gravenhurst in this?

5839     MS JOSEPH: Well, the closest comparison for us is actually monitoring the station to see how many Gravenhurst advertisers are on the station. And we have done that quite often and one in seven advertisers is a Gravenhurst advertiser.

5840     But then when you go back to the streets and speak to, you know, 80 of the businesses and you continually hear, 'I don't advertise,' you know, 'they don't reach my audience, it's not efficient, it's expensive for me,' like a smaller shop. And then you speak to some advertisers, the print is where we are going to be getting 30 per cent of our revenue.

5841     Print talks to a more mature audience and print is more expensive and print is where we have had a lot of advertisers say, you know, if you bring this to the market we will come ‑‑ Pride Marine is the perfect example, they have marinas in six various locations within the Muskoka area and they spend hundreds of thousands of dollars in print. And speaking with them at the boat show, they are saying bring it to us and we are excited about this.

5842     So that is really where the potential for us is. As well, if I could just go through Hawkesbury.

5843     COMMISSIONER MENZIES: Sure.

5844     MS JOSEPH: Again, Hawkesbury is a great example, because there was one station serving that market, actually in that market specifically, so it is a really good comparison. And since we have launched, it will be a year in April, we have already obtained our ‑‑ actually very very close to obtaining our revenue projections and we estimate that we will go over our first‑year projections.

5845     We have booked 140 clients since we have been there in eight, nine months. Six are those clients are national, so that is 7 per cent. Two others were agency bookings. And then of the 132 remaining clients 73 are completely new to radio, that is 57 per cent, completely new to radio, never used radio.

5846     Forty‑five of those came from expanded budgets or other media, mainly print, the local newspaper, which is 34 per cent. And 14 of those clients were impact from other stations and that included Radio Nord station and Montreal stations as well and actually Cornwall as well.

5847     So we know that the impact will be minimal. We know that because we drill for new revenue. And yes, it does ‑‑ I mean, it does sound and compared to the other applicants, but we really have done the research and we do have ‑‑ you know, our philosophy in the Evanov Radio Group being a standalone in all the markets that we are in, we have developed strategies to train our sales reps to go in and drill for new business.

5848     And I know that probably everybody says that, but the truth is that we incent our reps with a very high commission, I believe the highest in the entire broadcast spectrum. And they have got a regular budget and they have a new business development budget and if they make one and they don't make the other, that is not good. They have to drill for new business, that is the foundation of our business plan.

5849     And we have done it, we know we will do it, we have done our research and so really the impact we do believe is $25,000 to the Bracebridge station. And like Ms Laurignano said before, there is an extra $250,000 there based on the RMB formula. And even if there was, you know, some room for error, there is still plenty of dollars for them. I don't even think they are taking those dollars out of the market.

5850     COMMISSIONER MENZIES: What the incumbent selling a 60‑second spot for?

5851     MS JOSEPH: They are selling ‑‑ well, winter or summer? Because there is two rate cards.

5852     COMMISSIONER MENZIES: Average. Give me the average annual.

5853     MS JOSEPH: Okay. Well, a 60 is $30 in the winter and $35 in the summer.

5854     COMMISSIONER MENZIES: Okay, and what is the local newspapers line rate?

5855     MS JOSEPH: I don't have that information handy.

5856     COMMISSIONER MENZIES: Okay. Do you know how much a full‑page ad costs in the local newspaper?

5857     MS JOSEPH: I don't.

5858     COMMISSIONER MENZIES: Okay. Now, you are selling for $22 for a 60‑second spot, right?

5859     MS JOSEPH: Yes.

5860     COMMISSIONER MENZIES: And that only goes to $25 in the seven‑year plan?

5861     MS JOSEPH: Yes.

5862     COMMISSIONER MENZIES: I mean, you are free to charge more or less, whatever. But compared to the rates currently being charged in the area, that is about 60 per cent lower, right? Is that your usual strategy or is that a lowball strategy for this market? On the face of it I expect your competition would accuse you of having a long‑term lowball rate.

5863     MS JOSEPH: Well, okay it is 40 per cent lower. So if you look at, for example, the Moose in Bracebridge, they are ‑‑

5864     COMMISSIONER MENZIES: (Off microphone) thirty ‑‑

5865     MS JOSEPH: Yes, sorry, their 30 is $20 and ours is $15 in the winter and then $22 in the summer. They have a two for one sale January/February like most broadcasters do.

5866     But, you know, we are coming into a market, we are going to be brand new, we believe that the rate will give them the return on the investment, it is a local station. Again, we are concentrating on Gravenhurst proper, we are not concentrating on Bracebridge, we are not concentrating on the larger centres. Will we get dollars from larger centres? Absolutely.

5867     You know, Ross Windows and Doors in Orillia, who I personally bought my windows from, they said absolutely you bring a radio station to Gravenhurst and we will advertise because we want the consumers, we want those 11,000 consumers living in that marketplace.

5868     And mainly, we have a different rate because it is a different coverage area. We don't have as large a coverage area as they do, so it completely goes in sync with our business plan.

5869     MR. EVANOV: If I can add. We have deliberately designed our signal not to put the millivolt into Bracebridge, because we are concentrating on Gravenhurst and our news will concentrate on Gravenhurst. In other words, we are a Gravenhurst service, we are not a Bracebridge service. We are not going to ignore all of the Muskokas, but our concentration here is Gravenhurst and our signal is concentrated on Gravenhurst.

5870     Most of the applicants have signals that concentrate on the entire area, we chose not to in order to allow that station some room to manoeuvre.

5871     Something else too, the stations attract two different demos and, therefore, two different types of advertisers. The same advertisers, in many cases, will not buy both stations because they are two totally different. And the needs and the wants of the people that are the of Hot AC are very different and they are much younger than the demographic that will listen to the Jewel.

5872     COMMISSIONER MENZIES: I think it is very clear that you are concentrating on Gravenhurst. I have got that part.

5873     So I just want to have another somewhat technical question just for sourcing. In your application, sections 6.1 and 6.2, total weekly hours, share of marketing listening hours are projected, population and households projected.

5874     Do you have specific ‑‑ and this goes back to your Gravenhurst, but I need it for the record ‑‑ from which specific geographic areas do you expect to draw these numbers?

5875     MR. EVANOV: I will as Debra to answer that question, as well as the ranking and the market.

5876     MS McLAUGHLIN: I can break it down in two ways for you, the population it represents of our contour and then the hours ‑‑

5877     COMMISSIONER MENZIES: Thank you.

5878     MS McLAUGHLIN: ‑‑ if that would be helpful.

5879     COMMISSIONER MENZIES: And households, if you have it.

5880     MS McLAUGHLIN: Households I don't have. I can give you the population and then I can do the conversion and file it at the end of this.

5881     COMMISSIONER MENZIES: Sure.

5882     MS McLAUGHLIN: Okay. So our coverage area or our point 5 is 38,697. We estimate that Port Severn will represent about 5 per cent, Port Carling 13 per cent, Port Sandfield 1 per cent, Bracebridge 43 per cent, Gravenhurst 28 per cent and other is about 9 per cent, that is in population.

5883     Where the shift happens is because of the local programming and because Bracebridge is an established station and people in Bracebridge are going to want to listen to Bracebridge news. And people in the outlying areas that I have described; Port Severn, Port Carling, Port Sandfield, they are going to want to listen to both to get a perspective on the region.

5884     And because people in Gravenhurst will tune we think principally to the new station but they will be, because of the different demographic, still tuned the hours don't line up with the population. In fact, we expect to take 65 per cent of our hours, of the 8,000 plus hours we described, from Gravenhurst, 25 per cent from Bracebridge and the remaining 20 per cent from those other areas.

5885     COMMISSIONER MENZIES: Okay, thank you.

5886     Back to your advertising base again in terms of that. Is there any difference in the profile of an advertiser for the type of operation you propose in terms of its format, et cetera? And other formats, would they basically still be local retailers or is there any..?

5887     MS JOSEPH: The answer is, they are very different, depending on the format that you are playing and the listeners that you are going after. And the best data that we use is either BBM qualitative data or RTS and we source what categories index high and relative to the other stations.

5888     So, for example, with regards to this station we index very high in aesthetics, insurance, financial, jewellery ‑‑ now, jewellery is broad, but it is higher end ‑‑ as well as the higher ticket items. I mean, a lot of discretionary, a lot of leisure, so high‑ticket travel.

5889     You know, if you had a travel agent, yes, they do serve the entire market but they will have, you know, travel cuts for the 18 to 34 and then you will have the cruise lines and travel such as that for the higher end. So you cannot be all things to all people and we do our niche formats very very well and we are very precise with the categories that we go after.

5890     And, like I said, we create a list of our P1, priority 1 categories that make sense on our station, that index very high and we dig for all of them, we want to own all of them. So if there is a category, we want all of them on the station.

5891     COMMISSIONER MENZIES: Okay. It just kind of got ‑‑ in your profile in terms of national advertising, I was curious to know why that might not be higher for a station aimed at this particular demographic in terms of oh, health products for instance?

5892     MS JOSEPH: You know, you and me both.

‑‑‑ Laughter / Rires

5893     COMMISSIONER MENZIES: Yes?

5894     MS JOSEPH: I will tell you, quite simply when there is not numbers, you know, when there is not a rated market it is very very difficult. And although, you know, there are ‑‑

5895     COMMISSIONER MENZIES: So is it just off the agency profile, because it is the sign of the market?

5896     MS JOSEPH: Oh, national is always off ‑‑ yes, is off the agencies. And, you know, there are government buys and there are some regional, you know, Tim Horton's regional and things like that, but it is very very low.

5897     COMMISSIONER MENZIES: Yeah, okay. That is interesting, an interesting challenge for you.

5898     Those are all my questions for now. Thank you very much.

5899     THE CHAIRPERSON: Thank you, Commissioner Menzies.

5900     Commissioner Patrone.

5901     COMMISSIONER PATRONE: Thank you, Madam Chair.

5902     My question, first off, I want to pick‑up on one of the question that Commissioner Menzies asked regarding your forecasts for revenues in this particular market. And you used the formula from the radio marketing bureau, which factored in retail sales.

5903     One of the ongoing areas of discussion throughout the week for both the Orillia and Gravenhurst market portions of this hearing has been the ability by or the challenges that broadcasters face when they try to monetize those high retail figures. And the suggestion that in fact there is a disconnect between those retail sales figures and what you are able to charge in your rate cards because of the difficulties inherent in trying to monetize those summer swells.

5904     To what degree did you factor that in when you came up with your revenue figures?

5905     MR. EVANOV: We spoke about that and discussed it. I will ask Carmela and then Ky to comment on that.

5906     MS LAURIGNANO: Well, there were indications that, you know, the economy was starting to experience some movement, not necessarily in an upward spiral as far back as 2006. And so certainly, you know, we are aware, we were aware, but I don't think that we knew the extent or the velocity that it would approach. And certainly this last fall, you know, we have seen quite a bit of room in that sort of direction.

5907     So it is not something that sort of came out of the blue, it is something that we did factor. And we looked at ‑‑ we keep track, you know, because we do operate a number of other radio stations and we have to make adjustments in our sales strategies, in forecasting how we could look at impact and be in a position to pre‑empt some of the dire situates that we could find ourselves in.

5908     But having said all that, with regards to the Gravenhurst application, it does not impact us in any significant way in terms of our ability to deliver this plan, which we can deliver regardless of market conditions. We are well‑financed, as Bill said, we are debt free. We are committed to the expenditures, we will do that.

5909     And by the same token we are very confident that we do have the margin of ‑‑

5910     COMMISSIONER PATRONE: Let me stop you there, because I am not sure you are addressing the question that I asked. What I was referring to specifically was the fact that the retail sales figures are skewed by the ‑‑

5911     MS JOSEPH: Yes.

5912     COMMISSIONER PATRONE: ‑‑ activity during the summer.

5913     Do you want to deal with that, Ms Joseph?

5914     MS JOSEPH: Yes. So to answer your question specifically about the formula, we did discount it by 40 per cent. So we did consider, certainly, that otherwise we would have obviously ‑‑ and we have in the past, depending on the markets that we go into ‑‑ factored in I guess a closer revenue projection to what the advertising potential is, so we did look at that.

5915     And also, talking about revenue and can we get that revenue, the economy has certainly affected everybody. I mean, radio sales are down, I believe 5 per cent September to December TRAM. We looked at our stations, national dollars are down, there is no doubt about it. Our retail dollars, if anything, we have to give more to get the same and our sales people have to work twice as hard to get the same.

5916     So again, we have put strategies in place depending, you know, in this economy we have had no choice but to do that. But our local dollars have not moved, they are right on target. As a matter of fact, we have increased our local dollars marginally based on our original projections in the year. We have had to adjust the national, no doubt about that.

5917     MR. EVANOV: And I would like to ask Debra just to comment as well.

5918     MS McLAUGHLIN: One of the things that we hear about is the concern, as you said, to monetize summer and seasonal business. The issue for a lot of businesses in these area is not whether they are going to advertise in the summer, it is whether they are going to do it in the winter. Because, certainly in the summer, when everybody is coming in any sane businessperson would want to get their message out there and a lot of people advertise specifically in those times.

5919     I worked for BBM for years and we used to do a summer book in Barrie. And the reason we did that was because the broadcasters there thought ‑‑ not that they couldn't monetize the summer rush up the 400, but that they weren't getting enough value for it. So they put a book in, but the problem is in capturing that group, because the way diaries are sent out, they can't be sent to temporary audiences.

5920     What happened was those books came out, the numbers weren't nearly as high and the Barrie Broadcasters at the time said let's cancel that because we get more money simply on the knowledge from media planners that there is all these people coming into the market.

5921     I also planned on Coca‑Cola for years. We bonused every market where there was a summer rush, where we know that there was going to be population. You know, were we accurate in the amount? No, but we knew as an advertiser that if we weren't there, we weren't going to make any money. We actually decreased those for the other months of the year.

5922     COMMISSIONER PATRONE: Did I hear you correctly, I believe it was Ms Joseph spoke about a competitor having a summer rate card, is that correct?

5923     MS JOSEPH: Yes.

5924     COMMISSIONER PATRONE: Do you intend on doing the same thing?

5925     MS JOSEPH: Our rate will be flexible based on it, yes.

5926     COMMISSIONER PATRONE: I want to move over to your programming commitment. It was interesting hearing you speak about instrumental music, Mr. Evanov, having in your view fallen out of favour with other stations and yet you were somewhat resurrecting that type of music with your stations.

5927     And I wanted to ask you about the supply of this music because, as you know, as stations play it less it gets harder for artists to produce this type of music and have their music heard on the radio, and then factor that in with your emerging artists commitment.

5928     Do you anticipate that there may be issues around getting a supply of emerging music as it relates to this genre of instrumental music? I hope I have asked that correctly and that it is relative clear.

5929     MR. EVANOV: And I hope I understand it correctly. I am going to ask Debra just to talk about our findings in terms of production and demand in a minute.

5930     When we launched out of Ottawa with the instrumental factor we were getting calls from all over the country. The instrumental CD business became a basement industry, if you want to call it that. But everywhere we went we were approached by instrumental artists saying that they get no exposure, no airplay.

5931     There is a casino down the road here and we went to a performance there one night. And, if you went there, there is a big area lounge just outside, in the hotel there. And there is a piano player and his name was Oscar and Oscar was playing the piano and 200 or 300 people were there just thoroughly enjoying the program.

5932     And we said hello to him and we mentioned we were from The Jewel. And he got so excited, he stopped his performance, he ran to his dressing area, came back with two CDs and said, "Would you play these?" And we are playing them.

5933     Instrumental music has been around for centuries. Every school has music departments with instrumental music. There has to be an outlet for it on radio and not just maybe a half hour here or a half hour there on CBC. And ours is woven within the format and it makes it sound familiar and very nice and it is an outlet for these artists.

5934     And then we did the catalogue and this one has surprised us tremendously. We thought we would spend a tremendous amount of money on marketing this so that people would find out about it and submit to it, but we haven't had to do that. The word of mouth has been incredible.

5935     And I will ask Debra to really expand on that.

5936     MS McLAUGHLIN: One of the challenges with the catalogue is it is Canadian instrumental music. And in order to qualify under MAPL we have to do the research. And initially, we got the CIRPA database because CIRPA used to keep a record of this. And over the years given the lack of interest, for lack of a better description, in the production industry in putting this music out there, because they could get airplay, they sort of let it slide.

5937     So the first year was spent sorting through that database and making sure everything on it qualified. When the word got out we started getting all sorts of submissions on the catalogue from artists who weren't even in Canada but were Canadian and insisted that it qualified.

5938     The challenge has been to get all that data qualified. We don't have any problems with submission. And in fact, we have just had two production companies in Canada that deal exclusive with instrumental, give us all of their artists. We are now having to go back and tell them, and it is a debate, that they don't qualify on some of there selections under the categories.

5939     So that has been the upside in terms of having available titles to insert. It has been the downside because, really, the volume is staggering from my perspective. We didn't budget it, we didn't understand how much work on that front, just getting qualified selections in the catalogue would be.

5940     COMMISSIONER PATRONE: Thank you very much.

5941     Those are my questions, Madam Chair.

5942     THE CHAIRPERSON: Commissioner Lamarre.

5943     COMMISSIONER LAMARRE: Merci, Madame la Présidente. Good morning.

5944     Just two small technical points I want to make sure that are cleared up. I am referring you back to the map that was extracting from your engineering brief, Map 3, that shows your contours, the 3 millivolt and the .5 millivolt per metre also.

5945     I will let you find it. You have it?

5946     On this map, there are two shaded areas that show potential interference zones, one coming from CKJJ‑FM, the other one coming from CFNY‑FM.

5947     I want to make sure that you realize within those zones of interference you will have reception problems and that that interference may not only be present once you go on air, it may actually not be there when you go on air, but materialize when CKJJ and CFNY decide to increase their parameters.

5948     MR. EVANOV: Yes. Well, I have been told years ago that women make the best broadcast engineers, so I am going to ask Carmela to respond to that.

5949     MS LAURIGNANO: I would add that women make a lot of bests, more than engineers.

‑‑‑ Laughter / Rires

5950     MS LAURIGNANO: However, just to answer your question, yes, we are aware of it. Mr. Moltnar has gone over it with us and we are aware of the possibilities there.

5951     COMMISSIONER LAMARRE: I don't think it would be Mr. Moltnar who would have gone over it ‑‑

5952     MS LAURIGNANO: I am sorry, Mr. ‑‑

5953     COMMISSIONER LAMARRE: Mr. Cam maybe?

5954     MS LAURIGNANO: That's right.

5955     COMMISSIONER LAMARRE: Mr. Cam, okay.

5956     MS LAURIGNANO: That's right.

5957     COMMISSIONER LAMARRE: Okay. And so you do accept the situation is ‑‑

5958     MS LAURIGNANO: Yes, we do and I apologize for that. Two items in one hearing and you get a little confused.

‑‑‑ Laughter / Rires

5959     MS LAURIGNANO: So I really appreciate your position there.

5960     COMMISSIONER LAMARRE: On the question of alternative frequencies in the event that the Commission decided to licence more than one applicant in this market, you have identified an alternative frequency is 97.5 or channel 248, as I prefer to call them that way.

5961     Have you discussed the limitations of that channel or that alternative frequency with your consultant?

5962     MS LAURIGNANO: We have to the degree that ‑‑ on a preliminary basis. We have not done an engineering brief.

5963     Our first option is for the one that we have applied for as we believe it does meet the business plan and will deliver a very reliable signal.

5964     We understand that on a preliminary basis it would work but we have not gone further than that.

5965     COMMISSIONER LAMARRE: Okay. And you understand that on a preliminary basis that the frequency you apply for in the first place is usually the best of the two?

5966     MS LAURIGNANO: Yes, absolutely.

5967     COMMISSIONER LAMARRE: Thank you.

5968     MS LAURIGNANO: Thank you.

5969     COMMISSIONER LAMARRE: Those are all my questions.

5970     THE CHAIRPERSON: Thank you very much. I do have a couple of follow‑up questions and I do apologize if I'm going to ask you to repeat some of the things that you may have already discussed with Commissioner Menzies, in particular about your spoken word.

5971     But Mr. Gamble, I do believe I heard you say that there will be a total of 19 hours of spoken word programming?

5972     MR. GAMBLE: That's correct.

5973     THE CHAIRPERSON: And I'm looking at your response to deficiencies dated November 1st where you provided the grid of the miscellaneous programming that you did talk about with Mr. Menzies at three hours and 22 minutes. And then you spoke about your news component of five hours and 22 minutes.

5974     MR. GAMBLE: Right.

5975     THE CHAIRPERSON: And of course it's not a difficult math equation because that totals eight hours and 44.

5976     MR. GAMBLE: The balance of that is our announcer talk which is the rolling talk throughout the day which will also include mentions of community calendar events and of course are our jocks talking about what is going on the air. So that additional, I believe 16 hours and 18 minutes, would be strictly announcer talk.

5977     THE CHAIRPERSON: Okay. That still doesn't get me to 19 hours.

5978     MR. MOREMAN: Commissioner Cugini, if I could jump in, there is also ‑‑ the five hours and 22 minutes as has been said a few times, is pure news. So the surveillance is also additional to that.

5979     We do have a more complete grid that breaks down the news, surveillance, features and announcer talk that I will ask Bill or Carmela to confirm we are prepared to submit by the end of the hearing, but I think we should be okay with that.

5980     MR. GAMBLE: I can give you a total right to the minute right here.

5981     THE CHAIRPERSON: Why don't you do that?

5982     MR. GAMBLE: All right.

‑‑‑ Laughter / Rires

5983     MR. GAMBLE: Pure news, five hours and 22 minutes; sports/weather totals just over ‑‑ about one hour and 30 minutes; traffic reports, two hours and 50 minutes; features that we talked about before, three hours and 22 minutes, and if you add in our announcer talk, six hours and 18 minutes, that should bring you out to about 19 hours and eight minutes or 15.7 percent of the programming schedule.

5984     THE CHAIRPERSON: I'm going to take your word for it on the math at this point.

5985     Thank you very much.

5986     MR. GAMBLE: Maybe a minute here and there.

5987     THE CHAIRPERSON: But thank you very much for that clarification.

5988     MR. GAMBLE: Thank you.

5989     THE CHAIRPERSON: Mr. Evanov, the question I have asked every applicant throughout these proceedings: Are you prepared to file within 10 days an updated financial capacity letter?

5990     MR. EVANOV: Yes, we are.

5991     THE CHAIRPERSON: Thank you very much.

5992     Legal counsel.

5993     MR. BOWLES: Thank you, Madam Chair. I only have one follow up matter to discuss.

5994     With respect to the undertaking provided in response to a question by Commissioner Menzies to provide the panel with the number of households that will be targeted in the primary marketing area can I get the date by which you would be willing to fulfill this undertaking?

5995     MR. MALCOLMSON: End of day tomorrow, Friday.

5996     MR. BOWLES: By tomorrow is ‑‑ by end of the day tomorrow?

5997     MR. MALCOLMSON: Yes.

5998     MR. BOWLES: Okay, thank you very much.

5999     THE CHAIRPERSON: Sorry, I do have one other thing.

6000     You attached the Gravenhurst applicant playlist duplication analysis to your oral presentation this morning. Is this new information or was this information that was included in your original application?

6001     MS McLAUGHLIN: It is a duplication analysis based on what other applicants filed so it could not be contained, but it is data that is on the public record.

6002     THE CHAIRPERSON: So it's an accumulation of the data from other applications?

6003     MS McLAUGHLIN: That's correct.

6004     THE CHAIRPERSON: Okay, all right. We just have to make sure.

6005     MR. EVANOV: And the BDS.

6006     THE CHAIRPERSON: Okay. And therefore it's acceptable.

6007     I want to thank you very much for your presentation this morning, and look forward to see you in the upcoming phases of the hearing.

6008     Thank you. We will take a 15‑minute break.

‑‑‑ Upon recessing at 0950 / Suspension à 0950

‑‑‑ Upon resuming at 1018 / Reprise à 1018

6009     THE SECRETARY: We have now reached Phase II in which applicants appear in the same order to intervene on competing applications if they wish.

6010     For the record, JOCO Communications Inc., Instant Information Services Incorporated and Bayshore Broadcasting Corporation have already indicated they will not appear in Phase II.

6011     I will therefore call Mr. ‑‑ from Muskoka‑Parry Sound Broadcasting Limited.

‑‑‑ Pause

6012     THE SECRETARY: I would just ask you, Mr. Grossman, to reintroduce yourself for the record ‑‑

6013     MR. GROSSMAN: My name is ‑‑

6014     THE SECRETARY: ‑‑ and you have 10 minutes.

6015     MR. GROSSMAN: It won't take 10.

INTERVENTION

6016     MR. GROSSMAN: My name is Christopher Grossman. I'm the President of Haliburton Broadcasting Group and the Muskoka‑Parry Sound Broadcasting Limited.

6017     The following is an intervention opposing the applications by Evanov Communications Incorporated, Bill Wrightsell, Bayshore Broadcasting Corporation and JOCO Communications Incorporated.

6018     This intervention is based solely on the potential devastating financial impact a new radio service would have on CFBG Bracebridge in combination with the current and ongoing world economic meltdown.

6019     We were confident that we could have weathered a new competitor in a good economy but now. We don't oppose a new service in the future. We just oppose a service now.

6020     When this application process for Gravenhurst began, all broadcasters were enjoying one of the longest and most profitable runs in the period of radio's history. Those truly were the good old days.

6021     The radio business is like the stock market. It looks to the future and represents the confidence that our retailers have in the future. Future bookings and the number of unique advertisers in our industry is in a serious decline for quarters three and four and organic radio growth has gone from flat in quarter one to a negative outlook for the next two quarters in the foreseeable future. Our customers are under attack from a global meltdown and a frozen credit market.

6022     The communities of Gravenhurst and Bracebridge have experienced the most dramatic decline in job losses in recent memory which are Dura Automotive, which is Muskoka's largest employer and the largest manufacturing company in the area closed its doors last year, throwing 400 employees and families out of work.

6023     This December Algonquin Automotive announced the layoff of 50 fulltime employees and later in the month announced an extended winter shutdown and mothballing of the Huntsville and Bracebridge plants. It was further announced this week that those layoffs may be extended indefinitely.

6024     Last week, January 2009, Fennar Dunlop, an industrial belt manufacturer in Bracebridge, laid off 32 fulltime employees and Glanstein, a siding/covering plant, laid off seven of its 10 employees.

6025     These companies' job losses are over 500 people in a community of 16,000 in Bracebridge and 11,000 in Gravenhurst and represent all the real manufacturing in the Muskoka area. It disappeared in less than a year.

6026     Other key areas we have seen, Newark Marine, the largest marina with five locations in Muskoka, filed for bankruptcy. And for the third year in a row we expect to see a net decline in tourism and overnight visits to Muskoka.

6027     And how has that affected the communities of the people in Bracebridge and Gravenhurst? In January 2009 alone there has been a record increase from the month prior in families depending on social assistance in Muskoka. Muskoka's Commissioner of Community Services, Rick Williams, says they are expecting a 10 percent increase in caseloads this year.

6028     In the most recent month reporting period Gravenhurst has the highest actual number of families ‑‑ the highest families living on social assistance in the Muskoka area even though it has the smallest population base. Most people on welfare, smallest population base in Muskoka.

6029     Residential housing sales are off 23 percent year to date over last year.

6030     Recreational and luxury, recreational property sales are off 43 percent year to date and price declines are expected to outpace residential real estate by 23 percent.

6031     Applications for access to social housing in Muskoka has increased 15 percent last year same time.

6032     And finally, on Monday of this week, the District Council of Muskoka voted in favour of increasing the emergency assistant fund for residents in crisis after a record number of applications for emergency funding this month. This has doubled from last year and in the first three weeks of January the district has seen a record amount of people requesting payments for food, shelter and utility bills. This is the last resort for the social safety net in Muskoka.

6033     And the good news is not that good. The only major mall development in Gravenhurst is a Canadian Tire store that is replacing an existing store and the Muskoka Wharf, the largest retail capital project in Muskoka, which was originally planned to be three buildings, has been trimmed to two, five of the 10 original businesses have gone out of business, two of the buildings are vacant and there is retail properties available in every retail category. And as of today, if you were to drive 30 minutes north you will see five businesses in operation today.

6034     How this will affect our revenues is our current booked‑ahead for the key summer period on CFBG, which represents 100 percent of our operating profit for CFBG, and 60 percent of our annual revenues are running 11 percent behind last year.

6035     We expect to see the full brunt as most economic analysts agree. The full brunt of this meltdown will begin in the summer period with no real end in sight. The combination of this meltdown and a new licence could take CFBG from profitability to an operating loss and the collateral damage of that loss would have a dramatic impact on our company.

6036     As these profits from Bracebridge and North Bay, our more profitable stations, fund people, capital, content and communities like Iroquois Falls, Kapuskasking, Elliott Lake; small communities that on their own are standalone properties, could not afford these investments and are certainly not viable.

6037     In listening to the presentations over the last day, Bayshore and Evanov's applications are excellent. They are well thought out. They are logical and they are done by excellent broadcasters. I have a tremendous amount of respect specifically for Bill, knowing that in a good economy these applications would work.

6038     We saw the same opportunity in Bracebridge in the good times. We filed an almost identical application to Evanov. It's just not now, not with this uncertainty, not with this unknown. There is too much risk for our company.

6039     Finally, this June represents the 50th anniversary of your predecessors, the Board of Broadcast Governors, and the defining tenets for the Governors was "fairness and commonsense". This is really a good time for that.

6040     Thank you, Madam Chair and Commissioners, and the other applicants for letting me speak. I really, really appreciate it and I welcome your questions.

6041     THE CHAIRPERSON: Thank you very much, Mr. Grossman. We too appreciate your presence here this morning.

6042     I have one question for you and then I will ask my colleagues if they have any further questions.

6043     You yourself said radio looks to the future. If we choose to licence one of the applicants today they have up to, realistically, three years to launch. Is that not looking to the future far enough?

6044     MR. GROSSMAN: Yes, it is and, you know, I think the market could absorb it in a good strong economy. If it's a condition of licence that they can't put it on for three years I would certainly accept that.

6045     THE CHAIRPERSON: Okay.

6046     Commissioner Molnar.

6047     COMMISSIONER MOLNAR: Thank you. You just mentioned that you had filed an application and it was withdrawn for various reasons, including potential common ownership policy issues. So you felt that there was capacity and that capacity, you suggest now, has been basically sucked up by the recession; is that what you are saying to us?

6048     MR. GROSSMAN: Yeah, what I'm saying is that I think that the combination of a new player in the market and a recession that could be a depression, and in the radio business looking forward, you know, the indication that we see is something we have never experienced before.

6049     When Clear Channel which is the most inspected broadcast company in the world lays off 10 percent of its staff last month, they may know something we don't.

6050     You know, I spend a lot of time in the States working down there and I have seen ‑‑ you know, the indications were ‑‑ the only difference between us and them is we are 18 months behind them and the radio business in south Florida is off 13 percent not year to date but last month. So what they are looking at is something that we could be looking forward to.

6051     Just it scares the death ‑‑ you know, I have inherited my business back today willingly and lovingly ‑‑

‑‑‑ Laughter / Rires

6052     MR. GROSSMAN: You know, it's a frightening proposition. I would love to have been able to compete with my application that we had. We had the support of just about everybody that was relevant in this community ‑‑ but that's not the case. So you know second choice is what I'm saying.

6053     COMMISSIONER MOLNAR: I would like to get your perspective. You mentioned the applications put forward by Bayshore and by Evanov and I would like to ask you particularly about the application of Mr. Evanov. He was up just before you ‑‑

6054     MR. GROSSMAN: Right.

6055     COMMISSIONER MOLNAR: ‑‑ and their party estimated that the impact on your station of their entry would be approximately $25,000 per year.

6056     MR. GROSSMAN: Right.

6057     COMMISSIONER MOLNAR: And so it's difficult to rationalize these two different ‑‑

6058     MR. GROSSMAN: As I said to Bill, I would want that to be a condition of licence, though.

‑‑‑ Laughter / Rires

6059     MR. GROSSMAN: You know the problem is that most of the applicants have understated our revenues in the markets. So you know we take and have no issue discussing it ‑‑ you know, a quarter of our overall revenue comes from Gravenhurst customers. It would have a dramatic impact on it.

6060     To suggest that a station that targets Gravenhurst where 25 percent of our revenue comes from represents $25,000 is illogical, but not that Ky would know that, but the reality is it will have a devastating impact on those revenues in our marketplace.

6061     So you know I don't know how they came to that calculation. You know they are certainly competent and they have a lot of experience in doing it, but obviously it has dramatically understated the impact it would have on us.

6062     COMMISSIONER MOLNAR: Thank you. I just have one more question and it continues ‑‑ you say a quarter of your revenue comes from the market. The other thing I had some interest in when I heard it was the price that Evanov proposed was, I think ‑‑ averaged out over winter and summer of approximately $22 per spot ‑‑

6063     MR. GROSSMAN: Right.

6064     COMMISSIONER MOLNAR: ‑‑ or per minute, actually ‑‑ per minute. And your rates, it was suggested to us or mentioned to us, were $30 in the winter and $35 in the summer.

6065     MR. GROSSMAN: Right.

6066     COMMISSIONER MOLNAR: And so I wonder if you feel that there would be any potential to re‑price your markets?

6067     MR. GROSSMAN: Yeah, and you know, again, those numbers are completely inaccurate. You would never know it. It's a good guess but the reality is our prices in the winter are dramatically less than that and our prices in the summer are dramatically more than that.

6068     So you know when so much of your revenue flows into those four months of May, June, July and August, you know, we have to fish when the fish are in the lake. And the reality is in January in Muskoka it's pretty slow going right now, even in a bad economy or good economy.

6069     Where the money is, is those four core months. And again those ‑‑ you wouldn't know that but the reality is we charge a lot less in January and a lot more in July than what was quoted.

6070     COMMISSIONER MOLNAR: And would you have any concern if a new entrant came in, a very effective new entrant came in with rates that were potentially 40 percent below yours, would that have an impact simply on the amount of advertisers you would be able to acquire or would that impact your revenue base?

6071     MR. GROSSMAN: Yeah, I have worked with the Evanov Group before and I have a pretty clear idea of the time of ‑‑ or how they price their inventories. I think we have a similar strategy, is that you know in a demand situation our prices tend to increase.

6072     It's difficult for me to understand how they would, with that older demo ‑‑ that format is a tough sell in Canada, you know in terms of its overall delivery ‑‑ how they would create that kind of revenue base out of the limited amount of advertisers.

6073     I just want to clarify one of the things that Ky said, which was a good point. He said in Muskoka it's not ‑‑ they don't target their advertising. They buy advertising. So they ‑‑ you know, if there was only one advertiser and Pride Marine is a perfect example of an advertiser that has been ‑‑ you know had a difficult time sort of breaking through in terms of radio advertising. But the reality is they only buy one radio station. So it would replace us which they buy.

6074     COMMISSIONER MOLNAR: Thank you. Those are my questions.

6075     THE CHAIRPERSON: Commissioner Menzies.

6076     COMMISSIONER MENZIES: I just noticed one thing. You didn't mention Instant Information Services in terms of that. Would they have an impact on you?

6077     MR. GROSSMAN: No.

6078     COMMISSIONER MENZIES: Now, on your overall theory ‑‑ well, not theory but case ‑‑ if all that's true, if it's as bad as you say it is, why wouldn't a new licensee in the normal course of things take a look at that and say, you know what, I'm going to take my time launching?

6079     Wouldn't the business case itself if it's that apparent to you, be that apparent to them and say, "Look, we have got three years to launch this thing. Why would we rush in there and, you know, start up in January of 2010 or something like that?" Why wouldn't they take their time and say ‑‑ I'm just presuming they are no more anxious to lose more money than you are anxious to have your revenues go down more than necessary.

6080     MR. GROSSMAN: It just takes me back to a comment that Paul Larche said yesterday when I talked to him about it, "You know, why did you pull your application in Gravenhurst and Bracebridge?" because I originally felt that that would have been the biggest threat to us. And he just said it was not the right time.

6081     I think the same logic that you used in Guelph where there was, you know, a large ‑‑ a well financed, public company, you know you pulled out of there and said there is really no argument that supports any logic that suggests that we know what the future is going to hold.

6082     To give them the licence and hope that the economy is going to turnaround is a risk that I don't want you to take. You know it would impact markets that ‑‑ believe me, when I buy these stations in the north that are losing money, they are out of compliance, that are problem licenses for everyone, you know, these are stations that are under‑funded. We use the profits ‑‑ we really do ‑‑ to keep those stations viable in communities that wouldn't support it.

6083     Iroquois Falls, as an example, it's a station that bills $19,000 a year in a community that the plant is closed; every second store is boarded up. You know, there is nothing going on right there right now and the only reason that they are open is because we fund it from the profits that we make in our more profitable markets.

6084     That's the ‑‑ you know, the franchise of our business is to buy distresses, make them a viable business.

6085     So in these times and on the ‑‑ I have never intervened against anybody ever, even when it's hurt our business. But today it's extraordinary.

6086     COMMISSIONER MENZIES: Okay, thank you.

6087     THE CHAIRPERSON: Well, thank you very much, Mr. Grossman. It is true that we don't often have these kinds of interventions in Phase II during radio hearings but I ‑‑ you know, especially in these extraordinary times they are very useful and I want to thank you for being here.

6088     MR. GROSSMAN: And I, Madam Chair, want to thank you. As one of my children that I was communicating with they said, "What are you doing today?" and I said, "Well, I have to go back and I have got to sort of try to pull a rabbit out of the hat" and she said, "Tell that Chairman that she is solid".

‑‑‑ Laughter / Rires

6089     THE CHAIRPERSON: From the mouths of babes.

6090     MR. GROSSMAN: Thanks very much.

6091     THE CHAIRPERSON: Thank you very much.

6092     Madam Secretary.

6093     THE SECRETARY: Thank you, Madam Chair.

6094     I will now call Bill (William) Wrightsell, on behalf of a corporation to be incorporated.

‑‑‑ Pause

6095     THE SECRETARY: Please reintroduce yourself for the record, and you have 10 minutes.

INTERVENTION

6096     MR. WRIGHTSELL: I will. My name is Bill Wrightsell ‑‑ Madam Chair, Commissioners.

6097     While we have great respect for the competing applications for a new licence in Gravenhurst, we feel compelled to state the obvious. We are an independent applicant here and we believe the market deserves a new station.

6098     The market size and competitive situation is tailor‑made for a new player like ourselves to be introduced into Canada's broadcast system.

6099     While we have no particular criticism with any of the presentations, we honestly feel that we have developed a proposed music format and programming features that are at least on par with the larger companies and a strong business plan and sales strategy.

6100     We will be 100 percent local, local, local, local while both Bayshore and Evanov will likely adapt a new licence into their existing frameworks.

6101     Further, as the Commission is well aware, the other applicants have been awarded numerous new licences in recent years. Bayshore has had three licences in the last three, Port Elgin, Goderich and Wasaga Beach; Evanov, four licences in the past few years, Halifax, Ottawa, Hawkesbury and Winnipeg.

6102     The Commission should also note that The Jewel in Newmarket is currently tied for sixth place in the BBM Haliburton/Muskoka sell on the basis of the county Reach Report, cumulating over three years from 2005‑2006 to 2007‑2008. Thus, the music format proposed is already making a significant impact in the existing market.

6103     Again, this market is the perfect fit for a new company to succeed. It will provide much needed diversity to the area without being challenged by well‑heeled broadcasters.

6104     With regards to the situation of market dominance of Haliburton Broadcasting Group throughout the Muskoka/Haliburton area, licensing a new station for the Town of Gravenhurst could very well be the last chance to provide competition on the dial, encompassing the area bound by Parry Sound, Huntsville, the Town of Haliburton, around to the City of Orillia coverage area.

6105     We give Mr. Grossman credit for assembling a collection of stations around this large geographic area but Gravenhurst is well capable of supporting its own independent station. We believe local ownership will be the best solution for the listeners and for the advertisers.

6106     We are the only applicant that is 100 percent community‑based. Our station will not be satellite ‑‑ will not be a satellite operation.

6107     Moving to Gravenhurst is important to make this work. I have no other radio operations to distract me from the main job which is providing the best radio service possible to the residents and the community.

6108     Thank you very much.

6109     THE CHAIRPERSON: Commissioner Lamarre, please.

6110     COMMISSIONER LAMARRE: Thank you very much.

6111     MR. WRIGHTSELL: Yes.

6112     COMMISSIONER LAMARRE: You have mentioned in your presentation ‑‑ I let it go. I figured ‑‑ I thought I could figure it out by myself. I guess I didn't.

6113     Again, you said it this morning. You said your operation would not be a satellite operation. What do you mean by that?

6114     MR. WRIGHTSELL: Well, we have no ‑‑ we are going to be a standalone operation in Gravenhurst. We have no other stations that we can share resources with. So we can't do any kind of network programming or have one station elsewhere providing programming for the Gravenhurst station.

6115     COMMISSIONER LAMARRE: Okay.

6116     MR. WRIGHTSELL: Okay.

6117     COMMISSIONER LAMARRE: Okay, I understand. Thank you.

6118     THE CHAIRPERSON: Commissioner Menzies.

6119     COMMISSIONER MENZIES: I just want to touch on this again in terms of timing. What convinces you that the arguments of the Bracebridge incumbent don't stand up in terms of the state of ‑‑ the current state of the market?

6120     MR. WRIGHTSELL: Well, it looks to me like it's a very healthy market. Driving the streets of Gravenhurst there seems to be a fair amount of economic activity. I didn't see the boarded up stores on the main drag. It looks to me like a vibrant community and, like I said the other day, you know, they have always lived in the shadows of the other markets, Bracebridge and Orillia and so forth.

6121     So having our own radio station I think the business community will support us and back us and I think there is probably room for competition in the Bracebridge market.

6122     More salespeople on the street for radio and more people talking about radio will generate more sales for radio. And I think that actually Mr. Grossman's station will benefit from having another station in the market.

6123     COMMISSIONER MENZIES: Had you been aware of the number of layoffs?

6124     MR. WRIGHTSELL: Well, I knew of the Dura plant. That happened quite some time ago. But some of the other ones ‑‑ I did hear about the belting plant, that they were looking at a small reduction in staff.

6125     But I still think ‑‑ you know, the community also is very retirement‑based and there is a fair amount of government sector jobs there too.

6126     COMMISSIONER MENZIES: Thank you.

6127     MR. WRIGHTSELL: Yeah, thank you.

6128     THE CHAIRPERSON: Commissioner Patrone.

6129     COMMISSIONER PATRONE: Commissioner Menzies sort of asked the question I was headed towards but you heard the last speaker, Mr. Grossman, talk about the fact that Gravenhurst will eventually be strong enough economically to support another station but now at this particular time it really can't.

6130     Do you think that perhaps your timing might be off relative to adding another broadcast property in that market?

6131     MR. WRIGHTSELL: Well, at the time I prepared the brief and, of course, I think everybody else here is in the same situation where when everyone was preparing their briefs this economic situation wasn't on the table. There was certainly a slowdown in southern Ontario overall but, you know, things have been a little rough the last few months.

6132     But, like I said yesterday, you know, the Bank of Canada is predicting things are going to start bouncing back next year. There is a fair amount of stimulus that governments all over the world are throwing into the economy to try and prop things up.

6133     So you know, right now today, yeah, probably not the best time but you know, certainly you know down the ‑‑ by the time we are ready to air, like I said yesterday ‑‑ I mean ideally next summer would be good but if things ‑‑ you know, if the economy was in poor shape after a licence was granted, we would certainly hold off and maybe do it in summer of 2011.

6134     COMMISSIONER PATRONE: Does the fact that you would be a standalone put you at an economic disadvantage compared with other applicants, given that there would be no synergies that you could employ relative to administrative sales, human resources, accounting, that sort of thing?

6135     MR. WRIGHTSELL: Right. Well, I think I would be lying if I said that wasn't true. I mean if you have other stations that can provide programming to your stations ‑‑ to other stations that are less profitable, you know, that's obviously better.

6136     So yeah, it would be a challenge for a standalone but, like I said, I think also the public will respond to having a local radio station with local ownership, with local troops on the streets.

6137     COMMISSIONER PATRONE: Those are my questions.

6138     Thank you very much, Madam Chairman.

6139     MR. WRIGHTSELL: Thank you.

6140     THE CHAIRPERSON: Commissioner Menzies has a follow up.

6141     MR. WRIGHTSELL: Okay.

6142     COMMISSIONER MENZIES: I just had a quick follow up in just terms of what you just said. You said if you couldn't launch next summer you would probably hold off until the summer of 2011, and I wanted to know if you meant 2011 or if you meant 2010.

6143     MR. WRIGHTSELL: 2011. Next summer would be 2010 or 2009, right. We are 2009 right now.

6144     COMMISSIONER MENZIES: So you were talking ‑‑ okay.

6145     MR. WRIGHTSELL: I'm talking ‑‑ yeah, the Commission likely would take three or four months to make the decision.

6146     COMMISSIONER MENZIES: I just wasn't sure when you said "next summer" whether you meant this summer.

6147     MR. WRIGHTSELL: Oh, right, yeah ‑‑ no, no, summer of 2010.

6148     COMMISSIONER MENZIES: Okay, thank you.

6149     MR. WRIGHTSELL: Thank you.

6150     THE CHAIRPERSON: Thank you very much, Mr. Wrightsell. Those are all the questions.

6151     MR. WRIGHTSELL: Thanks.

6152     THE CHAIRPERSON: Madam Secretary.

6153     THE SECRETARY: Thank you, Madam Chair.

6154     For the record, Evanov Communications Inc., on behalf of a corporation to be incorporated have indicated they will not be appearing in Phase II. So this completes Phase II.

6155     We will now proceed to Phase III in which intervenors appear in the order set out in the Agenda to present their intervention.

6156     Just for the record, NewPlace Reading Services indicated they will not be appearing today for this phase as they have already been heard in Phase II for the Orillia market.

6157     I would now call Redhead Media Solutions Inc. to come to the presentation table.

‑‑‑ Pause

6158     THE SECRETARY: When you are ready, sir, please introduce yourself for the record and you have 10 minutes.

INTERVENTION

6159     MR. SMITH: Good morning. My name is Graydon Smith. I'm company principal for Redhead Media Solutions.

6160     Thank you for allowing me to appear in order to comment on the licence applications for a new radio station in the Gravenhurst and South Muskoka marketplace and specifically on the application submitted by Mr. Bill Wrightsell.

6161     My name is Graydon Smith. I'm company principal for Redhead Media Solutions, a communications and production company based in Bracebridge, Ontario.

6162     While we currently work with a variety of clients, many of who choose radio when exercising their advertising budgets, I'm almost a former on‑air personality in the Muskoka area, working at CFBK‑FM Huntsville and CFBG‑FM in Bracebridge in the early to mid‑nineties, as well as a short time at Rock 95 in Barrie, Ontario. Of course today, both Huntsville and Bracebridge stations fall under The Moose banner.

6163     Lastly, I'm also a sitting municipal councillor for the Town of Bracebridge as well as the District Municipality of Muskoka, although I appear here today in no official capacity representing that office or my constituents.

6164     Based on recent studies commissioned by the District Municipality of Muskoka, and completed by Watson & Associates Economists, Muskoka is undergoing a profound change in demographic makeup that will continue for years to come.

6165     Key findings in this study include the following: Permanent population growth is forecast to continue at a higher rate than Ontario as a whole. The district's population is aging more rapidly than the rest of Ontario. In‑migration of the 55 to 74 age group appears to be less sensitive to provincial economic conditions than the working age population 19 to 54.

6166     From a format standpoint, I believe the radio marketplace is currently under‑serving this important and emerging older demographic which not only comprises a large portion of the overall population but one that is attractive to advertisers due to their higher levels of disposable income. Again, referring to the Watson & Associates study:

"A significant proportion of forecast net in‑migration is anticipated from the 55‑plus age group from the Greater Golden Horseshoe, both new residents and conversions from seasonal to permanent. On average, these residents have considerably higher average income levels when compared to the average household income of local residents compared." (As read)

6167     MR. SMITH: Muskoka is undergoing a transformation in its population. It's aging. It's seeing those in the youth and young adult category move out of the community in search of education and employment, with boomers and seniors taking their place in search of attractive communities for healthy living and retirement.

6168     It is projected that Gravenhurst will experience a 28 percent increase in permanent population by 2031, Bracebridge increasing by 46 percent. When it comes to seasonal population Gravenhurst again looks to increase by 18 percent in the same timeframe with Bracebridge anticipating a similar number.

6169     These factors help substantiate the ability of the Gravenhurst market to support a new radio station and also points to servicing that sector of the population to which a gold‑based adult contemporary format would resonate. The Wrightsell application does this with the proposed format of SUN‑FM.

6170     It's the same 35‑plus age group that are most engaged in staying abreast of what is going on in their community and abroad. Current news coverage in Gravenhurst consists of a weekly newspaper, the Gravenhurst Banner, a regional weekend newspaper whose front page is customized for each town in Muskoka, a bi‑weekly publication, various monthly feature magazines in the Muskoka and area and, of course, Bracebridge's Moose FM newscasts. While this may sound like a lot to some there are obvious gaps in the coverage.

6171     What is missing is timely coverage by an organization that puts Gravenhurst and surrounding area first and foremost with immediate reporting on both news and community events as they happen.

6172     There is no question that local organizations from the smallest service clubs to both levels of municipal government, which I'm intimately familiar with, need extraordinary help from all media outlets to help inform the public. It is, despite the usefulness of an organization's web page, a necessity for rural areas such as Muskoka. They can make the difference between people receiving critical information or not.

6173     It is my opinion that Gravenhurst has historically played somewhat of a second fiddle to Bracebridge when it comes to coverage, even by its local newspaper. Much of the Banner's news and editorial content is similar to that of Bracebridge and other Metroland area newspapers. Current radio coverage is sporadic, perhaps due to the large geographic area that is difficult to cover from a station based outside of the town of Gravenhurst.

6174     Save for the most dramatic of events, there is no immediate web‑based reporting of local news taking place. In short, if you want to find out what is going on in Gravenhurst and surrounding area in a timely fashion, hurry up and wait. In this age of information dissemination this is a situation which is unacceptable.

6175     I believe a new radio station should not only be committed to local news coverage but be committed to the Town of Gravenhurst by being 100 percent locally‑based. By having staff live and work in the community they will become part of the mosaic, become the lead supporter of events and individuals that will ultimately make the Gravenhurst area a better place to live. Giving access to community groups, service clubs and individuals working to make a difference should be a key mandate for the successful applicant.

6176     The Wrightsell proposal addresses these concerns through extensive local news coverage which is also fully web‑accessible, significant free airtime access for community groups and organizations, and support of the arts community.

6177     The town of Gravenhurst is a wonderful place to live, conduct business and relax. It continues to reinvent itself, shedding its old skin to reveal an important player in the tourism, retail and lifestyle environments.

6178     In recent years it has seen the revitalization of the wharf area from underutilized waterfront to a drawing card for people hundreds of kilometres away, featuring retail shops, restaurants, museums and more. Its retail sector is maturing with a major new development in the town's south end which will see jobs created and more people coming to shop.

6179     Its lifestyle is changing with waterfront condominiums dotting the bay, championship golf courses within minutes of the town centre and new hotels and housing developments under construction.

6180     In short, Gravenhurst is no longer considered the weak sister when compared to her sibling towns of Bracebridge and Huntsville but a vibrant community on the rise that has new requirements. As part of this maturity, a new radio station based and operated 100 percent in Gravenhurst is needed to reflect this emerging growth.

6181     It's no longer acceptable that the community should look to Bracebridge for its media needs, no longer acceptable that advertising dollars flow out of their town, no longer acceptable that community news access is frankly no better than it was 10 years ago.

6182     It's time the town changed for the better, and I believe the application put forth by Bill Wrightsell will achieve this goal.

6183     Not only does this application show clear regard for community demographics and involvement, it also represents an opportunity for the CRTC to allow for new investment in the radio industry in a place where it is appropriate and significant.

6184     Muskoka radio is currently dominated by one ownership group. The station is in Bracebridge and Huntsville as well as many others, creating a vast network for that company. As you know, recently the proposed sale of that network was scuttled, apparently due to factors surrounding the worsening economy.

6185     While I make no comment on those stations in particular, I remain concerned the vulnerability of larger operations during tough economic times can often lead a consolidation in various forms, through programming or other more drastic means, resulting in homogenous, non‑community based programming.

6186     While this may be financial reality, I do not believe it serves the desires and needs of the citizens where these stations are located. There is a case to be made that while the independent operator may not enjoy quite as much economic success during good times, they can be sometimes more impervious to defeat during the bad ones.

6187     Having reviewed the applications, I'm confident the town of Gravenhurst would be served very well now and in the future by the Wrightsell proposal.

6188     Thank you for your time and the opportunity to speak with you today.

6189     THE CHAIRPERSON: Thank you very much, Mr. Smith, and welcome to our hearing. And thank you for solving the mystery around the name of your company.

‑‑‑ Laughter / Rires

6190     THE CHAIRPERSON: Commissioner Patrone.

6191     COMMISSIONER PATRONE: Thank you, Madam Chair.

6192     Thank you, Mr. Smith.

6193     You spoke a little bit about how you feel that this area of Gravenhurst is buffered somewhat from the economic issues that are facing other parts of Ontario. That runs quite counter to some of the other ‑‑ what some others are saying that in fact this place is feeling it and of course you heard Mr. Grossman talk about the hundreds of layoffs that have already taken place.

6194     How can you justify saying what you are saying and how would you expect the CRTC to kind of try and figure out where the truth is between what you say and what Mr. Grossman has said?

6195     MR. SMITH: Well, if I may, I will put on my experience as a district councillor for the region and just talk about that. You know, having worked with people in the town of Gravenhurst I know they are taking steps to improve their economy, hiring an economic development officer in the last couple of years who is really out spearheading new development in that community.

6196     And while it may be true that some of the new developments are suffering now, it still poises them well for the future to have retail space available for companies to expand into. While there may be retail space available in the wharf area today; again, I have heard other applicants talk about, you know, what are things going to be like in the future?

6197     I think it serves Gravenhurst well in the future to have that space available now. I mean, essentially they are prepared in a bad time for when times get better.

6198     And the same could be said about the retail development that's occurring in the south end of town where space will be available for retailers to come in, you know, when times are better.

6199     I make no representation that Muskoka is doing gangbusters today in any of its markets compared to what it was. We certainly have seen significant layoffs in the manufacturing sector. It's not the manufacturing sector that's buying radio advertising. It's the retail sector, as you well know, and certainly from reports that I have seen, admittedly somewhat vicariously, they had a very good Christmas season. So you know people ‑‑

6200     COMMISSIONER PATRONE: Just this past Christmas?

6201     MR. SMITH: Just this past season.

6202     COMMISSIONER PATRONE: Do you have any figures on that?

6203     MR. SMITH: I don't. Again, that's ‑‑ that's somewhat second‑hand information that I have just been privy to through conversations with some staff at various levels of government.

6204     You know, the downturn will affect Muskoka. The downturn will affect Gravenhurst. There is no doubt about it. But, again, I think the position they put themselves in to be ready for when things come back around is admirable.

6205     COMMISSIONER PATRONE: Also, you have spoken and written about your belief that in fact ‑‑ and this has sort of been an area that cropped up repeatedly during questioning over the last week or so ‑‑ and that is monetizing the retail sales which peak as you know or reach a bubble level during the summer months.

6206     It is your view, based on your submission, your written submission, that in fact these can be monetized. And I just want to quote briefly from your written submission:

"There is no doubt that many current cottage country stations benefit greatly from this phenomenon." (As read)

6207     COMMISSIONER PATRONE: To what extent do ad rates increase during the peak seasonal period?

6208     MR. SMITH: Well, I think that's subject to any given time, any given station in any given place. I don't believe that the current operator in Muskoka has a rate card to make a definitive statement on that.

6209     But I think what used to occur even ‑‑ and I will hearken back to a time a long time ago when I was on the air at that very station. You would have sold out situations in the summer where certain day parts would essentially be blocked out and there would be advertisers that want to get in there and can't because the rush was so great. Certainly, the rates would go up, you know, commensurate to that demand.

6210     So I don't think any operator would be wise to back themselves into a corner, you know with a rate card, because supply and demand economics would dictate that the sun is shining and there is hay to be made in the summertime. And that's going to vary depending on the town.

6211     COMMISSIONER PATRONE: Were you involved in sales?

6212     MR. SMITH: No. I was certainly involved in voicing all the commercials that the sales department put through and they were never ending.

6213     COMMISSIONER PATRONE: Are local ratings measured during the summer period?

6214     MR. SMITH: I'm not aware that there is a book that is produced in that market for the summertime.

6215     COMMISSIONER PATRONE: I ask because, as I mentioned, some of your research runs counter to some of our research. So I'm just trying to glean what your thoughts are in regards to how this phenomenon, sort of peculiar to markets like one ‑‑

6216     MR. SMITH: Yeah, I mean, if you are asking how I arrived at that information, I mean some of it is when I used to work there. I owned another business where I was actually buying airtime on those stations for 12 years.

6217     I mean, I would certainly note that the increase in rates from winter to summertime and the availability of getting on when you want it as an advertiser, you know, would be ‑‑ could sometimes be compromised in the summer. I mean, you couldn't get exactly what you wanted when you want it necessarily for the price you wanted because times were good.

6218     You know, certainly in January it's different than it is in July but in the summertime in Muskoka there are so many advertisers clamouring to get their message out and you know there is only so many avenues to do that, that potentially providing another avenue for another town ‑‑ and I would note that the towns are still quite, I think, parochial in their thinking.

6219     You know the residents of Gravenhurst are pretty interested in Gravenhurst and don't want to be lumped in with Bracebridge all the time. And I would say the same thing for possibly the retail sector, that I think they would appreciate the opportunity (a) to get what they want when they want it or have another opportunity to do that and, (b) be able to do that in their own municipality.

6220     COMMISSIONER PATRONE: We have heard different accounts of the impact to which the Gravenhurst‑based operation would have on neighbouring communities. Do you feel strongly that that impact would be somewhat minimal to, say, Bracebridge?

6221     MR. SMITH: You know it's obviously going to be there. Gravenhurst is an interesting town in that it's the most southerly town in Muskoka. It starts to straddle other markets pretty significantly.

6222     Muskoka is subject to a lot of radio stations reaching us from a lot of different areas. You know, certainly Rock 95 is a major player in the Muskoka market. The Orillia stations are a major market in the Muskoka market, you know.

6223     There is advertising representatives travelling that used to travel through my door from probably a 100‑kilometre radius, you know. So it will have some effect on Bracebridge, undoubtedly, but it will also have some effect on other stations and I think that pain stands to be spread amongst many as opposed to the few.

6224     COMMISSIONER PATRONE: I just want to go back to something you said a little earlier before I wrap things up.

6225     You have spoken about, again, how this market is peculiar in that it benefits largely from people who come ‑‑ you know, retirees for instance, and you talked about demographics and how the population is expected to swell.

6226     Could you tell us again, you know, the degree of impact that you think that phenomena will have and the degree to which we should consider that phenomena in deciding whether or not to licence another station?

6227     MR. SMITH: Well, I personally think it's going to have a major impact. The growth study that I referred to is commissioned by the District of Muskoka, is a study so that they can plan for future municipal needs on a district‑wide level. The towns are doing that on a municipal level as well because, you know, they are seeing this influx of older population coming into the area.

6228     They are doing what they can to try and keep younger people in the area but the reality is there is a lot of boomers retiring. They are selling their principal residence and either converting their seasonal to their new principal residence or just buying a new residence.

6229     I mean we have seen a massive change in the demographics which you can tell solely by looking at the number of condo units available in these towns where they used to never exist. It was all single residence family homes where people were raising those families. Now, condos are in place because it's primarily older residents that have done exactly what I talked about, of changing their principal residence, moving to Gravenhurst, moving to Bracebridge and settling there.

6230     They continue to proliferate. The number of building applications we have for people doing just that continues to proliferate in every town. So there is a profound shift going on in the demographic makeup. There is no doubt about it.

6231     COMMISSIONER PATRONE: I hear your optimism and, yet, we have also heard once again from Mr. Grossman saying that sales of recreational properties are down significantly.

6232     MR. SMITH: I know it's hard to reconcile the two and I guess Mr. Grossman certainly is going to take a negative view. It behoves me as a politician maybe to take a positive one.

6233     But at the same time, you know, I don't believe anything lasts forever. We are talking about a point in time and we can all sit and debate how long we can stretch out this downturn and everyone will find information to support their case. But the reality is while recreational sales may be ‑‑ the property sales may be down, I think you will find that people that continue to convert those recreational properties to fulltime dwellings has been going up overtime.

6234     So the migration continues to the area and that migration will have to be served in one form or another. You know, they are not going to be content to sit and wait for the local economy to catch up to them. They have got certain demands and they want them met.

6235     COMMISSIONER PATRONE: One last question.

6236     We have heard from one intervention, suggesting that a standalone would face challenges because of an inability to realize synergies with other operators. And you are a radio guy. You understand how an operation can, during economic difficulties, be able to utilize those synergies effectively.

6237     MR. SMITH: I was on the air during the last profound downturn in the early nineties. And I was on the air in Bracebridge and at that time Tele‑Media was the owner of the radio station.

6238     We came into work one day and they decided to tell us that we were all out of a job because what they were going to do, if I can recall correctly, was have an original morning broadcast from six to nine a.m. in Bracebridge and then simulcast the rest from their other available properties.

6239     I don't think that's doing a great service to the community and while it may be financial reality to have to do that, you know, I think what Gravenhurst is looking for is somebody to come in and operate as part of the community and be part of the community as much as possible so they can extend that pride in the community. That's going to be impaired if 12 hours or 18 hours or whatever number of programming a day is originating somewhere else.

6240     So that's ‑‑ while I understand the synergies that are available and while I understand the potential hardships of a completely independent operator, at the same time the big plus they have going for them is their ability for community immersion which I think is able consideration.

6241     Financial bad times don't last forever but their community involvement will.

6242     COMMISSIONER PATRONE: Thank you very much, sir.

6243     MR. SMITH: You're welcome.

6244     COMMISSIONER PATRONE: Madam Chair.

6245     THE CHAIRPERSON: Well, thank you very much for your participation, Mr. Smith. We have no other questions for you.

6246     MR. SMITH: It's been my pleasure. Thank you very much.

6247     THE CHAIRPERSON: Thank you.

6248     What time is it? Oh, I'm sorry. You know what, sit down.

‑‑‑ Laughter / Rires

6249     MR. SMITH: Well, I didn't turn my mike off so I suppose ‑‑

6250     THE CHAIRPERSON: That's a good thing.

6251     MR. SMITH: Can't get away that easily.

6252     THE CHAIRPERSON: Commissioner Lamarre.

6253     COMMISSIONER LAMARRE: Thank you, Mr. Smith, for not running off so fast.

6254     MR. SMITH: I can't run fast. Don't worry.

6255     COMMISSIONER LAMARRE: And thank you also for providing us with the written ‑‑ the hard copy of your presentation. I always appreciate that especially when the presentation is not in my first language.

6256     I note from your presentation and the discussion you have had that your motivation in supporting Mr. Wrightsell's application is closely linked to the advantage it will bring to Gravenhurst and to have Gravenhurst be represented in the news, on the radio locally. In fact, if I may quote your presentation, at one point you say:

"A new radio station based and operated 100 percent in Gravenhurst is needed to reflect this emerging growth. It's no longer acceptable that the community should look to Bracebridge for its media needs." (As read)

6257     COMMISSIONER LAMARRE: I can't help look at coverage maps and I can tell you that the plan that was done by Mr. Wrightsell's consultant ends up with a tower location that is actually very strategic and very smart. It's basically halfway between Bracebridge and Gravenhurst and Bracebridge and Gravenhurst will both enjoy a good quality, similar level of signal from this undertaking.

6258     Can you tell me what in my Wrightsell's application gives you the comfort that Gravenhurst will get the lion's share of local programming and commitment and commitment and involvement from a community ‑‑ sorry ‑‑ and community involvement from Mr. Wrightsell's operation if it gets licensed and goes on air?

6259     MR. SMITH: I think it's ‑‑ part of it is strictly based on the fact that not only has he provided ‑‑ I mean (a) a lot of programming space to fill.

6260     I mean there is a lot of news time to fill and there is a lot of community engagement time to fill. Some of that is being done already in Bracebridge. I mean, so locally you are ‑‑ or logically you are going to turn to where you know it's being underserved.

6261     Gravenhurst and Bracebridge, as I think I may have mentioned, are very separate towns and despite the location of a mutually beneficial, you know tower or coverage map, you know Bracebridge is being served quite well and it has been served quite well by The Moose.

6262     It's tough to quantify in any sort of number but as a politician I guess I get a lot of opportunities to talk to a lot of people in a lot of areas and, you know, there are stories to be told in Gravenhurst. And I guess what gives me comfort in Mr. Wrightsell's application to do that is because he has made a commitment to telling the stories you are going to go and find where those stories are. And those stories that haven't been told, so to speak, are in Gravenhurst and the coverage of their local council, you know, to a more in‑depth level and the arts community in Gravenhurst it's all been washed over, I think, overtime by Bracebridge.

6263     Bracebridge has kind of dominated the South Muskoka market at worst, or at best the two towns get lumped in together. And there is a specific identity to that town of Gravenhurst and a story that needs to be told.

6264     And I think you know by virtue of his commitment to provide that time that story will be told.

6265     COMMISSIONER LAMARRE: Thank you, Mr. Smith.

6266     THE CHAIRPERSON: Well ‑‑

6267     COMMISSIONER LAMARRE: That was my only question. Thank you.

6268     THE CHAIRPERSON: You can now leave.

6269     Thank you very much.

6270     MR. SMITH: Are you really sure?

6271     THE CHAIRPERSON: I'm absolutely sure. Thank you very much.

6272     Madam Secretary.

6273     THE SECRETARY: Thank you, Madam Chair.

6274     I will now call Scott Dibble and Debi Sander Walker to appear as a panel and present their intervention.

‑‑‑ Pause

INTERVENTION

6275     MR. DIBBLE: Hello. My name is Scott Dibble. I'm here really representing the singer/songwriter community of Canada but I live here in Ontario.

6276     I'm just going to share a story. I'm really here in support of the Evanov Group. I have a specific story around that that has made, you know, quite a difference in my life and the career of a group that I'm a member of which is called Hemingway Corner.

6277     Hemingway Corner, at one time we had a record deal with Sony Music and, as many people are aware, we have kind of had a music industry crash in the last 10 years. Many of the singer/songwriters in this country are now independent artists. So it's a little bit more difficult and things are changing, you know, as we evolve. It's a little bit more difficult to get your songs heard and played on the radio.

6278     So specifically, Hemingway Corner, we recorded a song spring of 2008, and the song is called "Into Muskoka Lake". And being an independent artist I wasn't exactly sure how to get the song played in Muskoka so I drove my car through the area and I wrote down all the radio stations.

6279     Now, I got a little bit south of the Muskoka area and I was more in the Barrie area and I picked up one of the Evanov Radio Group's. I think it was The Jewel station and I wrote it down in my book and did a little bit of research and got Bill Evanov's name and I sent him the song and a little bit of a bio, the result of which, to my delight and surprise, Bill contacted us personally and let us know he really liked the song and would play it on his radio stations. Unfortunately, I didn't know that it wasn't really a Muskoka station at that time but, you know, that's great. To get on the radio is a rare thing and for any Canadian singer/songwriter right now it's very important.

6280     So I think really what I'm here to say is that, you know, the Evanov Radio Group may from the outside look like a corporation or a big company but I think that at the heart and soul there are people there who are really looking out for great music and specifically Canadian music

6281     I think there is a terrific opportunity here in having a radio station that plays more of a melodic lyric‑oriented thing or we would say adult contemporary or easy listening. I think that Canadian singer/songwriters really fit into that area.

6282     Sometimes I think a Canadian singer/songwriter you could also call it, you know, cottage country music, you know. I mean, if you put on Gordon Lightfoot at a cottage it just fits in beautifully.

6283     So that's really what I wanted to say. I think that Bill Evanov has his heart in the right place as far as music goes and he has supported myself and the group Hemingway Corner, and so I wanted to come here and put a word in for him and his company.

6284     Thank you.

6285     THE CHAIRPERSON: Just please introduce yourself for the record, and you have 10 minutes to make your presentation.

INTERVENTION

6286     MS SANDER WALKER: See I am a singer, not an engineer.

6287     My name is Debi Sander Walker. I live in Mississauga, Ontario. I was born in the States and lived in a small town in Kansas called Great Bend, Kansas.

6288     I have been a Canadian for most of my adult life.

6289     We had one radio station in the town I grew up. Now, there are more because the town is larger but I totally understand the value of the kind of exposure that a radio station can give an artist. My music is played locally in my hometown and that has given me the exposure I needed to get larger venue gigs.

6290     I was called to do the Patsy Kline show as the lead alternate here in Canada but then I was later called to play the lead role in the States. The local stations were playing my CD with Patsy Kline music on it so I got that exposure. I got the run of the lead on the show in the States.

6291     Next year I will be headlining the Jazz Festival in my hometown in the States.

6292     I have firsthand experience at how important it is to get airplay in Canada. In 1993 I released my first CD and the first cut I released went to 26 on the Top 40 charts in Quebec. Did any of you hear it, "A Mother's Cry"? It was from 1993 so you are excused.

‑‑‑ Laughter / Rires

6293     MS SANDER WALKER: I am a singer/songwriter and I depend on exposure for my livelihood, not the kind you get by lifting your shirt but the kind you get that's real and that counts.

6294     The Jewel has been great for me. About four years ago listeners started to call to order my CDs, especially from the north area, from Barrie. I asked where they heard my music and they told me on the Gary Gamble show, The Jewel. So I called Gary to thank him very much and that was the start of the relationship.

6295     They have been very supportive of my career ever since. They have also been very supportive in their support of all the charity concerts I do. I have been on the Gary Gamble show numerous times either promoting a new CD I have just released or giving the details of a concern I'm doing or promoting a show to raise funds for a local charity.

6296     The concert this summer in Ottawa that they put on was fantastic. Were any of you able to attend that concert?

6297     Again, you missed me ‑‑ next time.

6298     The concert was excellent, even if I do say so myself ‑‑ booked to capacity crowds and they even had to add a matinee. I sold every CD I brought to the concert. The audience support was wonderful. After the concert I received a call from an audience member who told me they were so pleasantly surprised when they saw the variety in the show but they especially loved my songs and they were glad they had discovered me. That is the kind of invaluable exposure I have experienced.

6299     I have heard that The Jewel plans on hosting an annual concert in Gravenhurst which local artists would not only get to perform in and receive local exposure but because of the Evanov network might get a chance to perform in larger markets like I did in Ottawa.

6300     They play my music and I get so many responses from the exposure. I have phone calls from Barrie and also the Toronto area. It's great. I have phone calls for my CDs and also just to compliment me on my talent, which is another thing artists need, that constant warm and fuzzy. That's the kind of exposure I want and that all Canadian artists need.

6301     I know that in Canada we have this wonderful rule concerning Canadian content on the radio. I personally have benefited from that rule and it is my understanding that The Jewel plans to exceed the requirements, which is kudos to The Jewel.

6302     The format of The Jewel is so appropriate for Gravenhurst. Think about it, small community promoting local talent supporting local concert series, supporting local charities and involvement with local community events. Very, very appropriate.

6303     My Patsy Kline concert ‑‑ my ‑‑ Patsy Kline and Me concert in February at the Rose Theatre in Brampton was sold out and was very well attended by my followers from the Barrie area. Many of them came to me after the show and the autograph signing and said, "We are so glad we heard about you from Gary Gamble on the show" because they advertised my show. I had been on the show with Gary Gamble to promote the show and that exposure and promotion was very successful. Many audience members had heard about the concert because of The Jewel.

6304     Then in July I was in Hammerson Hall with the Royal Regiment and again the exposure that The Jewel gave me was invaluable. Think about the concept. A jewel in Newmarket, a jewel in Winnipeg, a jewel in Hawkesbury, a jewel in Toronto, a jewel in Gravenhurst, a jewel in ‑‑ you guys fill in the blanks.

6305     So many local artists are supported by The Jewel. They get more airplay, thus more exposure. And in support of what Scott was saying it is very hard to get played in the Toronto area unless you are a hard rock band, and I'm not young female T&A.

6306     The industry in the music world, you guys can die on the stage. Women can't. If we are an older person and a female and you are not a star when you are young, you are not recognized when you get older because the industry of the music world does not have that in them. And it's just a fact. It doesn't. It's not fair but it's fact.

6307     Thanks to The Jewel I'm where I am.

6308     Thank you.

6309     THE CHAIRPERSON: Thank you both very much.

6310     Commissioner Molnar has some questions for you.

6311     COMMISSIONER MOLNAR: Thank you to the both of you. It is refreshing. I have to say that through the past week we have been struggling with some economic issues, so it's nice to be able to turn our attention to one of the other objectives and benefits of radio here in Canada, and that's creating and supporting our local artists.

6312     It's also great to hear that both of you are achieving success in your fields.

6313     I would like to start with Ms Walker. I have just one question. You were talking about the benefits of the exposure that you received from The Jewel from the Evanov Group of stations.

6314     Have you received any other benefits through Canadian Content Development Funds or otherwise ‑‑ from the Evanov Group or from the system?

6315     MS SANDER WALKER: I did the concert in Ottawa. They didn't ask me to do it for free. I was paid for it. I think I probably missed that in the page.

6316     No, I have ‑‑ any other like what you mean, being able to sell my CDs, being called to do gigs?

6317     COMMISSIONER MOLNAR: No, there is a number ‑‑ and often as part of licensing new stations the radio stations make commitments to support Canadian content development, Canadian development, and so there are different ‑‑ you noted a festival that may ‑‑ I don't have the background but may be supported through some of the monies that are intended to support Canadian development.

6318     I think you note and I don't see here ‑‑ there is the Muskoka Lakes Music Festival that they are proposing, for example, if they were to be awarded the licence here.

6319     MS SANDER WALKER: M'hm.

6320     COMMISSIONER MOLNAR: They may have another festival that they could support through the monies that they receive through their station.

6321     MS SANDER WALKER: Well, I think that's very representative of their ideas of supporting local artists. I'm not expecting to be coming up to Muskoka to perform in their concert for the Muskokas. I would love it. I will say yes, but I think that is another focus of how they work with the local community to help the local artists get somewhere.

6322     Wouldn't you come up here and perform?

6323     MR. DIBBLE: Oh, yeah, for sure. I would love to.

6324     MS SANDER WALKER: I mean it's great if you can do something like that. But you also want to support your fellow musicians who are struggling too.

6325     And I don't know if you guys know any of the people with Evanov personally. I don't know all of them personally but from the little bit I have ever met with these people all of them are so nice and they are just like ‑‑ they are really down to earth and honest with their emotions with you. And nobody told me to come in here and say anything that wasn't real. I mean it was just ‑‑ no B.S., just straight ahead, want to do the best for whatever they can for. It's great.

6326     That's why I like it, because I do a lot of charities and because I give a lot of my charities I want to work with people who are going to have that same kind of headspace and they have always been very supportive of any of that stuff too.

6327     COMMISSIONER MOLNAR: Thank you.

6328     I'm going to turn to Mr. Dibble ‑‑

6329     MR. DIBBLE: Yes.

6330     COMMISSIONER MOLNAR: ‑‑ Mr. Dibble, for just one moment. You said that you live in Ontario.

6331     MR. DIBBLE: Yes.

6332     COMMISSIONER MOLNAR: What region? Where is it that you live?

6333     MR. DIBBLE: Well, I live in Etobicoke now. I have lived ‑‑ as a songwriter I have lived all over. I have lived out in the Maritimes and I lived in Stouffville for a while and I lived downtown Toronto for a while.

6334     MS SANDER WALKER: Gypsy.

6335     COMMISSIONER MOLNAR: So you wrote a song about Muskoka Lake from Etobicoke?

6336     MR. DIBBLE: Yes, I did. It was actually a song that was ‑‑ a very good friend of mine his father grew up in Muskoka area, and I was asked to write a song for his 60th birthday party. And they gave me a list of all of these things that he was interested in, some of which were cars and other things, and I was really racking my brains how am I going to write this song.

6337     And the Muskoka theme just kept coming back and so I wrote the song about him as a boy and then him as a father and then him as a grandfather and it's all around Muskoka Lake.

6338     And of course, you know, Muskoka is a place where you know many, many people visit. Unfortunately, I don't own a cottage there. I would love to but occasionally I'm invited to go to someone's cottage. I'm hoping Bill will invite me sometime.

6339     COMMISSIONER MOLNAR: You want to go to Carmela's. It's winterized.

6340     MR. DIBBLE: Oh, right, okay.

‑‑‑ Laughter / Rires

6341     MR. DIBBLE: So the thing about the song, Muskoka is an area that is known really throughout the world. I believe Goldie Hawn has a place there. You know it really is a famous place and my hopes for that song are that not only will it serve that community but maybe you know that other areas can listen to as well and dream about spending some time in Muskoka.

6342     COMMISSIONER MOLNAR: So is this a recent song that ‑‑ when did you write this song?

6343     MR. DIBBLE: The song was written last winter and then Hemingway Corner ‑‑ we are spread out a little bit. One of our members is in Edmonton. But we got together last spring to do a Neil Young tribute show and we ended up recording that song while we were all together. And now we are working hard on the rest of the songs.

6344     But that was the other great thing about, you know, Bill and the Evanov Group adding the song without actually having a CD to back it up or in retail at this point. He just liked the song and wanted to play it on ‑‑ or put it on the radio.

6345     COMMISSIONER MOLNAR: And I hear what you say and it's very refreshing to hear about, as I said, some positive and successful initiatives to bring Canadian content and new Canadian content to our airwaves.

6346     I just wondered, and why I asked about when you wrote it is, it is a song about Muskoka Lake and I wonder if you have any sense if it has been picked up within this region by any of the other broadcasters?

6347     MR. DIBBLE: Well, I did visit The Moose radio station and had a meeting with Mike Fry and he featured the song there, and that was great.

6348     From that point I haven't really been able to track. When we had a record company they would come in with sheets and say, "Okay, here is where you are being played" and whatever. I believe they are playing the song a little bit as well. But so far the only really committed stations are The Jewel stations.

6349     COMMISSIONER MOLNAR: Okay. Well, thank you, and thank you for coming here to provide us your perspectives as it relates to your relationship with the Evanov Group.

6350     Those are all the questions I have.

6351     MR. DIBBLE: Thank you.

6352     THE CHAIRPERSON: Commissioner Patrone.

6353     COMMISSIONER PATRONE: Thank you, Madam Chair, and I want to thank you both for your interventions.

6354     Mr. Dibble, I can remember when Hemingway Corner was the next big thing.

6355     MR. DIBBLE: Yeah, me too.

‑‑‑ Laughter / Rires

6356     COMMISSIONER PATRONE: We have heard a lot about how there are so many economic challenges relative to adding another broadcast operation in Gravenhurst but what your intervention really tells us is that the issues of artists is economic as well. And if there is a station that is sympathetic to playing new artists and that is an economic boost to the artists who, as you said yourself, are facing big challenges as well, can you talk a little bit about that?

6357     This question is for both of you, by the way.

6358     MR. DIBBLE: Oh, okay.

6359     So the challenges that the artist are facing now given sort of the economic climate we are having now; is that what you ‑‑

6360     COMMISSIONER PATRONE: What I'm saying is that there have been interventions that we have heard repeatedly suggesting that adding another operation is not sustainable. My question to you is could you speak a little bit about how the economic issues of artists in fact depend on the addition and are enriched by the addition of operations that are sympathetic to playing artists like yourselves.

6361     MR. DIBBLE: Okay. Well, as I had mentioned before, I am very passionate about Canadian singer/songwriters. I believe that we in this country for many ‑‑ you know 100 years we have been you know putting out some of the most amazing artists coming out of the country, very often not supported as much financially as our southern neighbours, the American artists are.

6362     So it's ‑‑ at this time it's really, I think, very, very important that local smaller stations and all stations really realize the pride in what we have created. I mean we know Gordon Lightfoot. We know Joni Mitchell, we know Neil Young. We know all kinds of ‑‑ but there are ‑‑ for every really well known Canadian singer/songwriter there is 20 or 30 that are equally world class that we are not actually hearing from and from every area. It's a real Canadian natural resource.

6363     If I could describe it this way, our singer/songwriters are really created from our culture here. We are not trying to sound like an American artist or whatever. It's just something that if you give a Canadian a guitar and put him in a cabin for two months he is going to write some songs. He doesn't have to be a musician.

‑‑‑ Laughter / Rires

6364     MR. DIBBLE: You know it's just something we do.

6365     You know with Bill Evanov supporting that and understanding that ‑‑ and he and I have had a few conversations around that and ideas of how better to support that, I think that you know anywhere that we can grow that, but especially in the smaller markets, and especially if there is a station in Gravenhurst that can help those artists, because I bet you there is, you know, 10 or 20 really amazing songwriters and singers there that are, you know, really creating world‑class music but feeling like hobbyists because they don't have the outlet. And more importantly, those artists are writing songs that really relate to their community.

6366     So if it's in Gravenhurst or its any other small town in this country, if they are putting a radio station together that's going to support our talent, I'm there to support it.

6367     COMMISSIONER PATRONE: Thank you very much, unless there's anything that you can add.

6368     Sander Walker.

6369     MS SANDER WALKER: Okay. You jump in if you want.

6370     Scott said something earlier about all of the names of the different people who are performers in the Canadian who have been well‑known, and I can't think of a whole lot of them that didn't go to the States to make it and they came back to Canada.

6371     When I moved here 25 years ago, I watched a show on television and I didn't even know who the man was. It was Oscar Peterson speaking. And Oscar Peterson said in his show, and it scared me when I heard this because I had just moved here as an artist, but Oscar Peterson said, As Canadians, we eat our young. Only until the folks south of the border say it's talented do we claim it as Canadian. And I'm trying to quote it as close as I can to what he said.

6372     That scared me because I thought, I'm coming up here to a country that doesn't support its own, only until you go to the States, and I just came from the States. But I was very young and I thought I could buck the system. Well, no, it doesn't work like that. You don't buck a system as large as a country.

6373     And so in thinking about that, when I look at how Evanov is supporting the local artist, it makes me feel like, Okay, maybe they are trying to buck a system. And I'm all for that because I'm a rebel and that's how I write, but I also think that, when we look at the idea of small communities, there's that small community feel.

6374     And I don't know if I'm allowed to comment on previous things I heard in here or not...am I?

6375     COMMISSIONER PATRONE: Sure.

6376     MS SANDER WALKER: Okay.

6377     COMMISSIONER PATRONE: We will stop you if you go down a place where you shouldn't be.

6378     MS SANDER WALKER: Okay. I won't give you the punch line of their joke.

6379     But I think competition is good in an industry. It makes people see that they have to stay on their toes, number one, to keep the business. And unless there's a Wal‑Mart radio station, we are safe.

‑‑‑ Laughter / Rires

6380     MS SANDER WALKER: I'm sorry, but I'm not putting Wal‑Mart down...in a way I am, but in another way I'm not, there is just ‑‑ there is always room for competition. We work in an industry where we are competing constantly with people who are dying to perform, and they will do it for free, and we have chosen to do it for an income, to live on.

6381     You can't make a hundred dollars on a Saturday night and live on it. Four hundred a month is really not enough to live on. I mean, that's kind of how it goes for us, as musicians. We spend a lot of our time doing the writing, doing the promoting, and then it says in the American Federation of Musicians' paper, you might be lucky if you spend 3 percent of your time when you are pursuing a musical career. On the career, actually performing in the career.

6382     That's why we spend 97 percent of our time trying to get on that stage, because we want it, we live it, we breathe it. It is inside us. We can't get rid of it.

6383     So we are dedicated to it. And if we find somebody who's going to support us like that, we are on their side.

6384     So that's it.

6385     COMMISSIONER PATRONE: Thank you very much for your answers.

6386     Madam Chair.

6387     THE CHAIRPERSON: I, too, want to echo Commissioner Molnar's comments and thank you for being here and reminding us that this is the real reason we do what we do.

6388     MS SANDER WALKER: Yes.

6389     THE CHAIRPERSON: And I do see the makings of a festival. We, a few months ago, were all at a conference where David Clayton Thomas performed his song about Muskoka. So three names like that, bound to be successful festival.

6390     Thank you very much.

6391     MS SANDER WALKER: Thank you.

6392     MR. DIBBLE: Thank you.

6393     THE CHAIRPERSON: Madam Secretary.

6394     THE SECRETARY: Thank you, Madam Chair.

6395     This concludes Phase III. We will now proceed with Phase IV, in which applicants can reply to all interventions submitted on their application. And applicants appear in reverse order.

6396     I would then ask Evanov Communications Inc., on behalf of a corporation to be incorporated, to come forward to the presentation table.

‑‑‑ Pause

6397     THE SECRETARY: You will have 10 minutes for this purpose.

REPLY / RÉPLIQUE

6398     MS LAURIGNANO: Thank you.

6399     For the record, I am Carmela Laurignano, Vice‑President and Group Manager for Evanov Communications Inc., and with me is Bill Evanov, who is the President and CEO.

6400     Madam Chair, members of the Commission, our comments in reply will be brief, and they will be limited to the potential of the Gravenhurst market and the impact of our new Jewel station on the incumbent regional operator, Mr. Grossman.

6401     We listened carefully to Mr. Grossman's intervention, and while we certainly sympathize with his current situation, we believe that his estimates of the impact on his Bracebridge Hot AC station are overstated. Here are the facts.

6402     Our estimate of the local advertising potential of Gravenhurst is based on reliable methodology that has been used for years in markets across the country. The seasonality of Gravenhurst has no impact on revenue estimates. It affects only during which period of the year those revenues may be earned, but not the total estimate of the market.

6403     We estimate there are approximately $650,000 in radio advertising revenue available in the Gravenhurst area today ‑‑ or in Gravenhurst today. When we launch, we expect to garner $400,000, leaving $250,000 available to Mr. Grossman's regional Hot AC service in Bracebridge.

6404     Moreover, this estimate of revenue is conservative, as it does not take into account any market growth between now and the launch, nor does it take into account the stimulative effect that a new entry has on radio advertising. This stimulative effect benefits all operations in the market.

6405     Based on our survey of the local advertising market, it is clear that Mr. Grossman's sales focus is on the larger market of Bracebridge and Gravenhurst, in any event.

6406     As you heard from Ms Joseph, our monitor of ads on the Bracebridge Hot AC indicates that only one in seven of the ads that aired over a two‑day period were from Gravenhurst advertisers.

6407     And finally, our 3‑millivolt signal is limited in its reach to Gravenhurst. This means that our primary service area is, and will remain, Gravenhurst, not Bracebridge.

6408     Of all the applicants before you, our signal is by far the least impactful on Mr. Grossman's operations. We are not a Bracebridge service in disguise, we are a local Gravenhurst radio station, and we will remain that way.

6409     Despite Mr. Grossman's bleak view of the area, the fact remains that he owns and operates three FM stations, or a herd of moose, if you would, throughout the region and he has access to all major markets in the area. He is a regional operator and with access to regional revenues; we will be a local Gravenhurst service.

6410     In any event, our assessment of the Gravenhurst market shows that we are leaving $250,000 in revenues available to Mr. Grossman's regional operation.

6411     For these reasons, we believe that Gravenhurst can support a new service without having an undue impact on the incumbent regional operator.

6412     I think Bill may have something to add.

6413     MR. EVANOV: Just a couple of comments.

6414     If you want, there is a turndown or a correction and a recession in this country and there are layoffs everywhere, but that doesn't mean the broadcast industry should come to a halt until it's totally over. I think that you have to do things. When things are down, you do things. You do extra things. Maybe you work a few extra hours, you create a larger retail base, but you do something.

6415     The status quo in Muskoka will not combat the recession. Activity will, stimulus will and certainly the need for competition will stimulate the ‑‑ help stimulate the economy. Right now, you have one operator with no competition, and I think we all know in any market in the world you need at least two, if not more ‑‑ but in this particular case two ‑‑ to really activate and stimulate the market.

6416     The Moose has three stations that cover all of Muskoka, so any entry into the market will have to compete with the three ‑‑ not just Bracebridge, but Parry Sound, Huntsville, Bracebridge ‑‑ because if you drive up the road for 10 minutes and put your car radio on, you will receive all those three stations.

6417     So it's not an easy task, but it's not one where the status quo should remain. Something has to be done. And I think an entry, whether it's us or one of the other applicants, someone in that market, has to come in and provide competition for Haliburton broadcasting and that will stimulate the market of Muskoka.

6418     MS LAURIGNANO: Just finally, we would like to thank all of the appearing intervenors, and whom we just saw just a little while ago, as well as those who supported the application. And if you go through the file, you will see that we have quite a number of them.

6419     And thank you, Commissioners, Madam Chair and staff for your usual job well done, as we say.

6420     And just for the record, my cottage is winterized, but it also has a canteena, so you are all welcome!

‑‑‑ Laughter / Rires

6421     THE CHAIRPERSON: Thanks a lot. Now I have to tell them what a "canteena" is.

‑‑‑ Laughter / Rires

6422     THE CHAIRPERSON: Thank you both very much.

6423     COMMISSIONER MOLNAR: ...still in favour of that, but it sounds very attractive.

‑‑‑ Laughter / Rires

6424     MS LAURIGNANO: Trust me, it is.

6425     THE SECRETARY: Thank you.

6426     I will now call Bayshore Broadcasting Corporation.

‑‑‑ Pause

REPLY / RÉPLIQUE

6427     MR. KENTNER: Madam Chairman, Commissioners, Bayshore would just like to take a brief moment to express our appreciation for a really excellent hearing. And I would just like to assure some of the newer Commissioners that, even after nearly 50 years in broadcasting, I feel I have learned a lot at this hearing. So we all, you know, have room to learn.

6428     I have just one final comment, after I turn it over to Deb Shaw for her remarks.

6429     MS SHAW: I also want to thank the rest of our team, the rest of our senior management team, Kevin Brown, Lois Reid and Rob Brignell; our support team here for the hearing, with Paul and Michael Fockler and Jeff Vidler; but especially Mariane McLeod and Rick Ringer, who not only helped at this hearing, but they moved to Wasaga Beach for us to help us deliver the kind of product that we are very proud. So I thank them for their help here, as well.

6430     MR. KENTNER: And I think I would just like to perhaps close with taking you back to the presentation by Dr. Bruce Meyer and Robin Parkes about the reading series that we are proposing and a quote from Dr. Meyer, "The only people who can navigate difficult times are those in pursuit of their dreams". I just think there are a lot of people here with dreams that they are pursuing, and we hope that we can do that.

6431     And I just close with my admiration for my fellow broadcasters on the other teams, who I think represented our industry extremely well.

6432     Thank you.

6433     THE CHAIRPERSON: Well, thank you very much, Mr. Kentner and Ms Shaw. Thank you.

6434     THE SECRETARY: Thank you.

6435     I will now call Bill (William) Wrightsell.

‑‑‑ Pause

REPLY / RÉPLIQUE

6436     MR. WRIGHTSELL: This is the fun intervention stage. I get to thank people.

6437     I want to thank the Commission, all of you. Wonderful questioning. I know Dorothy and I and Glenn were very impressed with the depth of the questioning during the hearing, and the Orillia hearing, as well.

6438     I would also like to express my thanks to the other applicants. I think they all did a wonderful with their presentations.

6439     I would also like to thank some of the supporters of our application: the Bracebridge Arts Council, Muskoka Tourism, the Mayor and Town of Gravenhurst, Neil Mather, Kathy Saboken, both of friends of mine, broadcast instructors at Humber and Seneca College, the Bracebridge and Gravenhurst Chambers of Commerce, South Muskoka Hospital Foundation, Bracebridge Arts Council, cottagers from the GTA, independent music producer and emerging artist, David Lawlor, who is a little like the fellow from Hemingway Corner, actually. He's been in the music business a long time and he still considers himself an emerging artist and is looking for air play on a radio station.

6440     I also would like to thank Graydon Smith, of Redhead Media, for giving us some insight into the market. And I would like to thank the people that appeared in our video, as well. We had a fun time putting that together, and those comments were ‑‑ you know, I dragged people in front of the camera, and they were very genuine and certainly wanted to give us their thoughts on a new station coming to their town. So we thank them.

6441     And thanks again to the Commissioners and the staff, and have a good trip home.

6442     Thank you.

6443     THE CHAIRPERSON: Thank you very much, Mr. Wrightsell.

6444     THE SECRETARY: Thank you.

6445     For the record, Madam Chair, Muskoka‑Parry Sound Broadcasting Limited, Instant Information Services Incorporated and JOCO Communications Inc. have indicated they will not appear in this phase.

6446     So this completes the consideration of items 9 to 15 on the agenda.

6447     THE CHAIRPERSON: Counsel has an announcement.

6448     MR. BOWLES: Thank you, Madam Chair.

6449     I wish to make an announcement on behalf of the panel. This announcement relates to materials provide by Orillia applicant, Nick Montague, on behalf of a corporation to be incorporated as part of his presentation. To be more specific, this is application number 2007‑1507‑1.

6450     It will be noted that as part of that presentation a number of intervention letters of support for the application were provided. After a review, it has been determined that two of the tendered intervention letters has previously been filed with the Commission in a manner that was compliant with the established procedures.

6451     For purposes of clarity, these two intervention letters are those from the Green Haven Shelter for Women and that from Mr. Dimitri Revelis. It has, however, been determined that our records provide no indication that the remaining letters tendered had been previously submitted and the applicant has not provided evidence to suggest that they had been submitted.

6452     Accordingly, these letters are out of process and the panel has determined not to add these to the public file for this applicant. As such, these intervention letters will not be considered by the panel.

6453     Thank you.

6454     THE SECRETARY: For the record, I would like to add, as well, in response to undertakings from Debra McLaughlin, we received clarification on their antenna heights used in the printed program to produce the realistic contour map.

6455     And then from Bayshore Broadcasting Corporation, we received an updated financial statement for both Orillia and Gravenhurst markets, a response clarification regarding the receiving antenna height, as well as the realistic contour map.

6456     And, as well, from Frank Torres, we receive additional information, including the height of the receiving antenna height used to calculate the realistic contour map, and other technical information asked by Commissioner Lamarre.

6457     So all of those documents will be added to the public file and copies are available in the Examination Room.

6458     THE CHAIRPERSON: And for the record, on behalf of my colleagues, I would like to thank all of the applicants, all of the intervenors for your professionalism, your thoroughness and the quality of the applications submitted for both the Orillia portion and the Gravenhurst/Bracebridge portion of this hearing.

6459     That concludes those two portions of this hearing. We are now going to stop for lunch, and we will resume at one o'clock to hear Quinte Broadcasting application.

6460     Thank you.

‑‑‑ Upon recessing at 1147 / Suspensions à 1147

‑‑‑ Upon resuming at 1308 / Reprise à 1308

6461     THE SECRETARY: Good afternoon.

6462     And now, Madam Chair, we will proceed with item 16 on the agenda, which is an application by Quinte Broadcasting Company Limited to renew the licence of the commercial radio programming undertaking CJBQ, Belleville, expiring 31st of August 2009.

6463     The Commission is concerned that the licensee may have failed to comply with the Radio Regulations, 1986 concerning the broadcast of Canadian content for Category 2 music and that it may have failed to comply with its condition of licence regarding its contribution to Canadian talent development.

6464     The Commission expects the licensee to show cause at this hearing why Mandatory Orders should not be issued requiring the licensee to comply with the Radio Regulations, 1986 relating to the broadcast of Canadian content for Category 2 music during the broadcast week and with its condition of licence relating to Canadian talent development contributions.

6465     Appearing for the Applicant is Bill Morton, but before you introduce your colleagues and make your 20‑minute presentation, Mr. Morton, I would now our legal counsel, Eric Bowles, to explain for everyone's understanding what we mean exactly by a Mandatory Order and what the ramifications are.

6466     MR. BOWLES: We will take a few minutes to address the possible issuance of a Mandatory Order which is before the panel today.

6467     A Mandatory Order may be issued under section 12 of the Broadcasting Act. The relevant portions of section 12 are as follows, and I will read:

"(1) Where it appears to the Commission that

(a) any person has failed to do any act or thing that the person is required to do pursuant to this Part or to any regulation, licence, decision or order made or issued by the Commission under this Part, or has done or is doing any act or thing in contravention of this Part or of any such regulation, licence, decision or order, or (b) the circumstances may required the Commission to make any decision or order or to give any approval that it is authorized to make or give under this Part or under any regulation or order made under this Part, the Commission may inquire into, hear and determine the matter."

6468     Subsection 12.(2) of the Act provides:

"The Commission may, by order, require any person to do, forthwith or within or at any time and in any matter specified by the Commission, any act or thing that such a person is or may be required to do pursuant to this Part or to any regulation, licence, decision or order made or issued by the Commission under this Part and may, by order, forbid the doing or continuing of any act or thing that is contrary to this Part or to any such regulation, licence, decision or order."

6469     In this case, what is under discussion today is the possibility of issuing a Mandatory Order requiring compliance with the Radio Regulations, 1986 requirements as they pertain to the broadcast of Canadian content for Category 2 music, as well as requiring compliance with its conditions of license regarding its contributions to Canadian talent development.

6470     To summarize what Mandatory Orders will entail in this case, after hearing and considering the matters, the panel may decide to issue a Mandatory Order which would be filed with the Federal Court of Canada and served personally on the licensee in the usual fashion that any court document may be served.

6471     Thereafter, under subsection 13.(1) of the act, the Commission's Mandatory Orders would in fact become orders of the court and would be enforceable in the same manner as any court order.

6472     Under the Federal Court rules, anyone who disobeys an order of the Federal Court is guilty of contempt of court, so if a Mandatory Order were issued and the licensees subsequently failed to comply with this, the Commission would provide evidence of such failure to the court, and thereafter a show‑cause hearing for contempt of court would take place. The licensee would be entitled to present a defence, and, if found guilty of contempt, it would be subject to a fine as set out by the court.

6473     As you are aware, the licensee has been called today to show cause at this hearing why Mandatory Orders should not issue. This means that you have the burden of convincing the panel why the Commission should not issue Mandatory Orders.

6474     Thank you.

PRESENTATION / PRÉSENTATION

6475     MR. MORTON: Thank you, Mr. Bowles.

6476     Madam Secretary, Madam Chair and members of the Commission, my name is Bill Morton. I'm the President of Quinte Broadcasting. We own three radio stations in the Belleville‑Trenton market in eastern Ontario.

6477     To my right is Sean Kelly, our Director of Programming for the company; and to my left is Mike Hill, who is our Music Director for CJBQ.

6478     May I begin by saying that it is with regret that we appear before you today for something that was quite preventable, and, to make matters worse, as you are well aware, it's the second time we have had this issue with CJBQ in the past two licence terms.

6479     Like yourselves, we do not take this lightly and realize there is little, if any, tolerance for such infractions. We are here today to explain why it occurred, what we have done to correct the problem. We are also prepared to accept whatever consequences the Commission feels you must impose as a result.

6480     We would also like to put this problem within the context of the high level of service that CJBQ provides for the entire Quinte area. I would like to ask Sean Kelly to provide details of those services.

6481     MR. KELLY: Good afternoon, Madam Chair and the Commissioners.

6482     Just over 63 years ago CJBQ was launched in Belleville and became not only the first radio station to serve the Quinte region, but also became the main source for news, sports, community information, and entertainment on the AM dial. Sixty‑three years later, much has changed, but CJBQ continues to be the radio station for record of local news and information.

6483     CJBQ has become a regional full‑service station that not only serves Belleville, but instead provides extensive coverage of news and local events from Brighton, to the west, Napanee to the east, Prince Edward County to the south, and Bancroft to the north.

6484     Since it's inception, CJBQ has been recognized locally, provincially, nationally and internationally for its outstanding service to the entire Quinte region and the communities that make it up. In particular, we have been recognized for outstanding coverage of news events.

6485     CJBQ has twice been awarded the CAB Canadian Radio Station of the Year Award for community service, has been named OAB Station of the Year, we have received numerous awards from the RTNDA, two employees have been awarded the Howard Kane Award for community service, and we were nominated for an International Peabody Award and our hallways at the radio stations are littered with plaques of appreciation.

6486     CJBQ does more than report the news and play music. Here are some of the things CJBQ does very well to this unique market: we produce a daily two‑hour open‑line talk show. This show is the longest continually running talk show in the country and provides an opportunity for folks to discuss matters of public concern, whether they be local, regional or provincial, all with the context of respect for diversity.

6487     CJBQ produces a daily show during the noon hour which is specifically designed to interview local groups and charities throughout the area.

6488     We run 18 locally produced newscasts per day.

6489     Myself, I host Weekend Magazine. This show focuses on local and other Canadian musicians and authors and folks from the world of entertainment.

6490     Newsmaker Sunday is a weekly 15‑minute locally produced news show that deals with local government.

6491     CJBQ produces and broadcasts live all municipal, provincial and federal elections. We post reporters at all surrounding return offices throughout the area, from Brighton to Napanee, Picton to Bancroft. We even sponsor, produce and broadcast two all‑candidates nights for municipal elections.

6492     Quinte Broadcasting has the largest newsroom of any media in the Quinte area: six full‑time and three part‑time reporters.

6493     CJBQ broadcasts live from the annual Remembrance Day ceremony in Belleville.

6494     CJBQ also broadcasts death announcements, birth announcements, lost and found pets.

6495     We also provide four agricultural reports daily to help serve our large farming community.

6496     We also broadcast, and we are proud of it, 68 regular season games, plus the playoffs, of the Belleville Bulls hockey team. We have been partners with them for the past 30 years. The Bulls play in the Ontario Hockey League.

6497     We also broadcast 15 games of the Wellington Duke of the Provincial Junior A Hockey League.

6498     These are just some of the features CJBQ produces that no other radio stations in the market provide.

6499     In addition, we sponsor numerous kids' sports teams, offer intern and co‑op placements for several students each semester, from the high schools to the local college.

6500     Staff sit on numerous local boards, including the Chamber of Commerce, Downtown Business Associations in various cities and communities.

6501     The United Way, advisory boards at Loyalist College, Police Service Boards, City Council, Lung Association, the ALS Society, MS Society, Quinte Regional Children's Foundation, the YMCA, Ladies' Sales and Advertising Club, the Adopt‑a‑Child program at Christmas for kids, Volunteer & Information Quinte, Adam's Hope, which is a fund‑raising committee supporting alternative treatments for autism, Water Festival throughout the summer months, Canada Day celebrations, Operation Red Nose, the Community Trust, Stirling Festival Theatre, and Camp Trillium, a cancer camp for kids, are just a few of the things that we are involved heavily with throughout the year.

6502     I'm now going to pass the torch to Mike Hill, who's the Music Director, to explain the Can con concerns.

6503     MR. HILL: Madam Chair, Commissioners, as already suggested by Mr. Morton, I am particularly embarrassed to sit here today and due take direct and full blame for us missing our Can con targets.

6504     This is a serious issue and the only thing that gives me some relief is the fact that I still have my job. I will describe the areas where we had difficulty and how it has since been rectified.

6505     Based on the Commission's analysis of our Can con for the week of June 1st, 2008, it is clear that we did meet our requirements for the Monday‑to‑Friday portion of the week, but failed to meet them on the weekend. In fact, Monday to Friday, 6 a.m. to midnight of the week in question our Can con levels averaged 41.3 percent or 6.3 percent more than our commitment.

6506     We have a strong commitment to Canadian artists, and the fact that we exceeded the Canadian content regulations in the highest audience period of the week, demonstrates that we have never tried to isolate Canadian music to low audience periods. Although that should not forgive the weekend deficiency, it should at least give proof that we are in no way attempting to avoid our responsibility to Canadian music.

6507     The real issue here is with our weekend block programming. CJBQ airs the American Country Countdown, which is a four‑hour show running Saturday afternoons from 1 to 5 p.m., plus Into the Blue, which is a one‑hour show, running from 5 to 6 p.m. on Saturday afternoons. Both of these programs originate from the U.S. and contain little or not Can con. Additional Can con was added to compensate for this, but, clearly, we miscalculated as it was not sufficient to make up for the shortfall.

6508     CJBQ also runs paid programming on Saturday and Sunday. These shows are half‑hour in length and run in the bottom half of their time slot, which is where a lot of our Can con traditionally would fall. Although I did attempt to make proper adjustments for the American music shows, I did not make any adjustments for the paid programming. This was simply an oversight and part of the reason why we sit here today.

6509     Since then, music clocks on CJBQ have been completely overhauled to compensate for any shortfalls we have experienced in the past, and specifically for the automated hours of broadcast, which include the special block programming. We have added Can con before and after these features in order to meet our requirements. Paid programming has been moved to the top of the hour, and, therefore, Can con will now fall in the bottom of the hour.

6510     It is also now my responsibility to provide Mr. Morton and Mr. Kelly with a weekly breakdown of Can con so that everyone is on the same page. If for some reason an issue emerges, we can rectify it immediately. No more guessing games or assumptions.

6511     We have filed these reports with the Commission staff on December 16th and I have brought extra copies today should you require them.

6512     Also, we have been working with some older technology, which has caused some discrepancies with regard to the number of musical selections we air. This is not meant to excuse our shortfall. Rather, we would like to explain to you that one of the steps to correct the problem is our purchase of a new music scheduling system, MusicMaster.

6513     Moreover, we are in the middle of installing brand new automation equipment in all of our studios. With new technology, steps taken to compensate for block programming, the weekly reports and fear of losing my job, I can promise you that meeting our Can con levels in the future will be achieved.

6514     In closing, although Mr. Morton has taken responsibility for these errors because of his position as president of the company, clearly it's within my job description to ensure Can con levels are at or above the accepted levels, and for this I do take full responsibility as we missed those levels.

6515     Sean Kelly, our Program Director, will discuss the various things that we do to promote Canadian artists.

6516     MR. KELLY: CJBQ has had a strong relationship with record companies, independent labels and Canadian musicians. We continue to air new Canadian artists and, when possible, support their work through live interviews and appearances on the radio station.

6517     Over the past several months we have interviewed the following artists: The Wilkinsons, Lindsay Ferguson, Katelyn Dawn, Rita MacNeil, Ryan Malcolm, Serena Ryder, Six West, Tommy Gill and Divine Brown, Kenny Burke, Johnny Reid and Shane Yellowbird.

6518     Each Saturday and Sunday, CJBQ features local musicians and their work with radio host Jim Wright. We encourage local singers and songwriters to provide us with their latest works and, in turn, profile them with our special programming on the weekend.

6519     We also partner with many jamborees in the area, the Trent Valley, the Holly Road, Havelock, along with the water front festivals and local fairs. We promote these events via interviews, public service announcements and provide MCs for these communities.

6520     For the past three years, Quinte Broadcasting has hosted a prime‑time Christmas special at the Empire Theatre in Belleville. This is a live show provided free to 700 of our listeners, and it's also broadcast live on CJBQ's sister station, CIGL‑FM, known as Mix 97. In 2008, the following Canadian artists performed at the show: The Sleddogs, Low Level Flight, Naomi Striemer, Divine Brown, The Raynes and Roz Bell, all new names to the Canadian music industry.

6521     All these musicians performed free because of the relationship that we have built with them over the years, and they have also given back to the Quinte Regional Children's Foundation to help us support money for kids' programs in our area. These are a few examples of our ongoing commitment to support Canadian artists.

6522     MR. MORTON: As far as Canadian talent development commitments are concerned, our final issue to deal with today is that, is the fact that, based on the Commission's analysis of our CTD commitments, there appears to have been a shortfall in CJBQ's annual commitment by $300 in the year 2006. The apparent shortfall has been addressed. Proof of payments to FACTOR was provided to the Commission on December 16th.

6523     Upon further investigation it appears that the company, as a whole, didn't make the appropriate annual payment of $1,200 in 2006; however, our accounting department for some reason allocated $700 of that payment to one of our FM station, CJTN‑FM, when, in fact, that station's commitment was only $400. In any event, as mentioned, we did send the extra $300 to FACTOR to hopefully put this issue to rest.

6524     Also in our application for CJBQ's licence renewal, we had indicated that CJBQ would pay $400 to FACTOR per year during our next licence term, when, in fact, that number should be $600, based on a new CCD formula.

6525     I don't wish to sound like a broken record, but I'm very embarrassed to be here today. I recognize that Canadian content is a key part of our responsibility ‑‑ my responsibility.

6526     As Mike pointed out, it's not our policy to avoid Canadian content, in fact, we exceeded it in the high‑audience periods. This was an error of omission and we have taken steps to ensure that never happens again.

6527     Thank you for your time today and we welcome your questions.

6528     THE CHAIRPERSON: Thank you very much, Mr. Morton, and your colleagues.

6529     We can appreciate how difficult a task this is for you to be here before us. I just want to add that I also appreciate the context that you provided us. We are always quite amazed, still, at just how much radio stations give back to the community and I wanted to thank you for reminding us of some of the great work that you do.

6530     MR. MORTON: Thank you.

6531     THE CHAIRPERSON: I will now ask Commissioner Molnar to start the questioning.

6532     COMMISSIONER MOLNAR: Good afternoon.

6533     MR. MORTON: Good afternoon.

6534     COMMISSIONER MOLNAR: I, like Chairman Cugini, would like to acknowledge the context that you have put this in and placed this within the full context of what you do as a radio station to deliver to your community, and deliver particularly, as you noted in here, to the promotion and advancement of Canadian talent.

6535     Having said that, we are here today to speak particularly of two issues: one being the Canadian content levels and the other being the CTD requirements theme. So I would like to begin so we can have you out of here, out of your uncomfortable positions, as quickly as we can, and move directly to the issue of the Canadian content requirements.

6536     I note that you have provided us in your statement, as well as in a letter that, Mr. Morton, you sent to the Commission on July 28th, with an explanation of the steps that you will take, or, in fact, have already taken, to address the issue of meeting your Canadian content requirements, and I would like to go through those, please.

6537     Firstly, and before we address the actions taken that you noted here today and that you have in your letter, I would like to ensure that I understand the reason you are here today is this is not the first time it's occurred, it occurred in 2003. And at that time the decision issued in 2005, Decision 2005‑331, indicated that corrective measures were implemented to ensure that the issue of noncompliance would not recur.

6538     Could you tell us, in following the 2003 issue, what, if any, measures were put in place following that occurrence that were intended to ensure you would be compliant with your Canadian content requirements on a go‑forward basis?

6539     MR. MORTON: Okay, I can answer part of that question, and I think Mike can probably answer some of it.

6540     Again, we had technical errors at that point, and I will say, to be quite honest, that the music director at that time, as it turns out, didn't really care about our commitments and he's no longer with the company.

6541     We continue to have had technical errors with our automation system and our music scheduling system, and that's why we have just made the investment to replace that.

6542     After the last incident, I did not receive ‑‑ I was not receiving the weekly Can con reports, which I am now. Sean was to receive those and I guess that didn't happen all the time either.

6543     I'm going to let Mike maybe give a few more explanations of why some of the things we implemented didn't work.

6544     MR. HILL: From what I understand, after the last occurrence, and since I have taken over as music director, there were a few ‑‑ well, the items that I mentioned were the items that have caused the most recent problem. I don't know what the cause of the last problem was.

6545     But this time around the fact that I didn't compensate adequately for the addition of the paid programming ‑‑ the two extra shows that were added that contain, you know, little to no Can con on a weekly basis ‑‑ and I just miscalculated and it missed the mark here and there. But the first week or so and the periodic times that I did check it, which, again, my fault for not keeping a better eye on it, but the times that I did check it it was in compliance.

6546     And then the paid programming came in, and I think with the addition of the paid programming and the loss of the Can con in those hours was where the bulk of the problem was created.

6547     COMMISSIONER MOLNAR: Okay.

6548     MR. MORTON: I was just going to say, because now I receive a report every week, and insist on receiving it every week, as I mentioned earlier, I mean, I can keep track of that now and I know for ‑‑ I don't have to take other people's words for it. Three of us receive that report every Monday, and if it's ever out, then we address immediate.

6549     COMMISSIONER MOLNAR: M'hm.

6550     MR. KELLY: If I can just add, too, Mr. Morton talked about '03, the music director at that time, and also the program director, have since moved on.

6551     And I feel terrible to be here, too, at the Commission today dealing with this issue, but there's been a change in programming since the '03 situation. And when Mike and I did put together some of the new programs and format clocks for the radio station, if you will, everything was working out.

6552     I guess things get missed. We added some new programming, as he touched on, special block programming on the weekend for revenue for the radio station in down times, where it's tough to make a sale, and that's where we missed it.

6553     We have rectified that problem, and, I'm proud to say, since we received notification in June from the CRTC about this issue, we haven't missed a week. I see us moving forward, and progress has been made, and so we have seen in the last six months that there's been no issues.

6554     MR. MORTON: I might also add that now I'm insisting on 40 percent minimum for the radio station. I would prefer that not be condition of licence because then I have to request that 45 percent would be the minimum, which would put us at a disadvantage in the market, but we have been over 40 percent since the most recent incident.

6555     COMMISSIONER MOLNAR: M'hm.

6556     Mr. Morton, it's a bit unfortunate that the reports now have to go to you. I understand why you are suggesting that's a control, and it is unfortunate in an organization that it has to be you, yourself, who's, you know, having to receive these reports to ensure that it's followed.

6557     I have a question about the reports, though, and about some of the other things I have heard here, and let me start with the reports.

6558     Are you getting this report that tells you the results of the week before? I understand you get these reports weekly.

6559     MR. MORTON: Yes. I wish I could get the week following, but that's not possible, so I can only get the week before.

6560     COMMISSIONER MOLNAR: Okay. And that was really my question.

6561     I mean, what I looked at and seen in this report of the steps, and what I have heard from you today, continues to be a bit of auditing the past, instead of putting in controls that ensure the future, if you will.

6562     MR. MORTON: Correct. I understand that.

6563     COMMISSIONER MOLNAR: If there is no way with the technology that you are putting in place that you are able to assess your programming plans, you know, through the music selector program to program to ensure that it meets all of your requirements, and then you air it?

6564     MR. MORTON: I will let Mike address that one.

6565     MR. HILL: Yes, no the program that we use now does ‑‑ as I schedule each day, you know, today I would schedule tomorrow, once that's done I can see an hour‑by‑hour readout of the Can con levels to make sure they are in compliance. And then once the log is reconciled the day after, then, you know, we make sure we are still in compliance, based on, you know, any songs that may have been dropped for timing‑out purposes for the news or anything like that.

6566     But the way that we have reconstructed all of the clocks, we are always at a minimum of 40 percent scheduled each hour, and that ‑‑ that's pretty much what ends up playing, too, within maybe a percent or two, so...

6567     MR. MORTON: I understand what you are asking also, if he preplans a week ahead, that we would know going into that week pretty much what we were going to hit.

6568     COMMISSIONER MOLNAR: M'hm.

6569     MR. MORTON: The only time that's not going to work, obviously, is, depending on the amount of talk in certain hours, commercial load and that sort of thing, whether, again, how many songs get dropped in that hour.

6570     COMMISSIONER MOLNAR: M'hm.

6571     MR. MORTON: I guess if we front‑loaded everything, then that would probably fix our problem.

6572     COMMISSIONER MOLNAR: And I'm not here as a radio expert and I'm not here to suggest what is the correct control, just looking at these controls that were identified here, modifying the block, I mean, you had this program, you put in weekend programming and didn't have an outcome, didn't have a report that's filled out to tell you you were not meeting Canadian content requirements?

6573     MR. HILL: The programming that was in those hours isn't our own programming. They weren't songs scheduled by that program, they were ‑‑

6574     COMMISSIONER MOLNAR: But you would know that programming that's coming out of the U.S. is not going to ‑‑

6575     MR. HILL: Yes.

6576     COMMISSIONER MOLNAR: ‑‑ contribute to Canadian content requirements.

6577     MR. HILL: Yes.

6578     COMMISSIONER MOLNAR: So, you know, help me understand what controls were in place such that this was programmed, the weekend programming was put in place, this syndicated programming out of the U.S., and there was no report, or otherwise, either in planning what was to air or what did air that would have indicated to you that wasn't met.

6579     MR. HILL: The way the clocks were set up when the programming was added, it was in compliance, but with the addition of the extra Into the Blue program ‑‑ like, the American Country Countdown program, Can con was added before and after that show to compensate, and it did work out to 35 percent for the day. However, once the Into the Blue program was add and the paid programming was added, insufficient amounts of Can con were added to the day, but it wasn't enough to make up for the amount of non‑Canadian content.

6580     MR. MORTON: I fully understand your question ‑‑

6581     COMMISSIONER MOLNAR: Yes.

6582     MR. MORTON: ‑‑ and your reasonings for it, and I think the best answer I can give is that enough attention wasn't being paid to that.

6583     COMMISSIONER MOLNAR: So the technology allowed you to look at what that programming ‑‑ that block of programming, how much Canadian content it delivered, your technology allowed that, nobody was looking at it?

6584     MR. MORTON: That's what I would say.

6585     MR. HILL: Yes.

6586     MR. MORTON: On a regular basis.

6587     COMMISSIONER MOLNAR: Yes. And so now the difference is you have given yourself a little bit of a cushion ‑‑

6588     MR. MORTON: M'hm.

6589     COMMISSIONER MOLNAR: ‑‑ but, at the end, who's looking at it, how often?

6590     MR. HILL: It's looked at every day now. Like, the reports are, you know, looked at daily, and then the week reports are filed once a week. So by, usually, early Tuesday I have the report for the entire weekend done and it's always ‑‑ it's always in compliance, right around 40 percent, with the addition of the ‑‑ well, where we have positioned the Canadian content through the day before and after ‑‑

6591     COMMISSIONER MOLNAR: M'hm.

6592     MR. HILL: So...I don't know if I ‑‑ did that answer your question?

6593     MR. MORTON: And I think what he's saying is that he is...he is looking at the weekend before the weekend comes, and then we are achieving the levels that we are during the week, around the 40 percent, because he has added more Can con and made proper adjustments.

6594     COMMISSIONER MOLNAR: So, Mr. Morton, you are obviously comfortable in providing that responsibility and accountability to...oh, well, I'm sorry...sorry, to Mr. Hill. Right? Yes.

6595     So you are comfortable in looking in a proactive manner and ensuring that this is being met is properly delegated to Mr. Hill and you will review it ‑‑

6596     MR. MORTON: Yes, I believe so.

6597     COMMISSIONER MOLNAR: ‑‑ the subsequent week?

6598     MR. MORTON: Yes. And I think, actually, after today we will probably review it before the problem could arise. So maybe on a daily basis. Certainly before the weekend's run, because I know we haven't really had any problems during the week. But I will check now to ensure that we are going to be covered on the weekends prior to the weekend.

6599     COMMISSIONER MOLNAR: And you are going to do that personally? You are going to get some sort of a report ‑‑

6600     MR. MORTON: From Mike.

6601     COMMISSIONER MOLNAR: ‑‑ of what is planned?

6602     MR. MORTON: I will get a report from Mike on, I guess, Fridays or Thursdays, when he puts that stuff in.

6603     COMMISSIONER MOLNAR: Of what's planned for the weekend?

6604     MR. MORTON: For the weekend, and where we are standing with our Can con.

6605     COMMISSIONER MOLNAR: Okay.

6606     MR. KELLY: If I could just add something, too, Commissioner, that the new system that we have invested in with the company, we can do it hourly throughout the day now and we can find out exactly where we are with our Canadian content.

6607     The system we used before was a system designed in the early‑nineties and we are with 2008 technology now. And we have had some training over the last several months, that, as programmers, we can find out specifically at 10:30 in the morning where we are at exactly with our Can con for the day.

6608     So it's been a win‑win situation for the radio station.

6609     COMMISSIONER MOLNAR: So when did you install this new software?

6610     MR. KELLY: Two months ago.

6611     COMMISSIONER MOLNAR: And it's up, it's implemented, it's running?

6612     MR. MORTON: Yes, it is.

6613     MR. HILL: I believe November 12th was the first day for it.

6614     COMMISSIONER MOLNAR: Okay. Thank you.

6615     You have heard from our legal counsel, Mr. Bowles, what is meant by a Mandatory Order and, you know, the purpose of you being here is to, effectively, show cause why a Mandatory Order should not be issued to Quinte Broadcasting.

6616     Can you comment or tell us at this point why you believe it is unnecessary to issue a Mandatory Order related to the Canadian content requirements?

6617     MR. MORTON: I guess my belief is that we would hope one wouldn't be implemented only because of the steps we have taken and the additional steps we are going to take after being here today.

6618     Again, in no way were we trying to cheat on Can con. And being the second time, the first time having to appear for this reason, I can guarantee that it will not happen again.

6619     COMMISSIONER MOLNAR: Let me ask you, instead of issuing a Mandatory Order, another option available to the Commission is to issue short‑term licence renewals. As you are aware, the prior issue of non‑compliance resulted in a four‑year licence renewal. Another option could potentially be a two‑year licence renewal.

6620     Can you comment on that?

6621     MR. MORTON: I would certainly accept that.

6622     COMMISSIONER MOLNAR: You would accept that?

6623     MR. MORTON: I would accept that.

6624     COMMISSIONER MOLNAR: Okay, thank you.

6625     I'm going to turn, then, to the issue of Canadian content development.

6626     Mr. Morton, you noted in your comments that it was basically an accountant's error that caused this. They are laughing at me. I'm an accountant, so...

‑‑‑ Laughter / Rires

6627     COMMISSIONER MOLNAR: While it's fair enough that the accountant sent the money to the wrong station ‑‑ or directed it to the wrong station, it took a long time for this to be identified. And so I'm wondering if you have considered any additional reporting or other requirements. I mean, you have said here it's not going to happen again. What is our assurance, and, really, what's your assurance, that that's the case?

6628     MR. MORTON: Not a shot at the former accountant, but he's no longer with us. He retired. But, again, this is ‑‑ since this was brought to our attention, this is an issue that I'm dealing with directly now with the new accountant. He's well aware of the situation from the past, as am I, and we are going to make our annual payments in two payments, and it's going to be allocated to the correct stations. No ifs, ands or buts there.

6629     COMMISSIONER MOLNAR: So what is it that you will have? How are you going to know it's been paid and allocated ‑‑

6630     MR. MORTON: Because I sign the cheques.

6631     COMMISSIONER MOLNAR: So you are going to pay it and you are going to have provided to you a report, is that it? It's a report that will ensure: here's the revenue, here's the percentage due for CCD for each station?

6632     MR. MORTON: I have already prepared that for this ‑‑

6633     COMMISSIONER MOLNAR: You know, you probably sign this cheque, as well ‑‑

6634     MR. MORTON: I guess. You are right.

6635     COMMISSIONER MOLNAR: ‑‑ it just wasn't directed right ‑‑

6636     MR. MORTON: No.

6637     COMMISSIONER MOLNAR: ‑‑ right?

6638     MR. MORTON: No, and I wasn't ‑‑

6639     COMMISSIONER MOLNAR: So this is what I'm asking.

6640     MR. MORTON: Yes. I wasn't aware of that issue before, until it was brought to our attention. I'm the one that filled the form out for the new CCD requirements. I know what we are going to be paying. CJBQ's obligated for $1,000, the company's obligated for a little over $7,500. So I fill that form out, accounting has a copy of it, you know, and it's got the dates that it's to be paid, paid in two...two payments.

6641     So I have actually done the work myself, and I know I have got a copy of it and I know when it's to be paid, as does accounting.

6642     COMMISSIONER MOLNAR: Okay.

6643     MR. MORTON: And I would be happy to send them post‑dated cheques, if they would like, I mean, if that would make you more comfortable that it's been looked after.

6644     COMMISSIONER MOLNAR: Personally, I don't see the point of that.

6645     MR. MORTON: No.

6646     COMMISSIONER MOLNAR: You know, the point is to ensure that there's proper controls ‑‑

6647     MR. MORTON: Yes.

6648     COMMISSIONER MOLNAR: ‑‑ you know, procedures and controls, within your organization to ensure that the payments are paid, that it's paid accurately and timely. The point isn't to get the money early ‑‑

6649     MR. MORTON: No, no.

6650     COMMISSIONER MOLNAR: ‑‑ the point is just to ensure ‑‑

6651     MR. MORTON: I was just throwing that out now.

6652     COMMISSIONER MOLNAR: ‑‑ you know, and the point of today very much is to ensure that there's adequate processes and procedures in place within your own company to ensure that it can operate on a, you know, continued basis and meet the requirements that are there.

6653     MR. MORTON: I understand that. I'm very comfortable that we will not have any issues with that in the future.

6654     COMMISSIONER MOLNAR: Because you are going to fill out the forms myself.

6655     MR. MORTON: I already did that.

6656     COMMISSIONER MOLNAR: Yes.

6657     MR. MORTON: I mean, I don't have to, but I don't mind doing it. It's easy for me to do, so at least I have a copy of it and accounting has a copy of it. It doesn't take more than a couple of minutes to do.

6658     COMMISSIONER MOLNAR: Okay.

6659     Again, like the issue of the Canadian content requirements, given that you were not compliant with your Canadian content development requirements, the question to you is: can you show cause, can you explain to us why you believe the Commission should not issue a Mandatory Order to require you to comply with this condition of licence?

6660     MR. MORTON: I think because the controls are in place now so that error will not happen again. As I said, I'm looking after it, with the accounting department, but I'm doing the math on it myself, and so not just accounting has the information. Sometimes accounting doesn't always remember when things have to be sent, and that sort of thing, so with the new formula, I just want to make sure that I'm in the know before it happens.

6661     COMMISSIONER MOLNAR: Let me ask you one more thing here before. I wish you all good health, but a control that is limited to one person sometimes has an ability to fall apart as well. Have you considered this?

6662     You know, when your response to us is that it's going to work because I'm going to do it all myself ‑‑

6663     MR. MORTON: M'hm.

6664     COMMISSIONER MOLNAR: ‑‑ instead of having processes and procedures, you know, that would see it done, and adequate checks and balances, have you considered that?

6665     MR. MORTON: I have considered that. When I say...when I say I'm doing it all myself, I mean, I figure out ‑‑ I fill out the form, I give accounting a copy of it, and I say, "This is when we are going to make our payments". So it's not like I'm taking work out of the accounting department's hands, but for something of this importance, as with the Can con, with the Can con we are going to have three of us looking at it ‑‑

6666     COMMISSIONER MOLNAR: H'mm.

6667     MR. MORTON: ‑‑ but with the CCD commitments, it's obviously a very important issue, it's not like missing a payment to ‑‑ you know, for the water that comes into the radio station. We are sitting here today because of this and the other incident, and so I ‑‑ I like to be on top of it, so...but that's something I want to do. I want to be on top of that, and, obviously, accounting's going to play a roll in it, too.

6668     COMMISSIONER MOLNAR: M'hm.

6669     MR. MORTON: I don't want to be here blaming the accounting department three years from now ‑‑

6670     COMMISSIONER MOLNAR: M'hm.

6671     MR. MORTON: ‑‑ or two years from now or one year from now.

6672     COMMISSIONER MOLNAR: M'hm.

6673     As with the issue of the Canadian content requirements, can you tell us why or if you are willing to accept a short‑term ‑‑ a two‑year licence renewal, and if not, why we should not issue a two‑year renewal?

6674     MR. MORTON: Yes, I'm willing to accept that.

6675     COMMISSIONER MOLNAR: Okay.

6676     Mr. Morton, I just have two other small issues related to your licence renewal and the application you provided, and they are related to the sections of the application related to cultural diversity and Equitable Portrayal Code.

6677     In the section on cultural diversity, you did not describe the steps that had been taken to implement best practices and diversity initiatives regarding cultural diversity. It may be that you are not in a position, based upon your markets, to participate in the employment of these underrepresented groups, but you didn't speak of the matter in any manner, for example, their portrayal on air.

6678     Can you tell us what, if any plans you have to deal with the matter of cultural diversity and equitable portrayal on the air?

6679     MR. MORTON: Well, I think we do try to address it, again, when we are hiring people, not that we do a lot of hiring because our staff generally are with us for quite a period of time.

6680     We generally turn to the colleges, Loyalist College in particular, because they have students that intern with us there, and they aren't always members of the visible minorities that are with those colleges.

6681     We receive resumes, sometimes we interview people, a lot of times it's done by phone because of where that person's living at the time, so we can't always identify visible minorities.

6682     Again, I sometimes put the blame back on the colleges, because maybe they should be doing a better job of trying to attract people from those areas.

6683     COMMISSIONER MOLNAR: Can you tell me regarding the portrayal on air? And I say that from the perspective of reflecting back your community.

6684     I will admit, as the regional commissioner from Saskatchewan and Manitoba, I'm not entirely comfortable with the market you serve and what sort of cultural diversity exists within that market.

6685     Do you have any programs or other initiatives to ensure that you have reflected back your community and the diversity within that community?

6686     MR. MORTON: I don't think specifically we have.

6687     In the summertimes we have a migrant workforce that comes in from the Caribbean, for the main part, but they are not there for ‑‑ they are only there for maybe three or four months.

6688     We have an aboriginal community to the east of us. They have their own radio station. Mike has done work with the radio station, we have done work with the radio station. And we don't do any programming specifically for that community, but they already their own voice down there with their station.

6689     We have a fairly large European population. A lot of them are in the farming business. So outside of our agricultural reports we do run on CJBQ, we probably don't specifically present any programming for them.

6690     I'm not quite sure what else to say about that.

6691     MR. KELLY: I just wanted to add if I could, sir, that there's a ‑‑ in Belleville there's a huge ethnic festival every summer, so the radio station's a strong presence there, and interviews different ethnic communities on what's going on, and it could be ‑‑ whether they are promoting their food and their music and their culture. So we are heavily involved with that festival every summer.

6692     COMMISSIONER MOLNAR: Okay.

6693     Well, there is an Equitable Portrayal Code, a CAB Equitable Portrayal Code. Are you aware of that code, Mr. Morton?

6694     MR. MORTON: I am.

6695     COMMISSIONER MOLNAR: Okay. It has changed in the near term. In Public Notice 2008‑23, that portrayal code was approved and it replaced the previous Sex Role Portrayal Code that had been in place.

6696     So you are aware of the new code?

6697     MR. MORTON: I am.

6698     COMMISSIONER MOLNAR: And you are wiling to adhere to that code in your broadcasting?

6699     MR. MORTON: Yes.

6700     THE PRESIDENT: Okay. Thank you.

6701     Those are my questions.

6702     THE CHAIRPERSON: Thank you, Commissioner Molnar.

6703     Commissioner Patrone has a few additional questions.

6704     COMMISSIONER PATRONE: Thank you, Madam Chair.

6705     Just a couple of questions from me.

6706     You spoke a little bit about the economic imperative of airing these block shows. I was wondering, do you still run Into the Blue and American Country Countdown.

6707     MR. MORTON: Yes, we do.

6708     COMMISSIONER PATRONE: And do you normally get accurate programmed Q sheets for these shows when they come in?

6709     MR. MORTON: Yes. Yes, we do.

6710     MR. HILL: Yes.

6711     COMMISSIONER PATRONE: Okay. Did you have accurate Q sheets on that day in question, do you remember?

6712     MR. HILL: They were provided, I know that.

6713     COMMISSIONER PATRONE: Because sometimes, if those Q sheets aren't accurate ‑‑

6714     MR. HILL: Most of the ones that we get sent now ‑‑ well, that we download off whatever FTP site, they have the date on the Q sheets, so...and they haven't always ‑‑ I don't know when they started doing that ‑‑ but they do now, so that I know that, you know, that Q sheet is specifically for this coming weekend.

6715     COMMISSIONER PATRONE: Is the show always exactly the same time or does it vary when it comes in?

6716     MR. HILL: In length or...?

6717     COMMISSIONER PATRONE: Yes, in length.

6718     MR. HILL: No, the length of the show remains the same, the four‑hour American Country Countdown, and Into the Blue is one hour. Though not a full hour. I think the American Country Countdown works out to about 3 hours and 35, 40 minutes, because they ‑‑

6719     COMMISSIONER PATRONE: Three hours and 40 minutes for the entire show?

6720     MR. HILL: Yes. They allot time for commercial air play. And then the hour show, I believe, is 52, I think. But they allow...

6721     COMMISSIONER PATRONE: That's pretty long program. That's three hours and 40 minutes, is it that they...?

6722     MR. HILL: Thirty‑five or 40 minutes.

6723     COMMISSIONER PATRONE: Thirty‑five minutes.

6724     MR. HILL: Yes.

6725     COMMISSIONER PATRONE: And it's a hundred percent American content, I guess, whenever you would air those shows?

6726     MR. HILL: Yes. It's off of the American country music charts, so...

6727     COMMISSIONER PATRONE: Yes.

6728     MR. MORTON: There would be times when there are Canadian artists on there, but there would be times when there are no Canadian artists on there also.

6729     COMMISSIONER PATRONE: And you factor that into your calculations when you add or subtract ‑‑

6730     MR. HILL: Not the way we do it now, because we can't rely on that. So we just look at it as zero Can con and compensate otherwise.

6731     COMMISSIONER PATRONE: And did I hear you say that you insert your Can con before and then after the show in order to ‑‑

6732     MR. HILL: Well, not physically insert. I mean, it's built into the clocks now to air before and after the show. The default music that runs at the end of the program to get us through the rest of that last half‑hour, forty ‑‑ you know, 30, 25 minutes, it's about 50 to 75 percent Canadian content to get us to the top of the hour, and then start our regular broadcast hour the next hour.

6733     COMMISSIONER PATRONE: And when you say you miscalculated, was it just an arithmetic ‑‑

6734     MR. HILL: Yes.

6735     COMMISSIONER PATRONE: ‑‑ mistake?

6736     MR. HILL: Yes. There was not sufficient selections of Canadian content added to compensate for the number of selections that would air on the program.

6737     COMMISSIONER PATRONE: Okay.

6738     And you repackage these shows when they come in or...all right, let me reask that. Is it possible to repackage them so that it's absolutely fool‑proof, in terms of the Canadian content levels being adequate? So in other words, you would ‑‑

6739     MR. HILL: The way it's set up now, it is. The way we ‑‑

6740     COMMISSIONER PATRONE: So it wasn't like that before?

6741     MR. HILL: No, it wasn't like that, and that was part of the problem before.

6742     COMMISSIONER PATRONE: Is your station automated at that point, or do you actually have a body there that ‑‑

6743     MR. KELLY: It's automated.

6744     MR. HILL: No, that's automated.

6745     COMMISSIONER PATRONE: You don't have anybody there?

6746     MR. KELLY: No. No, we are automated Saturday at one o'clock and Sunday at two in the afternoon, so...

6747     COMMISSIONER PATRONE: Is that part of the problem?

6748     MR. KELLY: Could have been, but the announcer in the studio ‑‑

6749     COMMISSIONER PATRONE: There was no automatic pilot at the time, there was nobody there ‑‑

6750     MR. KELLY: There was nobody there.

6751     COMMISSIONER PATRONE: ‑‑ to monitor.

6752     MR. KELLY: And if an announcer is in the studio, if their role is not to be connected with the music or programming, they are just following the format, they are really not tuned in or zeroed in on where they are, as far as Can con, because, at the end of the day, I guess it's not their responsibility. It would come back under my portfolio and Michael's.

6753     So now that we have fixed it, we haven't had the issues in six months. And they are still in automation, those hours. There's nobody in that particular radio station.

6754     COMMISSIONER PATRONE: Doesn't it make you nervous, then?

6755     MR. KELLY: Well, you know, that's a good question, because things happen. And we saw it happen six months ago with the special programming from the east coast. Those are revenue‑generated programs and we had some glitches with the computers and...I mean, 99 percent of the time they work well, but when something happens and we don't catch it until when all the troops come back to work the next morning, it's too late.

6756     But I'm happy to say in the last six months we haven't been upset on a Monday morning yet, so...

6757     COMMISSIONER PATRONE: So this isn't a staffing problem, then?

6758     MR. KELLY: No.

6759     COMMISSIONER PATRONE: You are satisfied with your staffing levels?

6760     MR. KELLY: Sure. And I want to ‑‑

6761     COMMISSIONER PATRONE: You have enough people to monitor and ‑‑

6762     MR. KELLY: Yes, I mean ‑‑

6763     COMMISSIONER PATRONE: ‑‑ stay on top of this?

6764     MR. MORTON: I think so. Ideally, I would love to have people in there 24 hours a day, but the economics just aren't there to have that.

6765     We do run block programming on our other two stations also, and they are also unmanned, at different times, but we have never had issues with those. It seems to be on CJBQ we have had the issues.

6766     MR. KELLY: You know, the radio stations are dark, a lot of them in this country, Friday nights at five, and we are blessed with this company ‑‑ and I was going to touch on that ‑‑ is that we still ‑‑ it's over 60 years the Morton family have operated these three radio stations, over 40 staff, long‑time employees, too, some 30, 35 years.

6767     We stay because they are good people, they are good to their staff, they make a difference in their community. And on the weekend, as a programmer, with the three radio stations that I'm involved in, it's a blessing.

6768     And when I go on the advisory board at Loyalist College for broadcasters and talk to other programmers across the province and the country, they can't believe that we have two people in the newsroom on the weekend and we have an announcer for CJBQ Rock 107 and Mix 97. Particularly in the morning they are there, but in the afternoon the stations are manned by personalities.

6769     But CJBQ, this particular station, is automated because we are getting the programming from an out source, if you will, so...

6770     But this company, this family ‑‑ I know you are from Saskatchewan ‑‑ this family, in our area and across the province, are recognized broadcasters, that they are loyal. And trust me, I am under the gun here, too, and so is Mike, but talk about loyalty, it's the Morton family. And over 60 years.

6771     And if our kids are sick ‑‑ I have two young children ‑‑ and have to miss a day, I'm not docked and somebody's tracking me down to make sure I'm actually at home with the kids. And that's why I have stayed with this company for 20 years: because they believe in me and they have given us all opportunity.

6772     At the end of the day, we screwed up, but we are very fortunate, as broadcasters, to work for this company.

6773     COMMISSIONER PATRONE: Thank you very much.

6774     Oh, did you want to add something to that?

6775     MR. MORTON: I'm just embarrassed.

‑‑‑ Laughter / Rires

6776     COMMISSIONER PATRONE: Well, thank you very much. I appreciate your answers.

6777     Madam Chair.

6778     THE CHAIRPERSON: Thank you.

6779     Legal counsel.

6780     MR. BOWLES: Yes, I only have one simple question, and it seeks to provide a little bit of clarification with respect to your commitment you made to abide by the Equitable Portrayal Code.

6781     What I would like from you is an answer to the following question: would you be willing to be enjoined to that commitment by means of condition of licence?

6782     MR. MORTON: I'm sorry, would you repeat the question?

6783     MR. BOWLES: With respect to the commitment you gave earlier to abide by the Equitable Portrayal Code, would you be willing to be enjoined to that commitment by means of a condition of licence?

6784     MR. MORTON: Yes, absolutely.

6785     MR. BOWLES: Thank you very much.

6786     THE SECRETARY: Thank you.

6787     This completes Phase I of the consideration of item 16 for this agenda, and now we well proceed to Phase II, in which intervenors appear in the order set out in the agenda. And for the record I would like to advise you that no interventions were received for this item, so this completes Phase II, as well.

6788     Now, I don't know, Madam Chairman, if you wish to take the break before next phase or do we proceed?

6789     THE CHAIRPERSON: Well, the next phase is your reply to interventions, as you well know, and so I'm going to give you this opportunity to make a final statement. Or if there is, you know, just anything else you would like to tell us, this is your opportunity.

REPLY / RÉPLIQUE

6790     MR. MORTON: Okay, thank you.

6791     I guess, as Sean put it quite bluntly, we screwed up. I do think we have taken and will be taking further appropriate actions to ensure we don't have these mistakes again.

6792     We do have a great staff and they do a lot of great work in the community. I know that's not what we are here today to talk about, but when things do screw up we tend to look after them. And, obviously, we are here to say that promise we are not going to have these issues again.

6793     As long as we don't get called back for playing too much Can con or giving too much money to CCD, then I think we are going to be okay, and that's all I have to say.

6794     THE CHAIRPERSON: Thank you.

6795     MR. MORTON: Thank you.

6796     THE CHAIRPERSON: That concludes our hearing. We don't have any further questions for you at this point.

6797     Like I said, I do appreciate how difficult this is for you, and I want to thank you for coming here and appearing before us and giving us your frank answers.

6798     Thank you very much.

6799     MR. MORTON: Thank you very much.

6800     THE CHAIRPERSON: We are adjourned for today. We will resume at 1030 tomorrow morning.

6801     Thank you.

‑‑‑ Whereupon the hearing adjourned at 1403, to resume

on Friday, January 30, 2009 at 1030 / L'audience

est ajournée à 1403, pour reprendre le vendredi

30     janvier 2009 at 1030

REPORTERS / STÉNOGRAPHES

____________________ ____________________

Johanne Morin Sharon Millett

____________________

Jennifer Cheslock