TRANSCRIPT OF PROCEEDINGS BEFORE

THE CANADIAN RADIO‑TELEVISION AND

TELECOMMUNICATIONS COMMISSION

TRANSCRIPTION DES AUDIENCES AVANT

CONSEIL DE LA RADIODIFFUSION

ET DES TÉLÉCOMMUNICATIONS CANADIENNES

SUBJECT:

VARIOUS BROADCAST APPLICATIONS /

PLUSIEURS DEMANDES EN RADIODIFFUSION

HELD AT: TENUE À:

Delta Regina Delta Regina

1919 Saskatchewan Drive 1919, promenade Saskatchewan

Regina, Saskatchewan Regina, Saskatchewan

October 30, 2006 le 30 octobre 2006

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 BROADCAST APPLICATIONS /

PLUSIEURS DEMANDES EN RADIODIFFUSION

BEFORE / DEVANT:

Barbara Cram Chairperson / Présidente

Michel Arpin Vice-Chair, Broadcasting / Vice‑président, radiodiffusion

Rita Cugini Commissioner / Conseillère

Ronald Williams Commissioner / Conseiller

Joan Pennefather Commissioner / Conseillère

ALSO PRESENT / AUSSI PRÉSENTS:

Chantal Boulet Secretary / Secrétaire

Leanne Bennett Legal Counsel /

Conseillère juridique

Lyne Cape Hearing Manager /

Gérante de l'audience

HELD AT: TENUE À:

Delta Regina Delta Regina

1919 Saskatchewan Drive 1919, promenade Saskatchewan

Regina, Saskatchewan Regina, Saskatchewan

October 30, 2006 le 30 octobre 2006

- iv -

TABLE DES MATIÈRES / TABLE OF CONTENTS

PAGE / PARA

PHASE I

PRESENTATION BY / PRÉSENTATION PAR:

Newcap Inc. 7 / 35

Lighthouse Broadcasting Limited 81 / 340

Golden West Broadcasting Ltd. 115 / 551

Radio CJVR Ltd. 151 / 764

1182743 Alberta Ltd. 209 / 1076

Vista Radio Ltd. 256 / 1291

Harvard Broadcasting Inc. 300 / 1489

Regina, Saskatchewan / Regina (Saskatchewan)

‑‑‑ Upon commencing on Monday, October 30, 2006

at 0930 / L'audience débute le lundi

30 octobre 2006 à 0930

1 THE CHAIRPERSON: Order, please. À l'ordre, s'il vous plaît.

2 Bonjours mesdames et messieurs.

3 Good morning, ladies and gentlemen, and welcome to Regina. My name is Barbara Cram and I'm the Regional Commissioner for Manitoba and Saskatchewan for the CRTC. I will be presiding over this hearing.

4 Joining me on the panel are my colleagues Michel Arpin, Vice‑Chair of Broadcasting; Rita Cugini, to my right, Regional Commissioner for Ontario; Ronald Williams, Regional Commissioner for Alberta, to Commissioner Cugini's right ‑‑ Alberta and the Northwest Territories; and Joan Pennefather, National Commissioner, on my far left.

5 The Commission team assisting us includes the Manager of Radio Applications and Policy Lyne Cape, who is also acting as Hearing Manager; Leanne Bennett, Legal Counsel; and Hearing Secretary Chantal Boulet.

6 Please speak with Ms Boulet if you have any questions with regard to the hearing procedures.

7 At this hearing we will study eight applications to operate a new English language commercial FM radio station in the Medicine Hat, Alberta, market. We will also hear an application to change the frequency and authorized contours of radio station CJLT‑FM Medicine Hat.

8 The panel will then consider five applications to operate a new English language commercial FM radio station, and one application to operate a new English and Aboriginal language Native type B FM radio station in the Regina market. As well, we will examine an application to amend the licence of the Native radio station, CJLR‑FM La Ronge, in order to add an FM transmitter in Regina.

9 Finally, we will consider eight applications to operate a new English language commercial FM radio station, and one application to operate a new English and Aboriginal language Native type B FM radio station in the Saskatoon market.

10 Some applications are competing technically for the same frequencies in the Medicine Hat, Regina, and Saskatoon markets.

11 We will study the proposals in light of the cultural, economic and social objectives defined in The Broadcasting Act, and regulations flowing from it.

12 The panel will base its decision on several criteria, including the state of the competition and the diversity of editorial voices in each market, as well as the quality of the applications. It will look at the ability of the markets to support new radio stations, the financial resources of each applicant, and proposed initiatives for the development of Canadian talent.

13 Le comité fondera sa décision sur plusieurs critères, dont l'état de la concurrence et la diversité des voix éditoriales dans chaque marché ainsi que la qualité des demandes. Il examinera également la capacité des marchés à soutenir de nouvelles stations de radio, les ressources financières de chaque requérante et les initiatives proposées pour le développement des talents canadiens.

14 We will then look at the applications to renew Aboriginal Voices Radio's licence for its radio undertakings at Vancouver, Calgary, Toronto and Ottawa. The Commission will discuss a number of issues with the licencee, including its programming commitments and its apparent non‑compliance with certain sections of the Radio Regulations 1986, and conditions of licence.

15 I will now invite the hearing secretary, Ms Boulet, to explain the procedures we will be following.

16 Ms Boulet...?

17 THE SECRETARY: Thank you, Madam Chair.

18 Good morning, everyone. Before beginning I would like to go over a few housekeeping matters to ensure the proper conduct of this hearing.

19 When you are in the hearing room we would ask that you please turn off your cell phones, beepers and black berries, as they are an unwelcome distractions to participants and commissioners, and they may cause interference on the internal communication system. We would appreciate your cooperation with respect to this throughout the hearing.

20 We expect the hearing to take approximately one week. We will begin each morning, starting tomorrow, at 8:30, and finish around 7:30. We will take one hour for lunch and a 15‑minute break in the morning and afternoon. We will let you know of any schedule changes that may occur.

21 The Tuscany Room, just outside on your right, will serve as the examination room, where you can examine the public files of the applications being considered at this hearing. As indicated in the agenda, you may reach the examination room by calling 306‑790‑4735.

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

23 Simultaneous translation is also available during the hearing. You can obtain a translation receiver from the technician sitting at the back of the room. The English interpretation is on channel 1 and the French is on channel 2.

24 Finally, we will proceed at this hearing with a four‑phase process as follows: First, we will hear each applicant in the agenda order, and each applicant will be granted 20 minutes to make his presentation. Questions from the Commission will follow each presentation.

25 Phase II is where applicants reappear in the same order to intervene if they wish on the competing applications. Ten minutes are allowed for this purpose. And again, questions from the Commission may follow.

26 In Phase III other parties will appear in the order set out in the agenda to present their appearing intervention, and ten minutes will be allowed for each presentation. Again, questions may follow.

27 Phase IV, finally, provides an opportunity for each applicant to reply to all the interventions submitted on their application. Applicants appear in reverse order and ten minutes are allowed for this reply. And again, questions may follow.

28 For the record, I would like to indicate that the letter dated October 4, 2006, regarding the use of frequency 102.9 megahertz from the applicant carrying on business as Northwestern Radio Partnership, has been added to the public record of this application.

29 Also e‑mails dated October 23 and 24, 2006, from the applicant Aboriginal Voices Radio Inc., as well as the Commission's response dated October 27, 2006, clarifying the calculation of CKAV‑FM's spoken word programming, were also added to the public record of AVR's application 2006 0872‑1.

30 These documents are all available for your review in the public examination room.

31 And we're now ready to proceed to item 1 on the agenda, which is an application by Newcap Inc. for a licence to operate an English language commercial FM radio programming undertaking in Medicine Hat.

32 The new station would operate on frequency 105.3 megahertz (channel 287C) with an effective radiated power of 100,000 watts (non‑directional antenna/antenna height of 214.4 metres).

33 Appearing for the applicant is Mr. Robert Steele, who will introduce his colleagues. You will then have 20 minutes for your presentation.

34 Mr. Steele...?

PRESENTATION / PRÉSENTATION

35 MR. STEELE: Thank you.

36 Good morning, Madam Chair, Members of the Commission, Commission Staff. I'm Rob Steele, president and chief executive officer of Newcap Radio.

37 Before we begin our presentation I'd like to introduce our team. Seated in the front row to my immediate right is David Murray, recently named chief operating officer for Newcap Radio.

38 Beside Dave is Ron Thompson who heads up our Southern Alberta group. Ron has over 40 years in radio, with the last 25 years in Red Deer.

39 Next to Ron is Sue Stevenson, news director of our Southern Alberta group of stations, including KG Country and Z 99 Red Deer. Sue has over 25 years of news experience in radio, with 20 of it in the newsroom in Red Deer. At Newcap we are particularly proud of the quality of the news we provide in Alberta, and early this year, KG Country won the RTNDA award for best national newscast in the market category.

40 Next to Sue is Mark Maheu, executive vice‑president and chief strategist for Newcap Radio.

41 Beside Mark is Glenda Spenrath, assistant GM of Newcap's Alberta Radio Group East, based in Lloydminster. And rounding out our panel is Brad Boechler, our VP of sales.

42 In this application we are looking to extend our news programming and community service to an additional market in Alberta. Medicine Hat is really a good news story, and to give you some of the economic background I will ask Glenda Spenrath to elaborate.

43 Glenda...?

44 MS SPENRATH: Thank you, Rob.

45 Medicine Hat has a growing and diversified economy, with strengths in oil and gas, information technology, machinery and food processing. Its economy is broad‑based and well positioned for solid long‑term growth. Medicine Hat shares in Alberta's economic good fortune. Medicine Hat's population grew over seven percent between 2001 and 2006, and FP Markets projects another five percent growth between now and 2011.

46 Similarly, retail sales are projected to grow in Medicine Hat by 35 percent over the next five years; whereas, the corresponding rate for Canada is 28 percent.

47 These economic statistics paint a very positive picture, and an even more tangible example of economic growth, from January to May of this year housing starts in Medicine Hat were up a robust 32 percent.

48 In Medicine Hat a new entrant will be facing a strong entrenched competitor in Pattison. Its two FM stations are well positioned in an AC format that draws two‑thirds of the listeners in the market at least once a week, and a heritage country station that draws 37 percent of the market during each week with high satisfaction ratings according to our research.

49 Their radio stations share facilities with their television stations and enjoy the economies of scale that accompany this kind of operation.

50 To be successful in this market a new entrant will have to provide high quality programming. We have a track record of providing excellent programming in all the markets that we serve. The synergies we bring in the back office, as well as the added value of our Alberta news group, mean that we can devote the resources necessary to make the station a success.

51 We must be willing to be patient for profits to come. Our business plan does not envisage showing operating profits until the third year of operations, and pre‑tax profits do not happen until year five. All the other applicants foresee profits at the latest in year three, and some in the first year.

52 We will maximize synergies to increase sales and generate incremental radio advertising revenues.

53 And we will direct the savings from back office and other administrative efficiencies to on‑air programming for listeners.

54 To tell you a bit more about our Alberta Radio Group and our Southern Alberta stations, here is Ron Thompson.

55 MR. THOMPSON: Thanks Glenda. Good morning, Madam Chair and Members of the Commission.

56 When Newcap purchased the Telemedia stations in Alberta, it was decided that to provide high quality service in the many small markets served, capital investment and programming improvements were needed to make markets viable. The research and capital investment of Newcap is over $5 million put into many small markets we serve in Alberta. They've resulted in more jobs, more local service and better local reflection.

57 Newcap also created three subdivisions to further group stations regionally that have even more similarities. The three groups are based in Lloydminster, Edson, and Red Deer. The Red Deer stations anchor the Southern Alberta Group of seven stations in Red Deer, Blairmore, Brooks, Stettler, and Drumheller. These stations have a great deal of political, social, economic and cultural characteristics in common. With mixed economies based upon both the resource industries and agriculture, among others.

58 Adding Medicine Hat to this group would benefit all the other markets in the Southern Alberta Group, providing coverage of southeast Alberta while allowing us to provide a higher quality programming focus in that market.

59 A the same time, Medicine Hat's size means that we can invest in a strong local team, with all of the programming decisions being made in that market. We expect that we will be live and local at least 120 hours per broadcast week with occasional features from one of the larger markets.

60 For example, if Nickelback is playing in Edmonton or Red Deer, our local rock stations in those markets can interview the band and provide interview clips that our Medicine Hat rock station would not otherwise enjoy.

61 To talk a bit about the news approach, I'd like to introduce Sue Stevenson our Red Deer news director.

62 MS STEVENSON: Thanks, Ron, and good morning.

63 In a radio environment that has increasing music choices from satellites, the Internet and iPods, we realize that to compete we have two strategic advantages. We are local and we are live. For this reason, you may have noticed in all three of the applications on this hearing we increased our commitment to news over the course of the written process to five hours and 45 minutes per week, and at least 75 percent of this weekly total will be local news.

64 Newcap Radio strongly believes that local news is the key to success in markets like Medicine Hat. For example, in many smaller Alberta markets we have significantly increased our local news content. The feedback from listeners and our clients has been very positive, to say the least.

65 Newcap has introduced a news access system that allows Red Deer and our other southern Alberta stations to instantly share stories through what's called a wire relay system. It has greatly increased news content of local interest on all stations.

66 Newcap has instituted a protocol to share stories and interviews as well with our other centres right across the province for both news and agriculture.

67 The agriculture sector is an important part of Medicine Hat's economy, and as such, will receive extensive coverage on our station. Newcap stations in Red Deer, Camrose and Lloydminster have dedicated agricultural reporters who routinely share information. It has proven to be a good asset and is an area that we are aggressively trying to grow. Medicine Hat radio will benefit from our established expertise in this agricultural area.

68 In Red Deer we have operated mobile community studios for some time. We use our two vehicles to broadcast live from locations around our service area. This summer CKGY‑FM and CIZZ‑FM in Red Deer were appointed the official voice of the 2006 Alberta Summer Games, and we put our mobile studios at the disposal of the games to provide live coverage at the various venues. We combined this with our Newcap Alberta synergies to provide our stations with exclusive coverage of the games, which resulted in their communities getting realtime information on how their area athletes were doing. We intend to have a mobile studio in Medicine Hat as well.

69 We are proposing to provide five‑minute newscasts each day of the week through morning drive, at noon, and in afternoon drive in Medicine Hat, and that includes weekends. This will be supplemented during the weekday by shorter updates on the half hour in the morning drive.

70 Our three full time and one half time reporters will be supported by regional news information from our 12 reporters in other southern Alberta markets. And around the province we currently have over 50 dedicated reporters and journalists.

71 We will also provide a range of other local information features, including 35 weekly community event updates, 35 weekly public affairs reports, which we plan to call The Hat Today, and a one‑hour weekly public affairs program The Hat This Week. We see the news department following various Medicine Hat events through the week in the community updates, while local issues might be tracked on our public affairs updates. On the weekend the top local news events and public affairs topics will be developed into the hour‑long show. Some weeks this might track one particularly hot issue like the municipal elections race. Other weeks might see more diverse topics covered.

72 We will also seek out our listeners' opinions on issues of the day with our listener pole, The Hat Line. We hope to make this the coffee shop topic by asking for opinions throughout the week and then airing the feedback later in the week as a feature of our morning show.

73 Of course, our spoken word will include our announcers' talk about the music they are playing, about the events around Medicine Hat, as well as humour and other entertainment.

74 And now to talk to you about our format choice and the sound of the station, here is Mark Maheu.

75 MR. MAHEU: Thank you, Sue. Good morning.

76 It's fairly clear when you review all the research presented at this hearing that what is most missing in Medicine Hat is a rock radio station. Most of the applicants for a new station who tested multiple formats found that rock tested the highest in Medicine Hat. The question for an applicant, and maybe for the Commission, I suppose, as well, is what kind of rock should that be?

77 The research that we commissioned showed two clear market voids, classic rock and classic hits. The research found that 44 percent would listen to classic rock most of the time or all the time, and 39 percent for classic hits. The strongest demand for classic rock was among men aged 18 to 49, while the stronger demand for classic hits was with women, particularly those aged 35 to 54. At the same time, there was still strong interest among men for classic hits and among women, particularly those 35 to 54, for classic rock. So they would both work together.

78 After we asked about the perceptions and the availability of the formats among those who liked them the most, we calculated the percentage of format void. These two formats ranked the highest again at 24 percent for classic hits ‑‑ or classic rock/classic hits, and 23 percent for classic rock.

79 Our conclusion after looking at all the research was to blend the most common elements of each format into one single format proposition. Our format choice of a classic rock and classic hits hybrid is called The Rock. The Rock combines the very best of mainstream classic rock from artists like The Who, Tragically Hip and Led Zeppelin, and it mixes it in with the classic hits sound of artists like Foreigner, Elton John and Brian Adams.

80 The station will sound like a rock station, but a mainstream adult‑targeted version. Since there are presently no stations playing rock in Medicine Hat, The Rock will also play some new music from Canadian artists like Sam Roberts, Mobile and Arcade Fire.

81 We'll also provide compelling music features to keep our listeners interested and involved.

82 One of those programs will be called The Way Back Machine and it's a Friday night show, it's a bit of a rock'n'roll house party, where from eight to ten The Rock rolls the best classic rock from the late‑'60s and the early‑'70s.

83 We'll also be featuring a program called Saturday Night in Concert where we will have live performance material from the legends of classic rock. From seven until 8:00 at night listeners enjoy front‑row seats as The Rock rolls the live cuts, and we'll do that commercial free.

84 Far West Rock will feature the new music makers from Western Canada week nights at 6 p.m.

85 And Sunday's at 6, we fire up the MP3 player to feature the newest and unreleased tracks from Canadian music makers participating in Newcap's making of the band initiatives taking place in Calgary and in Ottawa.

86 We will solicit Medicine Hat bands' participation in entering our soon to be announced Calgary Canadian Talent Development program. You may remember that we've proposed to devote half of our $7 million in CTD in Calgary to a program called Making of the Band. This program is designed to find and showcase upcoming new Alberta artists, and we propose to use all of our Alberta radio stations to promote this initiative.

87 Given the format we propose in Medicine Hat, it will be a natural extension of this initiative to the benefit of aspiring Medicine Hat performers. Entries from Medicine Hat will be featured and showcased in regular rotation on the proposed station The Rock.

88 Our Medicine Hat spending on Canadian talent development will target two areas. The newest musicians in the system, students, and the national initiatives designed to support and showcase our emerging stars. We will contribute $100,000 each year to the development of Canadian talent.

89 We will provide the Medicine Hat School Boards with $40,000 each year in total to help students develop musical literacy. Four programs will each receive $10,000.

90 Instruments for deserving and needy students, music scholarships for the most promising students, support for their music festivals and support for their musical curriculum.

91 On the national level, we will provide $40,000 each year to the Radio Starmaker Fund to support their efforts for emerging artists. We will also ask them to target this to Alberta artists to the extent that they are able.

92 And we will also provide an annual contribution of $20,000 to Canada Music Week with a view to financing an Alberta Music showcase at their annual Toronto event. We have already spoken with CMW and they support this initiative.

93 Our local and national Medicine Hat initiatives combined with our on‑air support for our national Making of the Band initiatives, will provide support to emerging talents at many levels of their development.

94 Madam Chair, Members of the Commission, Newcap is before you this morning looking to provide a new service for the listeners of Medicine Hat. Our proposal for a new rock formatted station goes well beyond a format choice for the market. Our proposal is focused on delivering a truly local radio station for listeners of Medicine Hat. A radio station leaning heavily on spoken word, local news and service to the community.

95 The radio listener's world is changing rapidly. Every day there are new listening choices popping up. Conventional radio is challenged to find new ways to keep people coming back to local radio. At Newcap we believe a big part of the solution to maintaining and building audiences is to create a broadcast content that is not easily duplicated. This is why we believe our proposal for Medicine Hat will be successful. An iPod, satellite radio or internet radio station never did spot news coverage from an accident, a fire or a flood. Being live and being local can and will be the difference, and we believe our proposal for Medicine Hat will make a difference. We'll be a new editorial voice in the market, along with providing new listening choices to the market in a format that it indicates it would enjoy the most.

96 Medicine Hat, as you may well know, is enjoying excellent economic growth right now, which bodes very well for new entrants into the radio market. Our financial projections for Medicine Hat are modest, achievable, and they will likely cause little or no material impact on incumbent broadcasters.

97 Newcap Radio has an excellent track record in Alberta, and we truly want to be part of the Medicine Hat community. We see it as an important community, and we would be very proud to serve it.

98 To that end, we have proposed significant benefits, including a Canadian Talent Development package totalling $700,000 over the first seven years of a licence. This, combined with our strong local programming proposals, we believe makes Newcap the best choice to be licenced in Medicine Hat.

99 We thank you for your time and attention this morning. We'd be pleased to answer any questions you have about our proposal.

100 THE CHAIRPERSON: Thank you, Mr. Steele and panel.

101 Commissioner Pennefather...?

102 COMMISSIONER PENNEFATHER: Thank you, Madam Chair.

103 Good morning, Mr. Steele. Good morning, ladies and gentlemen.

104 I'll direct my questions to you, Mr. Steele, but if you would indicate to whom we ‑‑ you would pass on the answers, that would be great.

105 MR. STEELE: You can direct your questions to Mr. Maheu, if you wouldn't mind, and he will pass them on if it's ‑‑

106 COMMISSIONER PENNEFATHER: I shall. Mr. Maheu, we'll start with the programming with the music component. And your presentation this morning on that point and others actually has provided quite a bit of clarification, but I think it is important to go through the points and get a clear understanding of where you're positioning your approach to music.

107 In the Supplementary Brief and again this morning, you discuss, I think, what is a mix of classic hits and classic rock, and a mix which brings in both the male and female audiences. Let's ‑‑ I'd like to understand a little bit better how that works and why then you've decided to brand the proposed station as rock? In fact, in your Supplementary Brief I think you call it The Rock 99.1, but I think you might mean Rock 105.3.

108 Why have you ‑‑ if we can break that down this way. On the classic hits component of this mix, can you elaborate on how that's going to work? Is it a selection that's leaning more to the AOR variety or more to the top 40 variety, and can you give us some examples to demonstrate how the classic hits component will be heard by the audience?

109 MR. MAHEU: Sure, I'd be very happy to, Commissioner Pennefather. It's just to help you clarify and understand really what we're going to sound like and where these components come from.

110 As we discussed in our Supplementary Brief and again in our remarks this morning, it's a little bit unique, our approach in Medicine Hat, from what you might find in other markets. Not very often would you combine two formats like this to hybrid it and make it one. If I could, just before I explain the elements of that, I'd like to fill you in on why we're even doing it and looking at it that way, because obviously when you look at the research, there are two pretty significant opportunities here, one in classic rock and one in classic hits. The first question is, well, why not one or the other because there's a pretty significant opportunity.

111 And the reason for that is in a market the size of Medicine Hat, it is on the smaller size of a medium‑sized market. There are only 67,000 people in Medicine Hat. So ‑‑ and there are only two existing radio stations in the market today, an AC and a country. And to be very narrow in a market that small would, in a way, be doing a disservice to the market because we'd only be serving a very, you know, limited number of people, those who like classic rock or, say, classic hits. But what's unique about these two formats, classic rock and classic hits, is they're rather complementary, and they do overlap quite well. And they are also two formats that unlike, say, trying to mix top 40 and country together, you would find when you research both of those constituencies that there's very little overlap there. People who love top 40 aren't really country fans, and vice versa. But when you look at classic hits and classic rock, there is a lot of commonality between these two groups of people, and some of the music universe inside of those two formats is shared.

112 So when we looked at the opportunity in Medicine Hat, and the research came back and said, well, classic hits is a good opportunity and so is classic rock, we looked at it a little bit deeper and we found that with men, classic rock was certainly their first choice, and with women classic hits was their first choice. But when you go down to second choices it was vice versa, where women who enjoyed classic hits also enjoyed some classic rock, and many who liked classic rock also enjoyed some classic hits. So it brought us to the point where we had to figure out a way to be wide enough in a market as small as Medicine Hat to have an offering that would be listenable to the most number of people. And we were fortunate because classic hits and classic rock are very complementary.

113 To answer your question specifically about what genre of classic hits would work with classic rock, there are a number of different flavours across Canada right now and in the United States of classic hits. There is one flavour which is very much based in the pop top 40 sound from the '80s and '90s with a sprinkling of '70s and a little bit of today.

114 There are other classic hit stations that lean a little bit more to the rock side of classic hits, where there is some top 40 in the mix, but it's more on the songs that charted on the rock charts from the '80s and '90s.

115 What we're proposing in Medicine Hat is to take the real core of classic rock, the super stars of classic rock from the late‑'70s, the '80s and the '90s, and combine it with the classic ‑‑ the classic hits version that is a little more rock leaning. So there's going to be less top 40 or pop sound in the classic hits component of this hybrid format. So that plays a little better to the rock sensibilities on the classic rock side, and certainly makes sense for the classic hits people.

116 Where some classic hits stations you might be hearing songs by Hewey Louis and the News or Madonna from the '80s and the '90s, you would not hear that on our proposal for The Rock. You would be hearing songs from Foreigner and Elton John and people like that on the classic hits side, blended in with classic rock.

117 COMMISSIONER PENNEFATHER: I think that's helpful, because if we look at the research that you've included in your Supplementary Brief, I don't believe that you submitted a separate research report. You included it with your Supplementary Brief, so I'm using that.

118 It would appear that the classic hits component came out though a little ahead from page 7 of your Supplementary Brief of classic rock. In your statement today, you say that the station will sound like a rock station ‑‑ will sound like a rock station, but a mainstream adult‑targeted version. Can you really do both?

119 MR. MAHEU: We believe you can, and you make a good point on classic hits where it did come out ‑‑

120 COMMISSIONER PENNEFATHER: Yes.

121 MR. MAHEU:  ‑‑ just a hair above classic rock. Part of our consideration when we were putting our proposal together to make it a rock station rather than a hits station, was the fact that there is a ‑‑ somewhat of a mainstream AC radio station in the marketplace already. We know from our experience and the research that we've done, if you put a more classic hits based format on, it's going to steal much more from AC radio, or mainstream AC, and we felt there was just much more room for us to carve out our own audience and our own constituency of listeners as a rock leaning hybrid rather than a classic hits leaning hybrid.

122 So we felt that: A) we'd be able to generate an audience that is not being served right now at all, and we needed to position that radio station to be different; and B) it would infringe less on the existing AC that is in the marketplace today.

123 COMMISSIONER PENNEFATHER: Well, I think that's the last ‑‑ the latter part of your comment, was part of my point, that the AC served in the community today is skewed to females at, I think, what is your target demographic. So again, they would appear to be well served in the market. One would have assumed then that you would lean more towards the rock component. To help us understand then, there are three components to your hybrid, if you will. Can you have a hybrid of three? Tribrid?

‑‑‑ Laughter / Rires

124 COMMISSIONER PENNEFATHER: The classic rock, the classic hits and the newer rock, can you give us a sense of the proportions, the percentage more or less, of the play list and if each component will be broadcast throughout the broadcast day, or will there be particular components of the broadcast day which will be ‑‑ in which you will carry one or other of the three components of your rock?

125 MR. MAHEU: Sure. First of all, just on the components of what part of the broadcast day they might air, just so members of the Commission have a ‑‑ as clear an understanding as possible. We're not really proposing or anticipating to do any day parting on the radio station. So we're not going to be a little more rocky or a little more current at night and a little more gold based and familiar during the day. The idea here is to really focus the radio station with a consistent sound on a 24/7 basis, so very little day parting.

126 As to your question about the percentages or components of new music versus ‑‑ on your tribrid approach of how much current music, how much classic rock and how much classic hits. Under normal circumstances, and this really is a bit unique, because in virtually any other market that has more signals in it, we would not try to do as much in terms of the combination of different music styles. We wouldn't try to do as much in a larger market.

127 The competition likely would not let you get away with it if there were four or five or six radio stations in a market. But looking at the size of this market and the minimal amount of service it has right now, we can be a little broader than we normally would be in trying to please a few more people than we would normally try to please.

128 The current component of the radio station we anticipate to really be 10 percent or less. And to be forthright, the current component is really in there to give us an opportunity to play some of the new Canadian releases that are out there right now, for two reasons. Number one, there is a lot of good new Canadian music out there right now in the rock genre. And secondly, a little more self‑serving reason, it allows us to lean a little less heavily on some of the Canadian gold that ‑‑ from the '70s, '80s and '90s that is approaching the critical burn out level. So that's why we introduced a slightly small percentage of current music to the sound. So about 10 percent of the music that you're going to hear on the radio station will be new or newer, released in the last couple of years, and a large percentage of that is going to be Canadian.

129 The radio station, for the most part, is going to be firmly based in rock. In terms of classic rock, and ‑‑ and rock based classic hits songs, it's virtually the rest of the ‑‑ of the music sound of the radio station.

130 COMMISSIONER PENNEFATHER: So the rest 90. And of the classic rock and classic hits, is there ‑‑

131 MR. MAHEU: It's probably 60/30 classic rocks, 30 percent classic hits. The funny part about that, it's kind of hard to describe. Between classic rock and classic hits, the 60 and the 30, there are songs that could fall into either side of that category as you might appreciate, so ‑‑ but just to give you an idea, 60 percent would be that traditional classic rock that you would think of, you know, Led Zeppelin, Rolling Stones, The Who, and bands, Tom Petty and the Heartbreakers, Springstein. And then on that 30 percent part, you're going to have more pop/rock oriented top 40 chart type of hit songs from people like Elton John, Genesis, Phil Collins and folks like that, but finding the best songs that work with both constituencies.

132 COMMISSIONER PENNEFATHER: Speaking of both constituencies though in terms of being precise, which I'm sure is an exercise you've gone through in terms of the advertising issue looking at it. Your Supplementary Brief refers to ‑‑ on page 7 to the audience will be predominantly male, 35 to 44 men. And you've suggested as well that men aged 18 to 24 would be attracted to your format due to the 10 percent active rock component. So just to be clear for the record, what is the general and core audience you would serve with your rock/classic rock blend, just to clarify?

133 MR. MAHEU: Sure. The ‑‑ you know, in a market this small we can look at a broader target audience than we would in a large market where you're really narrowing it down to a certain demographic group. But the broad target audience for the radio station is adults 25 to 54, with a skew more men than women. The real tight targeting of the radio station is 35 to 49 year olds, more men than women.

134 At the end of the day, in terms of cumulative audience, our experience has been that you're going to have slightly more men in terms of total numbers, cumulative audience, slightly more men than women listening to the radio station. And in terms of hours tuned, we're anticipating probably 60 percent of the hours tuned to 62 percent will be male, and 38 to 40 percent will be female hours tuned. Although the cumulative hours will be rather close.

135 And in terms of, if I can, on the younger part of the audience, the 18 to 24 men coming to the radio station, it will be partly because a little bit of the new music we play, but to be quite honest, we're not going to play enough new music for young 18 to 24‑year‑old guys to love this radio station a lot. But by virtue of the fact that it will be the only rock offering in the market, we are going to get some tuning from 18 to 24s almost by default. We're not going to actively target them obviously because there are so many people in that 25 to 54 group that want this radio station, but they'll certainly come to it because there's no alternative choice for them in the marketplace to listen to.

136 COMMISSIONER PENNEFATHER: Thank you, Mr. Maheu.

137 I'm going to ask you a question now about a response you gave to our deficiency letter. And your response is dated August 14. And you've indicated that nearly 100 percent of your program will be locally produced, and that voice tracked or automated programming will air only in non‑regulated hours between midnight and 5:30. You've also indicated your intention to offer some syndicated programming.

138 Could you tell us what type of syndicated programming would be offered and on average the number of hours per week you would devote to this type of programming?

139 MR. MAHEU: Our intention, Commissioner, is to be as live and as local as we can possibly be whenever we can possibly do it. And we thought long and hard about this, and we made reference to it a little bit in our opening remarks, that we feel going forward for radio to be competitive, especially in smaller markets, we need to be live and we need to put people on the air and have people in the radio station. And we're doing that not only in our proposal for Medicine Hat, but throughout Alberta, and all our radio stations across the country.

140 There's a ‑‑ this is our strategy and this is our approach. There are different opinions out there, but we believe that pouring money back into people and content on the air is going to be what helps differentiate us from competition.

141 In terms of voice tracking, we're only going to be voice tracked right now, we propose, between midnight and six. It's actually probably going to be probably midnight to 5:30. But in the unregulated hours, we will employ voice tracking to reduce our expenses.

142 We're going to be live with real people behind microphones in the radio station from six in the morning until midnight seven days a week. We do want to have the opportunity to look at some potential syndicated programs. We have not chosen any yet, but there are some interesting programs out there. We talked about our in‑concert program. There are some live syndicated programs that are available in Canada and the United States, we're going to look at some of those. There may be some rock documentary type of programs. There are some long‑form documentaries about the Beetles and the Rolling Stones and bands like that that we may look at airing from time to time, but the majority, the vast overwhelming majority of our programming is local originating programming with real people.

143 COMMISSIONER PENNEFATHER: I see in your comments this morning we expect we will be live and local at least 120 hours per broadcast week.

144 MR. MAHEU: Right.

145 COMMISSIONER PENNEFATHER: Can we take that as a specific answer?

146 MR. MAHEU: Absolutely, yes. And if I may, just to supplement that. When we are doing some features, or if we are running some syndicated programming between six in the morning and midnight, if we do run some of that type of programming there is going to be a real person in the studio. It's not going to be in a computer in an automated system. We're still going to offer service and surveillance, weather, et cetera, during those hours when those programs are airing. And if there's anything going on in the city or whatever, there is somebody there to answer the phone in the radio station. So we are ‑‑ we are live and we are doing business and it's not off a computer and turn off the lights on your way out the door.

147 COMMISSIONER PENNEFATHER: Thank you.

148 Before we leave the music, one last question. I think you've given us a good sense of the play list and your approach to the mix. As you know, other applicants have also proposed the use of the terms classic rock, classic hits. Very briefly, how would you describe your approach in comparison? How does it differ from the approach that others have tabled?

149 MR. MAHEU: Specifically the difference with our proposal to the others is the fact that we're the only proposal looking to make a hybrid out of classic hits and classic rock. There are other proposals that are looking to incorporate alternative rock and mainstream rock and classic rock together, but our proposal really takes ‑‑ is rooted and based in familiar music with a small current component. The other proposals that are looking to put a rock station on are generally a little younger, have more different genres of music being put together into one format.

150 Our experience is with classic hits and classic rock, we do them as independent formats in a lot of different markets with a great deal of success, is that those two genres of music are very complementary, because partly they really target a very similar demographic group as opposed to, say, trying to mix alternative rock with classic rock.

151 You know, when you take those two genres, they both fall under the rock umbrella, but they're both kind of at polar ends of the rock scale, and it's very difficult to hybrid a format that, say, is targeted to 16 to 29 year olds with a format that's targeted predominantly to 35 to 54 year olds.

152 So we believe that our proposal here, that's how it's different, that we've taken two genres that are demographically complementary, sound ‑‑ they sound complementary in terms of the intensity and the texture of the sound of the music that we would play, and we put them together.

153 COMMISSIONER PENNEFATHER: Thank you.

154 I'm going to turn now to another component of the 120 hours of locally produced programming, and that is the news and spoken word. I should say spoken word comprised of news, traditional news and non‑news. And I believe with your presentation this morning there is a ‑‑ a document which puts ‑‑ lists the components of the scheduled news, the non‑news and the hours. So if we repeat a little bit of this, those were some of my questions to try to clarify these points, but perhaps to also add a little more substance to what we're going ‑‑ what the audience would hear.

155 When we got to the deficiency on August 14th, you raised your news packages from 53 news packages, for a total of 3.5 hours, to 81 news packages of various lengths, for a total of five hours and 45 minutes of news. I see it here as five hours and 75 minutes, and in your presentation this morning you said five hours and 45 minutes.

156 Just can we clear for the record the news, per se, the packages as described in this document Monday to Friday, Monday to Friday and Saturday and Sunday. Is it five hour and 75, or five hours and 45?

157 MR. MAHEU: If I can, Commissioner, just to clarify. Five hours and 45 minutes we've done it numerically down the sheet, so that's 5.75 hours. So that's the ‑‑ five hours and 45 minutes would be five and three‑quarter hours.

158 COMMISSIONER PENNEFATHER: I see.

159 MR. MAHEU: And ‑‑ sorry for the confusion. So 5.75 hours, which would be five hours and 45 minutes.

160 COMMISSIONER PENNEFATHER: Okay. So it's still five hours and 45 as such in terms of the news itself, okay?

161 MR. MAHEU: That is correct.

162 COMMISSIONER PENNEFATHER: That's what I had added up from the August 14th deficiency. In terms of the ‑‑ the news itself, you've talked this morning about the content of the newscast and you will have on staff, as I understand your August 14th deficiency and your Supplementary Brief at page 9, two journalist announcers and one news director. You also discussed this morning the possible synergies with other Alberta holdings. Do you intend, however, to hire more journalist announcers or draw ‑‑ or is it going to be supported ‑‑ your increase from 53 to 81 supported by the synergies with the other operations in Alberta?

163 MR. MAHEU: I'm going to ask Sue Stevenson in a moment to just kind of elaborate on that a little bit if I could. But I want to make quite clear that our proposal for Medicine Hat, the journalists and the radio reporters that we're going to hire for the marketplace, are going to work in Medicine Hat, collecting news, creating news programs and delivering it on the air in Medicine Hat.

164 When we talk about the synergies throughout the Alberta Radio Group, it's really the icing on the cake. It's not the cake. The cake is good service done by people in Medicine Hat for the people of Medicine Hat. But one of the things that we do bring to the table is the ability to access all the reporting work and the news coverage that's being done throughout the Province of Alberta because we are in so many markets, and we think that it kind of makes us a bit unique and gives us a bit of a leg up that we can cover stories in other areas that just can't be covered by our competition, because we are in so many places. And we think that makes for a more robust and real substantive news approach.

165 And, Sue, if you wouldn't mind elaborating a little bit on what our intentions are in terms of doing news in Medicine Hat with people here, and maybe how we can work in what we're doing through the rest of the radio room.

166 MS STEVENSON: Thanks, Mark. Of course the reporters, journalists who are based in Medicine Hat, that is their focus. They're focusing on City Hall, they're focusing on doing streeters on the hot topic of the day, going and talking to the city planners or the school board, agriculture. That is their focus. Local news is their business.

167 Now, what the ARG south stations can add to that is ‑‑ it's really a complementary service. The Medicine Hat reporters have their own local news. What we have in the ARG south is a group of reporters that can complement the Medicine Hat service.

168 We may have a story in Red Deer that deals with the river that goes through Medicine Hat. Well, we in Red Deer are going to send that to Medicine Hat, and they will be able to incorporate that into their newscast. So really it's a win, win situation in that regard.

169 News content of course, you know, we've stated 75 percent local, and that is ‑‑ you know, that's not going to happen every newscast. Some newscasts are going to be 100 percent, some newscasts may be 65 percent, but the Medicine Hat reporters will be complemented by our resources elsewhere in the province. Not just in the southern Alberta markets, but in the rest of the province. We have over 50 reporters on the ground right across Alberta, and it's really a win, win situation.

170 COMMISSIONER PENNEFATHER: I think if we could just pursue that. I wanted to be sure I understood you. The 75 percent of the news would be local news, and that was in your August 14th deficiency as well, but you said that could change so ‑‑

171 MS STEVENSON: No. On average it's always going to be 75 percent or more.

172 COMMISSIONER PENNEFATHER: Okay.

173 MS STEVENSON: And, you know, given by what we do in Red Deer, it's the or more.

174 You know, there is going to be a day where you're going to have more local stories that you can even put in your newscast, the next day might be a little slower. It's going to balance out.

175 COMMISSIONER PENNEFATHER: So does this 75 percent cover only the news portion, or does it include the weather and sports and ‑‑

176 MS STEVENSON: The five‑minute newscasts, of course, would cover weather and traffic and sports. But all those are local issues. People want to know ‑‑ if there's a storm out on the highway, that's top of mind. That's what they want to know about. If there's a bad accident that's affecting traffic, that, of course, is local content, because that's what people want to hear, and that's what we would deliver.

177 COMMISSIONER PENNEFATHER: You recognize the ‑‑ the interest in discussing this as well because you explained well this morning the synergies that you are bringing to your proposed station from your other Alberta stations. So it's the balance in trying to understand as yet how local, the live and local, what it will really mean for Medicine Hat listeners.

178 Will the 75 percent local content in newscasts be measured over the week or over the broadcast day?

179 MS STEVENSON: I think it would have to be over the week, just for the reasons that I mentioned. You know, news doesn't happen in a vacuum. We have national news, we have international news. Of course you strive to localize that. If we have something happening in Afghanistan, of course Medicine Hat has a large military base there, you know, so you can tie that in. So you're looking for every angle to localize that story.

180 But, you know, as I said, it doesn't exist in a vacuum. If there's a big national story, that might supersede local. If you have another 9/11, for instance, you know what's going to lead the news, so you can't say every single cast is going to be 75 percent, but during the week it's going average out to that or more.

181 COMMISSIONER PENNEFATHER: When you responded to this point in the August 14th deficiency, and I think you also spoke to that again today, Ms Stevenson. You increased the news packages from 53 to 81, stating that the radio environment has increasing music choices from satellite and iPods. We have to compete, we have to be local and live ‑‑ compete local and live. And you used that same rationale for increasing your involvement and your commitment to spoken word.

182 The increase is in the news packages, why did you focus on increasing the number of news packages as opposed to the other component of your spoken word proposal, which is non‑news?

183 MS STEVENSON: I'm going to let Mr. Maheu answer that.

184 MR. MAHEU: Thanks, Sue. This is really in response, and this is characteristic of an approach we've taken on a number of our applications, and an approach that we've taken and implemented at our radio stations across the country. And I touched on it in our opening remarks.

185 The radio world is changing and it's changing quickly. And we plan on being in this business and being successful in it for a long time to come. We have seen this pendulum kind of swing back and forth. If you look back to the late‑'80s and through the early to mid‑'90s, when economic times were tough for AM radio and radio in general, things that were cut out of radio, and I'm unfortunately old enough to have been in the business during those times, newsrooms got slashed, sports departments disappeared.

186 The music centric orientation of radio became paramount. Everything was about the music, and everything else, including talent, surveillance, news and weather was cut back because people cost money.

187 What we found at Newcap, and I'm sure other companies are looking at it as well, in a world where we're not necessarily the king of the hill any more, where people can program their own play lists into an iPod and take it anywhere or pop it in their car, or listen on line to pretty much any music choice they want any time they want, radio broadcasts coming over on cell phones so you can listen to the music you want or even watch TV, so we have to re‑invent and re‑think our whole proposition.

188 It's been a great run for radio. We've had it pretty darn good, but now the competition is starting to close in around us, and it's non‑traditional competition. The interesting thing about the non‑traditional competition is it's made us kind of go back to our roots what made radio famous to begin with. Good local service done by real people doing things you couldn't get anywhere else, and it really isn't that complicated.

189 So we don't want to make it sound like it's some sort of big, elaborate, you know, well‑researched and well‑thought out idea. It's pretty much coming to the common sense basics that in order for us to compete in our markets, and we operate in a lot of small and medium‑sized markets, where people's expectations of us are maybe a little higher than they are in major markets where they have so many choices, that we have to re‑invest and re‑think our proposition, and that begins with people and service.

190 And we think the way we can be different in markets like Medicine Hat, is to really go back to the basics. Put a little more money, time and effort into good people and good ideas, and do some spoken word. It's an unrated market, there's limited competition. This isn't a contest to see who can play 12 in a row commercial free, this is really a market that's going to respond to radio stations that reach out, become part of the community and reflect what's going on.

191 And that's really our approach in our response in the deficiency, what it was all about. We've kind of come to this conclusion in a lot of our markets, that we've got to beef up the amount of local news and information that we're actually providing on the air, be more than just a stick cranking out hit after hit after hit, and start doing things that bring people back to the medium of radio and keep them listening to us. So that was really the reason for that.

192 COMMISSIONER PENNEFATHER: So you increased the scheduled news component. And on the non‑news, I think this sheet answers my question that I had coming in, is to get some precision on the number of hour that the community events updates, the public affairs reports, the one‑hour news public affairs announcer talk comes to 19 hours ‑‑ 19.95 hours, correct?

193 MR. MAHEU: Correct.

194 COMMISSIONER PENNEFATHER: She can be taught. And could you tell us a little bit more about the listener poll?

195 MR. MAHEU: Sure. Maybe, Sue, would you mind doing that?

196 MS STEVENSON: Not at all. A listener poll is ‑‑ would be a way to engage our listeners. You're going to take the hot topic of the day, whether it be the end of free parking downtown or whatever, and you're going to poll your listeners on that and try and get some compelling answers that you're going to be able to use on the air. It's an effort to really engage our listeners in what we do, and we see it as a very good tool to use for that, to kind of gauge what the community is thinking.

197 COMMISSIONER PENNEFATHER: I think you called it The Hat Line?

198 MS STEVENSON: That's right, The Hat Line.

199 COMMISSIONER PENNEFATHER: Why?

200 MS STEVENSON: Have a little fun with it. It doesn't always have to be serious, you know, so ‑‑

201 COMMISSIONER PENNEFATHER: It isn't always serious. The Hat Line, so throw your hat in kind of thing, discussion?

202 MS STEVENSON: Exactly.

203 COMMISSIONER PENNEFATHER: All right. We're going to move now to Canadian talent development. And I'm looking at clearly your revised proposal through the August 14th deficiency, and you described it again in your comments this morning. And just a couple of clarifications.

204 I believe in the August 14th deficiency we described a school board, and today we have school boards. And I know there are two school boards in Medicine Hat, the Catholic School Board of Education and Medicine Hat School District number 76. So are we clear that it is a proposal to support both school boards?

205 MR. MAHEU: That is correct.

206 COMMISSIONER PENNEFATHER: And could you describe to us then how that will work in terms of disbursement of the 40,000 amongst the two school boards?

207 MR. MAHEU: Yeah. The funds would be split evenly between both school boards. That was an oversight on our part in the reply to deficiency for the singular there. So it would be $20,000 to each school board each year for seven years.

208 COMMISSIONER PENNEFATHER: So they will be split evenly between the two school boards?

209 MR. MAHEU: Correct.

210 COMMISSIONER PENNEFATHER: And you indicated that they would have control over the distribution of the funds in the same deficiency letter, and your expectation is that it will be divided into ‑‑ the funds will be divided into four equal parts, which you've described again this morning in terms of instruments, scholarships, support for festivals and for the music curriculum.

211 Could you explain to us if the school boards have the control over the distribution, how you would assure that this breakdown would be carried forward and whether the control of the funds entails the control over which schools or students have access to the appropriate funding? How would you maintain some sense that the funds would actually be disbursed as you have proposed here if they have control of the disbursement?

212 MR. MAHEU: It's certainly a point we've contemplated, and our approach to that would be pretty straight‑forward. The staff or the management of the radio station would work with the school boards and liaise with them on an annual basis. Obviously we want to monitor how that money is being spent and whether it's working or not. Are we getting ‑‑ is the school getting the desired result and are we seeing it do what we thought it would do, because we also need to report back to you each year that we've spent the money and it's been done appropriately. So there would be an ongoing dialogue and a relationship between the radio station management and the school boards. I would envisage that there would be a meeting at least a couple of times a year to update each other on how it's going.

213 I think we want to ‑‑ we laid it out for you in our presentation and in our application so you got a good sense of where that money was going to be used. I think we need to be somewhat flexible in speaking and in working with the school boards, where maybe in a particular year a need in a certain area exceeds the amount that maybe they spent the previous year, and money from one area maybe gets moved to the other. So if each school board has $20,000 and it's five, five, five and five, there might be one year where, you know, they don't need to buy music stands this year because they did it last year, but they want to go to a couple of extra music festivals and need extra money. I think there needs to be some flexibility because the educators, I think, are in the best position to decide what the needs of the students are and where the money could best be used.

214 You know, I ‑‑ we want to give them as much latitude as possible as long as we're working together, knowing that that money is being spent on what it was proposed for, and that's to develop young talent for the future.

215 COMMISSIONER PENNEFATHER: I think that's the point as far as ‑‑ I can certainly follow your point about flexibility, but clearly the Commission is interested in knowing, in fact, at the end of the day, if, in fact, these funds are supporting Canadian talent development as per the contributions approved by the Commission.

216 So backing up again on this point, have you had discussions with the school boards, and if so, at what stage are those discussion and are there any specific agreements to the points that you've raised in terms of: A) flexibility; but B) reporting?

217 MR. MAHEU: Dave Murray has certainly been riding point on this particular issue and ‑‑

218 MR. MURRAY: We ‑‑ Al Anderson actually was the one that made contact with the school boards. We don't have a lot of information about that with us today, but we found that, in our experience and Glenda could give some examples in Lloydminster, for example, where we are giving a significant amount of money to the schools there, that there is very much a need and it is in those areas. And most of the details will be worked out, if we're lucky enough to be granted a licence.

219 COMMISSIONER PENNEFATHER: Okay, thank you very much. You also changed your proposed Canadian Talent Development and are now proposing to ‑‑ I think it's 40,000 to Canadian Music Week. Can you tell the Commission why you made the change from the previous proposal?

220 MR. MAHEU: The proposal from the southeastern Alberta musicians ‑‑

221 COMMISSIONER PENNEFATHER: That's correct, convention.

222 MR. MAHEU: Well, there are certainly a lot of worthy places for money to go to develop Canadian talent. We have proposed a ‑‑ a southeastern Alberta musicians convention as part of another application that was heard previously by the Commission. And when we went through it, it was one of those ideas that I think if we had more money and more time, this thing could grow into something really big. When we proposed it there were a lot of questions about it, a lot of unanswered questions, and we didn't want to bog down ‑‑ you know,we're working with a small radio station here in Medicine Hat if we get it. You know, it's going to be a modest radio station. And an effort of that size is going to take a lot of people and a lot of organization, and we felt that at this point in time it didn't make a lot of sense for us to tie up the amount of time, effort and energy it would take to pull that off.

223 But what we did know is that there are a lot of worthy areas out there. Radio Starmaker Fund is certainly one we've supported over a long period of time, and we're kind of really excited about the Canada Music Week proposal. We talked to Canada Music Week about doing a specific showcase of Alberta talent, and they were quite excited by that idea. And the money we're proposing for that is $20,000 each year that would go specifically in Toronto, during Canada Music Week, an Alberta music showcase. Which I think many up and coming artists from Alberta, and Medicine Hat in particular, could take advantage of. And we would ‑‑ we would get behind that and I think it could do ‑‑ it could do a lot to expose some of the talent that is happening in southern Alberta, specifically in the Medicine Hat area. So we think the money is well‑spent in that area.

224 COMMISSIONER PENNEFATHER: You say that you have a view to financing an Alberta music showcase at the annual event. And the CNW support, is that support in form of written agreement?

225 MR. MAHEU: Yes.

226 COMMISSIONER PENNEFATHER: It is?

227 MR. MAHEU: Yes.

228 COMMISSIONER PENNEFATHER: If you could table that?

229 MR. MAHEU: Sure.

230 COMMISSIONER PENNEFATHER: Thank you.

231 My last area of questioning is in the area of the business plan and your economic analysis. In your Supplementary Brief at page 7 you outline for us your audience share which you propose the new station would ‑‑ would gain at 20 percent. If I understand correctly, you're looking at 12 percent of its share points from the audience of CFMY, and your projections indicate that eight percent of the audience share will come from out‑of‑market stations.

232 Could you help us by identifying the out‑of‑market stations from which you would expect to repatriate audiences and the extent to which these stations will contribute to the eight percent share that you project for repatriated audiences?

233 MR. MAHEU: I believe the out‑of‑market stations really are lumped into a category called others. And the others category comprise anything from out‑of‑market radio stations, internet listening, et cetera. So we can't really quantify station call letters or station names when we talk about out of market, but what we are talking about is other listening choices that are not available generally in the Medicine Hat area. So a little bit of it, as you see, you know, comes from ‑‑ comes from CBC and CJLT. It's a point here and a point there.

234 There's no one particular out‑of‑market radio station because there's not a lot that gets into Medicine Hat. But there are, you know, when people drive south there are stations coming out of the U.S. that you can hear in your car and things like that.

235 COMMISSIONER PENNEFATHER: Okay. On your revenue projections, which we have in front of us, based on your application. In looking at that and looking at the market, what is your comment on the Medicine Hat market's ability to support one new station or more than one new station at this time?

236 MR. MAHEU: That's a really good question, and our thinking has changed on that. As you may note from the dates on our application, we, I think, triggered this call a couple years ago when we filed. And when we did our research and our homework on Medicine Hat a couple years ago, things were a little bit different then than they are today.

237 They were still pretty good, but Medicine Hat was feeling the effects of the BSE cattle quarantine, exports to the United States and so on, which has now pretty much passed and things are different. The economy in Medicine Hat has grown ahead of expectations by quite a bit over the past couple of years. I'm going to ask Glenda to maybe comment on that in just a second because she's done some excellent homework on what's going on in the economy.

238 When we originally applied, we put our application in in 2004, we felt that there was certainly room for one, and that's kind of what we were thinking, and our business plan was based on that. But looking at what's happening now, and FP Markets, what they're reporting, and just talking to some business people in Medicine Hat, things are a lot better than I think many anticipated they would be today. And we're of the mind, based on the retail sales and everything else that is going on in the marketplace, that, you know, there is room for two.

239 Here we are in late‑2006 instead of the middle of 2004, and we believe now the market has grown to the point and shows growth for the future that we could handle two.

240 Glenda, do you have some of the stuff that you found out?

241 MS SPENRATH: Yes. Actually, since our filing two years ago, I have looked at the indicators over the past two years for 2005 and 2006 from the FP Markets published by the Financial Post. And what we're finding or what I found when I looked over this research, is that the actual results are actually leapfrogging ahead of prior projections. And the biggest thing is the financial analysts are really being challenged in Alberta to keep up with the boom that's going on out here. To give an example of that, when you look at some of the major financial indicators that would give us, you know, an indication that there is room in this market for additional entrants, one of them is the retail sales in the market. If you look at where they were in 2005, they were projecting the retail sales for the Medicine Hat market to be at $1.05 billion generated in 2005. At that time they were looking at projecting ahead to 2007 the retail sales for the market being at $1.17 billion.

242 Well, here we are today in 2006, 2007 hasn't happened yet, and we're already at $1.29 billion in estimated retail sales for the Medicine Hat market. So, I mean, we've surpassed 2000's retail sales and we've done it a year early. And if you take that onto the population, for example, there's another area that's a good indicator. Last year they were projecting the Medicine Hat market to be at 67,000 by 2007, here we are today and they're estimating the population to be 67,500 according to the FP Markets Research, and so again we're meeting next year's goals this year.

243 Another indicator would be the new housing starts. And as everywhere else in Alberta, it's booming, and we're looking at new housing starts for January to May of 2006 for Medicine Hat being at 32 percent, which is astounding. But when you look back at the results for 2005 ‑‑ or 2002 to 2006, the jump came in 2004, and we've been pacing still 30 to 40 percent ahead in housing starts from the 2002 to 2004 period. So, you know, it's growing faster that we can project it, so I really do believe there is room in the market for two new stations.

244 COMMISSIONER PENNEFATHER: Just on the population growth, what, in your view, is the percentage growth rate? You mentioned a number, but what is the percentage of population growth that you have seen in the reports?

245 MS SPENRATH: What they had said in 2001 to 2006 was about six percent growth in population during that period of time. And they're looking ahead for 2006 to 2011 to be another five percent. It's anybody's guess. Maybe eight percent at this point. That was yesterday.

246 COMMISSIONER PENNEFATHER: And going forward, do you see that being maintained?

247 MS SPENRATH: I think what's happening in Alberta ‑‑ I don't think you could say it could be maintained indefinitely at all. When you see what's happening it's fabulous out here, but it's not realistic to say that it's going to go on at this pace for ten or 11 years. But I think that five percent at this point over the next five years would be realistic, yes.

248 COMMISSIONER PENNEFATHER: The population within the contour at 105.3, what is that population and do you expect growth in that population as well?

249 MR. MAHEU: Dave, do you have the contour handy in our Supplementary Brief? I think it's in the 80,000 range. I'll just get that for you.

250 MR. MURRAY: Yeah, the population in the three millivolt contour is 61,091 people. And in the .5 almost 68,000.

251 COMMISSIONER PENNEFATHER: 68,000. What impact would licensing ‑‑ you mention the possibility of one, the possibility of two. What would be the impact of licensing a somewhat similar rock, classic rock, rock, classic hits format, or even the adult standards modern nostalgia formats stations, what impact would that have on your application?

252 MR. MAHEU: Well, the impact, if you licenced another classic rock or classic hits application along with Newcap's hybrid proposal, it would certainly be giving the folks who like classic rock and classic hits a lot of choice because there would be two stations kind of trying to deliver that to them.

253 We would suggest that if we were fortunate enough to be licenced as one of the choices in Medicine Hat, and in the Commission's wisdom if you decided to licence a second, a classic rock or a classic hits format would not necessarily be as complementary with our offering as maybe some of the other proposals that have been put forth.

254 When you take a look at the audience targeting demographically, and the life group music choice, and how to best serve the market if you were going to do two, obviously there are a number of rock and classic rock proposals that fall into a reasonable area, and then there are older targeting softer formats that are also being proposed. So if you were to ask us which one would work best with what we are proposing, it would be an older, softer format, and I think there are a couple of those being proposed by Mr. Larsen and Mr. Hildebrand. They would certainly provide an alternative to the marketplace that's not there, and would not compete with classic rock, classic hits hybrid, and there would be minimum overlap. There would be lots of overlap with the other ones.

255 COMMISSIONER PENNEFATHER: So in your view, the ‑‑ it is possible to licence two stations in this market to add to the current incumbent stations, and provided that there was ‑‑ the effect on your application, however, if we also licence another classic rock station, would that make it impossible to achieve your revenue projections?

256 MR. MAHEU: No, it would not make it impossible. It would certainly make it more difficult because it is a smaller, medium‑sized market, and the vast majority of the revenue that we would be projecting to do would be retail, local advertising sales, and part of what drives local advertising sales is results and offering something different to advertisers to get them those results. And if we're out knocking on doors and, you know, the word comes down, hey, there's two new radio stations coming to town, and, hey, they're both the same, it's going to make it more difficult for the new radio stations to go out there and differentiate themselves and establish their business in the marketplace because they are going to really be competing head‑on for listenership and audience, and certainly advertising revenue. So it would not be impossible, it would just make it a lot more difficult.

257 I think if it were the case, and I certainly can't speak for other licencees, but speaking on behalf of Newcap, if we were licenced and another classic rock or classic hits station were licenced, we would do what we always do. We'd go back into the market and say, okay, we do some more research and go here's what we've got. We've got a classic rock station that's coming on and we want to be classic hits, classic rock hybrid. We'd go to the marketplace, do our homework and find out how can we make this work? What's the best formula, the best approach to put this on and actually get an audience and to be successful. So we would do whatever it takes to make it work.

258 COMMISSIONER PENNEFATHER: So it would knock your 20 percent share projection down if we licenced a similar classic rock?

259 MR. MAHEU: We'd probably end up splitting that share. We'd probably grow the share maybe to 28, and then we'd both split it somehow to whatever degree that would be.

260 COMMISSIONER PENNEFATHER: Okay. Thank you very much, and thank you for your responses to my questions.

261 Thank you, Madam Chair.

262 THE CHAIRPERSON: Thank you, Mr. Maheu and Commissioner Pennefather.

263 Vice‑Chair Arpin...?

264 VICE‑CHAIR ARPIN: Thank you, Mrs. Chair.

265 When I read your ‑‑ all of the applications for Medicine Hat and ‑‑ and the material prepared by staff, there were numerous references to the Suffield armed forces base, which is somewhere around 50 kilometers west ‑‑ northwest of ‑‑ of Medicine Hat. And I also read that they do contribute somewhere close to $120 million to retail sales in the Medicine Hat market. Is Suffield of some importance for your business plan?

266 MR. MAHEU: It would be of importance to the extent that we wanted a 100,000 watt signal so that we would be heard there, for sure, and because we believe that's important. They are an important part of the community in terms of the retail sales and the local economy, so to that extent they are important, yes.

267 VICE‑CHAIR ARPIN: Now, in your programming plan, have you provided for some things specific for the armed force or ‑‑

268 MR. MAHEU: I think what you are ‑‑ our plan would be because they are an important part of the community, and especially now more than ever with what's going on around the world, I think that would be handled more in the spoken word area. The reflection of the radio station, if we're going to be The Rock and some of these members of the forces are going to be our listeners, I think we need to be doing things on the radio station in terms of spoken word and featured spoken word that makes sense to them and that they can relate to and enjoy listening to.

269 In terms of special programming musically for that specific group of people, that's probably something we would look at down the road. I think the biggest thing though is to build an audience and to build some loyalty and partisanship with that constituency is through our spoken word, and being able to talk about things and report on things that are reflective of what they are doing and things that they would find interest in.

270 VICE‑CHAIR ARPIN: Thank you for your summary sheet.

271 And I notice that you've provided me with my answer to my question regarding median age, which you've put at 48 years old. The ‑‑ but your classic hits will carry more to female, while your classic rock portion of your hybrid programming, and even tribrid, with alternative rock, will cater more towards male. Overall, will it be more male or female driven?

272 MR. MAHEU: Slightly more male than female in terms of music appeal.

273 VICE‑CHAIR ARPIN: Yes.

274 MR. MAHEU: We'll try to mitigate that because the market is of a size where you can do some things ‑‑ you have a little more flexibility, let's say, than in a major market. And I think some of our commitment to spoken word and the kind of news and information that we're going to do on the radio station, although it's branded as a rock station, it's going ‑‑ as we mentioned, it's going to be a very mainstream accessible rock station, so that women who enjoy the slightly harder side of classic hits and rock are going to feel very much at home on this radio station.

275 It's not going to be as much of a guy's radio station as you might hear ‑‑ as what we ‑‑ say what we do in Edmonton at K Rock, which is very focused on men. This is going to be very much more of a mainstream approach in terms of production value, how we position it, the content of the news, the personalities, et cetera. So women will feel at home, even though the music is not going to be liked as much by them as it is by men. But we're still looking at an audience split of about 60/40 in terms of hours tuned.

276 VICE‑CHAIR ARPIN: Thank you very much. Thank you, Mrs Chair.

277 THE CHAIRPERSON: Thank you.

278 Commissioner Cugini...?

279 COMMISSIONER CUGINI: Thank you, Madam Chair. Mr. Maheu and team, good morning.

280 I just have a question to fine tune a little bit your format, and with a particular focus on the Canadian component, and perhaps an even finer tune on the 10 percent new or newer artists that you referred to earlier. And the questioning really goes to the diversity of music choices available in the market. You mentioned Sam Roberts, Arcade Fire, Mobile, and I know they're just as examples, and including the Tragically Hip. But would you agree with me that I might be ‑‑ I might hear those bands on CFMY currently? Like, you know, their format could accommodate Mobile or Arcade Fire or Sam Roberts?

281 MR. MAHEU: It could. And those are only examples for sure, but ‑‑

282 COMMISSIONER CUGINI: So how extensive a list is there out there that would provide an opportunity for more exposure to more Canadian artists?

283 MR. MAHEU: Well, that's always the ‑‑ that's always the challenge when you're doing a gold based format, is, you know, looking at that part of the Broadcast Act where predominantly Canadian, and taking a look at the Canadian music that you can play.

284 In a gold‑based format ‑‑ we're kind of cheating the gold‑based format here a little bit, and we're only doing that because ‑‑ to be forthright, because the market is small enough that you can do it. If you try to do that kind of thing in a major market you'd really pay the price because you cannot be that wide.

285 But in terms of the current component, there are a lot of good bands making good Canadian music today. When we talk about Arcade Fire, for instance, on a classic rock radio station, that's a bit of a stretch because it leans ‑‑ active rock alternative, you know. We play it on our alternative rock stations. And, you know, it's a bit of a stretch, but we could play it because we're not going to be penalized in a market the size of Medicine Hat with ten other radio stations trying to carve up the pie where you have to be so right on the music all the time. We can take a little licence there, so ‑‑ but in terms of finding an outlet for current Canadian performers, it's very difficult in gold‑based formats because it is what it is. It's Guess Who, it's April Wine, it's Brian Adams, it's Triumph, you know, and all the usual great bands from the past.

286 What we wanted to try to do here is to at least ‑‑ and we're doing this on a lot of our classic rock stations too, like in Edmonton and Cold Lake and even in Saint John's, Newfoundland, where traditionally these stations have been 100 percent pure classic rock gold, no currents, we've started to play and introduce some current Canadian music on those radio stations, as long as it fits the essence of the radio station, sort of sounds like it belongs.

287 We'd be doing the same thing with the rock in Medicine Hat, where we would judiciously look at, you know, can we play a couple of new tracks from the Tragically Hip album? Absolutely. Sounds like classic rock, fits the essence of what we're trying to do. Are there songs from Arcade Fire we could play? Yes, yes, there are.

288 And we want to do that partly because if don't we're going to be recycling the same gold list over and over and over again. And it works with some degree of success in a lot of markets, but we're seeing through the music testing we're doing in markets of all sizes, that the life expectancy of some of that Canadian gold, because classic rock and classic hits is so popular now, is really starting to fade.

289 Like, the like‑a‑lot scores are way down, the tired‑of scores are through the roof on a lot of those library titles that we've counted on. So we've got to find new ways to re‑invent these gold‑based formats to accommodate the Canadian component, which is part of our responsibility, and we think the current portion is part of it. And although we're only proposing about 10 percent of our sound be current, of that 10 percent, of 100 records or 100 songs that you'd hear on the radio station, 10 percent of them would be new, and of those ten, I would suggest that seven are going to be Canadian. Seven to eight, to take a little bit of the heat off the gold library.

290 COMMISSIONER CUGINI: Thank you. Thank you, Mr. Maheu. Thank you, Madam Chair.

291 THE CHAIRPERSON: Thank you. I have a few questions, and the first one is, and I noticed that in both your letters of the 14th of August and, I guess, the 20th, you talked about being live to air for 126 hours. But of course you were at the Edmonton Hearing where I asked if you would agree to a COL on live to air during the 426 hours of the broadcast week. And so today you say live and local at least 120 hours during the broadcast week, and you would agree to a COL saying you would be live to air at least 120 hours during the broadcast week?

292 MR. MAHEU: Yes, we would.

293 THE CHAIRPERSON: You were talking about money to Starmaker, and that you were asking that they would target it to Alberta to the extent that they can. What is the extent that they can?

294 MR. MAHEU: It's ‑‑ it's pretty simple. If there is an artist that meets the criteria for Radio Starmaker funding that particular year or time frame in the course of the year where the money is available, and they are from Alberta, they're going to get it. In other words, if it comes down to an Alberta artist and an artist from some other part of Canada, and there's only so much money, our money is going to the Alberta artist.

295 What Starmaker says though, and they are right, there are only so many artists that they look at each year that meets the criteria for number of units sold and to be eligible for that additional funding. And if there's not an Alberta artist eligible that year, our money is just going to go into the general fund to promote Canadian talent to the next level. But we've asked them that in case of a tie, or in case of an Alberta artist being available and eligible for funding, that our money be directed specifically to them.

296 And, you know, Nickelback was one of the first ‑‑ you know,there's an Alberta band that was one of the first beneficiaries of the Starmaker Fund that really took that band up a notch to the next level. They've done very well. We're hoping over the course of the seven years that we're sending this money to Starmaker on behalf of the Medicine Hat station, that there are at least a few years where there is an Alberta artist that will be able to take advantage of it.

297 THE CHAIRPERSON: And would this money be incremental to that otherwise allocated by Starmaker?

298 MR. MAHEU: We're going to send them that cheque each year and we want to know what the money went for. So, you know, obviously ‑‑

299 THE CHAIRPERSON: Okay. Can you ‑‑ do you have a letter from Starmaker saying what the extent possible really means?

300 MR. MAHEU: We have a ‑‑ we have a pretty good relationship with Starmaker. We don't have a letter. We can certainly get one. We've got their say‑so on it. But we can certainly get a letter and have it described, to the extent that they can, what that exactly means.

301 THE CHAIRPERSON: Yes.

302 MR. MAHEU: But we ‑‑ we're operating on the assumption that we've always had with Starmaker in our conversations with them, that they have a certain number of candidates each year that meet their criteria for funding, they fund them accordingly. And obviously we want, in the case of Medicine Hat, that if we have money available that we want it for somebody not only from Alberta, but from southern Alberta would be even better. But that can't ‑‑ they can't always guarantee that. But if you'd like a letter we could certainly file one.

303 THE CHAIRPERSON: Yes.

304 MR. MAHEU: Okay.

305 THE CHAIRPERSON: My next question is you didn't really answer Commissioner Pennefather when she said why did you beef up the news and not your non‑news spoken word programming? In other words, you beefed up your news in response to satellite radio and et cetera, but you didn't beef up the community event updates, the public affairs reports, and ‑‑ I'm not talking about DJ talk, but, I mean, you didn't increase those. And it would seem to me that on the news it would be far easier to recycle the same stories when you're increasing your news, as opposed to the community updates and public affairs reports that might require more staff input. Is that why you only beefed up the news and not the non‑news programming?

306 MR. MAHEU: Not exactly. We did not beef up the community event reports and the public affairs reports because we felt that 35 per week on each was pretty substantial to begin with. We did feel though when we looked back on the amount of news that we were doing that given where we wanted to go and what we wanted to accomplish, it wasn't enough.

307 In terms of, you know, whether it's easier to recycle news or it needs more work to be put into the updates and so on, I think it's a fair observation. Our experience has been, and would be in Medicine Hat, we're trying to build long‑time spent listening, especially in a gold‑based format like a classic rock, classic hits hybrid, and we're going to have to do a better job, as we're starting to do in a lot of our locations, on taking a ‑‑ an approach to news where we're doing more rewrites, we're doing more ‑‑ we're out gathering more actualities, we're cutting them up differently so that the newscasts that you hear at 8:00 in the morning on our radio station in Medicine Hat will sound substantially different from the newscast your heard at 7:30 if you're listening, you know, over the course of 40 minutes, because any more ‑‑ the expectations are going up, especially in a small market.

308 We're faced with this particular situation in Charlottetown, where we just, you know, converted CHTNA into FM, and it's a big station for news on the island. And we were really surprised when we were converted there, the amount of time spent listening being done to the radio station. They love it, and people are listening four, five, six hours straight, you know, and you can't keep rerunning the same newscast every hour. Not only does it not sound very good, people won't tolerate it.

309 So in this particular case, that's why we're going to have three and a half people in the news department, because we're going to have to get people that know how to write, and we're going to take a much more proactive approach to going out and gathering news. And technology helps us do that a lot these days as well, so we can get more actualities on the air and do a much better job of creating a news cast. So the clip you heard of the mayer at 7:30 as part of story that was happening, it may be a different clip that you hear from the mayor at 8:00.

310 So substantively, the newscast is the same news, but it's being presented in a slightly different way so you don't fatigue and get burned out on it.

311 THE CHAIRPERSON: And my final question is, you were saying to my colleague that there would be a problem if a classic rock or classic hits format was also licenced. The reality is, we don't regulate those, and it's going to be a race, isn't it?

312 MR. MAHEU: It would be a race to who could get on first and ‑‑

313 THE CHAIRPERSON: And then the second person would just have to adjust?

314 MR. MAHEU: Would have to adjust, absolutely. And that's why we go and do research and figure it out.

315 Again, at the end of the day, we don't decide and the Commission really doesn't decide what format is going to be in a market, the listeners will decide what they want and how they want it. And if we do our jobs properly we will give them what they want. As long as it lives up to the spirit of what was intended originally, and that we honour our commitments and our promises and do a good job for the marketplace, and we would intend on doing that.

316 THE CHAIRPERSON: Thank you.

317 Counsel?

318 MS BENNETT: Thanks. I just want to establish the filing dates for the letters that you agreed that you would file. The letter ‑‑ or the written agreement with respect to the Alberta Music Showcase at the Canada Music Week, could you indicate when you could file that letter?

319 MR. MAHEU: Could a week from today be okay?

320 MS BENNETT: I think that's fine.

321 MR. MAHEU: Would that be all right?

322 MS BENNETT: And the second letter from Starmaker describing the extent to which they can target Alberta artists?

323 MR. MAHEU: Could we file that at the same time?

324 MS BENNETT: Okay. Thank you.

325 THE CHAIRPERSON: Thank you, Mr. Steele, Mr. Maheu, Panel.

326 We'll now take ‑‑ you have two minutes to tell us how wonderful you are and why you are better than everybody else. I'm sorry.

327 MR. MAHEU: How about we take 40 seconds? Just to sum up, thank you very much for hearing our proposal this morning. I know you've got a very long week ahead of you, lots of applications, lots of good ideas for not only Medicine Hat, but for other markets as well. We appreciate the opportunity to lead off this morning.

328 To sum up, you know, for Medicine Hat we're proposing something that's a little bit different. It is a hybrid. It is something new that hasn't really been done a lot anywhere else. We just want you to know, please, if you decide that this is the most worthy use of that frequency that we'll do a good job on it, we'll take the judicious care we need to do to put together a great radio station that delivers on the needs and wants of the people in Medicine Hat.

329 They've told us through the research clearly they want this kind of music in the marketplace. We believe we have a very good track record of delivering this type of music in this format in markets this size and smaller. We're very comfortable and excited about markets like Medicine Hat. It's one we very much want to be a part of. And if you give us the licence we promise we'll go in and roll up our sleeves and we'll do a very good job for the people of Medicine Hat. You have our word on that.

330 Thank you very much.

331 THE CHAIRPERSON: Once again thank you, Mr. Steele, Mr. Maheu and panel.

332 We'll now take 15 minutes. By my watch that will be 20 after 11.

‑‑‑ Upon recessing at 1105 / Suspension à 1105

‑‑‑ Upon resuming at 1120 / Reprise à 1120

333 THE CHAIRPERSON: Order please.

334 Madam Secretary...?

335 THE SECRETARY: Thank you, Madam Chair.

336 We'll now proceed with item 2 on the agenda of this public hearing, which is an application by Lighthouse Broadcasting Limited to amend the licence of radio programming undertaking CJLT‑FM Medicine Hat.

337 The licencee proposes to amend the licence by changing the frequency from 99.5 megahertz (channel 258LP) to 93.7 megahertz (channel 229A).

338 The licencee also proposes to change the authorized contours by increasing the effective radiated power from 48 to 2,300 watts, by relocating the transmitter and by increasing the antenna height (non‑directional antenna/antenna height of 99.5 metres).

339 Appearing for the applicant is Mr. Scott Raible. And Mr. Raible, you will have 20 minutes for your presentation.

PRESENTATION / PRÉSENTATION

340 MR. RAIBLE: Thank you.

341 To the honourable members of the Commission and to others here at this hearing, good morning.

342 Lighthouse Broadcasting has been broadcasting and serving Medicine Hat since April 2003 with a strong commitment to entertain and encourage the listeners of Medicine Hat through high quality Christian music and programming.

343 As quoted by a letter from the Mayor of Medicine Hat written in support of our application for our technical amendment, CJLT‑FM has been a welcomed business in Medicine Hat providing a radio station with religious programming. This business has been well received by the community since their commencement of broadcasting in our community. Lighthouse Broadcasting supports the vision of Medicine Hat as being a Community of Choice providing alternate programming.

344 We've been committed to Medicine Hat, providing free promotional assistance to non‑profit charitable organizations and local businesses just starting up. Lighthouse Broadcasting also has local features such as local hero of the month featuring and supporting our local police and firefighters serving our communities.

345 We also feature various non‑profit groups and organizations on the air supporting the different events that take place in our community. We're also used by the Medicine Hat College for job showing opportunities in radio, as well as bringing local school choirs on the air. And we're proud supporters of the Medicine Hat High School Dry Grad and the annual Medicine Hat Jazz Fest that takes place in the community every year.

346 We've also been a platform for local and Canadian Christian bands that you can't hear anywhere else in Medicine Hat, such as Medicine Hat's own Cross Rock, Play it Again and Minister Joe C, and some of the national Canadian bands that we feature are Amanda Falk, Downhere, and Starfield, just to name a few.

347 Indeed Lighthouse Broadcasting won the small business of the year for 2005 award as presented by Autracor(ph) and the Medicine Hat Chamber of Commerce.

348 The one complaint that we have received over and over again was that our signal was not strong in many part of the city, even those that fall well within our 3.0 MV contour and our original map. This became an issue both with listeners and advertisers, as a commercial licence and a station dedicated to providing our listeners with high quality programming, this of course has caused a problem. Whereas in the end of the 2005 fiscal year we had a $12,000 profit, this past year we've had actually a deficit.

349 The reason we heard back from advertisers is that our signal wasn't strong enough and they do not have confidence in the strength of our signal. Many of them asked our sales team to come back once our signal is increased. We've tried several ways to compensate that, unfortunately we are still fuzzy in many areas that we should reach according to our original map and some listeners complain they can't get us on their alarm clocks because they want to listen to us when they wake up in the morning, as well as even in their cars, and, again, in some areas that should be covered according to our original application.

350 Our technical staff tells us that because of the coulees in Medicine Hat and recent construction, the only way to compensate is to increase our signal strength and broadcast from a higher location.

351 As we, of course, are a commercial radio station, in order to remain economically viable it is imperative that we are able to cover our entire city effectively. In response to our community, listeners and advertisers, we feel the best course of action is to increase our signal strength and relocate our transmitter to the CBC tower in the Cypress County area.

352 We have approached CBC and they have given us written approval, upon condition of CRTC acceptance, to broadcast from their tower. Pippin Technical, which provided our technical Brief, has been in constant contact with the engineers from CBC and has agreed that our proposed signal will be able to adequately cover our broadcast area and will not interfere with any existing frequencies.

353 Industry Canada has also given us conditional approval for our amendment upon condition of the CRTC acceptance.

354 We will remain committed to fulfil our commitment in our original application to the City of Medicine Hat. Though we have requested a power boost, may I note, it is only enough to reach our city. We are not asking for a 100,000 watt or even 20,000, we're asking for 2,300 watts in order to effectively serve our community.

355 In our comparison chart, our contours are focused on Medicine Hat, and as our community is growing it will allow our signal to carry on into the new developments of Medicine Hat, as well as the existing areas that we should be reaching in our 3.0 MV contour, but currently are not.

356 As stated in our application, Lighthouse Broadcasting will be willing to accept any reasonable conditions of licence in order to obtain a technical amendment to our broadcast licence. As a condition of licence we would increase our commitment to the City of Medicine Hat by offering an annual scholarship of an additional $500 to local students who wish to pursue music at the Medicine Hat College. This would be in addition to the $400 scholarship we are currently doing for Canadian talent development.

357 I also want to take this moment and reaffirm Lighthouse Broadcasting's commitment to our Christian music format, and that the purpose of this power boost and technical amendment is to keep CJLT‑FM economically viable as a commercial radio station in Medicine Hat, and allow us to reach all of our current and potential listeners in our community with a strong, clear signal. This is particularly important to us due to the potential of future radio station in our market.

358 In closing, please let me read you the ten reasons we think you should approve Lighthouse Broadcasting's request for our technical amendment:

359 ‑ (10) Lighthouse Broadcasting is the only applicant applying for this frequency;

360 ‑ (9) As a condition of licence, Lighthouse Broadcasting will increase our CTD to a total of $900 to the Medicine Hat College, which will benefit local Medicine Hat musicians;

361 ‑ (8) There are no negative interventions against our application;

362 ‑ (7) This is our second attempt for this technical amendment, and Lighthouse Broadcasting Limited has responded to the Commission's request for more compelling reasons to grant us our request;

363 ‑ (6) It will provide Lighthouse Broadcasting Limited an opportunity at economic stability, especially with the potential arrival of other stations in our market;

364 ‑ (5) Lighthouse Broadcasting is the only station serving the Christian music format, and we are committed to the Christian music format, and of course would make it a condition of licence;

365 ‑ (4) We are the only outlet for local, regional and Canadian musicians and artists of this format in Medicine Hat, and we support them by playing their music and promoting their events. On average we have about 16 percent Cancon if not more than that;

366 ‑ (3) Lighthouse Broadcasting is locally owned. We provide local jobs;

367 ‑ (2) We also promote community events and businesses;

368 ‑ (1) And the most important reason to grant us our technical amendment is our listeners. It will allow the listeners of Lighthouse Broadcasting Limited to receive a higher quality signal of the desired music and programming, especially those in areas outlined in our original application, but are not currently able to receive the signal, and therefore more adequately meeting the need for a Christian music format in Medicine Hat.

369 On behalf of Lighthouse Broadcasting, I thank you in advance for consideration of this request and I look forward to your questions.

370 THE CHAIRPERSON: Thank you.

371 Commissioner Williams.

372 COMMISSIONER WILLIAMS: Good morning. Is it Mr. Raible?

373 MR. RAIBLE: Mr. Raible.

374 COMMISSIONER WILLIAMS: Raible. Your application and your presentation to us this morning were quite thorough, however we have a few questions of clarification for you this morning and we will try to work our way through them.

375 In decision 2003‑12 you were licenced to serve the City of Medicine Hat, and in your current application for technical change you indicate that the station's principal marketing activities as a result of your increase in power will be directed towards the communities of Medicine Hat, Redcliff, Bow Island and Dunmore, all of which lie within the new proposed contours. I also note that the proposed five millivolt contour would include other communities, such as Bullshead, Bowell, and Vale.

376 Hypothetically, let's say you were approached by a community group in Red Cliff, Dunmore, Bow Island or Vale asking you to cover a church dance or maybe a recital. Your station is creating interest in these communities. You have stated that your personal marketing activities under this new technical proposal would include these communities. Would you ‑‑ would you reorient a portion of your local reflection programming to include content relevant to these new communities?

377 MR. RAIBLE: Definitely. In fact, what we have done currently right now, because parts of Red Cliff are able to get us a little bit, we have been bringing on Red Cliff organizations to support their events, like Red Cliff Days.

378 COMMISSIONER WILLIAMS: Could you explain your need to reflect these additional communities in your local and spoken word programming? Since your stated rationale in applying for this technical amendment is to increase your signal strength to address coverage deficiency specific to Medicine Hat and your ability to serve Medicine Hat as you were originally licenced.

379 MR. RAIBLE: Okay. Let's see if I can answer this correctly. By serving Medicine Hat and by reflecting on what's happening in Medicine Hat as well we could also reflect what's happening in Dunmore and Red Cliff. Things that happen in Medicine Hat usually affect those outlying communities as well. At the same time we will be able to actually communicate what's happening in those communities to the greater city at large.

380 By ‑‑ what we have currently now, we have ‑‑ we would invite local groups from those areas to come on. During our morning show we actually have a spot every Friday morning where local groups can come on and explain to our listeners what's happening, so they would be included in that. Also we have a feature where local ministers or pasters from various denominations come and have one week free of doing what we call an on‑air devotional, and ministers from those communities would be invited as well to partake of that.

381 COMMISSIONER WILLIAMS: For the record, if your proposal was approved would you maintain the current conditions of licence as set out in your licence and the appended decision 2003‑12?

382 MR. RAIBLE: Yes. That was loud.

383 COMMISSIONER WILLIAMS: I note in your deficiency response dated 26 October 2005, you indicated you would devote $500 a year towards a music scholarship to the Medicine Hat College. Who will be responsible for the allocation of the funds, and how will the recipients be chosen?

384 MR. RAIBLE: Lighthouse Broadcasting would be giving the money to the Medicine Hat College Scholarship Foundation, and what would happen is the requirements to obtain that scholarship would have to be based on the fact they'd be applying to go to Medicine Hat College, be a member of the music program, and then myself with a couple other members of the Medicine Hat Cultural Centre and community would try and determine the best qualified applicant from those requirements.

385 COMMISSIONER WILLIAMS: What criteria would you be using to choose the best qualified applicant?

386 MR. RAIBLE: Again, we'd be looking to make sure they were applying for a music program at the Medicine Hat College and we'd be looking at their dedication and various aspects like that.

387 COMMISSIONER WILLIAMS: Okay. Could you comment on ‑‑ please comment on the commission imposing a conditional licence requiring that you make equal annual payments over seven consecutive broadcast years to the CTD initiative you've targeted, totalling $3,500?

388 MR. RAIBLE: I'm sorry, I didn't quite hear the question.

389 COMMISSIONER WILLIAMS: Okay. Could you please comment on the Commission imposing a condition of licence requiring that you make equal annual payments over seven consecutive broadcast years to the CTD initiative that you have targeted totalling 3,500? If it became a conditional licence.

390 MR. RAIBLE: Yes, we would definitely do it, yes. We would accept that.

391 COMMISSIONER WILLIAMS: Okay. Under the CAB plan as conditional licence, annual CTD payments by Lighthouse Broadcasting Limited for a small market station should be 400 per year. I had a question ‑‑ I had a question prepared that was to ask you ‑‑ ask you that it appeared that no payments have been made, but we received this document just this morning, stating that you're pleased to inform the Medicine Hat College Foundation has received a cheque for $800 from Lighthouse Broadcasting Limited, and these funds will be used to provide scholarships for students enrolled in the Medicine Hat College Conservatory of Music Academy Program for 2005/2006 academic years. When was this payment made?

392 MR. RAIBLE: The payment was made actually on Friday. And if I can clarify what happened there, we made this agreement with the college in 2005, and we felt ‑‑ we thought everything was organized and ready to go. I guess they didn't proceed with it, they were waiting for a fax I guess they didn't get, but they didn't tell us about it. So we've been under the impression that we've been having this going for the last two years.

393 When the request came from the CRTC to obviously provide proof and documentation, we went ahead to get that, only to find out that they had everything ready from 2005, but they didn't proceed with it and didn't notify us that they had not. So we got a hold of them immediately and settled ‑‑ asked what had happened. They explained, and so we, anyway, paid for 2005 and 2006. And we've asked that they would be able to explain that to you as well, should you have any questions, because we were quite surprised to find that out.

394 COMMISSIONER WILLIAMS: Okay, thank you. In CRTC Broadcasting decision 2004‑549, the Commission denied a previous application by you for a change in frequency and an increase in transmitter power. In that decision, the Commission stated you had not presented compelling evidence of either economic or technical need for the proposed changes.

395 With respect to economic need ‑‑ just give me a second while I find the information you provided. Can you tell us how your revenues and expenditures during your first two years of operation may have differed from those projected in your original business plan and where they have differed, provide us some reasons.

396 MR. RAIBLE: Okay. I guess projections are never as accurate as when you're actually on the ground running a radio station, so for us ‑‑ for myself, experience has probably been the greatest teacher of what expenditures are real and what you can expect from economic forecasts. So for us it was a real learning curve. However, things were very well in 2005 as far as we were considering, but due to the fact that our advertisers could no longer have confidence in our signal, we found they weren't renewing, and it was simply because of the fact of the weakness of our signal strength. So we have confidence that once we can get our technical boost we can retain and regain the advertisers we had, for example, in 2005.

397 COMMISSIONER WILLIAMS: Okay. Based on the information you've provided me here, you seem to have suffered a revenue drop of between 15 and 20 percent; would that be fair over those ‑‑

398 MR. RAIBLE: Yes.

399 COMMISSIONER WILLIAMS:  ‑‑ the time period we're talking about? Okay. Now, you said experience is a good teacher in terms of projections. Can you please tell us how you arrived at the revenue projections you included in this application? For example, what factors did you take into account projecting the amount of local advertising revenue?

400 MR. RAIBLE: We're looking at ‑‑ when we originally made the application in 2005, we were looking at several of the ‑‑ I guess what ‑‑ sorry. I guess we were looking at what we were currently generating at the time and what we could potentially get.

401 Things have changed in the last fiscal year. We weren't ‑‑ I guess we honestly weren't counting on our signal not being as strong as it was, and so we were faced, I guess, in a situation we didn't count on being in. And the importance of our technical amendment has really been stressed this past fiscal year, which is why I included in that package not just a copy of our 2005 fiscal year, but our 2006 as well, so you can see the drop in revenue. And when we've gone back to our advertisers, they keep on mentioning the signal strength.

402 COMMISSIONER WILLIAMS: In our decision 2004‑549, the Commission denied a previous application for a change in frequency and in increase in transmitter power. In that decision the Commission stated you had not presented compelling evidence of the technical need for these proposed changes.

403 MR. RAIBLE: Okay.

404 COMMISSIONER WILLIAMS: Could you please describe the changes which resulted in the submission of this new application that occurred since the Commission's last decision on Lighthouse Broadcasting, which also was based on a proposal to change the authorized contour by increasing the effect of radiated power and antenna height?

405 MR. RAIBLE: Okay.

406 COMMISSIONER WILLIAMS: What's changed since the last time?

407 MR. RAIBLE: What we've tried to do is we've tried to include, I guess, a clear picture, both from our listeners as well as with comparative maps, to show you that areas that we should be getting in our original application in our 3 MV contour, we're just not getting them. Key main areas we're just not reaching. So we're hoping to show that with the overlay, that this signal strength will obviously get those key areas, and at the same time, we believe we're still serving Medicine Hat and area. We're not serving any other major markets. We're keeping true to our original intent of the original application, which is to serve Medicine Hat with high quality programming.

408 We've also tried to provide information from Pippin Tech. And again, I believe if you look at the positive letters of support from our listeners, they'll mention over and over again that they ‑‑ the reason they're supporting us in this decision is because they want to hear us in their homes and in their basement, and many of those positive interventions are within the 3 MV contour. We didn't have that information in our last application.

409 COMMISSIONER WILLIAMS: Okay. Your answers have satisfied my list of questions here.

410 I'm completed, Madam Chair.

411 THE CHAIRPERSON: Thank you.

412 Vice‑Chair Arpin...?

413 VICE‑CHAIR ARPIN: Thank you very much, Madam Chair.

414 You have showed us a map that you have in your hand. Is it one of the maps that you put in your folder?

415 MR. RAIBLE: Yes. If you look in your ‑‑ in the package on the back tab, the first map will be of our original ‑‑

416 VICE‑CHAIR ARPIN: The Pippin map, yeah, which is the original technical ‑‑ taken out of the original technical brief that you submitted?

417 MR. RAIBLE: Yes.

418 VICE‑CHAIR ARPIN: And what you're saying is that even in the interior of your 3 microvolt per metre, the coverage is not good enough, so even people don't ‑‑ can't listen to the station in their home, particularly in their basement, as you said?

419 MR. RAIBLE: Or in their base ‑‑ in their businesses. We have clients, for example, who live on 3rd Street ‑‑ who have businesses, sorry, on 3rd Street, and other areas right in the middle of our 3 MV contour, would love to play our station, especially if they're advertising with us, but they can't. Every time they get a fuzzy signal they question whether they should be advertising with us.

420 VICE‑CHAIR ARPIN: Exactly, okay. Now, on your covering page of the document that you gave us this morning, which went ‑‑ which is going in the public record?

421 MS BENNETT: Sorry, could you repeat the question?

422 VICE‑CHAIR ARPIN: The document that we received, it's totally going into the public record?

423 MS BENNETT: Yes. I have a couple of questions to clarify exactly what we've got, but the documents will be put on the top of the licencee's file.

424 VICE‑CHAIR ARPIN: Okay, fine. Now, you addressed ‑‑ you said earlier today that ‑‑ how many employees ‑‑ you're locally owned and you provide local jobs. How many employees do you have?

425 MR. RAIBLE: Including myself, we have seven local employees.

426 VICE‑CHAIR ARPIN: And how many are on air?

427 MR. RAIBLE: Five of them.

428 VICE‑CHAIR ARPIN: Five of them?

429 MR. RAIBLE: Yes.

430 COMMISSIONER WILLIAMS: And including yourself?

431 MR. RAIBLE: Yes.

432 VICE‑CHAIR ARPIN: You also provided us with financial material regarding the year ‑‑ your profit and loss financials for the year 2006. And could I question you on those financials?

433 MR. RAIBLE: If you like to you can, and I'll do my very best to answer them.

434 VICE‑CHAIR ARPIN: Because I'm seeing, and you provided us ‑‑ there are two lines that I wonder if you could help me in getting more details. You have travel, and you have a $12,000 expense under travel, which for a station of your size, seems to me somehow significant and ‑‑

435 MR. RAIBLE: As you can tell, I don't handle the finances at the station, but I'll do my very best to answer that. I believe that included not just travel, but anything promotional to do with the station as well.

436 VICE‑CHAIR ARPIN: You have another line that is called promotion somewhere ‑‑ somewhere up there. I've noticed that you have sales promotions with another $5,000.

437 MR. RAIBLE: Mmhmm.

438 VICE‑CHAIR ARPIN: If you can't answer, could you provide us with an answer, say, within the next week?

439 MR. RAIBLE: Definitely.

440 VICE‑CHAIR ARPIN: Written answer?

441 MR. RAIBLE: Yes

‑‑‑ Undertaking / Engagement

442 VICE‑CHAIR ARPIN: I also have a similar question regarding line 54, 55, which is donations. And again, I have a fairly big number under donations. Do you know what that is all about?

443 MR. RAIBLE: That I can explain. Obviously we're a Christian radio station, so our religious beliefs, I guess, are ‑‑ motivate everything that we do. So what we do is we give back to the community, and so we believe in tagging 10 percent back to local churches and charities. No matter what, how much money we make, that's what we do. So that is the reason for that.

444 VICE‑CHAIR ARPIN: Okay, that's fine, no problem. I don't see anywhere bad debts because you don't have any bad debts, your clients are paying correctly?

445 MR. RAIBLE: Yes. And ‑‑

446 VICE‑CHAIR ARPIN: Lucky you.

447 MR. RAIBLE: We've got good clients.

448 VICE‑CHAIR ARPIN: You've got good clients.

449 MR. RAIBLE: Yes.

450 COMMISSIONER WILLIAMS: Thank you very much, Madam Chair.

451 THE CHAIRPERSON: Thank you.

452 Thank you, Mr. Raible.

453 So it is ‑‑ and I also notice that in the year before you have travel of 15,000, so I'd ask you to explain both?

454 MR. RAIBLE: Definitely.

455 THE CHAIRPERSON: And why they would be legitimate business expenses.

456 MR. RAIBLE: Okay.

‑‑‑ Undertaking / Engagement

457 THE CHAIRPERSON: And I ask you then secondly, why we should consider the donations as a legitimate business expense, when it is not generally a business expense in radio stations? I mean, you're saying we're not profitable or won't be profitable, but at the same time you have 20,000 in each year as a ‑‑ as an expense, and why should we consider for you it's a legitimate expense when we don't habitually do that?

458 MR. RAIBLE: Again, we do that for ‑‑ I don't know how this sounds. We do this for religious conscience or whatever. What I could do is I could actually find out why we consider it an expense when I talk to my accountant, but I just know that's what we have done as a principle of business, is just take ten percent off every month what we make, off the top, and we donate it.

459 THE CHAIRPERSON: Okay. Yeah, if you could ‑‑ if you could ‑‑

460 MR. RAIBLE: Okay.

‑‑‑ Undertaking / Engagement

461 THE CHAIRPERSON: Now, I'm confused as to when you actually went on air. The decision was issued 21 January 2003.

462 MR. RAIBLE: Yes.

463 THE CHAIRPERSON: Today you say you've been on air since April '03.

464 MR. RAIBLE: Yes.

465 THE CHAIRPERSON: In your Supplementary Brief at page 1 you said 2002, at page 1. And subsequently you said you've been broadcasting for two years. So ‑‑ that's your Supplementary Brief, I'm sorry. Your application said since 2002, your Supplementary Brief said you've been broadcasting for two years. Tell me when did you really go on the air?

466 MR. RAIBLE: I believe we were approved in January 2003. We were on the air in April 2003, very quickly right after that. I apologize for any oversight, for any confusion that would be in that application, but we have been on the air since April 2003.

467 THE CHAIRPERSON: So did you file your annual report as required by the regs for that year at the end ‑‑ effective the end of August?

468 MR. RAIBLE: Yes.

469 THE CHAIRPERSON: And did you pay CTD that year?

470 MR. RAIBLE: Yes.

471 THE CHAIRPERSON: And to whom did you pay it?

472 MR. RAIBLE: I would have to double check and see who we paid it to, but I know we did.

473 THE CHAIRPERSON: Why do you know you did?

474 MR. RAIBLE: Because it's a condition of licence, so I remember us doing that, but then after ‑‑ for 2005 we decided we needed a better Canadian Talent Development plan, and we felt that the scholarships, after talking to other radio stations in similar markets, would be a ‑‑ a better use of the money.

475 THE CHAIRPERSON: Okay.

476 MR. RAIBLE: Of the CTD.

477 THE CHAIRPERSON: Our information was that was your annual report for 2003 was not filed. Could you provide us with a copy of that within a week?

478 MR. RAIBLE: Definitely.

‑‑‑ Undertaking / Engagement

479 THE CHAIRPERSON: And did you then file your annual report for 2004, for the year ending August 31, 2004?

480 MR. RAIBLE: Again, yes.

481 THE CHAIRPERSON: Our information is you did not. Can you provide us a copy of that within one week?

482 MR. RAIBLE: Yes. You bet you.

‑‑‑ Undertaking / Engagement

483 THE CHAIRPERSON: So then you say ‑‑ so in the year 2004, you say again that you made ‑‑ you paid your CTD?

484 MR. RAIBLE: Yes.

485 THE CHAIRPERSON: For both 2003 and 2004, can you provide us with a copy of the cheque showing that you paid the CTD?

486 MR. RAIBLE: Yes. Yes, we will, within a week.

‑‑‑ Undertaking / Engagement

487 THE CHAIRPERSON: And then you say you decided to go to Medicine Hat College?

488 MR. RAIBLE: Yes.

489 THE CHAIRPERSON: And you did that, but they didn't proceed with it. Why didn't you write a cheque that would then push them to proceed with it?

490 MR. RAIBLE: Good question. Again, I don't handle the financial end of the business. We had made all the arrangements on the telephone. They had faxed us a contract, we had faxed a contract back, and I was under the impression that it was taken care of and that my financial department would look after any invoices that came in. I guess I have to do a much better job boning up and making sure in the future that things get taken care of.

491 When it came to our intention last week that it hadn't been taken care of, we contacted them. We wanted to find out what had happened. They, for whatever reason, didn't let us know.

492 Again, it's our responsibility. We took care of it the minute we found out, and we provided ‑‑ we paid for 2005 and 2006, and we have proof of that payment as well. But again, I do apologize, we should have been much more on the ball in that one and that's my fault.

493 THE CHAIRPERSON: It's your condition of licence?

494 MR. RAIBLE: Yes.

495 THE CHAIRPERSON: Mmhmm. If indeed it appears that our records show you did not file your annual reports for 2003 and 2004, it also appears that you have remedied your non‑compliance in terms of your CTD recently, habitually the Commission is not inclined to grant people relief if they are in non‑compliance. Why would we grant you relief if you were in non‑compliance?

496 MR. RAIBLE: I guess we would ‑‑ we would not knowingly be in non‑compliance. We want to comply to every ‑‑ everything you ask us to do. You've asked us to do reasonable conditions of licences, and so we want to meet those. And all I can promise to the CRTC, and I guess I have to show it by my actions, is that much more professional and making sure we commit and keep and follow‑up on every commitment and condition of licence that is granted to us. And you would definitely see that, no matter if you give us the application ‑‑ the request for amendment or not, we will definitely be better at doing that.

497 THE CHAIRPERSON: Thank you, Mr. Raible.

498 Oh, Vice‑Chair Arpin...?

499 VICE‑CHAIR ARPIN: Filing of annual returns is a part of the regulation book, and so ‑‑ and it is very important that you file your annual return because we're collecting the information and providing statistics for all the broadcasters in this country, and we're publishing on a yearly basis and monitoring the report that is used largely by various groups, including the OACD. And it's very important that the numbers that we're providing those are complete and are showing the real picture how broadcasting is in this country.

500 If you will make sure that in the future to provide your annual return in due time. They're due each year at the latest on November 30th of each year, and it is ‑‑ it is a very important tool for managing the ‑‑ the broadcasting system.

501 MR. RAIBLE: If I may, I remember ‑‑ I know we did the 2003/2004 annual return because I remember being helped very patiently by ‑‑ by employees of the CRTC. So that's why I know it was done because I remember how patient they were with us figuring out how to do it. So we will find out for whatever reason why you don't have a copy, because I remember us doing it. And I know when I talked to Kim last week, she said there were some problems with some faxing of things back in that time. Again, I'm not sure, but we will make sure that you get 2003/2004.

502 THE CHAIRPERSON: Along with proof of when you filed it.

503 MR. RAIBLE: Yes.

‑‑‑ Undertaking / Engagement

504 THE CHAIRPERSON: Commissioner Williams...?

505 COMMISSIONER WILLIAMS: Just one more question of clarification on your donations. The donations are to be 10 percent of your gross revenue; is that correct?

506 MR. RAIBLE: Yes, every month.

507 COMMISSIONER WILLIAMS: Maybe when you speak with your accountant then, he seems to have donated a little more than 10 percent. It's probably ‑‑ probably almost 10 percent over contribution. You might want to check his math on that one as well because it is affecting your bottom line in a negative manner.

508 MR. RAIBLE: Okay.

509 COMMISSIONER WILLIAMS: Thank you.

510 THE CHAIRPERSON: I'm sorry, I have another question, Mr. Raible. When Commissioner Williams was asking you questions, I thought the whole essence of your argument on lack of coverage was that in the first year you broadcast your advertisers thought your coverage was better than it was. Is that your point?

511 MR. RAIBLE: In our first couple years, advertisers were just excited that there was another alternative to radio in Medicine Hat, and many of them really liked the idea of Christian music programming. However, over the years, as they were listening and getting feedback from their clients ‑‑ from their customers, the responses seemed to be, yeah, we listen to it live, but not in our cars because we can't get it in certain areas or we can't get it into our businesses. So when terms came up for renewal, we noticed consistently businesses saying, you know, we like what you're doing, we like the sound, but we just don't have confidence in the consistency of your signal to get all of Medicine Hat. And so because of that, we noticed advertising revenue slowly dropping off, and then especially when they had the BSE crisis in Medicine Hat, we really felt that as businesses were being very careful with their advertising dollars, wanting to go with stations that had clear coverage across the community.

512 I know we've tried many different days to make do with what we have because we want to be good stewards of what we have. Again and again we keep on hearing that we need to increase our signal strength so people can get it consistently in their cars in the City of Medicine Hat, in their homes and in their business.

513 THE CHAIRPERSON: So when we get your annual ‑‑ copies of your annual reports as filed, we will notice a consistent decrease in advertising income over the years; is that correct?

514 MR. RAIBLE: Yes.

515 THE CHAIRPERSON: Thank you.

516 Counsel...?

517 MS BENNETT: Thanks. I have one substantive follow‑up question, and just a couple of housekeeping matters just to sort out what we've got here to put on the file. But the first question is just a substantive question on the number of people that would be within the proposed contour.

518 So could you just confirm that approval of your application would increase the population covered by your 3 millivolt per metre contour from 35,000 people to just over 66,000?

519 MR. RAIBLE: Yes, that would be correct.

520 MS BENNETT: Okay, thank you. Now, I just want to go to sort of nailing down all of the things that will be filed, but firstly I want to just confirm that what we have here in the package that you filed today on page 4 and page 5, are the revised annual returns for the years ending August 31st, 2005 and 2006, that were requested by the Commission staff; is that correct?

521 MR. RAIBLE: Yeah, I don't know ‑‑ I don't believe 2006 was, but 2005 definitely was.

522 MS BENNETT: Okay. Now, have these been filed separately with the Commission, or is it your expectation that we will forward this to them, monitoring ‑‑ or the annual return group?

523 MR. RAIBLE: 2005 has already been submitted with all the information.

524 MS BENNETT: Okay.

525 MR. RAIBLE: And 2006 will be as well, but 2005 they already have it, Kim already has it.

526 MS BENNETT: Okay, thank you. Now, just to go back through some of the things that you've agreed to file this morning. Firstly, you agreed to file a clarification on the 10 percent profit that goes back to the community. Could you indicate when you could file that information?

527 MR. RAIBLE: Within one week.

528 MS BENNETT: Okay. Now, secondly, you have agreed to file the annual reports for the years ending August 31st, 2003 and 2004, with a proof of when you filed those returns. When will you do that?

529 MR. RAIBLE: Within a week as well.

530 MS BENNETT: One week, okay. And lastly, it was the copies of the cheques for payment of CTD for the years 2003, 2004, I believe?

531 THE CHAIRPERSON: Yes.

532 MS BENNETT: Yes. Is that one week as well?

533 MR. RAIBLE: Yes.

534 MS BENNETT: Okay. Thank you, I believe that's everything.

535 THE CHAIRPERSON: Thank you. You now have your two minutes.

536 MR. RAIBLE: Again, I just want to thank you so much for the CRTC ‑‑ for hearing our request for a technical amendment for Lighthouse Broadcasting. We believe that this technical amendment will not only improve economic stability for Alive 99.5, but also improve the quality that our clients and our listeners can receive of their favourite Christian Canadian and other music.

537 Thank you very much.

538 THE CHAIRPERSON: Thank you, Mr. Raible.

539 Madam secretary, do you have anything to add to the record at this moment?

540 THE SECRETARY: No, madam chair. Thank you.

541 THE CHAIRPERSON: Thank you. We will take a one‑hour lunch break, which means we will reconvene at 1:05.

‑‑‑ Upon recessing at 1205 / Suspension à 1205

‑‑‑ Upon resuming at 1305 / Reprise à 1305

542 THE CHAIRPERSON: Order, please.

543 Madam Secretary...?

544 THE SECRETARY: Before ‑‑

545 THE CHAIRPERSON: We are presently experiencing technical difficulties, please standby.

546 THE SECRETARY: Thank you, Madam Chair.

547 Before we introduce the next application, I would just like to clarify ‑‑ to indicate for the record that the letter dated October 30th from the foundation coordinator with respect to the Lighthouse Broadcasting application that we heard prior to the lunch, will be placed on the application file of Lighthouse Broadcasting.

548 And we now proceed to item 3 on the agenda, which is an application by Golden West Broadcasting Limited for a licence to operate an English language FM commercial radio programming undertaking in Medicine Hat. The new station would operate on frequency 101.5 megahertz (channel 268C1) with an effective radiated power of 100,000 watts (non‑directional antenna/antenna height of 96.0 metres).

549 Appearing for the applicant is Mr. Elmer Hildebrand, who will introduce his colleagues, and you will then have 20 minutes for your presentation.

550 Mr. Hildebrand...?

PRESENTATION / PRÉSENTATION

551 MR. HILDEBRAND: Thank you. Madam Chair, members of the Commission and Commission staff, thank you so much for having us here today for this important hearing.

552 My name is Elmer Hildebrand, president/CEO of Golden West Broadcasting. I'm also on the Board of the Canadian Women in Communications, secretary‑treasurer of BBM and the Radio Marketing Bureau.

553 With me here today are Lyndon Friesen, executive vice‑president and chief operating officer of Golden West. Keith Leask to my right, senior, manager for Alberta. And Barrie Vice on my far left, program/music coordinator for Golden West.

554 As many of you know, I have been in the small market radio business since 1957, so next year we are marking our 50th anniversary. Lyndon Friesen has been with Golden West since 1975; Keith Leask joined our company in 1983, and Barrie Vice is the rookie of our team arriving in 1990.

555 Golden West has made its mark serving the prairies, and Medicine Hat is a perfect fit for our group of stations in the prairies.

556 We started in 1957 with a small 1,000 watt radio station in Altona, Manitoba. Altona is still the site of our head office, and the community has seen steady growth since 1957 and now has a population of 3,500 people.

557 From these modest beginnings in '57 our organization has continued to grow, always serving non‑metro markets.

558 Today we operate AM stations in 13 prairie communities and FM stations in 12. Just like everyone else, our AM stations are not experiencing a lot of growth, so we must increase the number of FM stations so our company will have long‑term viability when AM radio ultimately falls off into the sunset.

559 This then brings us to our application to provide local radio service to Medicine Hat.

560 Keith Leask will now outline our plans for news and information for the community of Medicine Hat.

561 Keith...?

562 MR. LEASK: News from the community is likely ‑‑ excuse me, is likely the most important thing we do at Golden West Broadcasting. It's how we remain relevant to our listeners. It will be no different in Medicine Hat, as we deliver to that growing community the kind of radio news service that they deserve.

563 Each weekday, Golden West will air a comprehensive three‑minute local newscast at the top of the hour at six, seven, eight, nine and 10 a.m. An additional newscast will air during the peak morning drive time at 7:30. One‑and‑a‑half minute sportscasts will follow the newscast at six, seven, 7:30 and eight. Three‑minute newscasts will also air during the midday and afternoon drive times at 1:00, two, four, five, and 6 p.m., with an extra newscast at 5:30. One and a half minutes of sports will follow each news segment at four, five, 5:30 and six. And you'll see the first of the two charts that show this very clearly in your package.

564 It's hard to capture all that's going on in a growing city on a daily basis during three minutes of news. That's why we're proposing a one‑half hour noon hour show called Medicine Hat Today to air each weekday from 12 until 12:30. This show will feature expanded news and sports, as well as features on items that are important to the citizens of Medicine Hat.

565 These will include the oil industry, agriculture, Medicine Hat City Council, the School Board and other education stories, including Medicine Hat College, recreation organizations, business and the Chamber of Commerce and news about the social fabric of the city.

566 This fast‑paced half hour will also include a good news feature that we'll call "Southeastern Success Stories." This will highlight accomplishments and successes, both large and small, of people, organizations and businesses in Medicine Hat and area. This feature will also air daily during our morning and afternoon drive time periods because everyone likes to hear something good about their neighbours and business associates.

567 This news coverage, combined with our weekend news coverage, means a total of just over five and one‑half hours and one hour and 20 minutes of sports, in addition to our ongoing surveillance of local traffic, local weather, community news and local entertainment.

568 Golden West will have a four‑person newsroom to cover all of the news in the area, including a dedicated reporter to cover regular beats and features.

569 MR. HILDEBRAND: Barrie Vice will now outline our music plans for Medicine Hat.

570 MR. VICE: Thank you, Elmer.

571 Golden West will play a hand‑picked mix of classic rock and modern rock to appeal to a broad base of listeners between 25 and 50. This format will incorporate new rock music from artists like Train, Coldplay, U2, Stone Temple Pilots, 3 Doors Down and Evanescence, along with great Canadian modern rock artists like Nickelback, Sam Roberts, Three Days Grace, Billy Talent, Sloan and AlexisonFire. As well as artists from the '70s, '80s and '90s, such as the Rolling Stones, Kansas, Boston, Pink Floyd, The Doors, April Wine and Bachman Turner Overdrive.

572 This format will skew 35 plus, and would be appealing to both male and females, while at the same time being completely different from what the incumbent stations are playing in Medicine Hat, which is country, and a pop music blend. Golden West would commit to playing 40 percent Canadian content and we would do so as a condition of licence.

573 MR. HILDEBRAND: Lyndon Friesen will now outline our plans to distribute $100,000 in direct contribution to Canadian Talent Developments.

574 MR. FRIESEN: Golden West Broadcasting has committed ‑‑ has committed to $100,000 over the first term of our licence in direct contributions to Canadian Talent Development. $10,000 per year in years one through five, and $25,000 per year for years six and seven. We also have a chart to indicate how that will be distributed.

575 Although our plans call for those monies to be split between four groups during the first five $10,000 contribution years and five groups for the $25,000 contribution years, many more individuals will directly benefit from those CTD contributions.

576 The Medicine Hat College has one of the finest conservatories of music and dance in western Canada. Both advance students enrolled in the academy programs, and students who are average, are taking the various courses for the pure love of music and dance, are a part of this fine program.

577 Although there are generally scholarships readily available for the academy students, this is not the case for non‑academy students. As the college tells us, very often musical training must come to an end for some of these students simply because they cannot afford to continue their studies.

578 Golden West will set up scholarships through five of the musical divisions at the conservatory of music and dance at the Medicine Hat College. $500 will be available each year to deserving non‑academy students in vocal, piano, strings, brass and percussion divisions. We would leave it up to the instructors in those divisions to select a needy and deserving student for the scholarships each year.

579 The second portion of our CTD contributions would go to the Medicine Hat School Districts junior and senior high band programs at the Alexandra Junior High, Medicine Hat High and the Crescent Heights High School. As you're likely aware, school band programs have been slashed in recent years. In discussions with some of the music instructors in the school divisions, the purchase of new instruments is high on their list of priorities. The $2,500 that Golden West would provide for these schools annually would be earmarked for the purchase of new band instruments each year. $500 to Alexandra High or Junior High, $1,000 each to Medicine Hat High and Crescent Heights High.

580 Again, we would leave it up to the people who know best where the needs are, the instructors of the programs, to determine how the money would best be spent to acquire new instruments.

581 A third portion of the CTD contributions would go to the Medicine Hat Jazz Festival. For 11 years now the Medicine Hat Jazz Society has brought the Jazz Fest to the streets, clubs and concert halls of Medicine Hat. Now, with the opening in October of 2005 of the multi‑million dollar Esplanade Arts and Heritage Centre, the Jazz Festival has a beautiful new venue to attract even more spectators than the 5,000 people who now attend annually.

582 The Medicine Hat Jazz Society is a not‑for‑profit organization and is a registered charity. Golden West Broadcasting would contribute $2,500 annually as a sponsor of the Jazz Festival. We would also provide extensive additional on‑air support and promotion of the Jazz Fest.

583 The final portion of the CTD funding would go to the Medicine Hat Folk and Roots Music Club and their monthly singer/songwriter nights. These nights are held at various venues throughout Medicine Hat. Each month approximately ten singers and songwriters of a variety of genres of music come together to perform their original works. The music of these evenings and the performers has not been to judge, but to encourage. However, occasionally someone stands out from the crowd and deserves a chance to record their music. Golden West, along with the club's executive would select a deserving performer who would then be given a total of $2,500 to record and package their music.

584 Golden West would then promote the CD and the performer on the station in an attempt to spur on sales of the CD, all of which would go, of course, directly to the performer.

585 In years six and seven: The above ‑‑ the above‑mentioned organizations will continue to receive their assigned benefits through years six and seven, however, we have intentionally left $30,000 unassigned, or $15,000 per year. Once we become better established in the community and have solidified relationships, we will have a much better handle on which local organizations have the greatest need and would most benefit from financial contributions. The recipient organizations of this initiative would be directed to reflect our musical format.

586 MR. HILDEBRAND: That details Golden West's Canadian Talent Development contributions. On top of these direct contributions, we will make ‑‑ Golden West makes music development an integral part of our commitment to the communities we call our home. We will air weekly a 30‑minute music program called "Made in Alberta," which will spotlight music from across Alberta, focusing on many of the artists we will be promoting from the southwestern portion of the province around the Medicine Hat area.

587 This is something we do everywhere through our Golden West group of radio stations, and even though the program has continued for several years in some cases, we find there is never a shortage of great material to feature, from new emerging artists to established musical artists.

588 We note that there are other applications from Medicine Hat that you have to consider. All of the applications are credible, but we maintain Golden West would be the best suited to provide a new radio service to Medicine Hat.

589 We have projected the lowest revenues from any of the stations applying, and therefore, we would have the least impact on the existing radio stations in the market.

590 I would also like to make a comment that goes back to what you heard this morning, where Mr. Maheu was saying that some years ago, during tough times, many broadcasters cut back in newsrooms as far as news people and sports people and information people. Golden West did just the opposite. When we saw everybody was cutting back in their newsrooms, we added people. So we have continued to add people to our news operations, and that has stood us in good stead, and that is what would make us, I think, the best application for Medicine Hat.

591 Our track record in providing real local service all the time is well established. We have the experience, the people and the resources to give Medicine Hat the kind of community service that is superior by any measure to any of the applications before you this week, and we hope that you would grant us a licence at the end of this meeting, and now we will be prepared to answer any questions you have. Thank you very much.

592 THE CHAIRPERSON: Thank you.

593 Commissioner Cugini...?

594 COMMISSIONER CUGINI: Thank you, Madam Chair. Gentlemen, good afternoon.

595 Mr. Hildebrand, your experience shows in that you must have anticipated some of the questions that we would have for you today and you did answer some of them in your oral presentation. So regrettably, I do have some more for you.

596 The first area I would like to cover is your format because in your application you called it a "popular format," and here today you're telling us that it's going to be a mix of classic rock and modern rock. So is that what you meant by popular all along?

597 MR. HILDEBRAND: You know, in our case, music is not the most important part of our business plan. Music is something that we obviously want to do, but our music genre is much broader and is very hard to sort of put in a narrow slot, you know, so we feel it would be popular, but it would be a much broader skew of music than you've heard either this morning or you will hear later this afternoon.

598 We think the most important part of our broadcast schedule is actually the news and information that we provide. Music is generally available anywhere from satellite to CD to iPods, to any number of other sources. But local news and information is the thing that makes us relevant, and that is the most important piece. So our genre of music would not be a narrow segment, but a much broader base of music.

599 COMMISSIONER CUGINI: We'll get to your local news and spoken word programming because I sense that you're quite anxious to talk to us more about that. But I hope you can appreciate that format ‑‑ music format is one of the factors that we consider, not only in terms of the incumbent stations in the market, but as well from the other applicants in these proceedings.

600 We don't licence format, that's true, but, of course, it forms the basis of your business plan and assessment of the market and so on, so I am going to delve a little bit into your format. Is there going to ‑‑ is your classic rock and modern rock going to be day parted or is it going to be seamlessly blended throughout the day?

601 MR. HILDEBRAND: I'll ask Barrie Vice to answer that.

602 COMMISSIONER CUGINI: Thank you.

603 MR. VICE: Sure. No, we have no plans to day part music. Our intent is to seamlessly blend, as you put it, through the day.

604 COMMISSIONER CUGINI: And your target audience is 25 to 50?

605 MR. VICE: Yeah.

606 COMMISSIONER CUGINI: Do you plan on skewing more male or female with this format?

607 MR. VICE: I think we see it as something that we hope would appeal to both sides because of, as Elmer has mentioned, the broad nature of it.

608 COMMISSIONER CUGINI: And I will ask the question that Vice‑Chair Arpin usually asks, and what is the median age of your listeners?

609 MR. VICE: I think we're typically looking at 35 plus. I would say around, if we need a number, 42. But 35 plus is our ‑‑

610 MR. HILDEBRAND: 42.5.

‑‑‑ Laughter / Rires

611 MR. VICE: Thank you.

612 COMMISSIONER CUGINI: How do you see ‑‑ what do you see as the difference between this format and what's currently available in this market?

613 MR. VICE: I think this format will have music ‑‑ will put music on the radio station that isn't currently ‑‑ or on the radio in this market that isn't currently on the radio in this market because of its ‑‑ because of its rock roots.

614 I think ‑‑ I think we'll be pulling our music largely from the '80s and the '90s. We mentioned some of the artists that we plan on spotlighting. We mentioned the new rock component, so ‑‑ it's certainly not our intent to duplicate, you know, much or anything that's on the radio currently.

615 COMMISSIONER CUGINI: And what differentiates this format from any of the other applicants?

616 MR. VICE: Again, not being familiar with what the other applicants will be saying, only having seen this morning, I think it's the broad based nature of our format that probably sets it apart and makes it a little bit different.

617 COMMISSIONER CUGINI: So ‑‑

618 MR. HILDEBRAND: I think maybe ‑‑ just to add to that, I think we will also be featuring more local music than might normally be the case, simply because that's part of our, you know, local inbred policies that we have at all of our stations, to feature as much local material as we can. And that doesn't ever get on the chart, so ‑‑ but we find it's important, and we find that there is an audience for that when you do that.

619 COMMISSIONER CUGINI: You also mentioned in your application that with this station you plan on repatriating people who currently tune out of market to your radio station. How will this music format do that?

620 MR. HILDEBRAND: Well, I think the repatriation will be accelerated more by what is aired between the music. The news and information will really be drawing people back. They may have been listening to CBC, and CBC doesn't do much local news, and they certainly can't get any local news on any of the other genres, so that's what we have found again in other markets. Once we get involved with the local community, that in itself repatriates a lot of people to our radio station and then the music just balances out the whole product for the day.

621 COMMISSIONER CUGINI: Local programming and spoken word. So from what you've told us today, if my math is correct, it's six and a half hours of local programming? Of spoken word programming, I apologize? 390 minutes is six and a half hours?

622 MR. HILDEBRAND: I'll have Lyndon Friesen talk about that.

623 MR. FRIESEN: Yeah, I think on the ‑‑ if you refer to the chart that we provided, it ‑‑ we tried to make it quite clear. Six hours and 55 minutes including ‑‑ and that is just the local newscasts and local sports casts. It doesn't add the features or the news ‑‑ the daily news feature. It doesn't include everything else that we do that we can't or haven't quantified.

624 COMMISSIONER CUGINI: So that's Monday to Friday six and a half, right? The 390 minutes?

625 MR. FRIESEN: Right. And 25.5 ‑‑

626 COMMISSIONER CUGINI: And 25 minutes on Saturday, so let's say seven hours. And that is strictly news, weather, sports, surveillance material?

627 MR. FRIESEN: It is 100 percent local. We have a policy within our entire organization that our newscasts and our local information, and as you can see earlier, we actually will hire four people that ‑‑ four news people that specifically do nothing but gather local news information and then that's why we can make this kind of commitment.

628 COMMISSIONER CUGINI: And the program that you spoke of today ‑‑ or this morning, "Medicine Hat Today," is that the news program or a public affairs program?

629 MR. FRIESEN: I think I would characterize it more as a public affairs program. Maybe I'll let Keith Leask describe it better.

630 MR. LEASK: Now it's on. We anticipate that that will be a program that fleshes out the news that we do during the regular newscasts. It will be encompassing a longer form of news. It will also encompass interviews with community people. Like I said, the southeastern success stories feature will encompass that in there as well. It will just be to flesh out the news that we're doing on a regular basis more.

631 COMMISSIONER CUGINI: And will that ‑‑ is that part of the seven hours, or is that in addition to the seven hours?

632 MR. FRIESEN: That's part of the seven hours.

633 COMMISSIONER CUGINI: And that program will also be produced by the four‑person newsroom?

634 MR. FRIESEN: Correct.

635 COMMISSIONER CUGINI: Is there any other programming staff that will be hired?

636 MR. LEASK: Programming staff?

637 MR. HILDEBRAND: There will be programming staff hired as well in addition to news people.

638 COMMISSIONER CUGINI: And how many programming staff do you ‑‑

639 MR. HILDEBRAND: We expect four.

640 COMMISSIONER CUGINI: Four. So if we were to add DJ banter, for example, to that seven hours, what would your total spoken word programming commitment be?

641 MR. HILDEBRAND: Everybody is very quiet when you ask ‑‑ you know, how much would the DJ banter add up to in hours.

642 COMMISSIONER CUGINI: Just so we can arrive at a total of spoken word programming.

643 MR. HILDEBRAND: At best it would be an estimate that we can give you here, but certainly every hour there would be anywhere from five to seven minutes of additional information that's provided during breaks.

644 COMMISSIONER CUGINI: Okay. And do you plan on doing any voice tracking?

645 MR. HILDEBRAND: Any what?

646 COMMISSIONER CUGINI: Voice tracking?

647 MR. HILDEBRAND: We would probably do a little voice tracking to assist during various day parts, but we plan to be live basically from six to 12 midnight, and we would be, as somebody said this morning, we'd be answering the phone during that time. So we are going to be fully staffed.

648 COMMISSIONER CUGINI: So you might have voice tracking between midnight and 6 a.m.?

649 MR. HILDEBRAND: We would.

650 COMMISSIONER CUGINI: Monday to Friday or Monday to Sunday?

651 MR. HILDEBRAND: Monday to Sunday, yes.

652 COMMISSIONER CUGINI: Monday to Sunday, okay. I am now going to move on to CTD. And thank you for the details in your presentation. You also are committing to the CAB $400?

653 MR. HILDEBRAND: Yes.

654 COMMISSIONER CUGINI: And that's in addition to?

655 MR. HILDEBRAND: Well, I think that's part of the whole package, but we could easily say that's in addition to, if you would like us to say that.

656 COMMISSIONER CUGINI: And will you accept as a condition of licence the incremental expenses of your CTD going ‑‑

657 MR. HILDEBRAND: Yes.

658 COMMISSIONER CUGINI:  ‑‑ $10,000 years one to five and $25,000 years six and seven?

659 MR. HILDEBRAND: Yes.

660 COMMISSIONER CUGINI: Now, the 30 ‑‑ you said there was $30,000 unassigned that you have left. What are your plans in terms of informing the Commission of how you're going to spend that $30,000 if you are established in the market?

661 MR. HILDEBRAND: Well, we obviously ‑‑ I mean, as Lyndon indicated, we are leaving some of that in abeyance as to who would get that. Because a lot of things happen in a community like Medicine Hat between sign‑on and seven years later. There will be events that will appear that we don't even know about yet. So we felt it made some sense not to earmark it all in advance in case there were some organizations that would be, you know, applicable to the CTD policies, and so we would put that in abeyance and say we would tell the Commission in year four or five, here is what we are planning to do in year six and seven. Basically just to give us a little flexibility because it's very hard to make seven‑year plans.

662 COMMISSIONER CUGINI: Okay. Synergies: In response to deficiency questions you did indicate that there may be some synergies with your High River, Okotoks operation. Could you just expand a little bit on where you see the synergies and how it will impact this station if licenced?

663 MR. HILDEBRAND: We see a lot of synergies between High River and Okotoks, as well as Medicine Hat, in overall management of the operation, in news coverage. There will be obvious sharing of news stories for southern Alberta between those three radio stations. There would be synergies by coordinating ideas between program people, and there could also be some synergies with our operation in Swift Current, which is to the east of Medicine Hat, which covers a similar area to Medicine Hat. So we see a lot of synergies in our organization across the prairies that we can call on.

664 We have, you know, what we think experts in a lot of departments, and they're available then to all of the radio stations. So that's one of the pluses that we see being able to give to Medicine Hat. We really give Medicine Hat the benefit of our experience over the last 50 years. And the synergies are always very hard to quantify, but we know from previous experience where we have launched new radio stations that there are a lot.

665 COMMISSIONER CUGINI: How do you see the newsrooms, for example, elaborating or ‑‑

666 MR. HILDEBRAND: The newsrooms would not only collaborate, they would also share whatever news is generated in High River, Okotoks and southern Alberta, would be shared with the newsroom in Medicine Hat. And in all likelihood would also be shared with Swift Current and vice versa. As an example, in Manitoba, where we have more radio stations than in Alberta, obviously all of the news from all of the newsrooms is shared, and so if there are particular stories that are applicable in different areas, then we already have the information. And so those kind of things would be applicable here as well.

667 COMMISSIONER CUGINI: And are there any other back‑office functions that will be shared between the ‑‑

668 MR. HILDEBRAND: A lot. The traffic and the creative and accounting and overall management is all shared, so we have huge savings in that area. Again, we have the experience to make this work, and we find that the most important things for a community is to have visible news people and visible program people. They're really not concerned who does the accounting.

669 COMMISSIONER CUGINI: And speaking of accounting, we're going to move on to your projections. You are by far the lowest in terms of your advertising projections of all the Medicine Hat applicants. I was wondering if you could tell us what are the factors you took into consideration in coming up with these financial projections?

670 MR. HILDEBRAND: Well, basically, again, we were calling on experience in other markets, and I think as the Commission knows, we tend to be conservative in our estimates of revenue projections. And in all likelihood, we would work hard to exceed these, but we felt that this made some sense going into the process. And we're projecting very little national business because that's not something that really comes through to smaller markets like Medicine Hat a great deal. And we are finding even now more and more of the national business is being concentrated in the top seven markets. We're seeing erosion of national business even in markets like Saskatoon, Moose Jaw, because the cost of advertising by national clients in Toronto, Vancouver and Montreal is rising dramatically, and so many of the budgets that used to come our way in the prairies don't come our way any more simply because of the added costs the advertiser needs to cover those three big markets. So we see us making our living in the future, broadly speaking, by selling retail advertising on the street.

671 And so when Commission staff have asked me in the past how do we come up with our numbers? By and large, we have to rely on our experience from past years in other markets, and as I say, we generally try to be conservative.

672 COMMISSIONER CUGINI: Some might argue that you're being overly conservative because you are proposing perhaps one of the most popular music formats, and by being over conservative you're underestimating your impact on the incumbents.

673 MR. HILDEBRAND: Well, I'm sure that case can be made. And as I say, if we can over‑achieve these numbers we'd be happy to do that, but we think that this makes some sense going forward. And we also feel that this would have the least impact on the existing broadcasters in the community.

674 COMMISSIONER CUGINI: How many radio stations do you think Medicine Hat can support?

675 MR. HILDEBRAND: One of the concerns that certainly I've expressed before to the Commission is that the ‑‑ overlicencing is a concern. And so we're hearing and we're seeing that Medicine Hat has some growth over the past number of years and can project some growth, but I think it is important not to licence too many radio stations. So from our perspective, we would say that this is a conundrum that the Commission will have to determine. We're hoping that we would be licenced, and if in the Commission's wisdom they licence more than one, we would find our way through the process and ‑‑ but I think it's important not to overlicence.

676 COMMISSIONER CUGINI: Mr. Hildebrand, gentlemen, thank you.

677 Thank you, Madam Chair. Those are my questions.

678 THE CHAIRPERSON: Vice‑Chair Arpin...?

679 VICE‑CHAIR ARPIN: Thank you, Madam Chair.

680 You mentioned the High River, Okotoks, Swift Current. You never mentioned Lethbridge, but you have been granted a licence to operate a communicate‑based Christian music station in Lethbridge. Do you see any synergies from a ‑‑ from the news perspective with Lethbridge, which is probably much closer to Medicine Hat than any of the other markets that you've mentioned?

681 MR. HILDEBRAND: The reason that I didn't mention it yet is we still have that radio station to launch at a full power. Right now it's a low power operation, and we're working at launching the full power, which was approved by the Commission. And certainly there will be synergies there as well, but at this point, we ‑‑ because we haven't launched it yet, it's sort of hard to say how much the integration will be. And the format is also quite different than what we're proposing here, but certainly from administration and the back‑end operations, there would be a lot of synergies. And once the station is fully operational in Lethbridge, that newsroom would also be plugged in with all of our other newsrooms, so that all of that material would be available.

682 VICE‑CHAIR ARPIN: Thank you, Madam Chair.

683 THE CHAIRPERSON: Than you.

684 I have a few more questions. I think number one, I'd like to start with your financial projections in your application. And it's just a ‑‑ it jarred me at ‑‑ it's 4.1. Now, the pages aren't paginated in our ‑‑ but I see no local revenue, and I'm wondering, that's got to be a typo? Everything should be moved down?

685 MR. HILDEBRAND: Yes, it's basically all local revenue, yes. It's obviously in the wrong line.

686 THE CHAIRPERSON: Yes. So everything in network should go down to national?

687 MR. HILDEBRAND: Right.

688 THE CHAIRPERSON: And everything in national should go down to local?

689 MR. HILDEBRAND: Right, yes.

690 THE CHAIRPERSON: Okay. I just couldn't understand that. And in exhibit ‑‑ or chart 1, I notice it refers to three minutes of local news and one and a half minutes of local sports. Now, my colleague, Commissioner Cugini, referred to news, sports, weather and traffic. Is weather and traffic separate from these 4.5 minutes?

691 MR. FRIESEN: Yes, it is.

692 THE CHAIRPERSON: And would that be part of the five to seven minutes an hour of DJ banter you're talking about?

693 MR. HILDEBRAND: Yes.

694 THE CHAIRPERSON: Okay. The easiest way we could probably compare, would be what's called scripted word. And in those cases we normally use weather to include in scripted word. Could you give me an idea of what news, weather, sport and surveillance per hour would be, or per chunk would be?

695 MR. HILDEBRAND: You know, I think all of that was included in the package that I mentioned earlier. This would be, I think I said five to seven minutes an hour, and I think that's all inclusive there.

696 THE CHAIRPERSON: Okay, okay. Now, I carefully read your reply to interventions ‑‑ or reply to deficiencies dated July 24th, and if I can take you to page 3, right after the bullet about voice tracking. And I wanted to know ‑‑ what you said today, and I'm not the stenographer so I may be wrong, you said you would be live to air 6 a.m. to 12 midnight?

697 MR. HILDEBRAND: Yes.

698 THE CHAIRPERSON: So page 3 of that reply to interventions contemplates some voice tracking in the evenings?

699 MR. HILDEBRAND: I think what we would contemplate there, we would have an individual in the radio station who would be doing a variety of things, including answering the phones, taking calls from the news reporters that were out, and he would or she would be doing some voice tracking while they're still in the studio so they could continue doing two jobs at the same time. So this wouldn't be the kind of voice tracking where they would be leaving the building.

700 THE CHAIRPERSON: So how many hours during 6 a.m. to midnight would be live to air programming?

701 MR. HILDEBRAND: Well, with the exception of the kind of situation that I referred to, in the evening everything.

702 THE CHAIRPERSON: So would you agree to a COL?

703 MR. HILDEBRAND: Yes.

704 THE CHAIRPERSON: To live to air programming from ‑‑ during the entirety of the broadcast regulated week?

705 MR. HILDEBRAND: Sure.

706 THE CHAIRPERSON: Okay. And then also on the same page of the reply to deficiencies, you were referring ‑‑ you were asked about what you were going to be doing in relation to the CTD. And your answer consisted of one sentence ‑‑ two sentences. We will be splitting up the 10,000 into four specific contributions to local musical groups. The sixth and seventh year amount of 25,000 will be split between five groups. And you agree with me that today is the first time you've shown us where in particular you've chosen to ‑‑

707 MR. HILDEBRAND: That's right, yes.

708 THE CHAIRPERSON:  ‑‑ allocate these monies?

709 MR. HILDEBRAND: Right.

710 THE CHAIRPERSON: Why did you by ‑‑

711 MR. HILDEBRAND: By and large, from earlier hearings that we attended, we felt it prudent to provide more detail today, and that's why the charts were being provided. We anticipated some of your questions.

712 THE CHAIRPERSON: But the problem is that none of the people with whom you are competing have had a chance to look at this ‑‑

713 MR. HILDEBRAND: I see.

714 THE CHAIRPERSON: And provide their input and deal with the competitive side of that. So I guess I'll go on. You talk about the contribution to the Jazz Festival, does the $2,500 include on‑air support and promotion? No?

715 MR. FRIESEN: No.

716 THE CHAIRPERSON: Okay. The same with the Medicine Hat Folk and Roots Music Club, you talk about the recording program and then you've got on‑air support and promotion. On‑air support and promotion is not part of the $2,500?

717 MR. FRIESEN: The $2,500 is a cash support, all of the rest is on top of that.

718 THE CHAIRPERSON: Okay. And what will the funding to the Jazz Festival be used for?

719 MR. HILDEBRAND: Keith Leask will provide an answer.

720 MR. LEASK: That will be ‑‑ when I spoke to Lyle Revic(ph), who is the chairman of the Jazz Festival, that will be used for doing things like staging the shows, promotion ‑‑ promotion outside of the radio station, you know, for doing certain things. And just, you know, it will be designed to enhance the program, enhance the Jazz Festival to do that.

721 THE CHAIRPERSON: And in your view, is that appropriate CTD in accordance with our policy?

722 MR. HILDEBRAND: I think so.

723 MR. LEASK: I believe so too.

724 THE CHAIRPERSON: The next one, the Folk Festival initiative, again, what is ‑‑ that is for recording solely; is that correct?

725 MR. LEASK: Yes.

726 THE CHAIRPERSON: Okay. Now, today you said that you would be using a classic modern rock format, and I believe we ‑‑ Commissioner Cugini stated to you at ‑‑ or asked the difference between what you said in your application, which was popular music, if I understand. I guess my point again is, do you see this as a change from popular ‑‑ popular format to the classic modern rock? And if so, would you consider your lack of specificity in your application as being perhaps unfair to the other applicants?

727 MR. HILDEBRAND: I don't think so because popular music covers a broad spectrum, and so we will be certainly very different from anything that's being broadcast in Medicine Hat at the present time, and, you know, we think that this broadly falls into that category.

728 THE CHAIRPERSON: Okay, thank you.

729 Commissioner Pennefather...?

730 COMMISSIONER PENNEFATHER: Thank you, Madam Chair.

731 Just back to the Canadian Talent Development chart briefly. I think if I recall in your response to questions from my colleagues, you ‑‑ in talking about years six and seven, which is the 30,000, it's a fair chunk of the overall proposal, and it's left fairly vague as to where this money would go.

732 You ‑‑ I think you put it, Mr. Hildebrand, it would be as you see things evolve and what may come up. But is it possible though for you to assure us that in choosing some projects for this $30,000, which is a fairly significant part of the 100,000, that these projects would be in line with Commission policy on eligible contributions to Canadian talent development?

733 MR. HILDEBRAND: Absolutely, we would assure the Commission of that. I think I also then draw the Commission's attention to the fact that as an organization we have achieved or exceeded our CTD commitments in the past, and that we would be certain to do that again here. But we can absolutely assure you that it will fall into the policy of the Commission today and at that time.

734 COMMISSIONER PENNEFATHER: Thank you.

735 Thank you, Madam Chair.

736 THE CHAIRPERSON: On that subject, when would you be in a position to inform us of your intentions as to whom the recipient of your largesse would be of that?

737 MR. HILDEBRAND: Well, we could, let's say, advise the Commission of that in year four.

738 THE CHAIRPERSON: Okay, thank you.

739 Counsel...?

740 MS BENNETT: Thanks. I just have two brief questions with respect to conditions of licence. You've indicated that you plan to provide 40 percent Canadian content in your overall musical selections. Could you comment on the imposition of that 40 percent as a COL?

741 MR. HILDEBRAND: That's fine.

742 MS BENNETT: Okay. And then secondly, was your intention to provide the 40 percent as well between 6 a.m. and 6 p.m. Monday to Friday?

743 MR. HILDEBRAND: Yes.

744 MS BENNETT: And would a COL in relation to that be acceptable as well?

745 MR. HILDEBRAND: It would be.

746 MS BENNETT: Okay.

747 MR. HILDEBRAND: And just as an add‑on, our company has a policy of doing 40 percent in all of our radio stations as a floor, and, in most instances, we would be more between 40 and 45, so we're happy with a COL on all of these things.

748 MS BENNETT: Okay, thank you.

749 Those are my questions.

750 THE CHAIRPERSON: Thank you, Mr. Hildebrand, Panel.

751 Madam Secretary...?

752 MR. HILDEBRAND: I ‑‑ I ‑‑

753 THE CHAIRPERSON: Your two minutes of fame, I'm sorry.

754 MR. HILDEBRAND: No, I still have something left to say.

755 THE CHAIRPERSON: Yes, you do. I'm sure you do.

756 MR. HILDEBRAND: Again, we don't want to take two minutes. We want to thank the Commission for allowing us to appear here today. The Commission knows well what Golden West has been able to provide to the prairies over the past years, and we would take it as an honour to be able to do the same thing in Medicine Hat.

757 Our company is positioned to grow. We're 50 years old, and as a Canadian broadcaster, that may be getting a little long in the tooth, but we have a lot of young people that are eager to provide service for many years to come, and we know that we can provide a great service to the Medicine Hat community, and we look forward to doing that.

758 Thank you.

759 THE CHAIRPERSON: I really thank you, Mr. Hildebrand and panel. Thank you very much.

760 Madam Secretary...?

761 THE SECRETARY: Thank you, Madam Chair. I would now call on the next applicant to come forward for their presentation, Radio CJVR Limited.

762 We'll now proceed with item 4 on the agenda, which is an application by Radio CJVR Limited for a licence to operate a commercial English‑language FM commercial ‑‑ sorry, English‑language FM radio programming undertaking in Medicine Hat. The new station would operate on frequency 102.1 megahertz (channel 271C1) with average effective radiated power of 100,000 watts (non‑directional antenna/antenna height of 96.0 metres).

763 Appearing for the applicant is Mr. Ken Singer, who will introduce his colleagues, and you will then have 20 minutes for your presentation. Mr. Singer...?

PRESENTATION / PRÉSENTATION

764 MR. SINGER: Good afternoon, Madam Chair, Commissioners, and Staff.

765 Before we begin our presentation, I'd like to introduce the members of our team. My name is Ken Singer. I'm vice‑president of broadcast operations for our company. On my right is the president and owner of Radio CJVR, Gene Fabro. To Gene's right is Linda Rheaume, administrative manager for Radio CJVR's two stations in Melfort and our new FM station in Whitecourt, Albert, CIXM‑FM. Next to Linda is Jessica Schnell, director of research services at Insightrix Research of Saskatoon, and Jessica is trained in a wide variety of analysis techniques and earned her Bachelor of Science degree with great distinction from the University of Regina with a combined major in mathematics and statistics. Next to her is Corrin Harper, a partner at Insightrix Research. Corrin earned her Bachelor's degree in commerce and a Master's of business administration from the University of Saskatchewan. To my left is Kevin Gemmell, recently appointed as station manager and sales manager of our two Melfort stations, CJVR‑FM and CKJH‑AM. Kevin has been with our company over ten years. And on my far left is Dean Sinclair, a broadcast veteran whose 30‑year career includes programming, on‑air sales, and senior management experience. Dean has provided input and direction for our proposed classic rock musical format. I'm sorry I've got Corrin and Jessica mixed up at the end. I guess there's been a little seating adjustment here, so ‑‑

766 Madam Chair and Members of the Commission, Radio CJVR is pleased to appear before you today seeking approval to establish a classic rock formatted FM station on frequency 102.1 to serve Medicine Hat and surrounding communities. If approved, CJVR will provide Medicine Hat residents with an exciting FM station whose unduplicated classic rock format will bring significant musical and spoken word programming diversity and added listener choice to the local radio market.

767 In keeping with Medicine Hat's reputation as a community of choice, relative to the quality of life, economic opportunities, business growth, and social support that it affords its residents, Classic Rock 102 will provide a further important element of choice, namely a local radio service dedicated to fulfilling the needs and preferences of the area's underserved 25 to 54‑year‑old listening public.

768 Despite the fact that the city of Medicine Hat has a growing population in excess of 56,000 persons, and overall 170,000 within its trading area, residents are very limited in their choice of local radio offerings. Currently, Medicine Hat is served by three private FM radio stations, two of which are owned by the Jim Pattison Broadcast Group.

769 Approval of CJVR's proposed Classic 102 programming undertaking will establish competitive balance within Medicine Hat's local radio spectrum by providing, among other important elements, an alternative editorial perspective. Beyond adding programming diversity, listener choice, competitive balance, and a distinct news voice, approval of Classic 102 will increase ownership diversity within Medicine Hat's private radio sector.

770 The addition of Alberta's Fabro family to Medicine Hat's radio ownership ranks will create a healthy competition between two independent western Canadian broadcasters in an underserved market with a rapidly growing economy and sufficient advertising revenue to sustain new and existing FM undertakings.

771 CJVR has strived over the past 15 years under the Fabro family's ownership. Since acquiring CJVR in 1991, they have contributed stability and business acumen, along with strong financial and moral support to our management and staff.

772 If Classic 102 is approved, CJVR will bring to Medicine Hat that same commitment to excellence, broadcast professionalism, and dedication to local community service that has been our trademark in serving the needs of our listeners over the past four decades.

773 MR. FABRO: Madam Chair, when CJVR appeared before the Commission this past June at Edmonton, we had just received approval to acquire the shares of 1097282 Alberta Limited, licencee of CIXM Whitecourt, Alberta, whose authority as originally granted, had not been implemented.

774 At the Edmonton hearing CJVR gave the Commission its undertaking to have CIXM FM on air and serving the listening needs of Whitecourt residents by mid‑September 2006. I'm pleased to advise the Commission today that CIXM was successfully launched in mid‑September, and the response over the past 45 days from the residents and business community in Whitecourt and area has been nothing less than spectacular.

775 Having established CIXM, our earlier proposals for Grande Prairie and Fort McMurray, coupled with this application for Medicine Hat, are vital to CJVR's strategic broadcast plan to increase its critical mass in Alberta.

776 I think it is fair to say that Medicine Hat and our Grande Prairie and Fort McMurray initiatives are as important to the stability of CIXM Whitecourt, as Saskatoon and Regina are to the continued viability of CKJH‑AM and CJVR‑FM Melfort.

777 CJVR must grow its critical mass by expanding its radio operations in both Alberta and Saskatchewan while such opportunities for growth still exist.

778 MR. GEMMELL: Madam Chair and Commissioners, in response to the call for applications to serve Medicine Hat, CJVR engaged Insightrix Research Services of Saskatoon to conduct a consumer demand study to assess the market's potential for a new FM station and to identify service voids relative to musical and spoken word programming.

779 Among its many significant findings, the IRS survey underlines strong listener need and preference for a greater choice in music and a more focused approach to news and informational programming, specific to Medicine Hat.

780 As noted earlier, radio listeners in Medicine Hat have limited musical options to choose from. Essentially, CFMY's hot AC format skews towards the younger 18 to 24 demographic, while CHAT's country music format is more attractive to the older 45 to 64‑year‑old listener. And CJLT's contemporary Christian music format attracts a limited audience of all age groups.

781 Lost in the middle are the 25 to 54‑year‑olds, and, in particular, those 25 to 44‑years‑old who tune to distant stations, satellite radio, and other audio options to source their preference for classic rock.

782 The IRS survey indicates that 83 percent of respondents aged 35 to 44, 78 percent of those 25 to 34, and 63 percent of those aged 45 to 54 say they would spend more time listening to the radio if they had access to a local classic rock station.

783 Further to the IRS survey results in relation to listener demand for a local classic rock station, CJVR was moved by the heartfelt comments articulated by many Medicine Hat residents in their letters and e‑mails filed with the Commission in support of our application.

784 The following examples are representatives of the many comments, which captured the listener frustration and need for a local classic rock station.

785 Ben Wenzel states in part: Our current stations play country and young adult music leaving all us baby boomers, who grew up with rock music, without a listening choice.

786 Angela Pederson comments in part: I'm only 23, and I grew up listening to all my parents' favourite rock classics, and I think it would be great and well‑received.

787 Art Railton states: I believe there is tremendous support for this format, and it will bring people back to local radio rather than listening to Sirius or XM Satellite Radion. Me for one.

788 MR. SINGER: Madam Chair, CJVR, in programming its proposed new FM station musically will specialize in playing classic rock including milestone rock albums. The playlist will feature music by artists such as Tom Petty, Pink Floyd, Santana, Bryan Adams, The Eagles, The Rolling Stones, The Guess Who, Neil Young, The Beatles, Tragically Hip, and Streetheart, to name but a few. We'd like to provide you with a sense of how Classic 102 will sound and feel musically with the following montage.

‑‑‑ Audio Clip / Clip audio

789 MR. SINGER: CJVR, in bringing fresh musical diversity to Medicine Hat, will compliment rather than compete with existing music formats.

790 Classic 102 will further enhance that diversity through its in‑studio production of two special musical programs. In this regard, CJVR will produce a 20‑minute program, Canadians On Track, that will run weekdays at 3 p.m. Four Canadian rock artists will be featured daily in five‑minute segments in which each artist will be profiled and their music played.

791 The second program, Alberta Rocks, a 60‑minute weekly special that will run in prime time on Saturday from eight to 9 p.m.

792 As such, CJVR will aggressively seek out new and emerging Alberta artists and showcase their talent on that program. I would add that providing such windows of opportunity for established and emerging talent in prime time, like our commitment to 40‑percent Canadian content, is integral to CJVR's overall approach to Canadian talent development.

793 MR. GEMMELL: Madam Chair and Commissioners, among the key findings of the IRS study is the fact that nearly 87 percent of respondents on hearing a description of the proposed FM's musical and spoken word programming stated they were very or somewhat likely to listen to the station.

794 On the basis of gender, 94 percent of males and 81 percent of females said they were very or somewhat likely to listen.

795 A further breakdown by age group indicates that 92 percent of respondents aged 35 to 44 are very or somewhat likely to listen to the station, followed by 88 percent of those aged 25 to 34 and 83 percent within the 45/54 age category.

796 Further to the music, respondents were near unanimous in defining their common informational needs and priorities relevant to Medicine Hat. For example, 99 percent agreed that local news and weather was a priority, while 97 percent stressed the need for ongoing information on community events and activities and regular updates on road conditions and closures.

797 In response to meeting listener needs for locally relevant news and information, CJVR will employ three full‑time news reporters. Their work will be supplemented by a network of community correspondence and resource persons from various disciplines who will work ‑‑ who will assist in compiling information to be presented in the form of special features throughout the broadcast day and on weekends.

798 With respect to newscasts, the station will present locally originated news at the top of the hour and every half hour in the mornings and again during selected hours throughout the day. Classic 102 will also broadcast news on weekends. In all, the station will provide over five hours of scheduled newscasts per week plus additional surveillance material when necessary and as it becomes available.

799 Given the importance that respondents placed on traffic and road conditions, a minimum of 12 reports will air daily between 6 a.m. and 7 p.m. The Medicine Hat area historically has experienced critical weather extremes, often causing school closures and dangerous driving conditions. At such times, Classic 102 will air more frequent weather bulletins, engage the use of weather watchers, and bring in additional people to staff the snow desk and ensure locals are frequently updated on school closings and school bus cancellations.

800 MR. SINGER: Madam Chair, in 40 years of broadcasting to both urban and rural communities, CJVR has consistently provided its listeners with spoken word initiatives that focus on where they live and on those elements that influence and shape their daily lives and activities and impact on their communities.

801 As such, CJVR has devised an inclusive broadcast plan for Classic 102 that enables it to keep a finger on the pulse of daily events and activities occurring within Medicine Hat and surrounding communities.

802 This will be achieved in a number of ways, including the recruitment of a network of community correspondents who will be responsible for regularly providing Classic 102 with news and information specific to their communities.

803 These 90‑second reports from our community correspondents, known as Community Connections, will be featured four times daily as part of Classic 102's regular program schedule.

804 Information on current and upcoming events and activities within the coverage area will be highlighted every hour by Classic 102's Culturally Speaking information snippets.

805 A further exciting daily initiative, Live from the Esplanade will feature a midday arts and entertainment report from the Esplanade Arts and Heritage Centre, which brings together Medicine Hat's museum, archives and art gallery, performing arts theater, and discovery centre under one roof.

806 As well, Classic 102 will produce the 60‑minute news magazine show, a community perspective, which will run Sunday at 10 a.m. The program will initially focus on youth issues and activities, the area's diverse business sector, Medicine Hat's growing ethnicity, and an omnibus component that will focus on whatever is topical in the area from week to week.

807 In keeping with CJVR's deep‑rooted sense of community, Classic 102, through its newscasts and many special programs will ensure that the cultural diversity within each community served is truly reflected.

808 A further prime source for exposing and reflecting the area's cultural diversity will be realized through the collection of stories, folklore, and other such materials by groups and individuals who will transform them into vignettes. These many stories, in turn, will be featured throughout Classic 102's daily program schedule.

809 MR. FABRO: Madam Chair and Commissioners, CJVR brings to Medicine Hat a proud legacy of excellence, achievement, and commitment to the development of Canadian talent.

810 As such, CJVR has been recognized for its efforts six years in succession at the national level, and 11 years running at the provincial level by the Canadian and Saskatchewan Country Music Associations respectively.

811 In planning our strategy for Medicine Hat, we opted to apply a combined approach, which incorporates an on‑air exposure of artists' music and financial support through a series of direct spending initiatives.

812 While cash dollars are obviously important, hard air‑time currency and on‑air promotion is tremendously valuable to new and emerging artists who need the exposure and the public recognition to advance their musical careers.

813 With respect to direct expenditures, Classic 102 has committed to a minimum of $40,000 per year or $280,000 over the licence term on its Canadian talent development initiatives, which include 21,000 for each of the CAB/FACTOR Talent Fund, broadcast journalism scholarships, music scholarships, $42,000 for Alberta Rocks Boot Camp, $175,000 for opening acts.

814 Further to the $280,000 in direct expenditures, CJVR is committing to a minimum of 1.225 million over seven years for indirect on‑air expenditures.

815 CJVR is excited by the synergistic values created for talent development initiatives when direct and indirect expenditure allocations are combined to maximize their total effectiveness.

816 MR. GEMMELL: Madam Chair, a recent episode of CBC's television program, Venture, described Medicine Hat as being about "as close to economic heaven as it gets in Canada." Venture's portrayal of Medicine Hat, when coupled with Mayor Garth Vallely's description of its economy as "firing on all cylinders" aptly captures the reality of the dramatic growth and development that is taking place.

817 In examining some of the local market's key economic indicators, it is estimated that Medicine Hat's 2005 population of more than 56,000 will grow by almost 22 percent by 2012.

818 The retail sales in 2003 ‑‑ in 2005 were $1.053 billion, some 47 percent above the national average.

819 The FP market report estimates they will escalate by over 11 percent to 1.171 billion in 2007 and a further 17.3 percent increase to 1.373 billion by 2010.

820 With its natural resource‑based economy, growing population, expanding retail core, and inextricable linkage to Alberta's stunning economic growth, Medicine Hat's ability to sustain existing local radio stations and accommodate a much needed new FM service is, from CJVR's perspective, beyond doubt.

2005 retail sales are estimated at $1.053 billion. Advertising expenditures represent four percent of retail sales or $42 million available.

821 CJVR's market analysis shows 14 percent of the advertising dollars are available for radio or about $6 million. We estimate the current operators take about $4 million, leaving $2 million on the table for a new operator.

822 CJVR budgeted $1.35 million in first‑year revenue.

823 MR. SINGER: Madam Chair, the following are but some of the many important considerations that my colleagues and I feel warrant approval of our application for a classic rock FM station on frequency 102.1.

824 Classic 102's unduplicated music format will add significant programming diversity and listener choice to Medicine Hat's local radio market.

825 Through Classic 102's unique music format and locally relevant spoken word initiatives, many of the unfulfilled listener needs and preferences of Medicine Hat's 25 to 54 underserved demographic will be met.

826 The new classic rock station will help produce out‑of‑market tuning by repatriating listeners and drawing former listeners away from alternative audio options. This will result in new listeners and increased hours of tuning to local radio, without impacting on existing stations.

827 The listening public's desire for more choice, coupled with the commercial appeal of its classic rock format will result in new radio dollars being added to Medicine Hat's market with minimal impact on existing stations.

828 Approval of a new classic rock station will provide local and national advertisers with a more cost‑efficient advertising vehicle to target and serve Medicine Hat's maturing 25 to 54 adult population.

829 The addition of Classic 102 will establish competitive balance within the Medicine Hat radio market by providing, among other important elements, a distinct alternative news voice and increased ownership diversity.

830 CJVR, if approved, will provide a minimum of $280,000 in direct spending on Canadian talent development initiatives ‑‑ development initiatives over the term of the licence, as well as 1.225 million budget for indirect on‑air expenditures.

831 Classic 102 will maximize the utilization of the 102.1 frequency by extending its unduplicated classic rock format to serve the largely underserved 25 to 54 listenership spectrum within the Medicine Hat area.

832 Approval of Classic 102 will result in the creation of 16 full‑time and two part‑time employment equity opportunities within Medicine Hat's radio market.

833 Classic 102, through its daily musical and spoken word programming, will reflect the growing cultural diversity within Medicine Hat's broader community.

834 MR. FABRO: Madam Chair and Commissioners, my family believes that it is important to the public interest and to the ownership structure of Canada's private broadcasting system that voices of independent broadcasters be encouraged and maintained.

835 Equally, it is our view that motivated independent broadcasters, like CJVR, have an important and continuing role to play within western Canada's commercial radio sector at a time when ownership is becoming increasingly concentrated.

836 We are proud of what we've accomplished in Melfort, both in terms of quality of service that our radio stations provide to over 150,000 residents of over 100 communities throughout northeast Saskatchewan and the success that CJVR has experienced in our Canadian talent development endeavours.

837 Last month, CJVR had the privilege of launching CIXM Whitecourt. It is our hope that the Whitecourt launch represents the first of several FM stations that we'll have the honour of bringing to air in the coming months.

838 On behalf of my colleagues, I wish to thank the Commission for this opportunity to appear, and we respectfully ask for your approval of this application, which is central to CJVR's strategic broadcast plan.

839 We will be pleased to answer any questions that the panel may have. Thank you.

840 THE CHAIRPERSON: Thank you, Mr. Fabro. Should I address Mr. Singer with my questions, and then he can send them wherever he'd like.

841 I'm just going to be talking about programming. And you've said classic rock again here today, but in your Supplementary Brief at page 7, you actually talk about classic hits. That was a typo?

842 MR. SINGER: Yes, that would be, I apologize for that.

843 THE CHAIRPERSON: Okay. And in terms of the mix that you're going to be using for classic rock because there's one that sort of skews older, and I must say, from the sounds of it, that one ‑‑ the clip that you provided us with had me liking it a lot better than I think my nephew would. Are you essentially trying to skew more to the 45‑plus or ‑‑ or where are you trying to skew that classic rock? Mr. Singer...?

844 MR. SINGER: I'll let Dean Sinclair speak to that point, Madam chair.

845 MR. SINCLAIR: Thank you, Ken.

846 Thank you, Madam Chair. The bullet for the station is essentially 35 to 44. The research in the market will show the interest for the format was 25 to 44, and a big part of that has to do with the absence of the format, in general, in the market in terms of rock music.

847 In the mixture, we tried to give you an example of how the station would sound. It is, as you mentioned earlier, a true classic rock station, and where it comes from, it draws music from the '60s, '70s, and predominantly '80s, so there's a real mixture of product in there.

848 The format itself is really artist‑driven. It's not a hit‑driven station unlike what a classic hits station would be. And, as such, with artists, it gives us a great example ‑‑ a great chance to play a lot of product from those artists over those decades. It's a deep‑track station, album‑oriented.

849 THE CHAIRPERSON: And what about the new music artists that would be on this ‑‑ on this ‑‑ on your format, would it be the emerging AOR or the new alternative rock, or modern? Mr. Sinclair...?

850 MR. SINCLAIR: Thank you, Madam Chair. I don't think we would close the door to anybody wanting to get airtime, but, essentially, we would ‑‑ there would be a combination of rock music, whatever form that may take, broad‑based rock, and there could be some pop artists that cross over as well too, but, essentially, we would want to stay within the rock genre.

851 THE CHAIRPERSON: Can you ‑‑ and I'm going to go directly to Mr. Sinclair, Mr. Singer. Can you tell me what is different in your proposal as to format between yours and Harvard's, yours and Newcap's, yours and Vista, yours and Pat Lough, and the classic modern rock as proposed by Mr. Hildebrand?

852 MR. SINCLAIR: Absolutely. Thank you, Madam Chair. First of all, as we just talked about, the essence of this station is pure classic rock, so, predominantly, it's an older‑based station, '60s, '70s, '80s. It may creep up into the '90s. The good thing about the format is that it will add newer old music each year as, of course, the audience ages.

853 Just based on my interpretation of the other applications, what I see with Newcap, as Mr. Maheu said this morning, a combination of blended rock with classic rock and classic hits. The classic hits format is a wide interpretive format across Canada. But, essentially, by nature, classic hits is gold for top 40 stations from years ago, and top 40, by nature, played music from country, rock, and pop, but predominantly hit‑driven. So a classic hit station is an older version of that. I disagree with comments made earlier that it crosses over a lot with classic rock because it doesn't. It's more pop‑driven, so there are very big distinct differences between ‑‑ there's a little bit of overlap in terms of artists, but not in terms of the songs. So in their case, it would add that component of more classic hits music.

854 With respect, I believe, to the Vista application, Mr. Larsen's, the way that I read it, it does mention 35‑54 as a demo, but, again, focuses predominantly on '80s music. So in this case, you'd be missing with ‑‑ compared to ours, the '60s and the '70s music as well. I think there was a mention or a reference in there about K‑Tel albums and that, so that was more '80's‑driven.

855 With respect to Harvard's application, the demographic, as I read it, is 18‑49, so it's a bit younger. And you get that by adding in the modern and alternative formats as well. They're more new‑based, and so classic rock becomes maybe a bit of a spice format instead of a mainstream format in that particular application. We may call that a barbecue format.

856 In Rogers' ‑‑ Rogers', what I read was broad‑based rock, which was 25‑54, and it's probably closer in some ways to what we would do, although steps up a little more into the '90s music, so it's a little more current‑based. In other words, it would lop of anything prior to 1970 and add on things plus 1990. So there's two decades of difference between that application and the one that we're proposing.

857 Mr. Lough's application, again, not dissimilar to what I see with Newcap in where it blends hit music as well, the classic hits and also some alternative. I think there's a reference in there of going after 18 to 34 audience. That becomes a very broad radio station, as well, so ‑‑ they've also talked about playing some oldies, I believe, Sunday morning or something like that, so, again, that's astray from the format. I hope that helps.

858 THE CHAIRPERSON: And is there any ‑‑ can you distinguish yourselves from what Mr. Hildebrand described his format as today?

859 MR. SINGER: I'm sorry, I forgot about that. That was a new entry for us today to get down. It appears to us that it would lean more newer based. I have to tell you, I didn't quite get a grasp on the format entirely. It's sort of ‑‑ I don't think it would fall under our definition of popular music. It's certainly music out today, but popular, generally, is pop music, so they talked about more rock flavour. It seemed to be more current or newer‑based than it did on pure classic rock.

860 THE CHAIRPERSON: Okay. Spoken word. Now, I think, number one, I'm going to ask you if you can, within a week of today's hearing, provide us with the equivalent of Newcap's chart so that we have it in clear ‑‑ sort of an apples‑to‑apples comparison of spoken word programming, non‑news, and feature programming in minutes and hours. Could we have that, Mr. Singer?

861 MR. SINGER: No, problem, Madam Chair, we'll file that with you possibly even today.

‑‑‑ Undertaking / Engagement

862 THE CHAIRPERSON: Okay. Because I still was having problems counting minutes and hours when we were ‑‑ when you were talking today, but I want to start off with the inclusive broadcasting plan, and you referred to it again, and this inclusive plan seems to be largely based on volunteers. Is that the concept?

863 MR. SINGER: We have a ‑‑ I would say not primarily on volunteers, but it certainly would be an ingredient. Our plan to develop a number of community correspondents is ‑‑ it's an add‑on to our news resources in terms of our news department will be a full‑service news department and with three news people in it. But the correspondents are really our connection to these communities we propose to serve. These would be people that are residents of smaller communities and of Medicine Hat that are largely the ‑‑ involved with a lot of the events and organizations that are going on in those communities. We ‑‑ we, certainly, recognize that small communities ‑‑ I happen to live in one in Melfort, and it's difficult not to become very involved in just about anything that goes on in that community. So if you want to know about what's going on, talk to somebody that's on a committee or whatever. So it's our feeling that these correspondents would certainly be a go‑to for us to talk to them about events, functions that are planned for the area, and also to provide us with any information of news events in those communities, as well as ‑‑ but our news people will be digging those stories in addition to that.

864 THE CHAIRPERSON: So aside from the community volunteers, what else is involved in your inclusive broadcast plan?

865 MR. SINGER: Would you like me to go through the list one‑by‑one?

866 THE CHAIRPERSON: I'd like you to give me ‑‑ and I don't need descriptors, I just need to understand the skeleton of this plan?

867 MR. SINGER: Mmhmm, okay.

868 THE CHAIRPERSON: It includes community volunteers, number one, and then are you going to go into the specific programming that you've referred to? Is that ‑‑

869 MR. SINGER: Yes, our ‑‑

870 THE CHAIRPERSON: Okay.

871 MR. SINGER: I have a list of spoken word programming initiatives that we have outlined in our Brief.

872 THE CHAIRPERSON: Yeah, and you'll give that to me in the chart. So what else, then, is the inclusive broadcast plan? You have the community volunteers, the spoken word programming. Is there anything else in this inclusive broadcast plan?

873 MR. SINGER: Well, I guess it's the sum total of our spoken word programming, which, as you mentioned, is indicated in features such as Community Connections, Culturally Speaking, our community perspective programs.

874 THE CHAIRPERSON: Okay, yes.

875 MR. SINGER: Yes.

876 THE CHAIRPERSON: And you have three people in the newsroom, a station producer, an in‑studio producer, and another person. What will that job ‑‑ what will that job be called, just reporter, I guess?

877 MR. SINGER: The news department will be a news director and reporters. The in‑studio producer is more on the commercial side ‑‑

878 THE CHAIRPERSON: Oh, on the creative stuff.

879 MR. SINGER: ‑‑ our commercial producer, yes.

880 THE CHAIRPERSON: Okay. So what I need to figure out is I am living in Suffield, and I am your community correspondent, and I want to tell you about what's going on in Suffield.

881 MR. SINGER: Mmhmm.

882 THE CHAIRPERSON: Who do I contact to relay this information?

883 MR. SINGER: Our news director would be the one that coordinates these correspondents' information.

884 THE CHAIRPERSON: Okay.

885 MR. SINGER: Now, we also have ‑‑ we'll have a website as well and an opportunity for e‑mails and listener feedback as well, but ‑‑

886 THE CHAIRPERSON: And, again, that's the responsibility of the news director?

887 MR. SINGER: Correct.

888 THE CHAIRPERSON: Okay. And I am phoning in, and I am talking about some activity, and I guess what I do is I either ‑‑ you either tape me, or you read what I say in my e‑mail?

889 MR. SINGER: Mmhmm.

890 THE CHAIRPERSON: Is that what happens in terms of these ‑‑

891 MR. SINGER: There would be ‑‑ as we develop these correspondents, our plan would be that we would have some training with them as to the type of material, the ‑‑ just, you know, the ‑‑ I guess the format of the information that we require from them, and it wouldn't always be someone out in a community picking up the phone and calling us, we may ‑‑ our news department may be alerted there's something going on at Suffield, as you pointed out, and pick up the call ‑‑ pick up the phone and talk to any number. We don't propose to have only one person there, we might have several, depending on the size of the community. But, most definitely, there would be a training and an orientation type of a process with these individuals.

892 THE CHAIRPERSON: Okay. So that's ‑‑ that was what I was headed for.

893 MR. SINGER: Mmhmm.

894 THE CHAIRPERSON: There will be a training before these people do this?

895 MR. SINGER: Yes, there would be, and we're not suggesting that they would be ‑‑ you know, have the same abilities that a trained journalist would have, but, you know, we want to hear their perspective as a resident of that community, more or less, give us the high points of this item. We may use a part of their voice clip, we may do the whole thing, but, really, it would be driven by ‑‑ more like an interview process more than develop a story and file it with us.

896 THE CHAIRPERSON: Oh, okay. So how would you select these people?

897 MR. SINGER: I think the number one thing is we would ‑‑ it doesn't take long to find out who the potential people are in these communities, as I say. And, you know, in Melfort, where we operate two radio stations, we have developed such a rapport with the over 100 communities we serve. We do know people in those communities, and they know us, and we've really developed this over the period of time that we have kind of go‑to list, and if a really bad storm strikes in a certain area, our news department has a list of people that they know live in that area that they can pick up the phone and ask them what the condition is there specifically, as opposed to assuming that it's a widespread storm or whatever. And, certainly, that's ‑‑ you know, as I say, we ‑‑ on the air, we encourage people. If you have something going on in your community, let us know. Or over the period of time, we get to know who these organizers of these various events are, and, as I say, they're from all walks of life, teachers, lawyers, doctors, homemakers, farmers. We definitely have a broad range of contacts, so ‑‑

898 THE CHAIRPERSON: So if I described this as a rolodex ‑‑

899 MR. SINGER: Mmhmm.

900 THE CHAIRPERSON:  ‑‑ in order to be able to have somebody to phone on each and every issue ‑‑

901 MR. SINGER: Mmhmm.

902 THE CHAIRPERSON: How far would I be wrong?

903 MR. SINGER: Well, for sure we would certainly keep a database of the type of that listing, but I think from the point of view of recognizing that, you know, today we talked to Mary Smith from, you know, this organization in that community. I think when others hear that, they say, hey, I've got a story to tell too, and that's been our experience. They pick up the phone, and, say, you know, we'd like to tell you about what's going on in our community as well. So it's kind of ‑‑ it starts with ‑‑

904 THE CHAIRPERSON: So it's not that they do the programming at all?

905 MR. SINGER: Oh, no, no.

906 THE CHAIRPERSON: It's that your news people do the programming ‑‑

907 MR. SINGER: Yes.

908 THE CHAIRPERSON: ‑‑ they have the list of the people and their phone numbers, and they phone them for comments, and they may or may not use them. Is that ‑‑ is that where I ‑‑

909 MR. SINGER: But at the same time, what I'm saying is I think that there's information coming to us that's unsolicited as well because there's a pride in these communities and these smaller organizations that don't have this type of local coverage. If you pick up any weekly newspaper in Saskatchewan or in Alberta to that ‑‑ as far as that goes, you'll see that kind of pride. You'll see little stories that say, gee, that's not necessarily hard news, but it certainly is something worthy of sharing with the rest of the residents in the area. And, definitely, I think the contribution to those types of stories is ‑‑ usually just starts with, gee, I better let, you know, the radio station know about this because they have this program that profiles communities and events going on. So it's ‑‑ I guess it's a step beyond just taking a fax or an e‑mail from somebody that said there is going to be this event on, and here's what's going on. We're trying to find some people that are involved in the community who can tell us their story about that event. So, I think, yes, we will call out and ask questions, but we'll also be answering the phone and the e‑mails and the fax from people that are contributing this without being solicited.

910 THE CHAIRPERSON: But at the end of the day, my concern is with who retains editorial control, and who ensures adherence to all the standards?

911 MR. SINGER: That is the responsibility of us, as broadcasters, to ‑‑

912 THE CHAIRPERSON: So in terms of your inclusive broadcast plan with these ‑‑ I'm going to call them community correspondents ‑‑

913 MR. SINGER: Mmhmm.

914 THE CHAIRPERSON: ‑‑ who is the one who retains ‑‑ what person in your chart is retaining responsibility for the control and adherence?

915 MR. SINGER: It would be the news director and his staff.

916 THE CHAIRPERSON: Okay. And what kind of qualifications would you be looking at in terms of the news director and their staff in order to ensure that there would be compliance with the standards?

917 MR. SINGER: Our news directors certainly have ‑‑ they've got to have, you know, some experience for sure, but they've been trained in their orientation to work with us. They fully understand the parameters of what we expect from our news department, and the news director recruits and develops his or her news people as well, so that training is passed on.

918 THE CHAIRPERSON: Mmhmm. You see, when I read your Brief, I thought that ‑‑ and I've been talking about the news, but I'm going to move into the longer form programming, this Culturally Speaking, and I had ‑‑ I've got to say nightmares about somebody getting on and saying something incredibly anti‑Muslim because we have a community person who, you know, strongly believes his beliefs, but that you were just going to sort of let it go.

919 MR. SINGER: No, no.

920 THE CHAIRPERSON: So Culturally Speaking will be a news gathering from these community correspondents, but then the actual production of that will be done by your news people?

921 MR. SINGER: It's not exclusive to gathering from the correspondents. Culturally Speaking is a ‑‑ it's a reflection of what's going on in our listening area. So, in some cases, we may have a correspondent, in some cases we may not. We may have picked up on something that's going on from another source.

922 THE CHAIRPERSON: But at the end of the day, my point is it's not volunteer programmed?

923 MR. SINGER: No, no, it's not.

924 THE CHAIRPERSON: Okay. And neither is your other community programming that you referred to? There was another ‑‑ Community Connections?

925 MR. SINGER: Correct.

926 THE CHAIRPERSON: That will not be ‑‑

927 MR. SINGER: It's not programmed by the correspondents, it's programmed by our news director's news team who will develop the story and the final on‑air product.

928 THE CHAIRPERSON: Okay. If I can take you to your letter of August 17, and I just needed to get ‑‑ it's answer C.

929 MR. SINGER: Concerning the hours of local programming?

930 THE CHAIRPERSON: Well, the hours of live to air. When will that 14 percent of the broadcast week be automated, as you say, or voice tracked?

931 MR. SINGER: Our proposal is Monday through Friday we will be live 6 a.m. to 10 p.m., so 10 p.m. to 6 a.m. will be the ‑‑ we'll use voice tracking.

932 THE CHAIRPERSON: So it will be two hours Monday to Friday, eight to ten, that will be voice tracked?

933 MR. SINGER: Correct ‑‑ or ten to ‑‑ I'm sorry, ten to midnight.

934 THE CHAIRPERSON: Yes, yes.

935 MR. SINGER: It's six to ten live, ten to midnight voice tracked.

936 THE CHAIRPERSON: Correct, yes. At page 62 of your Supplementary Brief, you were talking about critical weather extremes, and you don't have to go to that. Is there anybody in the station ‑‑ would there be anybody in the station 24 hours a day?

937 MR. SINGER: No, there would not, but what we have in place in our present newsrooms is a plan of when such weather strikes, we have got a plan that we bring people in immediately if it is a time when we don't have someone in the newsroom, and that includes not just news staff, it includes extra programming staff. Really at the ‑‑ we have a ‑‑ I guess it's an emergency weather plan more or less, and we call it a snow desk plan in the winter months, but with the way the weather can be unpredictable at other times of the year, it would apply there as well.

938 THE CHAIRPERSON: Mmhmm. So then you talk about an emergency advisory service at page 70.

939 MR. SINGER: Mmhmm.

940 THE CHAIRPERSON: And if I can refer to it, you talk about it ‑‑ well, what I want to figure out is how it works. Page 70 at the top whereby, "Its broadcasting facilities will, in times of emergency, be available 24/7 to all levels of government and attendant agencies when it may be critical." Do you have a protocol for this?

941 MR. SINGER: Our intention here is that given a licence, an opportunity to operate in a new community, is ‑‑ we would work immediately to coordinate with the emergency measures organizations, amateur radio operators clubs, kind of plug into the whole infrastructure of what a community does when there is a disaster of any sort, and just make our radio station ‑‑ our transmitter available to them in terms of where can we play a role, and, you know, to what degree. If it means dropping our programming totally and just carrying public service announcements of what to do in an emergency situation, that we would ‑‑ we would spearhead the coordination of those types of measures, and, certainly, I respect that there's a lot of communities that may have this in place already, but as a broadcasting outlet, we would just like to make it very clear that we're there to serve and play our role in, you know, getting the message out to the people in our listening area.

942 THE CHAIRPERSON: So you don't necessarily have a protocol established ‑‑

943 MR. SINGER: Not a ‑‑

944 THE CHAIRPERSON: ‑‑ say, within your present licence ‑‑ with your present licencees?

945 MR. SINGER: No, we do not.

946 THE CHAIRPERSON: No? Because I can see, frankly, the Boy Scouts, you know, I mean, if you take it to sort of the extreme, wanting to take over your airwaves and, you know, sort of Captain Smith, you know, wants to make sure everybody should be looking out for, you know, Jimmy Jones because he threw a rock through a window. And so I guess my concern is with having a protocol that sort of tightly retains the licencee's control over the station.

947 MR. SINGER: The ‑‑ this would be developed very carefully with the authorities. I mean, the police, obviously ‑‑ we're talking about a major emergency situation here.

948 THE CHAIRPERSON: How do you define that?

949 MR. SINGER: Well, and that, again, is ‑‑ it would be a part of our plan to develop ‑‑

950 THE CHAIRPERSON: Should it be harm to life, or should it be harm to property?

951 MR. SINGER: Safety. Harm to ‑‑ you know, safety issues, certainly health issues, that type of thing. If ‑‑

952 THE CHAIRPERSON: Harm to property? A tornado that only harms property?

953 MR. SINGER: Well, certainly. I would consider that to be a role where we, as broadcasters, could play a very important role in helping people cope with that.

954 THE CHAIRPERSON: Mmhmm. Now, how many programmers are you planning on hiring?

955 MR. SINGER: How many ‑‑

956 THE CHAIRPERSON: Programmers?

957 MR. SINGER: ‑‑ programmers? We will have one program director who will also be our morning host. You're talking about a program director?

958 THE CHAIRPERSON: No, I'm talking about programmers, people in the cage from 6 a.m. until ‑‑

959 MR. SINGER: Oh, oh, on‑air staff?

960 THE CHAIRPERSON: ‑‑ 10 p.m., yes.

961 MR. SINGER: I'll let Linda Rheaume run you through our staff lineup because Linda has a chart on it.

962 THE CHAIRPERSON: Okay, good enough.

963 MS RHEAUME: Thank you, Ken.

964 Madam Chair, our plan is to have a programming department consisting of, as Ken has already said a news team with one news director and two news ‑‑ sports reporters. The on‑air team consisting of a program director, who would be the a.m. announcer, a midday announcer, a p.m. announcer, and two swing announcers, one being a part‑time. Those would be actual on‑air announcers.

965 THE CHAIRPERSON: Okay, thank you. I want to go back to these volunteers for a moment. I guess I'm trying to think. It appears ‑‑ what size is Melville [sic]?

966 MR. SINGER: Melfort?

967 THE CHAIRPERSON: Melfort, yes, sorry.

968 MR. SINGER: Melfort is just under 6,000.

969 THE CHAIRPERSON: Yes. I ask myself if the larger the community, the less available sort of volunteers would be ‑‑

970 MR. SINGER: Mmhmm.

971 THE CHAIRPERSON:  ‑‑ because they get involved in different things, and, certainly, in a ‑‑ in a building community, you know, I'm sure the unemployment or the employment rate or the unemployment rate in Lethbridge is ‑‑ or in Medicine Hat is very low. So I ask myself, if the kind of smaller town, prairie community volunteer concept would be able to graft itself on the Hat in terms of sort of a different dynamic there?

972 MR. SINGER: I think that there ‑‑ you know, there may be ‑‑ in a younger demographic, there might be a little different dynamic. Our former mayor has just moved to Medicine Hat. I think he'd make a great correspondent for us because he certainly knows community life, but I think you've got to look within a community of Medicine Hat as pockets of smaller communities, not the big picture. You know, we're talking about organizations here, I guess, if you'd want to identify them. I mean, you might be the head of the Kinsmen organization in Medicine Hat. Well, you know, if there's Kinsmen activities and things going on, well, that's our correspondent for the Kinsmen community. And, you know, within Medicine Hat, I think there's quite a few like that. But I'm talking about, as well, beyond Medicine Hat are the small, you know, communities of several hundred, not several thousand people. And, again, it's something that we feel that with promotion, some of those are going to come out of the woodwork and say, hey, count me in, I'd like to share some information about what we're doing.

973 THE CHAIRPERSON: Mmhmm, okay. Are you planning on any programming synergies between your existing stations with this proposed station?

974 MR. SINGER: Yes, we most definitely are, and before ‑‑ I'll let Linda speak to the actual positions, but one of the ‑‑ the key synergies to us is we would have some cross‑training opportunities here between our other radio stations.

975 THE CHAIRPERSON: The question was programming synergies.

976 MR. SINGER: Programming synergies, we do have a number of positions. I'll let Linda speak to those.

977 THE CHAIRPERSON: Okay. I was just talking about synergies in programming.

978 MR. SINGER: Oh, oh, the actual format? I'm sorry.

979 THE CHAIRPERSON: Programming synergies, please.

980 MR. SINGER: I don't ‑‑ like, we're ‑‑ we don't currently operate a classic rock format on any of our stations, so as far as musical programming, no. The closest thing to it would be our format in Melfort on our oldies AM station. I suppose there's some degree of sharing there, but from the point of view of, I guess, production for our programming, the production elements of our programming, yes, there would be some synergies that ‑‑ for example, we might produce a promo for Medicine Hat in our Melfort production studio and so on.

981 THE CHAIRPERSON: Voicing?

982 MR. SINGER: Yes. But actual programming elements, no. The news direction and I guess the style of news we do, there's some synergies there from a news point of view in terms of sharing stories between our ‑‑ especially our new Whitecourt station and Medicine Hat. There would be some synergies in an exchange of stories that are Alberta, and where Saskatchewan and Alberta stories could be tied together as well, there would be some synergies in that area.

983 THE CHAIRPERSON: Now, Ms Rheaume, the operating synergies.

984 MS RHEAUME: Thank you. With sharing stations, there are certain positions that would be shared, especially the admin side, the traffic, our two ‑‑ and ones that will for sure be shared between the two stations ‑‑ or three stations. With Whitecourt, we already do that. Our engineer will share responsibilities with our Melfort and Whitecourt and, hopefully, Medicine Hat. Other synergies that are ‑‑ we have already used between Melfort and Whitecourt is our music director programming and helping both with the country music format. That may not be as available with the Medicine Hat synergy that way, but we ‑‑ you know, we see it between Melfort and Whitecourt. I believe, you know, those are the positions where we see, and then as Ken had mentioned as well, the training of our people, we, you know, sent ‑‑ we use those synergies. When we started Whitecourt, we sent the news director to Whitecourt to help train, you know, to fit into our style of radio. As well as our producer went there, and our promotions manager went there to help train those people. So I feel we would probably do that the same way in Medicine Hat.

985 THE CHAIRPERSON: Yes. The Canadian content. It appears that in your application and in your Supplementary Brief you did not refer to the fact that you would be exceeding the regulatory requirement of Canadian content. And, apparently, now, and I noticed, you have said that you would adhere to a COL for 40 percent?

986 MR. SINGER: Correct.

987 THE CHAIRPERSON: Normally in competing proceedings, we're not open to people revising their commitments, especially something like this, at the hearing because we end up in a bidding war. Would you care to comment on this?

988 MR. SINGER: I have to be honest with you. We, Madam Chair, all along, had the plan to be at 40 percent, and in preparing for this hearing, we recognized that in no place had we written that down on the actual application. It ‑‑ it was added to our presentation today, most definitely. I was certain we had made an indication of that in our application, but I ‑‑ somebody else discovered it. Nobody has pointed it out to me yet, but we have not found it in there.

989 THE CHAIRPERSON: How would you feel if this happened to another party and you were sitting in the back of the room ‑‑

990 MR. SINGER: Mmhmm. Well ‑‑

991 THE CHAIRPERSON: ‑‑ and you found out somebody was upping their Canadian content out of something that had not been ‑‑ how would you feel ‑‑

992 MR. SINGER: Well ‑‑

993 THE CHAIRPERSON: ‑‑ if you were not there, but one of the other applicants?

994 MR. SINGER: Well, I mean, I don't know. I don't look at it as a great advantage. If we ‑‑ I guess I will take the Commission's advisement on that. If we must be at 35 percent rather than 40 percent, then fine, but it wasn't our intention to use that as a ‑‑ as any lever to give us an unfair advantage here. 40 percent is what we ‑‑ we submitted with our newest radio station, and we don't ‑‑ our history in Melfort has been we are long ‑‑ well over the regulated level of content, so ‑‑

995 THE CHAIRPERSON: But this is a competitive hearing.

996 MR. SINGER: Yes, I understand that.

997 THE CHAIRPERSON: And my question was, how would you feel if you were one of the competitors? Would you feel it would be fair that we would accept this?

998 MR. SINGER: I would have to say that I wouldn't consider it to be a real concern to me in terms of ‑‑

999 THE CHAIRPERSON: Okay, thank you, Mr. Singer.

1000 MR. SINGER: ‑‑ the playing ‑‑ even playing field.

1001 THE CHAIRPERSON: On your CTD, the Alberta Rocks Boot Camp, you're going to be spending $6,000 a year with 4,500 to industry professionals for it looks like a two‑day skill development kind of thing. Are you thinking about using a particular theme throughout the whole two days or doing a more generalist approach for the two days?

1002 MR. SINGER: I think there would be several areas of opportunity for the attendees to that. We might bring a ‑‑ somebody like a Randy Bachman to this who could speak ‑‑ you take a Canadian performer, such as Randy, who has a great ability as a recording artist, a writer, a touring artist, a producer. We see this as an opportunity to bring some industry specialists together and have musicians and performers have dialogue with them on whatever topics. Certainly there ‑‑ if you were developing new artists, planning the production of a new CD, or your CD is done and you need ‑‑ where do I go from here? I'm an independent artist, how would I ‑‑ how would I take this to the next level? We see this as an opportunity to deal with ‑‑ more with the business side of the music industry, and, certainly, beyond chord structures and great arrangements, it's ‑‑ but at the same time, you're going to have a gathering of musicians, so I think there's going to be a lot of sharing of information and development ideas.

1003 THE CHAIRPERSON: So I'm not hearing that it's like a seminar kind of style. Is it ‑‑

1004 MR. SINGER: Yeah, it would be structured as, like, various workshops with a panel or an individual.

1005 THE CHAIRPERSON: Okay. And I see you saying you'd like the Randy Bachmans of the world to come. Do you think they'd come for 4,500 for two days?

1006 MR. SINGER: I used Randy Bachman as an example, I guess. I don't know that for sure, but I do think that there are ‑‑ there is a pool of talented people out there who would ‑‑ who have a passion for the music industry. We see them all the time on the country music side at ‑‑ if you've ever attended a country music awards weekend, the sharing of information that goes on there is overwhelming between the musicians and established artists and emerging artists.

1007 THE CHAIRPERSON: Okay. Moving on to the opening act, and I see that is 25,000 a year. How many artists a year would you think that would hire?

1008 MR. SINGER: I think that that would be difficult for me to put a number on that. I would say that that is ‑‑ we will do everything we can to make that affect as many artists as possible. There's going to be different situations and different expectations in terms of remuneration for different size acts, but our intent here is to flow a hundred percent of that 25,000 directly to those performers. So our goal is to do whatever we can to give them some exposure in front of larger audiences, and if it's ‑‑ if it's ten acts at 2,500, great. We certainly would think that would do more than saying ‑‑ you know, paying two acts $12,500 kind of a thing.

1009 THE CHAIRPERSON: Mmhmm. Would you agree to a COL that you would pay $700,000 in CTD, payable in the sum of $100,000 per year over seven consecutive years? The concept is ‑‑

1010 MR. SINGER: I'm sorry, I don't understand your question, Madam Chair.

1011 THE CHAIRPERSON: ‑‑ the concept is that often, people begin operating a year or so after the licence is out.

1012 MR. SINGER: Yes.

1013 THE CHAIRPERSON: And there is CTD left owing that goes into the renewal period.

1014 MR. SINGER: Yes, yes.

1015 THE CHAIRPERSON: So that the concept is that you would agree to a COL that it would go for a period of seven consecutive years from commencement?

1016 MR. SINGER: I think I'll defer that to Gene.

1017 MR. FABRO: Well, yes, I think you have the number wrong. We didn't commit 700,000.

1018 THE CHAIRPERSON: You're right, I'm sorry, 280,000.

1019 MR. FABRO: Yes, yes. Well, we would commit 280 over the licence period or ‑‑

1020 THE CHAIRPERSON: Yeah, over ‑‑ yes.

1021 MR. FABRO: Okay.

1022 THE CHAIRPERSON: I'm sorry.

1023 MR. FABRO: Yes, that's fine.

1024 THE CHAIRPERSON: 700,000, that's a ‑‑ now, on page 74 of your Brief you talk about FACTOR and giving money to FACTOR, and you say, "We will do so only with the understanding that every dollar committed will be allocated and spent on local artists within the Medicine Hat area." Do you have a letter from FACTOR saying that?

1025 MR. SINGER: We do not have that, but we have had discussions with FACTOR saying that is a workable situation, so that's our understanding as we approach this opportunity.

1026 THE CHAIRPERSON: And did you discuss with FACTOR whether those monies would be incremental to those that would have otherwise been spent in the Alberta or Medicine Hat area?

1027 MR. SINGER: That is our intention, that we would want them to be incremental. They shouldn't replace money that was there.

1028 THE CHAIRPERSON: And are you aware that with FACTOR if the money allocated in any particular province is not, in fact, spent in that particular year, it rolls over and goes into the general fund?

1029 MR. SINGER: We would do whatever we can to make sure that that is spent on an annual basis. That is our commitment to cutting that cheque to them so ‑‑

1030 THE CHAIRPERSON: Can you provide us with a letter from FACTOR referring to the three things: One, the commitment to going towards Medicine Hat artists; two, that it is incremental to that otherwise being spent; and, three, whether or not there will be a roll over into the general fund if the money is not spent?

1031 MR. SINGER: We can ‑‑ we'd be happy to do that.

1032 THE CHAIRPERSON: And you can provide us with that within a week?

1033 MR. SINGER: Yes, I will.

1034 THE CHAIRPERSON: Thank you.

‑‑‑ Undertaking / Engagement

1035 THE CHAIRPERSON: How many new stations do you think Medicine Hat can accommodate?

1036 MR. SINGER: The million‑dollar question. Our business plan, too, is based on, you know, adding one more radio station to the marketplace, but as the research has been amplified in the applications heard so far, we continue to see more and more growth in the market. We're more encouraged today about Medicine Hat than we were when we filed.

1037 I'll let Kevin Gemmell speak to that, just in terms of ‑‑ I guess the short answer is, yes, we believe there is room for more than one player, based on our findings in terms of the increases in revenue, and if you'd like more on that, I'll ask Kevin to speak to that.

1038 MR. GEMMELL: Thanks, Ken.

1039 And, Madam Chair, I'll talk largely towards the Financial Post estimated retail sales. As all of the worthy applicants ‑‑ those that quoted a number they used the 2005 number of $1.053 billion in retail sales. It was expected by 2007 to go into the $1.1 billion range, in fact, the 2006 estimate is already at 1.288 billion. When we look ahead to ‑‑ two years to 2008, essentially, any one or number of stations that are approved for Medicine Hat probably won't sign on until about a year from now or later. If you use the 2008 year, the estimated retail sales are to be $1.454 billion. Using the calculations that we quoted earlier, four percent of the retail sales determines the total amount of advertising dollars available in the market, and then using about 14 percent as radio share, there's going to be about $8 million available in the Medicine Hat market for the 2008 year, which is lots of room to operate profitably.

1040 THE CHAIRPERSON: And because we don't regulate formats, what would you do if we licenced yourselves and any one of the others that I previously talked with Mr. Sinclair about?

1041 MR. SINGER: I'll answer that. Madam Chair, I think we'd do everything in our power to be the first one on the air.

1042 THE CHAIRPERSON: To get there first?

1043 MR. SINGER: Secondly, if we weren't the first one on the air, then we would, as we did in preparing for this market hearing, we would do further research and find out what the niche is to us. We're confident that there is a very strong demand in the market for some other choices, be it one or two more choices. I don't think Medicine Hat's growth is going to slow down by the time a successful applicant or applicants gets their station on the air, and, definitely, we feel that there is room in the market to find a niche that would allow us to be profitable.

1044 THE CHAIRPERSON: Thank you.

1045 Vice‑Chair Arpin...?

1046 VICE‑CHAIR ARPIN: Thank you, Madam Chair.

1047 I want to come back to your community volunteer program. Are you paying them, or do you have an incentive program so that it will entice them to keep cooperating?

1048 MR. SINGER: I ‑‑ no, we have no plan to pay them. We feel that, again, they're sharing information about their communities. Their pride is what it is, and we certainly ‑‑ you know, we will consider doing some things to thank them along the way, but in terms of a cash remuneration, no, we ‑‑ in Whitecourt, we have just gotten on the air, and we're developing that plan there, and we have done a number of, what we call, XM 105 news watches, and they're wrist‑watches with our logo on them, and we plan to reward some of these people with some type of an incentive on a, you know, monthly contribution type of thing or ‑‑ but, you know, as far as remuneration from a point of view of a pay cheque, no.

1049 VICE‑CHAIR ARPIN: But you're running some contests so the ones that are bringing the most interesting information ‑‑ piece of information, the more ‑‑

1050 MR. SINGER: Yeah, that's likely the way that will be handled.

1051 VICE‑CHAIR ARPIN: That's the way you're going to be doing it? Your answer to the last question of my colleague, Madam ‑‑ Mrs. ‑‑ Madam Cram, about being the first on air ‑‑ when I'm looking at all the applications, and except Newcap and Paul Larsen, you are all looking to implement yourself on the CBC site. You expect the CBC to allow one of you to go first or ‑‑ or because more than likely, if we were to grant more than one licence, then you're going to need to install a combiner and everything. Do you expect one will be able to go first?

1052 MR. SINGER: I would like to defer that to ‑‑ if I could get back to you from in consultation with our technical people. I'm not really a hundred percent sure just what the technical parameters are in terms of the timing of that. I guess what I'm thinking of is separate from the transmitter equipment, building studio, developing a staff, and so on, that is an area that we are familiar ‑‑ or I am familiar with. As far as how quickly we could secure space on the tower, I'm not a hundred percent sure, but I'd be happy to file a response to that.

1053 VICE‑CHAIR ARPIN: Could we ‑‑ could you talk to your engineer, say, before the end of the day so that by the time that you come back for the intervention you give us your answer?

1054 MR. SINGER: I could do that, Commissioner Arpin.

‑‑‑ Undertaking / Engagement

1055 VICE‑CHAIR ARPIN: Okay. The ‑‑ I've already asked all the other applicants what were the median age of their listeners, and if you were to be skewing more male or female, whatever, can I have your reply?

1056 MR. SINGER: We would ‑‑ our format would skew slightly more towards male ‑‑

1057 VICE‑CHAIR ARPIN: Yes.

1058 MR. SINGER: And if the Insightrix girls can back me up on this, I believe the median age that we determined was 38.

1059 VICE‑CHAIR ARPIN: Thank you, for those ‑‑ those were my questions.

1060 THE CHAIRPERSON: And I forgot my favourite one was would you agree to a COL that you would be live to air 116 hours during the broadcast week because there was the ten hours Monday to Friday, ten to 12?

1061 MR. SINGER: Yes, we would agree.

1062 THE CHAIRPERSON: Okay, thank you. I hand it back to Mr. Singer or Mr. Fabro for your two minutes to sum up and convince us.

1063 MR. FABRO: Thank you, Madam Chair, some great questions today, and I think we did a great job in answering all your questions.

1064 What we've proven today is that there is an opportunity in the market. There is a significant demand, and we've done our homework in terms of our research, and we found the right format.

1065 We have a tremendous human capital in our company. Our ten most senior people have an average of 18 years, on average, with us and 22 years in the business.

1066 We are well‑financed. We have tremendous corporate will and determination. We have a solid business plan. There's not too many holes in it. We have every detail covered.

1067 CJVR has been a trusted friend to 150,000 listeners in a hundred communities in northeast Saskatchewan for over 40 years, and we want to bring our brand of radio, great music, locally relevant to Medicine Hat.

1068 We need to grow our business. The status quo is not good enough. We want to play a larger role as an independent voice in Canadian broadcasting.

1069 My family comes from a history of entrepreneurs, and we deliver on our promises. We just ask you for this chance to deliver on this promise and give us a licence in Medicine Hat. Thank you for your time.

1070 THE CHAIRPERSON: Thank you, Mr. Fabro, Panel. We'll now take a 15‑minute break. My watch is ten after, so that would be 3:35 ‑‑ 3:25, 3:25.

‑‑‑ Upon recessing at 1509 / Suspension à 1509

‑‑‑ Upon resuming at 1528 / Reprise à 1528

1071 THE CHAIRPERSON: Madam Secretary...?

1072 THE SECRETARY: Thank you, Madam Chairman.

1073 We will now proceed with item 5 on the agenda, which is an application by 1182743 Alberta Limited, for a licence to operate an English‑language commercial FM radio programming undertaking in Medicine Hat. The new station would operate on frequency 102.1 megahertz (channel 271C) with effective radiated power of 100,000 watts (non‑directional antenna/antenna height of 208.5 metres).

1074 Appearing for the applicant is Mr. Paul Larsen, who will introduce his colleague. You will then have 20 minutes for your presentation.

1075 Mr. Larsen...?

PRESENTATION / PRÉSENTATION

1076 MR. LARSEN: Thank you, Madam Secretary.

1077 Good afternoon, Madam Chair, Commissioners, CRTC Staff. My name is Paul Larsen, and I am president of 1182743 Alberta Limited, and with me today is Mary Mills. Mary is the president of Norscot Holdings Limited, my business partner.

1078 We're excited to present our application for a new radio station to serve Medicine Hat, Alberta.

1079 In our presentation today, we'll be touching on the vibrant economy in Medicine Hat and southern Alberta, the need for a radio service targeting the large and growing 45‑plus population in Medicine Hat, and how our exciting new radio station will compliment, rather than compete with the existing stations in the market, and benefit Canadian recording artists, the Canadian Radio Industry, and most importantly, benefit the community of Medicine Hat.

1080 As the Commission's aware, we were recently awarded a licence to serve Lethbridge, Alberta, located just 200 kilometres west of Medicine Hat, and we're very grateful that the commission saw the benefits of our application and business plan and entrusted us with our first licence.

1081 We're in the early stages of assembling our team and preparing for a spring launch in Lethbridge.

1082 Now that we, officially, have a broadcast licence, we'll be renaming our numbered company and will be known corporately as Clear Sky Radio Inc.

1083 This is our fourth hearing appearance this year for new FM applications, and our message has been clear from the start. Our goal is to build a strong, new, regional radio company, not just a single licence. And to create a viable and self‑sustaining business, it is essential for us to gain critical mass in the early stages of our development, and Medicine Hat presents the most logical opportunity for our next growth stage.

1084 First and foremost, Medicine Hat is geographically close to Lethbridge. This will allow me and our management team to maintain a regular presence in both markets, which is critical in an owner/operator situation such as ours. Further, the two communities share much in common, including similar demographics, economic drivers and other synergies.

1085 Our application represents the best opportunity to leverage the synergies that exist between these two southern Alberta communities and to bring a new radio service to Medicine Hat that will compliment the market without significantly impacting existing operators.

1086 If licenced, our radio station will be known as The Lounge. Our target audience will be adults 35 to 64, with a focus on those 45 and older. Our application is the only one at this hearing targeting the mature adult audience.

1087 Medicine Hat is currently served by two local commercial FM radio stations, CFMY and CHAT, both owned by Pattison. There is also a low‑power specialty Christian FM, as well as the CBC radio one service and the provincial CKUA network.

1088 Ownership and market tuning is obviously dominated by Pattison's two stations, as they really are the only local choice.

1089 While Medicine Hat is not BBM rated, our research indicates that 62.2 percent of those aged 35 to 64 tune into the Pattison stations weekly.

1090 Our research study also identified significant out‑of‑market tuning by 35 to 64 year olds in Medicine Hat, specifically the Calgary AM radio stations that penetrate the market. And this is the same pattern that we saw in Lethbridge.

1091 As you can see on the slide on the screen, in Medicine Hat, our research shows that Calgary's CHQR, CKMX, CFAC, and CFFR have a combined market share of 10.8 percent with adults aged 35 to 64, and, further, another 8.9 percent of 35 to 64 year olds in Medicine Hat are tuning into other unidentified AM or FM radio stations from outside the market, likely from cable.

1092 Combined out‑of‑market tuning to adults 35 to 64 totals 19.7 percent. The Lounge will repatriate the significant out‑of‑market tuning, attracting these Medicine Hat adult listeners to local radio with a music format specifically designed for them, and one featuring extensive local news, weather, sports, and community content. We may also gain listeners from satellite or cable, internet, radio, personal CDs and MP3s, and people who have simply quit listening or given up on mainstream radio because they've been unable to find their music.

1093 Our research shows 84.8 percent of 35 to 64 year olds in Medicine Hat would definitely or probably listen to our new station, The Lounge. And of those, 41.4 percent said The Lounge would become their favourite radio station.

1094 We call our format modern nostalgia. It is a mix of classic adult standards from the past, mixed with new songs and new artists who are reviving adult formatted music.

1095 Our format is not just old songs. At least 50 percent of our music will be newer than 1981 to comply with hit/non‑hit rules. This exciting mix of new and old music creates an especially unique sound targeted to the mature adult.

1096 And Canadians are leading the way in the creation of this music style around the world. Artists like Vancouver's Michael Buble, Toronto's Matt Dusk, and Vancouver Island's Diana Krall. Sadly, these great Canadian artists receive virtually no airplay on Medicine Hat radio, something that we propose to fix.

1097 Of significance is the number of relatively unknown Canadian artists who will receive regular prime time airplay on The Lounge. None of these artists receive airplay in Medicine Hat today. Artists like Dawn Aitken, Karin Plato, Carol Welsman, Andrea Menard, Denzal Sinclair, Suzie Vinnick, and there are many, many others who we simply don't have time to mention today, but who we did name in our Supplementary Brief.

1098 The Lounge will also feature Canadian superstars such as Anne Murray, Gordon Lightfoot, Randy Bachman, and Paul Anka, who are still producing new music and touring. Even though these names are instantly familiar, they too suffer from a lack of radio airplay. The Lounge will play not only their established hits, but, also, their new music.

1099 Canadian music will be featured prominently in our programming, scheduled evenly throughout each hour. We will play 40 percent Canadian content weekly, and to ensure significant airplay of newer Canadian music, 50 percent of our Canadian songs will be released in 2000 or later.

1100 Of course, The Lounge will also feature international artists, many of them lesser known singers, again, ensuring diversity. Names like Steve Tyrell, Renee Olstead, Jamie Cullum. They're not household names, but they're exceptional new artists recording great music that is not currently featured on Medicine Hat radio.

1101 The Lounge will feature well‑known artists who are rerecording great standards and new songs in the standard style. Artists like Rod Stewart, Natalie Cole, Harry Connick Jr. and others.

1102 And we'll play the artists who originated and pioneered this music style, Frank Sinatra, Ella Fitzgerald, Nat King Cole, Tony Bennett, and many others.

1103 And singers from the '60s, '70s, and '80s, artists, who despite superstar status, receive very little airplay on Medicine Hat radio. Names like Barry Manilow, Barbara Streisand, Neil Diamond, James Taylor, The Carpenters, and others. And, again, we will play their new music in addition to the hits.

1104 We will blend these diverse music styles together to create an appealing mix of music, new and old, targeted to Medicine Hat's adult audience.

1105 The Lounge will also bring a new independent news and information voice to Medicine Hat. We will place a significant emphasis on spoken word relating to news, our music, the community, and the lifestyle of Medicine Hat's adult population.

1106 If licenced, The Lounge will provide hourly locally produced newscasts between 6 a.m. and 6 p.m. Monday to Friday and 8 a.m. to 4 p.m. on weekends.

1107 Our research showed the demand for news, particularly local news. 94.1 percent of total respondents said news and information specific to Medicine Hat is important, and we will provide it for them.

1108 If licenced, our Medicine Hat newsroom would benefit from synergies with Lethbridge newsroom, enabling our two stations to offer a unique southern Alberta regional perspective and coverage when appropriate.

1109 In total, The Lounge Medicine Hat will provide 93 newscasts per week, totalling four hours and 33 minutes.

1110 Other spoken word, including sports, road reports, agricultural and business news, arts and entertainment will total another two hours and 30 minutes weekly.

1111 Medicine Hat's adult audience wants to hear about important topics such as municipal issues, cultural events, health, and finance. The Lounge will air a daily magazine program called Medicine Hat At Noon to address this need.

1112 Our spoken word will reflect Medicine Hat's diversity and provide listeners with a balance of news, entertainment, and community information. Our spoken word programming totals 22 hours and nine minutes weekly, approximately 18 percent of the broadcast week. On top of that will be announcer show prep., community ad libs, and live interviews, which will add even more spoken word dimension to The Lounge.

1113 We've made this strong commitment to spoken word based on what Medicine Hat adults told us in our research and because we believe it is the spoken word content that truly differentiates great local radio from average radio. And with increasing competition for listeners from music‑focused services such as satellite radio, MP3 players, and internet streaming, the local spoken word content of our programming will be the biggest competitive advantage that we will have over these generic music services and will be the most critical component of our overall programming.

1114 In our research, we asked about the importance of exposure and promotion of local and Canadian artists. 78.9 percent of those surveyed says it is important. Our Canadian talent development starts first and foremost with airplay of new and emerging Canadian artists, most of whom receive no airplay on Medicine Hat radio today.

1115 A cornerstone of our indirect CTD initiatives is a commitment to play new Canadian music. We propose that at least 50 percent of our Canadian content will be songs released in 2000 or later, ensuring airplay of a high percentage of newer Canadian songs and artists. This initiative is unique and exclusive to our application.

1116 Further, to demonstrate our commitment to Canadian music, we will play 40 percent Canadian content over the broadcast week, five percent over the mandated amount.

1117 Canadian artists told us consistently that what they need from radio is simple, airplay and exposure, and The Lounge will ensure this through these two commitments.

1118 We are firm believers in Canadian talent development, both direct financial and, the equally important, non‑monetary means. Our direct CTD contribution will be $129,500 over the initial licence term, a significant contribution for a new broadcast entity.

100 percent of our direct CTD will stay in the Medicine Hat region. Our annual proposals include: post‑secondary music and journalism bursaries for Medicine Hat students, the purchase of music instruments for Medicine Hat schools, funding of the Medicine Hat Jazz Festival and the Medicine Hat Rotary Music Festival, funding to FACTOR, which Canadian artists told us is a critical source of funding for development of their music, and our FACTOR contributions will come back to southern Alberta artists, and our original song competition will be of direct benefit to local and regional independent Canadian artists.

1119 Our direct CTD commitments will be supported with significant on‑air promotional support, website exposure, and other marketing.

1120 In addition to our unique Canadian content airplay and our direct CTD plans, we also propose two significant indirect CTD initiatives. First is the Indie Lounge, a weekly one‑hour program focusing exclusively on independent Canadian music. While we will be highly supportive of Canadian music throughout our programming, the Indie Lounge will give us a platform to explore artists more thoroughly. Second, is a unique educational partnership with southern Alberta's broadcasting schools, which we call future broadcasters. If licenced, we will work with these schools to place students in actual paid jobs at The Lounge that will assist them in their education and development of their radio skills. These positions include on air, news, and production, and we're firmly committed to giving young broadcasters a start at our radio stations.

1121 We strongly believe that radio is a public service, and we take that role very seriously. In the community, The Lounge will be highly supportive of Medicine Hat events, charities, the arts and entertainment community, and cultural groups. Medicine Hat has a vibrant arts community. There are many annual festivals and events, and The Lounge will be front and center broadcasting live from each of them. Some of these include the Spectrum Festival, the Medicine Hat Exhibition and Stampede, Medicine Hat Jazz Festival, the Medicine Hat Rotary Music Festival, the Medicine Hat Film Festival, and many others.

1122 Medicine Hat is a culturally diverse city with a strong not‑for‑profit and social community. There are many individual organizations that promote and offer activities and services relating to multi‑cultural interests within the city.

1123 We've already reached out to many of these organizations ensuring our support through no‑charge public service announcements and interviews if we are licenced. These will be invaluable in assisting these groups with fundraising initiatives and general awareness. Further, the on‑air exposure of these groups and events will ensure that our programming is inclusive of Medicine Hat's entire population spectrum.

1124 Our news department will take into account the diversity of Medicine Hat and establish contacts with the city's cultural communities to ensure The Lounge includes their news in our programming.

1125 Medicine Hat has a rich First Nations history, and we will make a strong effort to connect with the Aboriginal populations in the region.

1126 We are committed to reflecting diversity within our company as well through employment and provided information to this in our application. And our music format lends itself perfectly to reflecting cultural diversity. The vast and varied music styles that comprise The Lounge music format include artists and musicians from every background and region of Canada and beyond, and we will encourage Canadian artists, from all backgrounds, to submit new music for airplay consideration.

1127 The Medicine Hat economy is vibrant and well‑diversified. Major industries include agriculture, manufacturing, natural resources, finance, and real estate. Canadian forces base, Suffield, is another significant contributor to the area's economy.

1128 Medicine Hat's retail sales are very strong with 2005 sales of over $1 billion, 47 percent higher than the national average, according to the Financial Post Markets. Retail sales in Medicine Hat are forecast to continue growing at a significant rate, reaching nearly $1.2 billion by 2007 and close to $1.4 billion by 2010.

1129 The correlation between retail sales and radio advertising sales is well‑documented, and we believe that Medicine Hat's stronger than average retail sales, coupled with the fact that they are forecast to continue to grow at a significant rate, indicate that Medicine Hat can sustain a new radio service or services at this time, and we strongly believe that our proposed radio station and format is the right one for Medicine Hat at this time. The demographics certainly support this position.

1130 Medicine Hat is experiencing rapid population growth, particularly in the upper demographics. According to the 2005 municipal census, the city population has grown 9.4 percent since the 2001 federal census, and now totals over 56,000 people, and the trading area is more than double that.

1131 The largest population increases have occurred within the 45‑plus age groups, the target audience for The Lounge. The 2005 municipal census is not fully broken down, so we refer to the 1996 and 2001 federal census to show the growth of the 45‑plus population specifically.

1132 As you can see by the graph on the screen, the Medicine Hat population of adults 45 and up increased 18.9 percent between 1996 and 2001, and, by comparison, those aged 0 to 44 jumped only 4.5 percent during that same period.

1133 According to the 2001 federal census, 38 percent of Medicine Hat residents are 45 or older, and they total over 19,000 people. Over one‑third of the Medicine Hat population is over the age of 45.

1134 This audience deserves a new radio station custom tailored for them. Local businesses that market to this impressive demographic deserve a targeted radio station to reach this audience, and The Lounge will be both.

1135 The Lounge will open up new advertising opportunities for retailers and manufacturers, who, until now, have had no viable local radio source on which to advertise their products and services to the 45‑plus population.

1136 Today's 45‑plus consumer is still very much an active consumer. They are far from retiring. Many are still working, but on their own terms as consultants or starting their own businesses, and they are purchasing second homes, luxury vacation condos, travel, new vehicles, recreation activities, in addition to their daily needs. This audience grew up listening to radio, and radio is one of the most effective advertising mediums to reach these active, mature consumers, but only if there are radio stations that are targeted to them, and The Lounge will be that radio station in Medicine Hat.

1137 In summary, The Lounge will bring a new format to Medicine Hat, one with virtually no overlap with existing stations. The Lounge will fill a void for the fastest growing demographic in Medicine Hat, one that already comprises over one‑third of the total population.

1138 The Lounge will repatriate a significant portion of the Medicine Hat adult population to local radio.

1139 The Lounge will provide significant news and other spoken word elements that are important to our target audience.

1140 Our station will bring a new independent news and information voice to the community.

1141 The Lounge will be highly active in the community, and community service will be the foundation upon which our company and our radio station is built.

1142 The Lounge is the only application before you at this hearing that will specifically fill the needs of this dynamic and growing segment of the population, what we believe to be the most undeserved demographic on Medicine Hat radio today.

1143 We're excited about the possibility of bringing our unique and innovative format to another southern Alberta community.

1144 We're building a strong, new regional radio company in western Canada. We're already licenced in southern Alberta, and Medicine Hat is the most logical market to grant us our second licence.

1145 I thank you for this opportunity to present our application for The Lounge, Medicine Hat, and we're looking forward to your questions. Thank you.

1146 THE CHAIRPERSON: Thank you.

1147 Vice‑Chair Arpin...?

1148 VICE‑CHAIR ARPIN: Thank you very much, Madam Chair.

1149 Mr. Larsen, Mrs. Mills, the ‑‑ well, let me start to say that we've seen you in Calgary, we saw you again in Edmonton, and, again ‑‑ and always with the same format, so that it's quite clear in our mind what you're ‑‑ have ‑‑ what you're looking to do, so we may have limited questions based on the format. I note you acknowledge having been granted a licence for Lethbridge, and I know that you were an applicant for Grande Prairie and Fort McMurray.

1150 So my questions will mainly relate to the specifics ‑‑ specifics of Medicine Hat, the impact on the existing service, the potential synergy with your new Lethbridge licence or ‑‑ as well as the potential synergies that you may have with Grande Prairie and Fort McMurray if a licence was to be granted to your group, and the impact those synergies may have on your business plan, including programming synergy.

1151 So I will start, first, with some clarification questions regarding Norscot and the applicant corporation. The ‑‑ your application shows Norscot Holdings as being one of the two shareholders, and you introduced Mrs. Mills as being the president of Norscot Holding; whereas, the shareholder's agreement that was filed with the Commission on March 14th, 2006, makes reference to Norscot Investment Limited.

1152 Is the Norscot Holding and Norscot Investment the same ‑‑ the same organization, or what is the correct name of your organization, and what is the ‑‑ is there a difference between Norscot Holdings and Norscot Investment?

1153 MS MILLS: Yes, sir. We changed our name in the past year from Norscot Holdings Limited to Norscot Investments Limited just to better reflect the business involvement that we have. We could file papers that show the official change of name.

1154 VICE‑CHAIR ARPIN: That's what my second question was to be. When could we expect you to file the change in the name?

1155 MS MILLS: I can get that to you this week.

‑‑‑ Undertaking / Engagement

1156 VICE‑CHAIR ARPIN: You can get ‑‑ and, again, you also, Mr. Larsen, said that you're changing the name of the numbered corporation to Clear Sky Radio Inc. Is the paper done, or is it in the works, or ‑‑ and when could you file the change in the name of the corporation?

1157 MR. LARSEN: Yes, Vice‑Chair, the name change was just completed within the past two to three weeks, and I can provide that documentation as early as tomorrow.

1158 VICE‑CHAIR ARPIN: Well, I'd prefer that you file it in ‑‑ directly to Ingetsano(ph) so that it goes to the right place, otherwise it will end up in the public hearing file, and the ownership group may never know about those two changes. So I will request that you ‑‑ they be forwarded to Ingetsano(ph) as soon as you can.

1159 MR. LARSEN: Absolutely.

‑‑‑ Undertaking / Engagement

1160 VICE‑CHAIR ARPIN: Okay. During the deficiency process ‑‑ has the Board of Directors of Norscot Investment and Norscot Holdings remained the same?

1161 MS MILLS: Yes, there's been no change to that.

1162 VICE‑CHAIR ARPIN: So there has been no change to the organization itself?

1163 MS MILLS: No.

1164 VICE‑CHAIR ARPIN: Okay, fine. Those seem to cover all our questions that we had on the corporate side of your ‑‑ of one of the two partners.

1165 Based on the 2005 census conducted by the City of Medicine Hat, I see that about 30,000 people out of 56,000 are 35 years old and over. Well, this is close to 55 percent of the total population. I also note that in your Telelink research that you conducted on the population of Medicine Hat, 35 years old plus, in ‑‑ in your Supplementary Brief, you're stating that the music mix of The Lounge will appeal to the 45 plus segment of the population, but all your studies have been conducted on the 35 plus ‑‑ 35 to 64, and you also refer, again, to the ‑‑ in your presentation today to the 35‑plus segment of the population. I see, as well, in the spring a 2006 BBM Reach Report tuning data indicates that CHAT‑FM, the incumbent new country format station, garners a very respectable 37 percent tuning share.

1166 First, will you give us what will be the ‑‑ well, the median age of your listeners, and will they skew more towards male or female?

1167 MR. LARSEN: Sure. I believe that our format is going to skew evenly between male and female, and a median age, I would suggest, would be 49.

1168 VICE‑CHAIR ARPIN: Will be 49?

1169 MR. LARSEN: 49.

1170 VICE‑CHAIR ARPIN: Okay. Could you also give us a more detailed and perhaps a more accurate picture of the actual size of Medicine Hat adult audience? Well, you gave us ‑‑ showed us a chart earlier in your presentation, but it draws up on the listeners of your ‑‑ to your station. I have ‑‑ because country audience generally remain loyal to the format and do little in the way of cross‑tuning to other commercial formats. And it appears from the evidence that we ‑‑ there is limited evidence because the Medicine Hat radio stations are not subscribing to BBM, but the reach report is giving us some small indications of ‑‑ of tuning, but we know, by experience, that country listeners are very loyal to their station, so ‑‑ and they are probably in the 45‑plus age group. So why do you think you're going to be able to get the ‑‑ they will be either cross‑tuning with your station, or they will move from the country stations to your ‑‑ to your station?

1171 MR. LARSEN: Sure. I spent ten years of my career programming country music, so I'm very familiar with the loyalty of that particular audience. I think where I see our biggest area to gain is in repatriating some of the adult audience that's tuning specifically to out of market, the Calgary AM stations, internet, cable, et cetera, and the one thing that I know from my experience in country music is when they are cross‑tuning ‑‑ these are people that grew up with music listening to the Neil Diamonds and the ‑‑ that sort of genre of music from the late‑'60s and early‑'70s, so I think we do have a good cross‑tuning ability with some of the fans that may be P‑2 listeners to country music that would go back and forth between CHAT and our station.

1172 VICE‑CHAIR ARPIN: Could you elaborate on why you feel that the size of the audience in Medicine Hat that you have is adequate to make your station viable in the short, medium, and long term?

1173 MR. LARSEN: I think when I looked at the demographic spread in Medicine Hat and the fact that fully one‑third of the population, by the data that I've observed, is over the age of 45, I felt quite confident that there would be an adequate audience there to support our radio station. And, again, counting on the fact that we do believe that the cross‑tuning between country music and the format that we're providing will be substantial.

1174 Also, in reviewing the same situation that we noticed when we researched Lethbridge there's a significant chunk of that 45 ‑‑ or 35 to 64 demographic that's tuning outside of the market, and we believe that providing a local radio station with local news, community information, and music that they'll like, we'll bring those people back to local radio. So I think in the short‑term, just by word of mouth in a community of that size, we'll get some good legs out of the gate, and I think our prospects in the medium and longer term are very, very good.

1175 VICE‑CHAIR ARPIN: You expect to pick up some listeners from the CBC and CKUA, which also are catering towards the same age group?

1176 MR. LARSEN: I think if we pick up some listeners from CBC and CKUA, again, we might get some of the non‑core P2 listeners. Again, we're looking for an alternative that may skip back and forth between our station and either the CKUA or CBC service.

1177 VICE‑CHAIR ARPIN: You mentioned approval will help to repatriate your target audience of older adult listeners to the ‑‑ back to local Medicine ‑‑ you alluded to out‑of‑market tuning by the group through radio, cable, and satellite. Can you quantify the number of people you will put in this category as a percentage of your potential pool of listeners?

1178 MR. LARSEN: The ‑‑ we didn't specifically ask. The 8.9 percent fell under, in our research, unidentified, so it's just a best case ‑‑ being in Medicine Hat, there's a couple of AM stations from Montana that drift into the market. A little bit of Saskatchewan radio, one from Taber. So a combination of those. It would be hard to quantify exactly how many are listening to satellite or cable at this time.

1179 VICE‑CHAIR ARPIN: Have you been able to check with the retail stores that are selling satellite equipment if their ‑‑ the sales of the satellite services has been significant in those markets? We know ‑‑ we've read, while we were doing the Edmonton hearing, that the Future Shop people were saying that their Grande Prairie Future Shop store was the highest vendor of satellite radio, but do you know anything about Medicine Hat?

1180 MR. LARSEN: We asked around in both Lethbridge and Medicine Hat, and retailers are experiencing fairly significant demand for the satellite services. And the general feedback we seem to get is that people are searching those out because of the lack of choice on mainstream radio. In Medicine Hat, for example, they have two mainstream stations, an AC, hot AC, and a country station, and then there is a Christian low‑power, and CKUA, and CBC, but there's very little other choice for them. There's no classic rock, there's no format such as ours, there's no softer AC, so they are seeking to find music on radio and are choosing satellite radio. So I think in rural communities where there is a lack of radio stations on the mainstream airwaves, on the FM airwaves, that satellite is gaining a bit of a foothold for sure.

1181 VICE‑CHAIR ARPIN: And if you are not successful to repatriate those listeners, not only those who are on satellite, but those who are listening to outside stations, what kind of an impact will this have on your business plan?

1182 MR. LARSEN: Well, again, I think we're confident in our format going forward. I mean, ultimately, if we got two or three years into the licence and there were no listeners, we would have to examine that and make a choice for a business plan that made sense. But in terms of the current business plan as stated and presented, I'm very confident ‑‑ just, again, from feedback from friends and family that have listened to satellite radio, they go to satellite radio for the music, but what they really are lacking and missing is the local content, and that's why the spoken word is such an important and critical part of our programming. So as long as we emphasize that spoken word and do a good job of that, we will definitely repatriate those people from the purely music‑driven services, at least on a part‑time basis. They will come to us for news and information and local community content.

1183 VICE‑CHAIR ARPIN: From ‑‑ comparing your projected expenditures towards the other applicants, your plan for programming expenses appears to be somewhat on the low side. And I'm looking at the number of programming staff you plan to hire and the amount of station‑produced local reflection spoken word you have committed to produce and broadcast, not to mention your belief that the quality of the local programming you will offer will be enough to repatriate listeners back to the local radio market. Why do you feel that your projected annual programming expenditures are sufficient to meet these commitments to provide the 45‑plus adult audience with the level of relevant and quality local reflection, spoken word, and music programming necessary to be successful in that market?

1184 MR. LARSEN: We did do some research in terms of the salary expectations for positions in a market the size of Medicine Hat. We're forecasting to have three full‑time news staff and then four full‑time programming staff in addition to that. I believe that the three news staff will be sufficient to meet our spoken word objectives. Some of the spoken word that we would be putting on the air, for example, business reports, we may source from somebody like a financial expert, a TD Waterhouse or a CIBC Wood Gundy, farming reports, maybe from a local farming expert. Again, our staff would be making those calls out, but the programming itself would be supplied by experts in those particular fields. So I believe that we would have sufficient programming and news staff to cover our spoken word commitments specifically.

1185 VICE‑CHAIR ARPIN: And if there are mistakes in the ‑‑ the reports that you've been provided by your expert, who is going to assume the responsibility?

1186 MR. LARSEN: Well, I guess, ultimately, I think the responsibility would fall back on my shoulders to formulate a plan to make ‑‑ make things work. When we're talking about, say, using a market report expert, generally they're recapping the results of the stock market for the day, gold prices, that type of thing. We would have our news staff likely cross‑verify that with a wire, Broadcast News, which also provides that same information. Really, by tapping outside experts to help provide that content ‑‑ more so, it's to enhance the programming. We could certainly have our news person read that same market report, but having a financial expert deliver it lends some more credibility to it.

1187 VICE‑CHAIR ARPIN: You just referred to Broadcast News. Are you planning to prescribe to Broadcast News for national and international news?

1188 MR. LARSEN: My initial intent is, yes to subscribe to BN for national and international coverage.

1189 VICE‑CHAIR ARPIN: Well, let's assume for the moment that your adult standard format application is licenced to serve Medicine Hat based upon the evidence you have provided in your written application and here this afternoon. Our ‑‑ a while after launching, you find out that you are have having some difficulty meeting your original audience and the revenue projections. How will your ability to provide your listener with the level of spoken word programming and general programming be affected if you are only unable to, initially, generate the local revenues as estimated. I can assume here that your ability to meet your projected programming expenses are tied in some way to greater projected local revenues?

1190 MR. LARSEN: We ‑‑ first and foremost, the last place we would reduce staff would be in the news department. If we found that we were in a position where we didn't have sufficient revenues to offset our operating expenses, we would have a second station in Lethbridge that we would feel could have some synergies on the back‑end side, traffic and accounting. For example, in the Medicine Hat application, I have budgeted for two full‑time administrative staff when we wrote this application, assuming that this would be our one and only radio station. Those funds could be diverted to programming staff now that we have Lethbridge because, for example, one traffic person could handle doing traffic for both radio stations.

1191 VICE‑CHAIR ARPIN: And, as you know, we don't regulate format, but could you ‑‑ what kind of assurance, if any, can you give us ‑‑ give the Commission that you will launch with your adult standard format and strive to maintain it in the face of potential audience and revenue shortfalls?

1192 MR. LARSEN: Sure. We put great pride and energy in putting this format together. I believe that so long as ‑‑ you know, if two adult standard stations were licenced in a single market, it would be very difficult, but this format allows us to be kind of on our own in the 45‑plus area. The biggest assurance that I can give you is our word that we will stay true to what we've presented, four times now, to the Commission, because, you know, as I did state, we intend to come back and apply for more radio stations in the future, and we do want to maintain the commitments that we put forward, and I do see a very successful business plan with this particular format.

1193 VICE‑CHAIR ARPIN: Now that you have had a chance to see the other applicants' proposals and the ‑‑ I will ask you, why do you feel that ‑‑ do you think that the adult standard format is the best choice for Medicine Hat? All those that we have heard so far, and I suspect all those who will come after you, will say that their format is what is the ‑‑ meets the most, the interests of the listeners of Medicine Hat. Why do you think your format is the one that has the most chance of succeeding?

1194 MR. LARSEN: I think our format ‑‑ again, being custom designed for a 45‑and‑up audience specifically, as our narrow target, gives us a unique position in that we would be the only radio station focusing on that particular audience segment. And there's a significant portion of the population that's in that age bracket in Medicine Hat, and we truly do believe that they deserve a radio station and that The Lounge will fill the need for that particular audience segment. It's an audience segment that's growing rapidly, as we all know, as the baby boomers are shifting in age.

1195 I'm very confident that our business plan is solid going forward and would be the right choice for Medicine Hat if one radio station were to be granted at this time.

1196 VICE‑CHAIR ARPIN: And if ‑‑ well, I'll come back later on with the discussion regarding one or more than one radio stations for ‑‑ for Lethbridge [sic]. But for the time being ‑‑ not Lethbridge, but Medicine Hat. Now, that you've been licenced for Lethbridge, what kind of ‑‑ and I will start, first, with the programming synergies, then we can look at others. We will be looking at others. Have you started to consider programming synergies between Lethbridge and Medicine Hat if you were to be granted the licence?

1197 MR. LARSEN: Yeah, I touched on what I believe to be some of the news synergies, which are obviously the most ‑‑ the most obvious areas where we could see some synergy. I think in production, sharing station voices back and forth between the two markets to give us a deeper talent pool in terms of commercial voices for the clients, creative, and, really, those areas on the programming side, specifically, where we could see some synergies.

1198 VICE‑CHAIR ARPIN: And in the other areas, have you ‑‑ are you contemplating some synergies? You had mentioned traffic earlier, and I suspect accounting will be the same.

1199 MR. LARSEN: Yes. With two stations, we feel that traffic and accounting could certainly be handled by one office and not having to have duplicate staff in two separate offices.

1200 VICE‑CHAIR ARPIN: So if you were granted the licence for Medicine Hat prior to launching Lethbridge, in which market will those synergies take place?

1201 MR. LARSEN: Well, our intent is to have Lethbridge up and running prior to the decision coming down for Medicine Hat, given the typical, about, five‑month timeframe, but, if not, the synergies, obviously, are not going to happen until both stations are on the air, so ‑‑ maybe I misunderstood the question a little bit.

1202 VICE‑CHAIR ARPIN: No, no, I think you ‑‑ you surely gave mea good answer, but, obviously, the market ‑‑ the size of the Lethbridge and of the Medicine Hat markets are quite similar in a way. I won't say the full market in both instances, they ‑‑ so what you're ‑‑ you just said, more than likely, Lethbridge will go on air ‑‑ well, shortly go on the air before Medicine Hat, and you just said it may even be before the decision for this ‑‑ the market is released.

1203 MR. LARSEN: Unless this decision were a lot quicker than some of the other ones, but, no, in ‑‑ if the typical timeframe is about right, we would anticipate launching right about the time that we would be expecting the Medicine Hat decision.

1204 VICE‑CHAIR ARPIN: So if there were to be synergies, they're more than likely to happen in Medicine Hat, rather than in Lethbridge because ‑‑

1205 MR. LARSEN: Yes, sir.

1206 VICE‑CHAIR ARPIN: ‑‑ the infrastructure will have been put in place in Lethbridge, and the staff will have been hired ‑‑ already hired?

1207 MR. LARSEN: Right, yes, exactly.

1208 VICE‑CHAIR ARPIN: Now, regarding ‑‑ I'll move now towards local programming and the ‑‑ which portion of it in presenter's terms or in ours will you be local live with staff in the studio versus voice track and automated?

1209 MR. LARSEN: We had proposed in our initial application to be live on air from 6 a.m. to 7 p.m., and then voice tracking in the evenings. If we're able to do the partnership that we're proposing with some of the southern Alberta.

1210 Broadcasting schools, we still may be incorporating voice tracking in the evening hour, but may be able to have a younger student or radio person in the building to answer phones and have that sort of live communication with the listeners.

1211 Our hope is that we outperform our revenue expectations, and the first place that we would divert expenses back into the company would be in the programming side and to be live as many hours as possible, and evenings would be the first place that we would add a live announcer.

1212 VICE‑CHAIR ARPIN: And what about weekends?

1213 MR. LARSEN: Weekends, at this point, we had proposed to be live from eight until four and again during voice track hours, hoping to have somebody in the building, again, to man the phones and keep the operation live so that people aren't just getting a busy signal if they phone the radio station.

1214 VICE‑CHAIR ARPIN: And are you planning any automation, or it's all voice track?

1215 MR. LARSEN: No specific automation. The voice tracking, obviously, does play back through the computer system, but nothing out of the ordinary.

1216 VICE‑CHAIR ARPIN: Are you considering airing some syndicated programming?

1217 MR. LARSEN: There is one syndicated program that we are considering airing, and it's a one‑hour old time radio program that would play later in the evening hours seven nights a week. Outside of that, no other syndication has been contemplated at this time.

1218 VICE‑CHAIR ARPIN: And are you planning some brokered program?

1219 MR. LARSEN: No.

1220 VICE‑CHAIR ARPIN: And regarding local live programming, are you ready to accept a condition of licence if you were granted the licence?

1221 MR. LARSEN: Yes, we would.

1222 VICE‑CHAIR ARPIN: We'll now move to your CTD plan. In your July 28th, 2006, deficiency response, you indicated that you will redirect your broadcasting education bursary funding, which is that $2,500 a year, to support a journalism bursary if the broadcasting bursary is deemed ‑‑ now, if the broadcasting is deemed ineligible as CTD. Will this bursary support a student attending a particular school and specific journalism program, or is it a general bursary with course and school to be determined?

1223 MR. LARSEN: No, it would be rewarded to a student who was to be enrolled and to give us proof that they were enrolling in a journalism program full‑time.

1224 VICE‑CHAIR ARPIN: And you will be managing the delivery of that bursary, or how will it work?

1225 MR. LARSEN: Our ‑‑ yeah, our intention would be to award the bursary only after such fact that the student had confirmation that they had been accepted into the journalism program so that we would have proof that the dollars that we were contributing would go toward that.

1226 VICE‑CHAIR ARPIN: Who is going to choose that student?

1227 MR. LARSEN: In my past ‑‑

1228 VICE‑CHAIR ARPIN: There might likely be more than one student interested in getting a bursary.

1229 MR. LARSEN: We would, generally, put that onus on the high school teachers to determine a short list of students and then maybe work in tandem with the teacher to help pick the most eligible student for the award each year.

1230 VICE‑CHAIR ARPIN: But you haven't ‑‑ well, you haven't, at this point in time, identified the school with which you will be working.

1231 MR. LARSEN: Right. I think what ‑‑ in the past experience that I've had at other radio stations, what we've done is picked the student, committed the funding, but not issued the cheque until such time as they have actually enrolled into the eligible program.

1232 VICE‑CHAIR ARPIN: Regarding your Music Festival and Jazz Festival funding, do you have any type of agreement with either organization to ensure that your annual funding will be used as directed by the organization and not used to underwrite administrative costs?

1233 MR. LARSEN: We have a letter from the Medicine Hat Jazz Festival indicating what they would use the funding for, specifically to bring up upcoming Canadian and international jazz talent to Medicine Hat. We would have them clarify that that would have to be Canadian talent obviously. The Rotary Music Festival have indicated that they would supply a letter. They did not get it to me in time to meet the deadline for the support interventions, but if required, we could certainly get a letter from them stating that.

1234 VICE‑CHAIR ARPIN: Yes, it will be appreciated if you table the letter that you have from the Jazz Festival and also if you could get a copy of the Rotary Festival, so ‑‑

1235 MR. LARSEN: I'll touch base with them today.

1236 VICE‑CHAIR ARPIN: Okay, fine.

‑‑‑ Undertaking / Engagement

1237 VICE‑CHAIR ARPIN: Now, really moving towards our ‑‑ my very last questions. In your.

1238 View ‑‑ and it's the whole discussion regarding more ‑‑ one or more stations. In your view, could the Medicine Hat market sustain the entry of more than one new commercial station at this time? And, if so, which of the competitive format applications could you live with, assuming that you are one of the successful applicants?

1239 MR. LARSEN: Well, that's easier for me to answer than everybody else probably because everybody else is in the classic rock or rock side. So in my perspective, we could live with two stations, us being one of them, and whichever other one got the licence wouldn't really impact our business plan at all.

1240 VICE‑CHAIR ARPIN: So you're ‑‑ it's not ‑‑ and it's not the idea of being the first one on air?

1241 MR. LARSEN: Not for us, again, because we would be launching with our identified format.

1242 VICE‑CHAIR ARPIN: The ‑‑ now, there's very limited information available on the Medicine Hat market to all the applicants, but if the Commission was to grant more than one station, what do you think the impact will be on the incumbent?

1243 MR. LARSEN: Well, and I think the mainstream stations, the classic rock or rock stations, would have more of an impact, but, again, I think that the impact would be minimal. I think because there's a single operator in Medicine Hat right now the market is not realizing the full potential of the radio advertising pie that may be available there. I would estimate the radio advertising potential to be somewhere in excess of ‑‑ between five and five‑and‑a‑half million dollars, and as I think somebody else indicated that the current incumbents may be drawing in four million. Again, we don't know those figures because they're not public information, but I do believe that there is room for more stations, given the size of the market and the fact that there is really only two commercial stations serving that population of over 56,000 at this point in time.

1244 VICE‑CHAIR ARPIN: I know that the question wasn't asked to the other applicant, but what ‑‑ are you considering that granting the power increase to the Christian music station has an impact, or can we contemplate increasing the power of ‑‑ and the coverage of the Christian music applicant, plus two stations or ‑‑

1245 MR. LARSEN: I think that's feasible. I mean, my experience has certainly been that the Christian formatted radio stations have their own specialized niche of the audience and don't really impact on the mainstream broadcasting stations.

1246 VICE‑CHAIR ARPIN: Well, thank you very much Mr. Larsen.

1247 Madam Chair...?

1248 THE CHAIRPERSON: Thank you.

1249 Commissioner Cugini...?

1250 COMMISSIONER CUGINI: Thank you.

1251 Mr. Larsen, thank you. Just a follow‑up question really about the Medicine Hat market because in your oral presentation this afternoon, you said that, "Local businesses that market to this impressive demographic deserve a targeted radio station to reach this audience." Do you have some examples of the kind of local businesses that market to this demographic?

1252 MR. LARSEN: Off the top of my head, the types of businesses that I'm thinking of, specifically, are ones that are catering to ‑‑ for example, there's a lot of high‑end recreational properties that are becoming available for sale, motor homes, luxury vehicles, second homes, outside vacation properties, those types of things that only the older demographic who have assumed or accumulated enough wealth to go out and purchase these types of items. So more of the high‑end types of products and services that would be targeted to that aging baby boomer that's spending their money on luxury at this point in time.

1253 COMMISSIONER CUGINI: And are these businesses currently advertising on radio in the Medicine Hat market?

1254 MR. LARSEN: Some are, I'm sure, others are probably avoiding radio. I don't have specific information by product category, but I would suspect that some definitely are currently using radio to a limited degree, and others are using other advertising medium to target that audience.

1255 COMMISSIONER CUGINI: So do you see this as an opportunity to increase the advertising pie in Medicine Hat, or do you see it as taking away advertising dollars from those other media or a combination of both?

1256 MR. LARSEN: No, I think absolutely to increase the advertising spend on radio, targeted to that particular product and service. I think our job would be to go in and convince these people that are marketing these products and services, to add radio as a component to their marketing plan, their overall marketing strategy and to increase ‑‑ I think the net result would be an increase in radio advertising spend in the market.

1257 COMMISSIONER CUGINI: Thank you, thank you very much.

1258 MR. LARSEN: Thanks.

1259 THE CHAIRPERSON: Thank you.

1260 Mr. Larsen, in your speech today, you said that a hundred percent of your CTD would be sent to Medicine Hat. How are you ensuring that the money you send to FACTOR ends up in Medicine Hat?

1261 MR. LARSEN: The best confirmation we could get back from FACTOR in writing is that it would be diverted to southern Alberta artists, so that is the confirmation we have from FACTOR at this point of time.

1262 THE CHAIRPERSON: And do you have any idea whether these monies will be incremental from that, that would have otherwise been paid by FACTOR?

1263 MR. LARSEN: I could get clarification on that.

1264 THE CHAIRPERSON: And do you have any idea whether or not the normal FACTOR rule, that if it is not disbursed within the year you send the cheque that it just simply rolls out into the general funds? Could you provide us with information as to whether or not that money will, in fact, just roll over into the general funds?

1265 MR. LARSEN: Absolutely. I'll clarify those two points with FACTOR and have a letter filed before the end of this week.

1266 THE CHAIRPERSON: Okay, thank you.

‑‑‑ Undertaking / Engagement

1267 THE CHAIRPERSON: Now, the only other thing was the voice tracking, and Vice‑Chair Arpin asked if you would agree to a COL. As I read your page ‑‑ well, and as you said, page 37 of your Supplementary Brief, really it's a COL that you would be doing live‑to‑air programming 101 hours in a broadcast week? Because seven to 12 would be voice tracked?

1268 MR. LARSEN: Right.

1269 THE CHAIRPERSON: Okay. Thank you, thank you very much.

1270 MR. LARSEN: Thank you.

1271 THE CHAIRPERSON: Madam Chair [sic], what I am told the schedule is, is that we take a break; however, perhaps we could just proceed with the next applicant?

1272 THE SECRETARY: Thank you, Madam Chair.

1273 THE CHAIRPERSON: We'll give two minutes for a change of ‑‑

‑‑‑ Pause

1274 MR. LARSEN: You're trying to work that part out of the proceeding, aren't you?

1275 THE CHAIRPERSON: I apologize very sincerely. I am going to get myself a big note. Please, please proceed, Mr. Larsen, with your two minutes on ‑‑ I was wondering what everybody was whispering to me about two minutes. Sincere apologies.

1276 MR. LARSEN: No problem. Thank you very much. Just to reemphasize again, the audience is there. More than one‑third of Medicine Hat residents are 45 or older, and they total more than 19,000 people. It's one of the fastest growing demographics in the city. This mature audience really does deserve a radio station custom built for them, and The Lounge would be that radio station.

1277 We have the financial resources to build the facilities, launch and market the station, and see it through its early operating years.

1278 And we are truly here before you, at this hearing, because we want to build a new dynamic regional radio company.

1279 We have our first licence in Lethbridge. It's a great start, we're very excited, and very grateful for that opportunity, but a single stand‑alone station is not a company, it is really truly an asset. And to grow a new company, we do need more licences, and Medicine Hat is the critical component for us for our future growth for the reasons that I outlined in our presentation today.

1280 Madam Chair and Commissioners, I do respectfully ask you to grant us our second FM licence to serve the City of Medicine Hat and sincerely thank you for your time and consideration today.

1281 THE CHAIRPERSON: Thank you, Mr. Larsen.

1282 I will just not reiterate what I said before, but if we could proceed to the next panel.

1283 THE SECRETARY: Thank you, Madam Chair.

1284 I would now call on the next applicant, Vista Radio Limited, to come forward to the presentation table.

1285 THE CHAIRPERSON: Maybe we'll just take five minutes and so we can ‑‑ we don't want to rush you in terms of getting your documents and everything.

‑‑‑ Upon recessing at 1625 / Suspension à 1625

‑‑‑ Upon resuming at 1633 / Reprise à 1633

1286 THE CHAIRPERSON: Madam Secretary...?

1287 THE SECRETARY: Thank you, Madam Chairman.

1288 We will now proceed with item 6 on the agenda, which is an application by Vista Radio Limited for a licence to operate an English‑language FM commercial radio programming undertaking in Medicine Hat. The new station would operate on frequency 105.3 megahertz (channel 287C) with an effective radiated power of 100,000 watts (non‑directional antenna/antenna height of 99.5 metres).

1289 Appearing for the applicant is Ms Margot Micallef, who will introduce her colleagues, and you will then have 20 minutes for your presentation.

1290 Ms Micallef...?

PRESENTATION / PRÉSENTATION

1291 MS MICALLEF: Thank you. Good afternoon Commissioners, CRTC Staff, Madam Commissioner ‑‑ Madam Chair.

1292 I'd like to start by apologizing for taking a bit of time to get our group organized and collected here on this panel, so thank you for that.

1293 I'd also like to introduce the panel. Seated to my immediate left is Bryan Edwards our vice‑chair of Vista Radio. Next to Bryan is Jason Mann, our vice‑president, programming, and to Jason's left is John Yerxa of Yerxa Research. To my right is Paul Mann, executive vice‑president, operations.

1294 Madam Chair, Members of the Commission, we're now ready to begin our presentation.

1295 It is an honour to appear before you today with an application for a new FM station to serve Medicine Hat, Alberta.

1296 The basis of our proposal is simple. First, Medicine Hat has a vibrant and growing economy, but is presently underserved in terms of radio. Second, Vista will introduce a distinct format to Medicine Hat designed to reach the largest unserved segment of the adult radio‑listening population. Third, Vista has a strong, well‑funded business plan, which will enable us to ably compete with one of the most profitable and well‑established radio broadcasters in western Canada. Fourth, in so doing, we will bring a new editorial voice to southeastern Alberta. Fifth, we will also be making a significant direct contribution to the development of Canadian talent, and sixth, by providing a new radio station reflective of the Medicine Hat community and with a significant emphasis on local programming, our application will clearly meet your licensing criteria and benefit the Canadian Broadcasting System.

1297 MR. EDWARDS: Vista Radio Limited is an emerging radio broadcasting company presently consisting of 19 stations all located in smaller markets throughout British Columbia. However, Vista's commitment is to be a strong western Canadian small and medium market broadcaster; therefore, the addition of an FM station in Medicine Hat will enable us to begin our expansion into Alberta, where two members of Vista's senior management team have their roots, and where the majority of Vista's shareholders also reside.

1298 As a small market broadcaster, Vista has, thus far, made major commitments in all of the communities we are licenced to serve.

1299 Vista not only endeavours to employ people locally, but to ensure that each of our stations has sufficient on‑air and information personnel to deliver a distinct musical sound, excellent local news, and an absolute dedication to the cities and towns we operate in.

1300 Our mandate is simple. Vista strives to create local radio stations, staffed by a local personnel, delivering local programming.

1301 MR. P. MANN: We've heard a number of applicants today describe the economic environment in Medicine Hat. We'd like to just briefly summarize what everyone else has said. The current economic situation in Medicine Hat is red hot. We've done our research, and we know it first hand from one of our founding shareholders who operates in this booming retail market.

1302 Current retail sales forecasts for 2006 are almost 60 percent above the national average. And in keeping with Alberta's economic and population boom, retail sales for Medicine Hat are forecast to grow an additional 30 percent over the next five years, which means it will continue to have one of the most vibrant retail sectors in Canada for years to come.

1303 MR. EDWARDS: Our analysis of the correlation between retail sales and radio revenue suggests that Medicine Hat is a very profitable radio market, yet it has been severely underserved in terms of radio for quite some time.

1304 In fact, Medicine Hat's local radio market has one of the highest concentrations of listeners per commercial station than does any other Canadian market of comparable size.

1305 And it may now be the only city in Canada with a population in excess of 60,000 people where one entity controls all of the full power radio and television broadcasting undertakings. Consequently, there is an exceptionally limited music choice, as well as a lack of appropriate news and information coverage for adult radio listeners. At present, if you are not a fan of country music your only alternative is current rock and pop, targeted at a younger demographic. Therefore, we believe the market is more than ready to support one, if not two, new radio stations adding diversity and choice to a listening public that definitely wants it.

1306 I'm now going to turn the presentation over to John Yerxa who will talk about our format research.

1307 MR. YERXA: Between October 17th and 21st of last year, Banister Research conducted 400 telephone interviews with adult radio listeners in Medicine Hat utilizing a questionnaire template, which I designed, and which has been presented by various other broadcast companies, including Corus, Pattison, and Standard at hearings such as this one.

1308 In the case of Medicine Hat, once adult respondents were randomly selected, Banister first studied their listening behaviour. It then probed listeners interest in six different mainstream music formats and asked whether they could identify an existing local station delivering each one.

1309 The two most important calculations the folks at Banister performed with their data were to identify the percentage of listeners that expressed significant interest in each format, as well as the percentage that could not associate a local radio station with each format.

1310 By comparing these two results, one is able to identify the largest musical hole or opportunity in the market, simply by examining the trade‑off between popularity and availability. Obviously, the more popular a music type is within the target population, the more economically viable that format will be. However, the more available a music type is perceived to be, the less opportunity it will have to grow as a district format without cannibalizing another player in the market. Therefore, suffice it to say that the more popular but less available a music type is, the greater opportunity there is for that format in a given market.

1311 Using this approach Banister was easily able to determine that classic hits and classic rock represented the best format opportunities in Medicine Hat as they registered high popularity but were also perceived by adult radio listeners to clearly be the most difficult music types to find on the local radio dial; however, let me be clear here. Medicine Hat radio listeners want additional mainstream music and as such, the Banister research has shown that there are clearly three mainstream music holes in the 35 to 54 demographic cell.

1312 MR. J. MANN: Now, the Commission may ask, why did Vista choose classic hits instead of classic rock? What difference is there between these two formats? The answer, very little. The classic hits format exhibits significant crossover with classic rock, and in the case of Medicine Hat, both classic hits and classic rock are primarily targeted at male listeners 35 to 54 years of age. So although our format has been labelled classic hits, Vista will be presenting a combined format if it is awarded an FM licence.

1313 But at this point, it is important to stress that because Pattison's MY 96 is primarily focused on the 18 to 34 age cell and does play some current rock music, the two biggest mainstream music holes in Medicine Hat are clearly classic hits and classic rock, as opposed to current rock, which would exhibit greater musical overlap with Pattison's local contemporary station.

1314 Let's remember that Vista's research mandate specifically outlined two objectives: One, to locate a format which would be commercially viable in Medicine Hat, as opposed to a niche format that would not, and, two, to locate a format that while popular would have minimal impact on the other commercial stations in the market. We have identified a format which will appeal to 35 to 54, primarily male listeners, by reintroducing many songs and artists that are not being aired locally in any significant numbers.

1315 By carefully balancing core classic hits artists like The Police, Bryan Adams, Fleetwood Mac, David Bowie, Colin James, and Elton John with core classic rock artists like Aerosmith, Pink Floyd, Rush, The Rolling Stones, and The Who, as well as one hit wonders from War, Gerry Rafferty, and Stealers Wheel, to name a few, Vista's customized classic hits format is clearly designed to superserve the 35 to 54 age demographic.

1316 And given Vista's 35 percent Cancon commitment, we will not only revisit past Canadian acts, but also present newer Canadian artists who are compatible with the overall sound of the station. Artists like Sloan, Mr. Completely, which is a Campbell River band that our stations on Vancouver Island were the first to play on the radio), Matthew Barber, Jeremy Fisher, and Bedouin Soundclash. Our view is that the insertion of the more up‑to‑date Canadian acts will add a variety and freshness to our format without violating the overall premise of Classic Hits 105.3 FM.

1317 After all, the key to this station is that it will be providing a much greater amount of 1970s and 1980s rock and pop music than the existing stations currently do. And in doing so, will be focused specifically on the age 35 to 54 demographic.

1318 MR. P. MANN: It's also important to recognize that our new FM station will primarily appeal to those adults who are now listening elsewhere to satisfy their hunger for the music they grew up with.

1319 Indeed, according to our research. Vista's estimated first‑year share is 27 percent, yet, in terms of impact, Classic Hits 105.3 would only take a relatively small percentage of each incumbent's existing partisanship, while gaining approximately half of its core audience from non‑commercial and out‑of‑market stations.

1320 And in doing so, Classic Hits 105.3 would have the smallest direct impact on the local market when compared to all of the other format options that were tested.

1321 Of course, Vista will easily be able to monetize this increased tuning or repatriation of listening to local commercial radio, thereby growing overall market revenue.

1322 One should also remember that Medicine Hat has not had any competition in the commercial radio market since 1998, when there were two full‑power operators, and the city has grown exponentially since then.

1323 Therefore, with Medicine Hat forecast to experience robust growth and a rapidly increasing population in the next few years, the existing stations will be granted an exceptionally stable and profitable business environment to withstand the impact of one or more new market entrants.

1324 MR. EDWARDS: Our belief in this regard is further reinforced by the fact that local and national advertisers do not currently have access to a Medicine Hat radio station that consistently appeals to 35 to 54 year olds, primarily males. Thus, we are confident that the revenue projections in our application are realistic.

1325 MR. J. MANN: Of course, Classic Hits 105.3 will be much more than just a music station. As you've heard in prior hearings from our director of news and spoken word programming, Glenn Hicks, who unfortunately couldn't be here with us today, news and spoken word is a key component of all of our stations.

1326 And, if licenced, Classic Hits 105.3 would be no different.

1327 Our research in Medicine Hat revealed that a high number of adult listeners are currently dissatisfied with the lack of news and information on Medicine Hat radio stations, and 35 to 54‑year‑old radio listeners, the prime target group of our proposed classic hits station, exhibited the highest dissatisfaction on this issue.

1328 Therefore, our intention is to establish Classic Hits 105.3 as a significant source for local and regional news coverage. In particular, Vista will provide 92 regularly scheduled newscasts for in excess of six hours of news coverage per week. Moreover, we will provide 10 hours and 37 minutes of structured spoken word per week, encompassing regular weather and road conditions, hourly community service announcements, entertainment and community news, as well as specialty information specifically designed for the Medicine Hat region, such as agricultural reports and energy sector reports.

1329 MR. P. MANN: Regarding our commitment to local information, I would quickly like to just add that in our first year on Vancouver Island, we have increased news staffing at our operations by 35 percent, resulting in a dramatic increase in the amount of local news coverage on the air.

1330 Everywhere we now operate, whether Duncan, Prince George, or Castlegar, BC, our policy is that each station must have its own newsroom with its own editorial voice.

1331 We view this local component of our programming as Vista's greatest opportunity to compete in an era of increased competitive technology, such as satellite radio and the internet.

1332 And in the case of Medicine Hat, Vista's proposal will answer the call for a greater diversity of editorial voices while our station addresses the local community's demand for more news and information.

1333 MR. EDWARDS: Regarding Canadian talent development, Vista is prepared to make a direct cash commitment of $420,000 over a seven‑year period or $60,000 per year in support of Canadian talent development.

1334 We will direct our annual $60,000 commitment to four initiatives. The first being FACTOR for $40,000 per year, the second to Starmaker Fund for 5,000 per year, the third to Native Women in the Arts for an additional 5,000 a year, and the fourth to ARIA for 10,000 per year. That's a total of 420,000 direct cash dollars over the seven years of the licence period.

1335 MR. P. MANN: Of course, another way for Vista to nurture and develop Canadian talent is through the hiring of new broadcasters who will work at our station, buy homes, pay taxes, settle down, create families, and contribute to the future of Medicine Hat and southeastern Alberta.

1336 Our proposed station will employ, starting from its first day of operation, 16 new full‑time employees and one part‑time employee, including on‑air announcers, news and sports reporters, creative writers, sales people, administrative, and promotional personnel.

1337 We are committed to being a local radio station, and Vista's operating philosophy of investing our money in small and medium markets across western Canada is one that we will maintain now and in the future, and we look forward to sharing some stories with you.

1338 MR. EDWARDS: At the same time, please be aware that Vista is committed to creating a barrier‑free, respectful workplace and a corporate culture that offers equal opportunity and reflects the diversity of the communities we serve.

1339 MS MICALLEF: Madam Chair and Members of the Commission, let's quickly review the merits of our application.

1340 We have provided evidence in our application underlining the strengths of Medicine Hat, and today you have heard about the need in that community for at least one more radio station, and possibly two.

1341 We propose a music format that is commercially viable and which will add diversity to the market. Our business plan is well thought out, and we are well‑capitalized. Our revenues are achievable, and our costs are reasonable.

1342 We will bring a new editorial voice to Medicine Hat adding an independent alternative to the local monopoly of mainstream radio and television news, which currently dominates that community.

1343 We will fully meet the Canadian content requirements and are prepared to allocate $60,000 per year for a total of $420,000 over the seven year term to support Canadian talent development.

1344 From day one, Vista will be committed to creating a workforce that reflects the cultural diversity of Medicine Hat and the province as a whole.

1345 Our mantra is local.

1346 Paul, Jason, Bryan, and I founded this company with a commitment to operating in small and medium markets and to making a positive difference in each of the communities we serve.

1347 These small communities are not an afterthought for us, they are our focus. Our stations stand on their own. They are not mini‑versions of larger market stations. We strive to give each of the communities we serve the opportunity to identify with a station that mirrors their community.

1348 This application will not only contribute significantly to the objectives of the Broadcasting Act, but it is truly a reflection of the commitment Vista Radio is now bringing to all of its small market radio stations and the communities we are licenced to serve.

1349 I wish to thank the Commission for this opportunity to explain our proposal to you, and we would welcome your questions at this time.

1350 THE CHAIRPERSON: Commissioner Williams...?

1351 COMMISSIONER WILLIAMS: Thank you, Ms Micallef, and good afternoon to your fellow panelists. Your panel made a very thorough presentation, and you've said you'll introduce a distinct format and spent a bit of your presentation time describing it in detail; however, we have a number of questions to get an even better understanding of your format, and I apologize in advance if there's some overlap between your answers to these questions and the facts you just provided in your opening remarks, but I think you're familiar with our ‑‑ or the Commission's legendary need for detail when we're processing competitive applications.

1352 So in the area of format, you've indicated your proposed station would offer a classic hits format to serve Medicine Hat. On page 17 of your Supplementary Brief, you define this format as true classic hits. Could you elaborate a bit on this description, and I ask because I'm trying to get an idea of whether your proposed classic hits format would focus on hit music drawn from softer AC top 40 music styles of the '70s, '80s, and '90s, or offer the more traditional classic hits music consisting of the harder rock‑oriented music from these same eras?

1353 MS MICALLEF: Thank you. I'm going to ask Jason Mann, who is our vice‑president of programming to respond.

1354 MR. J. MANN: Sure, and thanks for the question. By nature of the format, classic hits is a hybrid format and does have a degree of scalability, and, certainly, the format that we propose would be rock‑based classic hits.

1355 COMMISSIONER WILLIAMS: Okay. I note your core target audience would be adults between 37 and 47, evenly balanced between men and women. I understand that the traditional harder sounding classic hits format targets a predominantly male audience, while the newer, softer sounding version of the classic hits format targets women. Could you explain why you expect to target men and women equally with your classic hits format?

1356 MR. J. MANN: Yes. The music itself, if it stood on its own, would appeal to that proportion, I would suggest, as far as male/female skew, 62 percent as far as male skew. It's reflected on page 6 of the Banister Research Report. But it's more than music. It's the presentation of the music, it's the community involvement, it's the promotions, it's the stationality in the IDs, and in our experience with JET‑FM in Courtenay, British Columbia, it, too, is a classic hits format, a rock‑based classic hits format. We just had some research, in fact, done by CBS, our national representative selling firm, and it came back exactly 50 percent split male/female, so that would be our expectation as well, given the similar market dynamics.

1357 MR. WILLIAMS: Well, why do you believe your classic hits format would provide the 35 to 54 age group, but, more specifically, adults 37 to 47 years old with the greatest degree of programming diversity and represent the best choice of format to serve this audience?

1358 MR. YERXA: The short answer is simply because those ‑‑ the classic hits format was identified as the format with the ‑‑ representing the largest musical hole in the market, and it's primary target is 35‑54 years of age.

1359 COMMISSIONER WILLIAMS: You indicate your proposed classic hits format would serve a broad 35‑54 with a core of 37‑47 demographic. You've identified this group as being underserved. Two other applicants, Newcap and Pat Lough, are also proposing formats with a classic hits element. Both are proposing to serve the same general target audience. Could you please explain how your format differs from each of these others, and can you give us any examples that would demonstrate this difference?

1360 MR. YERXA: I think we'll begin with a short analysis that I did and presented to the Vista people, and then we can move on from there. If Jason wants to add any specific artist examples and so on, but I guess the way to start on this is my approach was to take the nine applicants for Medicine Hat and to immediately separate what I considered to be the mainstream applicants from the niche applicants. In other words, what I did is I took the liberty to separate the Christian station and the ‑‑ 1182743, I believe, Paul Larsen, which I considered to be more within a niche category, given the research that we performed on the format in various markets. And so what I was left with was seven applications, what I call mainstream applicants. Golden West, Harvard, Rogers, and Pat Lough, according to what I had read through the applications, and, also, adding what's been said here today thus far, I would classify as offering similar broad‑based rock formats; whereas, the other three, Newcap, CJVR, and Vista are more narrowly positioned at the older end of the pop or rock spectrum, more specifically targeting the 35‑44 or 35‑54 demographic. Now, I guess more specifically ‑‑ would you like me to deal with each applicant specifically?

1361 COMMISSIONER WILLIAMS: If you have the information, that would be helpful.

1362 MR. YERXA: Okay. I'll do the best I can here because this is kind of ‑‑ this changes a bit as oral presentations are made and so on.

1363 COMMISSIONER WILLIAMS: I understand.

1364 MR. YERXA: But based on what Newcap said today, there's not a lot of difference between what Vista is also presenting in that they are presenting a combined hybrid format, primarily focusing on 35‑54 men.

1365 As far as CJVR is concerned, their focus is strictly on classic rock; whereas, Vista is offering a combined classic rock/classic hits format. However, CJVR and Vista are both emphasizing men 35‑54 years of age.

1366 Harvard and Golden West are both focusing on current rock and classic rock. I'm not quite sure what the percentage breakdown is on Golden West, but I'm led to believe, based on their Supplementary Brief, and we'll see what happens tomorrow, that Harvard will still lean more about 60 percent or two‑thirds classic rock. Although they intend to skew somewhat younger, 18‑44 male.

1367 Rogers, similar to Harvard, has a focus on men 25‑54 and a broad‑based rock format, current/classic. I'm not sure of the breakout there. I didn't do an analysis of the examples.

1368 Pat Lough is close to Vista with a focus on classic hits and classic rock and men 25‑54, although he does appear to be proposing some alternative modern rock in the evening hours, so I'm not quite sure how that may skew the end result.

1369 COMMISSIONER WILLIAMS: Okay, thank you for that. You have emphasized that Classic Hits 105.3 FM will be a true classic hits music station, and in your opinion, would not impact on the incumbent station, CFMY‑FM, which I believe programs an AC/CHR blend targeting 18 to 44 women. Could you please explain to us how your format would differ from that of the incumbent?

1370 MR. YERXA: If you look at the research that we've performed, we identify CFMY's primary target as being 18 to 34, primarily female, with our own research; whereas, CHAT, for example, is primarily 55 plus, and, therefore, the hole, if you will, is 35 to 54. And as far as ‑‑ as far as the eras are concerned, CFMY is primarily focused on current music. I would say the majority would be pop, top 40 based, but there is some rock, which was evidenced in our research. This is why when we looked at the ‑‑ you see, we were ‑‑ I think we were one of the few companies that we just didn't perform a single hypothesis, we presented a variety of formats, and we discovered that current rock, mainstream rock, was not as available because it is perceived to be presented on CFMY to some extent, not ‑‑ not, by any means, a great extent, but it exists there. Consequently, they do capture some of that audience. And so, therefore, in terms of era, the Vista application would be focusing primarily on 35‑54, 1970s, 1980s, a mix of classic hits, classic rock; whereas, CFMY is pretty well targeted as a current‑based radio station.

1371 COMMISSIONER WILLIAMS: Okay, thank you. On page 17 of your Supplementary Brief, you indicate your intention to render the proposed station family friendly; although, you suggest it will be designed to primarily reach adults. Can you please elaborate on what you mean by family friendly and identify the programming elements that would support this family‑friendly branding?

1372 MR. J. MANN: Essentially, what we're saying there is that an adult 35 to 54 who happens to have kids, those kids would be safe to be in the car listening to that format, no shock jocks, and very adult in ‑‑ mature adult in nature, sophisticated, if you will.

1373 COMMISSIONER WILLIAMS: On page 28 of your Supplementary Brief, you state that it is your intention to offer this classic‑hits‑based format, given its absence in the Medicine Hat market; however, you added that this situation could change, however, before a new licence is granted. Should this occur, Vista Radio has identified an alternative format and would propose to operate a new FM radio undertaking in Medicine Hat utilizing this alternative format, should the market conditions change. What is the alternative format that you have in mind? Is it the classic rock format identified in the Banister Report, or is it another type of format?

1374 MR. YERXA: While one might assume that the choice would either be classic rock or classic hits, that is not necessarily the case. If the CRTC was to award one licence, many of these applicants would, frankly, be insane not to present a combined classic rock/classic hits format; however, recognizing that classic ‑‑ that classic rock and classic hits could fundamentally stand on their own in larger markets, the fact is that in Medicine Hat, those are the two largest music voids. But my recommendation to Vista was that assuming they were licenced, along with a second applicant, and they were preempted with classic rock and classic hits, then I would recommend that they go towards soft AC. If you look at page 5 of the Banister Research, you will see that the soft AC format has a very large void exhibited as far as not being readily available. Now, it may not demonstrate the same cume potential, but nonetheless, it is a very well‑thought‑out format, and they certainly would have no problem selling a blue chip format like that. So that was my recommendation to them to keep tucked up their sleeves if in a competitive situation they were preempted.

1375 COMMISSIONER WILLIAMS: Under what specific market conditions would you choose to change the format of licence based upon your current classic hits proposal? What would trigger that sort of change, another applicant licenced that somehow got on air before you?

1376 MR. YERXA: Again, like a lot of these hearings, depending on what's licenced, there's a mad scramble, and, of course, if you're second in ‑‑ that's why ‑‑ I guess, the danger, in a sense, is that although the CRTC does not technically decide, I suppose, on format, the danger here is that if you don't play ‑‑ if through the luck of the draw or the way things are presented there's a tendency to say, well, if everybody here is classic rock/classic hits, and there's some current rock here, then, well, I guess we better licence one of these and one of those; whereas, what I've discovered, working with Vista and prior to that with Pattison and prior to that for the past then years with Bill Yule at Monarch, in that market, there are significant holes available in the 35 to 54. So it's not really a younger versus older scenario as the market stands today. It's a 35‑54, those people who still appreciate radio if you can give them a mainstream format that they'll listen to. And, so, again, the recommendation being, if you want to present a combined format, fine, that's a wonderful opportunity, but in this case, if the market gets chaotic, the water is muddy, depending on what the local incumbent does, there are other opportunities there.

1377 COMMISSIONER WILLIAMS: What effect would this change in format have on your business plan, your current business plan, to serve the 35 ‑‑ 35‑54‑year‑old demographic.

1378 MR. P. MANN: I think I could speak to that. We very closely looked at that alternative, and, of course, because the percent of audience that it offered as an alternative, and the fact that it is a 35‑54 audience, albeit skewed female, still presents particularly, in our mind, a very viable business plan. We presented a very conservative revenue estimate as a start plan, in part, with a couple of things in mind. One was fully ‑‑ based on our own research, the belief there could well be viability here for two licences. And, secondly, that there would be aggressive competition from the incumbent, in any event, whatever format you chose. So I think at the revenue start base that we built our business plan around, the soft rock alternative, if two licences were awarded and if someone beat us to our first preference, it would not be a major impact to our plan.

1379 COMMISSIONER WILLIAMS: Okay. We'll move into the area of spoken word programming now. You indicate you will offer nine hours and 45 minutes of spoken word programming per broadcast week, which does not include non‑structured material, such as personal reflections or DJ banter or chatter. Could you confirm for us your estimated overall level of weekly spoken word programming, including the DJ banter?

1380 MR. J. MANN: Okay. My apologies on the typographical error there, it's actually 10 hours and 37 minutes, and I've provided a graph to the secretary with the title Classic Hits FM, Medicine Hat, at the top, and it's a spoken word matrix.

1381 COMMISSIONER WILLIAMS: Okay, I have it here. Okay, thank you.

1382 MR. J. MANN: In ‑‑ so in addition to that, anecdotally speaking, it would be somewhere in the neighbourhood of another three or four hours per week in spoken word.

1383 COMMISSIONER WILLIAMS: In the neighbourhood of three or four hours per week?

1384 MR. J. MANN: This is announcers introducing records and interviewing community leaders during the morning show and stuff that's just going to happen on a perchance basis.

1385 COMMISSIONER WILLIAMS: So 13‑and‑a‑half to 14‑and‑a‑half, in that timeframe ‑‑

1386 MR. J. MANN: Yes.

1387 COMMISSIONER WILLIAMS: ‑‑ hours per week? Regarding your local station produced programming, will it all be live to air, or do you plan to use voice tracking and/or automated programming? Could you tell us approximately how many hours per 126 hour broadcast week for each and when these periods would be?

1388 MR. J. MANN: Yes, total weekly hours of live announcer programming would be 62. It works out to 49 percent of the broadcast week. The hours live would be 6 a.m. to 10 a.m., followed by a couple of hours voice tracked 10 a.m. to noon, noon to one live, one to two voice tracked, two to 7 p.m. live, and 7 p.m. to midnight voice tracked, Monday to Friday. Saturday and Sunday, 9 a.m. to 3 p.m. live for a total of 62 hours. That said, during the office hours, we'll have staff, obviously, in the building prepared and ready to go on the air to do live contests or changes to weather forecasts and so forth.

1389 COMMISSIONER WILLIAMS: In your ‑‑ thank you for that. In your deficiency response dated the 19th of June, 2006, you indicated that you were planning to staff the proposed station with seven full‑time on‑air staff to realize your live to air and general programming commitments. Does this figure include the three full‑time news journalists/presenters you indicated would staff the newsroom?

1390 MR. J. MANN: Yes.

1391 COMMISSIONER WILLIAMS: Who will be responsible for the makeup of the news and information content in your newscasts?

1392 MR. J. MANN: The news director in Medicine Hat.

1393 COMMISSIONER WILLIAMS: Could you elaborate on the function of the freelance reporters you will employ and why you've chosen to give them the responsibility for preparing the agri‑biz and energy reports, rather than your full‑time station staff?

1394 MR. J. MANN: Okay, sorry, can you ask the question again?

1395 COMMISSIONER WILLIAMS: Sure. Could you please elaborate on the function of the freelance reporters you will employ and why you have chosen to give them the responsibility for preparing the agri‑biz and energy report, rather than using full‑time station staff?

1396 MR. J. MANN: Sure. The stringer concept, if you will, or special projects, I guess the thought is that the agricultural reporting and the energy sector reporting is a little bit softer news, and it's something that you can plan for a little bit more in advance. We'd like to reserve our primary news people for spot news.

1397 COMMISSIONER WILLIAMS: Okay. If I understand your financials, you indicated you have budgeted 18,000 in year one, increasing to 20,000 by year seven, to cover the costs associated with the Corus News Services and for paying your freelance reporters. Could you just take us through this budget distribution and why you feel it is sufficient to pay your freelance reporters on top of the annual news service subscription fee?

1398 MR. J. MANN: Sure. The Corus News Service subscription fee is 300‑$500 in our existing markets, and so that max, based on those numbers, there would be $6,000 remaining, 12,000 for stringer reports and energy sector and agricultural reports.

1399 COMMISSIONER WILLIAMS: Given your use of ‑‑ well, let me back up a minute. To what degree, will you rely on Corus News Service to provide your news content?

1400 MR. J. MANN: The benchmark for our news departments in Vista is 85 percent local, so it's very minimal. It's very much a local emphasis on news and information programming. We find that to be our greatest advantage in ‑‑ as a local broadcaster, but, of course, we want to make sure that we're aware and able to communicate other major national/international issues.

1401 COMMISSIONER WILLIAMS: So given your use of Corus News Services, I guess we can safely conclude that your programming won't be a hundred percent local. Can you tell us what the minimum percentage of local programming to be offered would be during each broadcast week?

1402 MR. J. MANN: The programming itself is local.

1403 COMMISSIONER WILLIAMS: 85 percent, like you said earlier?

1404 MR. J. MANN: We wouldn't use any prepackaged newscasts, if that's what you're referring to. It would be locally produced, locally generated.

1405 COMMISSIONER WILLIAMS: Using that information provided from Corus News?

1406 MR. J. MANN: I'm not sure if I ‑‑ if we're understanding. The ‑‑ the newscasts ‑‑ all of our newscasts, 100 percent of our newscasts, will be written, produced, and presented ‑‑

1407 COMMISSIONER WILLIAMS: Locally?

1408 MR. J. MANN: ‑‑ local.

1409 COMMISSIONER WILLIAMS: How will your ‑‑

1410 MR. P. MANN: Sorry, just a point of clarification, if I might. Just on the current use of Corus in British Columbia and all of our stations, our primary focus with Corus is to be a participant in the regional news pool. So in other words, because we don't have a Vancouver or Victoria station, therefore not a leg reporter or a downtown Vancouver business storystringer on site, that's where we draw, mainly, in the event of something that's relevant, you know be it in Prince George, Castlegar, Duncan, wherever. On the other hand, we also ‑‑ the quid pro quo is putting stories into that pool.

1411 COMMISSIONER WILLIAMS: Yeah, and that was going to be my next question.

1412 MR. P. MANN: Yes.

1413 COMMISSIONER WILLIAMS: So you actually contribute to that as well?

1414 MR. P. MANN: Absolutely, yes. So that's the mutual benefit.

1415 COMMISSIONER WILLIAMS: Thank you. How will your spoken word programming commitments be affected, if at all, should you be licenced, but due to market conditions, you opt to switch format, targeting a different audience group?

1416 MR. YERXA: Let me just clarify that if the alternative format was, in fact, adopted that it's the same target group, 35 to ‑‑

1417 COMMISSIONER WILLIAMS: The exact same target group, the same distribution?

1418 MR. YERXA: The same age group of 35‑54, which we found in our research was most wanting of further news and information in the market.

1419 COMMISSIONER WILLIAMS: And on an approximate 50/50 split on a gender basis?

1420 MR. YERXA: In ‑‑ no, the soft AC would skew more female.

1421 COMMISSIONER WILLIAMS: So there's a slight difference?

1422 MR. YERXA: But overall, the 35 to 54 age demo was clearly desirous of more news and information, local news and information.

1423 COMMISSIONER WILLIAMS: Okay, thank you. Now, we'll move into the area of Canadian talent development contributions now. In a deficiency response dated June 19th, 2006, you indicate that you will redirect the funds from your front and center initiative to either FACTOR or the Radio Starmaker Fund. Could you please confirm to which third party these funds will be directed, as well as the total amount that will be allocated to that initiative?

1424 MR. EDWARDS: I can confirm that the allocation will be to FACTOR.

1425 COMMISSIONER WILLIAMS: FACTOR? Okay, thank you. You've indicated that you will give 5,000 a year or 35,000 over the licence term to the Native Women in the Arts initiative. In a deficiency response, dated June 19th, 2006, you mentioned a formal letter from the NWIA that would provide an annual cost breakdown for this initiative. Do you have that letter? Could you provide details on how these funds will be directed?

1426 MR. P. MANN: We have an e‑mail letter that was filed, a response from Ms Sandler Laronde(ph), confirming that agreement, and we are still waiting on a letterhead letter, but we do ‑‑ we did file the e‑mail response confirming their commitment to spend the money on performances of western artists, yes.

1427 COMMISSIONER WILLIAMS: And how would these funds be directed?

1428 MR. P. MANN: Women in the arts in western Canada and musical as the criteria, so whether it's performance or recording.

1429 COMMISSIONER WILLIAMS: Yeah.

1430 MR. P. MANN: Yes.

1431 COMMISSIONER WILLIAMS: You ‑‑ I note that on page 27 of your Supplementary Brief, this funding would support music‑related projects?

1432 MR. P. MANN: Yes.

1433 COMMISSIONER WILLIAMS: Could you please elaborate on what some of these projects may be?

1434 MR. P. MANN: Well, let's take an Aboriginal female performer who may qualify within the bounds of their foundation for an opportunity to record or maybe taking a small performance troop on a tour in this part of the country, and they have done several of those, and, of course, focusing on Aboriginal women artists who originate from western Canada.

1435 MR. J. MANN: Another project that they have done recently, in fact, is a songwriters seminar, so a project like that would also, in our mind, be useful.

1436 COMMISSIONER WILLIAMS: I note that in the same deficiency response you indicate that in the event that this initiative does not qualify as Canadian talent development, you would direct these funds to FACTOR. Would you accept this as a condition of licence?

1437 MR. EDWARDS: Absolutely.

1438 MR. P. MANN: Certainly.

1439 COMMISSIONER WILLIAMS: Let's talk a bit about the synergies between your other Vista properties. Given your other radio holdings in the Province of British Columbia, could you please elaborate on the possibility of programming, management, and administrative synergies that may be possible with your proposed Medicine Hat undertaking? More specifically, do you envision any possible synergies in the area of news gathering and content presentation?

1440 MR. EDWARDS: I don't think that we would see any synergies in terms of news gathering. The provinces are quite different, other than the contribution that we get from the Corus pool, and just to be clear, the Corus pool are stories, not casts or any kind of programming.

1441 The synergies that we would achieve with the Vista operations are really the back‑office systems, traffic, which we've centralized, accounting, which has been centralized, and a certain degree of management in the culture of the company.

1442 Our success has been to brand in the marketplaces where we go, and each of the brands we have are very targeted to the marketplace, and ‑‑ and so the programming and the news is ‑‑ is extremely reflective of whatever city that radio station is in, and that would be ‑‑ continue to be our philosophy.

1443 COMMISSIONER WILLIAMS: I think you mentioned that your stations stand on their own, they're not mini versions of your larger?

1444 MR. P. MANN: That's correct.

1445 COMMISSIONER WILLIAMS: So other than the synergy opportunity of providing something from Medicine Hat into the Corus pool that may or may not be picked up, you don't see any synergies as it pertains to the gathering of news?

1446 MR. EDWARDS: Not unless we had another Alberta licence or two.

‑‑‑ Laughter / Rires

1447 COMMISSIONER WILLIAMS: No comment.

1448 MR. EDWARDS: I think on the programming side, you know, if we have a syndicated program that fits the format that we use somewhere else, we ‑‑ you know, we would use that. I think what we would do is certainly use the voices. You know, voice is to radio as colour to television, so there's no harm in using voices for the production, the commercial content, that kind of thing.

1449 COMMISSIONER WILLIAMS: Okay. On page 9 of your Supplementary Brief, you estimate that the regional population within one hour drive of Medicine Hat is over a hundred thousand people. Could you please explain to us how you arrived at that estimate?

1450 MR. P. MANN: Yeah, just ‑‑ that was a trading area, a population that was provided to us in terms of the retail service area that essentially funds the retail base of this marketplace.

1451 COMMISSIONER WILLIAMS: They would involve these ‑‑

1452 MR. P. MANN: So that would include say Brooks, for example, Newell County, County Forty Mile. You've got communities as far to the west as Bow Island, Taber, and, of course, over into the Saskatchewan side as well, within that circle, as far as Maple Creek and so forth. So it gets very close to approaching a hundred thousand. I believe there is ‑‑ there was an error in our 05 millivolt that stated a hundred thousand. That was a transposed retail trading area number not to be confused.

1453 COMMISSIONER WILLIAMS: So all within your coverage area, you can find a hundred thousand?

1454 MR. P. MANN: No, what I'm saying was the number put into that slot in that form was in error at a hundred thousand as the trading area population for Medicine Hat, as opposed to the .5 contour population, which is in the just over 60,000 range.

1455 COMMISSIONER WILLIAMS: Okay. Do you believe the Medicine Hat market, and I kind of get an indication that you might, could support more than one new station at this time? And could you describe the impact on licensing one of the similar format proposals would have on your application and your business plan?

1456 MR. P. MANN: I guess, we'll come at this from the business plan side first. In our case, we ‑‑ we actually looked at the very serious consideration, as I stated briefly earlier, that this market and our research on it suggested this was quite likely a two‑licence potential scenario, and so we did build a conservative business plan based on that, but clearly the growth, as others have spoken to here today, you know, is a significant factor here on where this market goes. Someone stated the '05 Financial Post numbers of just over a billion, it's now a billion, almost a billion three in the updated '06 numbers. If you look at markets comparable to that in the same FP book ‑‑ Prince George, where we operate, there are two operators, four FM stations. It's about a billion three, Financial Post '06 numbers. Lethbridge, which we're all well familiar with had been about a billion four when everyone was prepping for that application. It's now, in real life, in '06, in the FP numbers at a billion eight. So the entire sort of growth of this region and where the business core is going is quite phenomenal.

1457 There are also some interesting things happening in Medicine Hat. I haven't heard this mentioned today, but a major business park with Costco as an anchor has just been announced, and there are a number of other growth engines that are getting under way.

1458 It's going to actually, for example, stop traffic going west to Lethbridge in the case of major box‑store shoppers for choices like Costco that have gone there all the way from Saskatchewan and are going to park them in Medicine Hat. So I think there's a lot of reason for optimism, and I do believe, carefully chosen, two licences can do business in this market.

1459 COMMISSIONER WILLIAMS: Will the recent decision by the Saskatchewan government, in your opinion, to lower the provincial tax rate and the higher costs of automotive fuel affect this cross‑border shopping?

1460 MR. P. MANN: I guess for those of us who have shopped in Saskatchewan lately, it's quite a drive to Regina. The choices, you know, compared to what might be available in southeastern Alberta are limited simply by the nature of the communities. And when I say that, with all due respect, the consumer choices, if you will, for major shopping experiences in a Swift Current or a Shaunavon or a Kindersley or Rosetown, some of these destinations that do come across the border, lowered tax or gas costs or not, I suspect the consumer is going to make that.

1461 COMMISSIONER WILLIAMS: It's primarily a choice issue, isn't it?

1462 MR. P. MANN: It's a choice issue, absolutely.

1463 COMMISSIONER WILLIAMS: Yes, okay, thank you very much, Ms Micallef and Vista panel members.

1464 That concludes my questions, Madam Chair.

1465 THE CHAIRPERSON: Thank you. I don't ‑‑ I only have one question. And, Mr. Mann, I think you were referring to a letter from the NWIA, and you say you filed it. It's already been filed?

1466 MR. P. MANN: We filed the e‑mail response from Ms Sandler Laronde. Yes, that's the one you have on file, just asking her to confirm before that deadline that the criteria we had agreed upon was still intact. That was her response, and a letter to follow, yes. And, again, our ‑‑

1467 THE CHAIRPERSON: Oh, okay, so it's already ‑‑ the information is already on the file?

1468 MR. P. MANN: That e‑mail is on file, yes. The subsequent letter ‑‑ formal letter from her is not yet on file, which was, I think, though, the question about whether this became a qualification issue, would we have a concern about moving that ‑‑

1469 THE CHAIRPERSON: Over. Yes. All right. I have a sticky reminding me to give you two minutes to tell us why we should choose Vista. Please go ahead.

1470 MS MICALLEF: Thank you. Madam Chair, Commissioners, and CRTC Staff. Medicine Hat is an important market to Vista. Vista specializes in small and medium‑market radio.

1471 We understand these smaller communities, and we focus our resources in such a way as to be able to bring quality radio to these small communities.

1472 In the 12 months that we've operated the 19 stations that are licenced to Vista in British Columbia, our listeners have told us what a difference we've made in the communities that we serve.

1473 Our employees have told us what a difference we've made in the quality of their work environment.

1474 We've been named business of the year in one of our communities.

1475 We've taken markets, which have been virtually abandoned by previous owners, and we committed funds and time to the community and to charitable and other events and things that matter to those communities.

1476 In short, we have made a positive difference in the communities we serve in just the 12 months that we've owned these stations.

1477 In addition, Vista has been able to attract extremely talented employees including on‑air people, news people, and market managers.

1478 Our goal is to make Vista a company that people want to be with, and it's for this reason that we've implemented, just this year, an employee share purchase program that's available to our employees so that they can participate in the ownership of their company. This decision was driven by the enthusiasm and passion that had been shown us by our employees and their desire to become a part of the ownership structure of Vista.

1479 In the short time that we have been broadcasters in British Columbia, we've established ourselves as passionate about the communities we serve and the employees that work for us.

1480 We look forward to bringing this passion to Alberta, and, in particular, to Medicine Hat. Thank you.

1481 THE CHAIRPERSON: Thank you, Ms Micallef and panel. I think we will now take a 15‑minute break returning here at quarter to six.

‑‑‑ Upon recessing at 1726 / Suspension à 1726

‑‑‑ Upon resuming at 1747 / Reprise à 1747

1482 THE CHAIRPERSON: I'm pleased to announce that we have now completed volume 1 of 7 volumes of applications and Supplementary Briefs.

1483 Madam Secretary...?

1484 THE SECRETARY: Thank you, Madam Chair.

1485 We will now proceed with the last application to be heard today, which is the application by Harvard Broadcasting Inc. for a licence to operate an English‑language FM commercial radio programming undertaking in Medicine Hat.

1486 The new station would operate on frequency 92.9 megahertz (channel 225C1) with an effective radiated power of 100,000 watts (non‑directional antenna/antenna height of 96 metres).

1487 Appearing for the applicant is Mr. Bruce Cowie who will introduce his colleagues, and you will have 20 minutes for your presentation.

1488 Mr. Cowie...?

PRESENTATION / PRÉSENTATION

1489 MR. COWIE: Thank you.

1490 Good afternoon, Madam Chair, Members of the Commission, Members of the Commission Staff. I'm delighted to see all of you again, and I'm sure you're happy to see us too because we're the last volume today.

1491 I'm vice‑president of Harvard Broadcasting. I'm pleased to be here today to present our application for Rock 92, a new mainstream rock FM station serving the prosperous and growing community of Medicine Hat.

1492 Before beginning our presentation, I'd like to introduce the members of our team. Seated on my right is Michael Olstrom, Harvard's station group manager. Seated next to Michael is Karen Broderick, Harvard's national sales manager. On my left is Daryl Holien, Harvard's director of FM programming and creative services. Daryl has been in the radio industry for 30 years having served in every facet of the business from on‑air to production and programming. Daryl is responsible for programming Harvard's mainstream rock station, The Wolf. In the back row, beginning at my far right, is Debra McLaughlin of Strategic Inc., the company that did our consumer demand study. Next to Debra is Rob Malcolmson, a partner at Goodmans LLP, our legal counsel. Next to Rob is Tine Svedahl, vice‑president, investments, for our Harvard Developments, our parent company, and, finally, on my left, in the back row is Paul Hill, president and CEO of Harvard Developments. Mr. Hill is one of Canada's business leaders and operates a family‑owned diversified company that has just celebrated 103 years of doing business in western Canada. The success of the Hill companies has been built on two principles, caring and commitment, principles which guide not only our business operations, but our attitude and social activities in the communities we serve.

1493 Paul will first speak to you about Harvard ‑‑ why Harvard has chosen to apply for a new station in Medicine Hat and how Rock 92 fits into our regional growth strategy.

1494 Debra will then give an overview of the strong Medicine Hat market and the high demand for the format we propose.

1495 Karen will speak to the demand for our proposed service among advertisers, and then Michael and Daryl will describe the station in more detail, including its target audience and the kind of programming we propose.

1496 And, finally, I will present our locally focused CTD package and our plans for meaningful investment into talent development among Aboriginal peoples.

1497 Paul...?

1498 MR. HILL: Thank you, Bruce.

1499 As the Commission knows, Harvard is a regional broadcaster based in Saskatchewan with plans for growth beyond the boarders of our home province.

1500 Most recently, we have appeared before you seeking opportunities to serve Calgary and Fort McMurray, Alberta. And later this week, you will hear our application for Saskatoon.

1501 Medicine Hat represents another logical step in our regional growth strategy. It is the first major market west of the Saskatchewan/Alberta border, and it is home to many people and businesses that have their roots in Harvard's home market of Saskatchewan.

1502 As a result, Medicine Hat is a natural fit and will serve to link our operations in Calgary and soon, we hope, Fort McMurray, to our base in Saskatchewan.

1503 As the Commission is aware, our goals are to grow our radio business in western Canada, expand Harvard's role as a mid‑sized broadcaster, and make significant contributions to Canadian talent development in this region. Medicine Hat represents another key market for our regional growth strategy.

1504 In the recent commercial radio policy review, the Commission heard from Harvard and others on the importance of diversity in the broadcast system. There was a consistent view put forward that independent broadcasters play a critical role in providing balance and reflecting regional differences.

1505 We are here today because we strongly believe that at the end of a period marked by a considerable consolidation within the radio industry, there is a greater need to expand the role for smaller and mid‑sized owners, and we believe that Harvard meets that need.

1506 Debra...?

1507 MS SVEDAHL: I'm Tina Svedahl. I'm going to speak for Debra.

1508 Thanks, Paul. Medicine Hat is ideal for a new licence. The economy is stable, and forecasts for both the short and long term are positive.

1509 Personal income is expanding, the GDP is growing, and retail sales per capita are well above the national average.

1510 By all accounts, Medicine Hat is well‑positioned to absorb a new licence. The population is growing steadily, and the bulk of it, almost two‑thirds, is below the age of 45.

1511 Our research indicates that the 18 to 49 demographic in Medicine Hat is underserved. We found clear indication of dissatisfaction and an extraordinary level of demand for our proposed mainstream rock format. We found that 91 percent stated that they would definitely or probably listen to a new mainstream rock station. Our research demonstrated that Rock 92 would attract a broad audience ranging in age from 12 to 49, with the most interest from the listeners in the 25 to 44 demographic, and will include light listeners to radio.

1512 There are three radio stations in the market, an AC, a new country, and a low‑power Christian station, all formats that, typically, skew female. As demonstrated by the high levels of dissatisfaction among Medicine Hat listeners, what is clearly needed in the market is a service that provides a broader range of popular rock music and balances the market with a station that appeals to a male audience.

1513 Recognizing the reality that the Medicine Hat population is almost equally comprised of women and men, a mainstream rock FM will accomplish this.

1514 MS BRODERICK: Medicine Hat is a wealthy community with a diversified economic base. Retail sales in Medicine Hat are almost 60 percent higher than the national average and have increased 5.3 percent over last year. This city also has a low unemployment rate, and housing prices are on the rise due to increased demand and record‑breaking levels of new construction.

1515 Media buyers are enthusiastic about the prospect of another radio station in Medicine Hat. The continued expansion of retail advertising activity, combined with the demand of the marketplace, means that more radio advertising dollars will be available to all stations in the market. A new entrant will also add much needed diversity in terms of advertising options for local retailers.

1516 Finally, Rock 92 will have minimal impact on incumbent stations. Our research demonstrated that a mainstream rock service was more likely to attract new listeners and increase tuning among currently light listeners to radio.

1517 Michael...?

1518 MR. OLSTROM: Thank you, Karen.

1519 Rock 92 sound will be highly distinguishable from existing services in Medicine Hat. With an overall strategy to play more titles with fewer spins and fewer commercial interruptions, Rock 92 will offer what our research identified consumers want, more variety and less repetition.

1520 The new station will play a popular mix of classic, modern, and alternative rock. About 60 percent of the play list will be drawn from classic rock, while 40 percent will come from the modern and alternative rock charts. Drawing from three charts will provide a diverse selection of popular music that accounts for the majority of record sales.

1521 Canadian artists such as Rush and Neil Young fall into the classic rock category, while Nickelback, Three Days Grace, the Trews, Stabilo, and Mobile are Canadian modern rock acts. Alternative artists include Billy Talent and the Alberta‑based bands, Midpoint, Shutter, and Stairwell. Artists like these will be showcased through our regular playlist and will receive meaningful airplay on the station as evidenced by our commitment to 40 percent Canadian content.

1522 We note that both the AC and new country stations in the market offer formats that generally appeal to female audiences, so we see a prime opportunity to introduce a format that appeals to the male portion of the population.

1523 Finally, Harvard continues to recognize the need to provide a service to a younger audience to ensure radio's place in their media choices as they age.

1524 Our strategically scheduled feature programs combined with the emphasis on alternative and modern rock will enable us to attract a younger audience whose musical interests include alternative and modern rock.

1525 Daryl...?

1526 MR. HOLIEN: Not only do we intent to provide much needed coverage of new rock releases and infrequently played subgenres such as punk rock, two of our feature programs in particular will make a very tangible contribution to Canadian talent development.

1527 Indie Rocks will feature new and uncharted Canadian acts that are not getting the kind of exposure they need and deserve. Acts like the Novaks, Holler, Marble Index, and Boy. By liaising with indie labels and using a combination of our research, of listener suggestions, and feedback, Indie Rocks will bring cutting edge music to Medicine Hat. We know that there is a strong appetite for new music, and this featured programming will provide a time slot for those wishing to expand their musical horizons.

1528 Rock 92 will also place special emphasis on ‑‑ will also place special emphasis on Canadian and regional rock artists through Canadians Rock. This feature will air six times daily. It will include a short biography or interview, and then a song by the featured act. Canadians Rock will be mixed into Rock 92's regular music flow and maximize exposure for Canadian artists, providing our core audience with the innovative programming mix they demand.

1529 MR. OLSTROM: In addition to these features which highlight and expose Canadian talent, Rock 92 will offer other information programming of interest to the listeners.

1530 Our research showed that our target audience values local news and weather. As such, newscasts will be scheduled at peak periods, totalling 75 per week. Accompanying each newscast will be a one‑minute sportscast. Traffic reports will be incorporated as part of our day‑to‑day community surveillance.

1531 To ensure that our programming remains relevant to and reflective of the local community, we will reach out by actively soliciting feedback and input through our website.

1532 Additionally, Rock 92 will establish a local advisory committee, which will ensure that we are addressing issues of unique concern to Medicine Hat.

1533 Now that you've heard all about Rock 92, let's sample its sound.

‑‑‑ Audio clip / Clip audio

1534 MR. COWIE: Harvard is committing $700,000 over seven years to foster Canadian talent development in Medicine Hat. As with all of our applications, our CTD package is focused on discovery, exposure, and support of new Canadian artists.

1535 The first discovery, we will make an annual contribution to the Medicine Hat Exhibition and Stampede. Fully 100 percent of the funding will be used to pay musical performers at the Stampede, allowing this popular local event to expand its performance aspect and bring new undiscovered Canadian talent to Medicine Hat each year.

1536 Next, working with ARIA, a non‑profit organization dedicated to fostering the success of Alberta artists and the Alberta recording industry, Harvard will support artists through one of their toughest stages of development, exposure beyond their own local market. The travel assistance plan will be administered by ARIA, and Harvard will provide annual financial support to help Alberta artists with out‑of‑province travel expenses.

1537 Support for artists in Medicine Hat will be in the form of three annual scholarships to be awarded each year of the licence term to students enrolled in the Medicine Hat College's Conservatory of Music and Dance Academy Program, an intensive program for advanced musicians intending to become professionals.

1538 Harvard will also make a financial contribution to FACTOR, with a request that this funding be directed towards supporting Alberta artists with their work.

1539 Finally, we will invest in an innovative talent development program for Aboriginal persons through a contribution to the Aboriginal Media Education Fund. Harvard will make a seven‑year commitment to provide funding for this organization that will help educate and promote advanced training in a variety of performance production and broadcasting areas.

1540 Members of the Commission, that concludes our presentation‑in‑chief.

1541 In closing, I would like to summarize why we believe Rock 92 fulfills the Commission's licensing criteria.

1542 Our mainstream rock format will balance the market by providing a station that will appeal to a younger male audience. This is exactly what is needed in Medicine Hat, a young market dominated by female‑oriented radio formats.

1543 Our mix of 60 percent classic rock and 40 percent modern and alternative rock will appeal to the currently disenfranchised male audience, and at the same time, offer a listening opportunity to the younger end of the city's growing population.

1544 Approval of Harvard's application will bring both diversity of ownership and programming and offset a competitive imbalance in the market served by just two commercial stations and one owner. This diversity will stimulate the Medicine Hat market in terms of advertiser interest, new and increased listenership, and programming. The introduction of a new broadcaster in Medicine Hat would offer listeners and advertisers alike a greater choice.

1545 We have committed to 40‑percent Canadian content throughout the broadcast day and week. We will promote the development of Canadian talent both on the air and off through our feature programming, in which we will place a special emphasis on new and emerging regional and Canadian talent.

1546 Our locally focussed CTD package of $700,000 is a substantial investment, and will contribute to the discovery, exposure, and support of Medicine Hat and area musicians.

1547 Medicine Hat's population is clearly dissatisfied with local radio choices. Rock 92 will be able to enter the market, develop new listeners and distinctive advertising base with minimal impact on the incumbent broadcasters.

1548 And, finally, granting our application will bring a new voice, fresh editorial perspective, and distinctive programming to this market. It will also strengthen an independent broadcaster with roots in western Canada and support Harvard's regional growth strategy. We thank you very much for your attention and will be pleased to answer your questions.

1549 THE CHAIRPERSON: Commissioner Cugini...?

1550 COMMISSIONER CUGINI: Thank you, Madam Chair.

1551 Mr. Cowie, welcome, and to your panel, good evening as well. As you know, we have a number of proposals in front of us that are intending to do a blended format, for lack of a better word at this point, as is your application, a mixture of classic and modern alternative rock. And I understand, from your application, that it's going to be approximately 60 percent classic and 40 percent modern/alternative rock. So my first question is, are these two genres going to be day parted, or will they be heard throughout the day?

1552 MR. COWIE: Commissioner Cugini, I will have the mixture on my right and left here deal with the programming questions. Thank you.

1553 MR. OLSTROM: Commissioner Cugini, the format we're proposing is not a ‑‑ what I call a mixed or blended format. It is the music that makes up mainstream rock radio, and what, I guess, differentiates us from the other applicants in front of you today is the target that we've chosen of 18‑49 and a skew to a little bit younger.

1554 As a result of that strategy, I'd like to have Daryl sort of walk through the difference in the music and how it actually works and flows throughout the course of the day.

1555 MR. HOLIEN: The Rock 92 proposal includes the opportunity and the incorporation of more rock charts. And what that means is that we will serve a broader cross section of rock fans including a higher percentage of the younger population. The modern and alternative rock will be played in combination with classic rock throughout the entire day. We will not segment it to any time slot.

1556 The inclusion of the more rock charts also means we'll be able to attract listeners for longer periods of time because we will address their interests in having less repetition, more variety.

1557 The Rock 92 format will also allow us to easily, easily play 40‑percent Canadian contact without any burn on any particular artist. And by design, that will require the introduction of more new and emerging Canadian artists as the modern alternative portion of the playlist will be 40 percent, and we know that this works. We do it every day in Regina, and the radio station there is number 112 plus, number 118‑49, number 125‑54.

1558 COMMISSIONER CUGINI: The reason I'm asking the question, and your audio clip, of course does ‑‑ did provide me with more of a flavour for the station, but if I'm a fan of Genesis ‑ Lamb Lies Down on Broadway, that has a totally different sound than AlexisonFire. So would I tune into your radio station to hear ‑‑ would I hear both of those tracks?

1559 MR. OLSTROM: That's more along the classic rock lines of things. The classic rock that we're proposing is more of an '80s/'90s blend of classic rock, so it's much ‑‑ a little bit younger in skew. The median age of this radio station is approximately 27 years of age ‑‑ is 27 years of age, so it does skew younger than the other ‑‑ what's been proposed by the other applicants who are proposing a classic rock or classic hits format.

1560 COMMISSIONER CUGINI: So is that the main difference between this proposal and the others that include classic rock in theirs in that your classic rock is a younger classic rock, so I might hear the Smiths in your classic rock section, for example?

1561 MR. OLSTROM: Possibly, possibly, yes.

1562 COMMISSIONER CUGINI: Now, you said it was a younger core audience, and in your presentation, your oral presentation, I believe you said it was 25 to 44, is your core audience, or is it younger than that?

1563 MR. OLSTROM: Well, the demographic of the radio station is 18‑49. The driver of the format is 25‑34.

1564 COMMISSIONER CUGINI: 25‑34?

1565 MR. OLSTROM: That's the driver. The bulk of the audience will come in that 25‑44 demographic, but, as well, with the fact that we're providing the new and alternative and modern rock songs it brings in the younger demographics. It brings in the rock fans, which are not being serviced currently in the Medicine Hat marketplace, in particular, the male portion of the demographic in Medicine Hat.

1566 COMMISSIONER CUGINI: And the median age of your listener?

1567 MR. OLSTROM: The median age is 27 and ‑‑

1568 COMMISSIONER CUGINI: 27?

1569 MR. OLSTROM: ‑‑ skewing ‑‑ and skewing male.

1570 COMMISSIONER CUGINI: And in the features programming, Indie Rocks, Rock Releases, Punk'd, Canadian Rocks, for example, are ‑‑ will those also be scheduled throughout the day, or will they be day parted?

1571 MR. OLSTROM: Those features will be scheduled at specific times throughout the course of the week, but in terms of the music and the blend of classic rock, modern, and alternative, it's ‑‑ it's the same 24/7, and maybe I'll get Daryl to give you a breakdown of, specifically, what an hour would represent in terms of the number of songs per hour and what would be incorporated in that hour, and that would give you an idea.

1572 MR. HOLIEN: Typically, as we do every day in Regina, we would have an average of 12 songs per hour, and from that, seven songs would be classic rock, five songs would come from the modern ‑‑ the alternative range. We also have a wonderful opportunity with our feature programming to include the feature, Canadian Rocks, that runs six times a day that will allow us to expose the modern and alternative new and emerging artists throughout the entire day.

1573 COMMISSIONER CUGINI: Will this feature programming be exclusive to the Medicine Hat proposal, or, you know, you talked also about ‑‑ you are responsible for the programming on The Wolf. Will these features also be included in The Wolf's line‑up, for example?

1574 MR. HOLIEN: There may be an opportunity.

1575 MR. OLSTROM: There's an opportunity ‑‑

1576 MR. HOLIEN: Okay.

1577 MR. OLSTROM: ‑‑ for some synergies on the programming side of things. For example, in sharing Canadians Rocks with our station in ‑‑ and the material in there with our station in Regina, as well as our soon‑to‑be‑launched station in Calgary. So the majority of those feature programmings will highlight and focus on Canadian artists. Punk'd, for example, is not its ‑‑ it delves back into the '80s punk scene; however, quite popular with the younger end of the demographics even today. But the ‑‑ there is that opportunity to air some of that ‑‑ this locally programmed ‑‑ or produced programming from Medicine Hat in Regina or even in Calgary, and share opportunities. For example, when artists travel through town to ‑‑ through Calgary and Regina providing raw material that can be produced in Medicine Hat because some of those artists will never make it there, and those alternative modern rock artists reach the radio station will be in Calgary and will be in Regina, and ‑‑ but may not be in Medicine Hat.

1578 COMMISSIONER CUGINI: And have you identified any other areas where there could be synergies?

1579 MR. OLSTROM: There may be some synergy opportunities in terms of news sharing that ‑‑ with stories that are relatable to the marketplace that are ‑‑ impact the other markets, but that would be ‑‑ if there was something that was happening in Medicine Hat that related to Regina, for example, or maybe more relevant would be the Calgary marketplace where there may be an opportunity to share news stories and information back and forth. But all the news is ‑‑ in Medicine Hat is locally generated, other than if there are stories that happen to impact either of the markets that may have ‑‑ be of relevance that one of the other stations can feed information to or the stories about.

1580 COMMISSIONER CUGINI: And we will now move into the area of news and spoken word programming. I believe it was in our August 4th deficiency letter you said that six‑and‑a‑half hours of spoken word each week would consist of two hours and 42 minutes of news. The devil is in the details, gentlemen, one hour and 15 minutes of sports, and two hours and 31 minutes of weather. And you made a commitment to devote 80 percent of local stories and content. Does this 80‑percent local content commitment refer to news content only, or is it meant to reflect the overall content of the newscast that would include news, weather, and sports.

1581 MR. OLSTROM: I'm sorry, 80 percent ‑‑ the 80 percent is in reference to 80 percent local Medicine Hat and area stories, so 80 percent of the newscast would be ‑‑ would represent Medicine Hat stories and the reflection of the people in the community.

1582 COMMISSIONER CUGINI: And the other 20 percent would be national and international news?

1583 MR. OLSTROM: The other 20 is international/national stories, yes.

1584 COMMISSIONER CUGINI: And would this be a weekly commitment or a daily commitment?

1585 MR. OLSTROM: A daily and weekly commitment. Obviously, stories ebb and flow, and sometimes there will be more important stories. But over the course of the week and day, it would be 80/20, the 80 percent being the local news and information.

1586 COMMISSIONER CUGINI: And are there any opportunities for synergies in that 20 percent national/international news with your other radio operations?

1587 MR. OLSTROM: I'm sorry?

1588 COMMISSIONER CUGINI: Synergies in terms of the international and national news, would that also be produced in Medicine Hat, or would that be ‑‑

1589 MR. OLSTROM: All the news would be ‑‑ all the news would be produced in Medicine Hat. Those synergies are going to be minimal, you know, in terms of sharing of stories. It's really relevant to what's happening and occurring at the time, and that 80 ‑‑

1590 COMMISSIONER CUGINI: And ‑‑

1591 MR. OLSTROM: ‑‑ that 80 ‑‑ sorry, that 80 percent also includes sports and weather information as well.

1592 COMMISSIONER CUGINI: Right, right. I would assume that would be local?

1593 MR. OLSTROM: That will be local, yes.

1594 COMMISSIONER CUGINI: And what are your plans in terms of staffing the newsroom?

1595 MR. OLSTROM: We have three full‑time news people in the newsroom.

1596 COMMISSIONER CUGINI: I'm sorry, how many?

1597 MR. OLSTROM: We have three.

1598 COMMISSIONER CUGINI: Mmhmm. And would they also be responsible for the programming of the features, for the production of those features that we talked about earlier?

1599 MR. OLSTROM: No, that is the responsibility of the programming department.

1600 COMMISSIONER CUGINI: And how many staff members ‑‑

1601 MR. OLSTROM: There ‑‑

1602 COMMISSIONER CUGINI: ‑‑ would be in the programming department?

1603 MR. OLSTROM:  ‑‑ there are seven programming staff on ‑‑ and on‑air people.

1604 COMMISSIONER CUGINI: And they would do both?

1605 MR. OLSTROM: Yeah, there would be a program director/music director, but they'd hold dual functions of on‑air as well as their other responsibilities.

1606 COMMISSIONER CUGINI: What is your commitment to voice tracking versus live?

1607 MR. OLSTROM: We ‑‑ we ‑‑ in the deficiency letter, we've stated that there would be voice tracking between six and midnight on Saturday and Sunday evenings; however, we hope that that would not be the case. We hope that it ‑‑ we could be ‑‑ we could be live 126 over the course of the broadcast week, but that is in there until at some point in time hopefully we can develop, potentially, a mentoring program with university students or college students. We need to bring people and revitalize the talent pool within our industry, and that's an opportunity for us to do so down the road.

1608 COMMISSIONER CUGINI: I want to talk to you a little bit about your CTD commitments, and, in particular, the Aboriginal mentoring program to the Aboriginal Media Education Fund. As you know, this may be deemed ineligible as direct cost CTD expenditure under the current Commission and CAB eligibility guidelines. I've read what you've said in your Supplementary Brief in terms of its description. I want to give you one more opportunity to convince us that this should be an eligible CTD expenditure?

1609 MR. COWIE: This began, actually, through our relationship with Jean Larose and APTN where we're doing a news mentoring program in Regina now. We intend to do it in Calgary and in other markets. We chose, on his advice, and the advice of others to introduce a relationship with this new fund in this application. And it's ‑‑ it's wider in the sense that the Native community or the Aboriginal community believes that there is going to be opportunities at a growing number of levels for reporters in, not only news, but sports, but for presenters on‑air at venues like the Olympic Games, Regional Games, and those sorts of things. So all this does is take the idea of where we started in news mentoring in these markets and expands it. There's an opportunity now to create and ‑‑ and there are Aboriginal Games coming now in regional form and national form and so on. So it's an expansion into other parts of the broadcasting business, and it ‑‑ I think it just widens the face of the opportunity to present that Aboriginal perspective, in both radio and television, for years to come. So it ‑‑ this is just in its incubation stage now, and it's no more or less than that. It's a widening of the opportunity that we think the Aboriginal peoples both deserve and that we think we can help through this fund.

1610 COMMISSIONER CUGINI: And, in particular, what kind of skills training are they going to provide?

1611 MR. COWIE: Skills training will be in writing, it will be in presenting, it will be in music, and all levels of performance. And just a reminder that Murielle Watson will be appearing in intervention on this later in this hearing, so she probably can expand on it even farther than I have, but there ‑‑ it is not currently limited to other than following all of the on ramps that we can to getting Aboriginal peoples into our industry, both radio and television.

1612 COMMISSIONER CUGINI: Will Harvard be a partner in deciding who will benefit from this funding?

1613 MR. COWIE: I ‑‑ no.

1614 COMMISSIONER CUGINI: Directly? So will it be a third party?

1615 MR. COWIE: I'm going to ask Debra McLaughlin if she might respond to that.

1616 MS McLAUGHLIN: The Aboriginal Media Education Fund will actually be administered by a group with that label incorporated separately, and the training will be decided by a body set up, as I understand it, within that group, and it's dependent upon the applications that are received. So on any given year, you know, it may be a lot of radio broadcasting applications for various functions within that industry, another year it might be television. There is no limitations or any kind of a prescription being written by the AMEF for what the training should look like. It really will be largely based on the interest level expressed by Aboriginal people who qualify.

1617 COMMISSIONER CUGINI: And Harvard will not be part of this group?

1618 MS McLAUGHLIN: No, Harvard will be a contributor and would receive reports on how the money was spent, so they would be enabled, and at least in terms of tracking how their commitment has been used. But in making the determination, it will be the Aboriginal people who are running this fund that will make that decision.

1619 MR. COWIE: We ‑‑ just in addition to that, we will continue with the news mentoring program in those markets where we are successful in receiving your blessing for a licence, and they ‑‑ because we think that is very important for the long term, the relationship of talking between the Aboriginal peoples and the other population. That still isn't happening to any degree in this country and needs to be bolstered over time. We're now convinced that ‑‑ particularly in the prairies that every person that we move through this program over seven years will find work in the industry.

1620 COMMISSIONER CUGINI: Now, that news mentoring program, that's over and above the AMEF commitment, that's your ‑‑

1621 MR. COWIE: Yes, yes.

1622 COMMISSIONER CUGINI: ‑‑ your arrangement with APTN where the person works 50 percent of time with you and 50 percent ‑‑

1623 MR. COWIE: Yes, exactly.

1624 COMMISSIONER CUGINI: ‑‑ for APTN?

1625 MR. COWIE: It's just not ‑‑

1626 COMMISSIONER CUGINI: So this is in addition to that commitment?

1627 MR. COWIE: I wanted to make sure it didn't appear we were moving from one to the other.

1628 COMMISSIONER CUGINI: I understand.

1629 MR. COWIE: We probably, over time, will support them both.

1630 COMMISSIONER CUGINI: Now, I believe your total commitment is $175,000. If, in our deliberations, we were to deem that this does not qualify as eligible CTD, would you still be making that expenditure of 175?

1631 MR. COWIE: Yes, we would.

1632 COMMISSIONER CUGINI: So it would be over and above?

1633 MR. COWIE: Right.

1634 COMMISSIONER CUGINI: Thank you. The Medicine Hat Exhibition Fund, that's a $25,000 a year commitment. You've indicated that 90 percent of this funding would be used to support local and regional talent performing at the exhibition.

1635 MR. COWIE: The actual agreement reads a minimum of 90 percent. We have now ‑‑ this has taken a little while in getting this piece of our program together because of some communication problems. We will fund a hundred percent of the talent that will be on the stage. We do not require a new venue for it. The venue exists, so there will be no charges for that. All of this money will go to artists.

1636 COMMISSIONER CUGINI: And who will administer this fund?

1637 MR. COWIE: It will be administered by the Medicine Hat Exhibition and Rodeo.

1638 COMMISSIONER CUGINI: And you already have an agreement in place with them ‑‑

1639 MR. COWIE: We do.

1640 COMMISSIONER CUGINI: ‑‑ to that effect? Okay, thank you. In terms of your financial projections, you have an audience share over the first licence term of 7.3 percent of all persons 12 plus, in year one, rising to 12.6 percent by year seven. They are the lowest projections in terms of audience share relative to the other applicants in this market, yet you've also projected the second highest seven‑year total revenue compared with the other applicants. Can you reconcile this for us, please?

1641 MR. COWIE: I'm going to ask Tina Svedahl to respond to that question.

1642 COMMISSIONER CUGINI: Sure.

1643 MS SVEDAHL: I'm going to specifically speak to the robust market in Medicine Hat. Looking ‑‑ when we attempted to forecast revenue for this market, of course, we all know that there's no public revenue available, so we had to look for a market that was similar, and we used Lethbridge as our basis to create a proxy between retail sales and advertising revenue, and did ‑‑ looked at that for three years, and then created our infrastructure to forecast Medicine Hat. And on that, we used the 22‑percent forecast in retail sales, which we heard today and Financial Post attests to that its far exceeded that. So on ‑‑ on the forecast side, it's strictly related to the economic robust of that market.

1644 COMMISSIONER CUGINI: And in view of the robustness of the market, how many new radio stations do you believe Medicine Hat could support at this time?

1645 MR. COWIE: And I'm going to give you a little longer answer to that than you might ‑‑

1646 COMMISSIONER CUGINI: Okay.

1647 MR COWIE: ‑‑ but not very long. In using Lethbridge as a proxy for this, the latest numbers I'm looking at show the population of Medicine Hat closing on Medicine ‑‑ on Lethbridge very quickly. The numbers are now 72,000 to 67,000, and in addition to that, the ‑‑ the retail sales in markets that are now almost equal in size ‑‑ and average household income in Medicine Hat is now higher than Lethbridge. All of these things combined, and while there's a 600 ‑‑ retail sales in Lethbridge are $1.88 billion and $1.288 billion in Medicine Hat, we just think that there is a clear case of market being underdeveloped. And inside of that, we think there is room because everything else is reasonably equal now, and the only difference, I guess, is that Medicine Hat is growing faster in terms of population, and will catch up to Lethbridge very soon in terms of the overall numbers. In Lethbridge there are, I think ‑‑ I could be corrected on this, five radio stations in that market. There are two here. So just doing the math, we think that two stations in this market would be quite doable.

1648 COMMISSIONER CUGINI: Is that two new commercial stations, plus the increase in power to Lighthouse, or does that include Lighthouse, for example?

1649 MR. COWIE: We would not include Lighthouse in that. I'm talking about two commercial stations.

1650 COMMISSIONER CUGINI: Only, without approving the application as put forward by Lighthouse?

1651 MR. COWIE: No, no, we ‑‑

1652 COMMISSIONER CUGINI: Hmm?

1653 MR. COWIE: ‑‑ we do not include Lighthouse in our description here of commercial stations, even though they do direct advertising, but I'm referring to that group of rock'n'rollers that are appearing before you at this hearing.

1654 COMMISSIONER CUGINI: Thank you. Thank you very much. Those are all my questions, Madam Chair.

1655 MS McLAUGHLIN: Excuse me, if I could just address a question that I think we only partially answered for you, and that was the reconciliation of our audience share against our revenues. In a market where there is no audience measurement, which is Medicine Hat, share is not used to negotiate, and so the percent that we have taken is a reasonable ‑‑ a reasonable amount of the total over ‑‑ or the total amount within the market. It's just a percent of the total amount that a new station could seek to achieve, and it's not tied to audience because it's not available. So looking at a seven share and a 20 percent revenue or 25 percent revenue of the market, in a competitive market with measurement, that would seem disconnected, but in a really ‑‑ what we would deem a not very competitive market, it's a logical conclusion that people will sample you.

1656 COMMISSIONER CUGINI: Thank you for that.

1657 Thank you.

1658 THE CHAIRPERSON: Commissioner Pennefather...?

1659 COMMISSIONER PENNEFATHER: Thank you, Madam Chair. Ms McLaughlin, I just wanted to clarify something I heard you say about the AMEF. Did you say that they would ‑‑ the program which would be supported under your proposal would have a separate governing group, a separate Board, if you will, to the Board and Executive as established at the beginning in 2005? Is it a separate group?

1660 MS McLAUGHLIN: The AMEF is separate ‑‑

1661 COMMISSIONER PENNEFATHER: Yes, I realize that, but one ‑‑

1662 MS McLAUGHLIN: ‑‑ and ‑‑

1663 COMMISSIONER PENNEFATHER:  ‑‑ the AMEF has its own Board and Executive?

1664 MS McLAUGHLIN: Yes, and my description of separate was relative to Harvard or any of the partners.

1665 COMMISSIONER PENNEFATHER: All right. That's what I wasn't clear on. And is it your understanding that programs have begun to roll out?

1666 MS McLAUGHLIN: No, not at this point. They're still in the gathering the funding stages.

1667 COMMISSIONER PENNEFATHER: Thank you.

1668 Thank you, Madam Chair.

1669 THE CHAIRPERSON: I need to take another run at AMEF. Okay. So at some stations, you are proposing that you would have a person appointed by APTN that you would train to do the news, and they would provide some footage to APTN, and you would be paying for that person. That is a totally separate thing from what we're talking about?

1670 MR. COWIE: That's correct.

1671 THE CHAIRPERSON: Okay. AMEF is, as yet, not incorporated?

1672 MR. COWIE: No, I believe it's incorporated.

1673 THE CHAIRPERSON: It is incorporated?

1674 MS McLAUGHLIN: Yes.

1675 THE CHAIRPERSON: It has a Board?

1676 MS McLAUGHLIN: Yes.

1677 THE CHAIRPERSON: Okay. And the idea of AMEF is to provide scholarships for individuals to go to the appropriate schools?

1678 MS McLAUGHLIN: That and more. There's an educational component in the AMEF to begin with, and that's to educate Aboriginal people, both young and in the mid of their career on the opportunities that are available to them. In addition to that, there will be scholarships, there will be training set up at specific programs, and there is hope that there will be mentorship rolls engaged in with current broadcasters. So there's a range of services and training opportunities that are envisioned. All of them are in the broadcast industry. There's no other performing arts included.

1679 THE CHAIRPERSON: Okay. So what I'm wondering about is ‑‑ and I think it's a substantial amount of money that's going to them. The 20 ‑‑ I think it's 25,000 a year that you would be sending to them. None of that would come back to Harvard to pay for a portion of the salary of somebody they would be mentoring under this fund, would it?

1680 MS McLAUGHLIN: Absolutely not.

1681 MR. COWIE: No, it would not.

1682 THE CHAIRPERSON: Okay. So the monies that you would donate would not go to broadcasters, but would go for scholarships and workshops and educational?

1683 MR. COWIE: That's correct.

1684 THE CHAIRPERSON: Okay, okay. Now, in order to ‑‑ I'm looking at your letter of August 4, 2006, and in order for me to compare apples‑to‑apples ‑‑ you did a very good job of putting everything in terms of what I'm going to call scripted spoken word in there. What's your estimate of DJ talk?

1685 MR. OLSTROM: That's tough to estimate it. That's not in the ‑‑ in the spoken word total. The spoken word total is ‑‑

1686 THE CHAIRPERSON: I know.

1687 MR. OLSTROM: Weather surveillance, ag reports, community reports, those types of things. But in terms of announcer jock talk, I ‑‑ geez, I don't know. It's been a while since I've programmed, but five minutes an hour of talk. I ‑‑ it's really difficult to say. I mean, announcer bits can range from ‑‑

1688 THE CHAIRPERSON: Yeah.

1689 MR. OLSTROM: ‑‑ well, hopefully shorter than four or five minutes, but, you know, 30 seconds to a couple of minutes at a break, so I haven't done that calculation, but I ‑‑

1690 MR. COWIE: I think when we responded to this in another hearing, it was, on average, between five and seven minutes an hour.

1691 THE CHAIRPERSON: You're following Mr. Maheu's script. That's what he said this morning.

1692 MR. COWIE: Oh, did he? No, I ‑‑

1693 THE CHAIRPERSON: Yes.

1694 MR. OLSTROM: Although, within, for example, our feature programming we've sort of allotted for about ten minutes of spoken word, programmed ‑‑

1695 THE CHAIRPERSON: Yes, I've noticed that in the future programming you've go that.

1696 MR. OLSTROM: Okay. Right, okay.

1697 THE CHAIRPERSON: And I'm ‑‑ I'm calling that scripted, in a sense, spoken word.

1698 MR. OLSTROM: Yes.

1699 THE CHAIRPERSON: And, now, you did talk about live‑to‑air programming for 96 hours during the broadcast week. You, then, today, Mr. Olstrom, talked about trying to increase that after ‑‑ as time went on. Is that ‑‑

1700 MR. OLSTROM: No, it's actually 114.

1701 THE CHAIRPERSON: 114?

1702 MR. OLSTROM: If you take 12 hours out of the broadcast week from the 126, we ‑‑ for the two six‑hour shifts that we intended to voice track on weekend evenings basically, and we hoped to use that as an opportunity down the road to mentor future broadcasters.

1703 THE CHAIRPERSON: Okay. So voice tacking will only be used during weekend evenings between 6 p.m. and midnight. That's what your letter of August 4 said.

1704 MR. OLSTROM: That is correct.

1705 THE CHAIRPERSON: So out of the 126 hours, that would be Monday to Thursday, times six, 24?

1706 MR. OLSTROM: Well, 12 ‑‑ 126 over the week and minus 12 is 114.

1707 THE CHAIRPERSON: Okay. The regulated times? The regulated ‑‑

1708 MR. OLSTROM: Yeah, oh, that's through the ‑‑ sorry, that's Monday to Sunday or Sunday to Saturday, however you ‑‑ so the entire week. So during the week, Monday to Friday, there's no voice tracking.

1709 THE CHAIRPERSON: Okay. Just weekends?

1710 MR. OLSTROM: Just weekends, sorry.

1711 THE CHAIRPERSON: Okay. So then you would agree to a COL that there would be 100‑percent live‑to‑air programming during the regulated broadcast week?

1712 MR. OLSTROM: Monday to Friday?

1713 THE CHAIRPERSON: Yes.

1714 MR. OLSTROM: Yes.

1715 THE CHAIRPERSON: Subject to any sharing of feature programming and spoken word programming amongst other stations in your ownership group?

1716 MR. OLSTROM: I ‑‑

1717 MR. COWIE: No.

1718 THE CHAIRPERSON: No?

1719 MR. COWIE: No, the ‑‑ those programs, do any of them run on Saturday and evenings? They don't run there, but we would ‑‑ we would count that as normal ‑‑

1720 THE CHAIRPERSON: Live to air?

1721 MR. COWIE: Live to air.

1722 MR. OLSTROM: Live to air, yes.

1723 THE CHAIRPERSON: Okay. Even ‑‑ yeah, even if it was produced at another station and used?

1724 MR. OLSTROM: No, we were ‑‑ we were thinking more primarily of ‑‑ the program sharing would be, for example, Canadians Rock, which runs six times a day throughout the broadcast week. We would share that material with our stations, for example, in Regina or potentially in Calgary. But we're not talking about importing programming.

1725 THE CHAIRPERSON: Oh, okay.

1726 MR. OLSTROM: All programming that is ‑‑ it will be ‑‑ feature programming will be locally created and produced in Medicine Hat.

1727 MR. COWIE: As we grow, Madam Chair, the Medicine Hat station will be the only one with an export licence.

‑‑‑ Laughter / Rires

1728 THE CHAIRPERSON: Thank you for that. So then it is a hundred percent live‑to‑air programming during the broadcast week?

1729 MR. COWIE: Yes.

1730 THE CHAIRPERSON: And you would agree to that COL?

1731 MR. COWIE: Yes.

1732 THE CHAIRPERSON: Thank you.

1733 Now, I believe counsel has a question or two?

1734 MS BENNETT: Yes, just a couple of final questions on the CTD. Just to tie up a couple of loose ends, you indicated earlier that if the AMEF funding did not qualify as eligible CTD, you would maintain that seven‑year commitment of 175,000. Could you comment on the imposition of that as a COL?

1735 MR. COWIE: That would be acceptable.

1736 MS BENNETT: Okay. And you also indicated that you would maintain your CTD funding at 700,000 for the seven years. Are you in a position to indicate today what eligible CTD initiative you would direct that funding towards?

1737 MR. COWIE: No, we would take it away, and we would report back to the Commission and ‑‑

1738 MS BENNETT: Okay. Could you agree to file a letter within three months of a decision?

1739 MR. COWIE: Yes, indeed.

1740 MS BENNETT: Okay, thank you.

‑‑‑ Undertaking / Engagement

1741 MS BENNETT: That's it.

1742 THE CHAIRPERSON: You now have two minutes to finally convince us as to why we should choose Harvard in Medicine Hat.

1743 MR. COWIE: Thank you, Madam Chair. Well, the Commission has before it a number of applications in the rock genre. Clearly, there is a shared view that a rock format will best serve this young and growing market. The challenge for you, of course, is to select which format is the best to fit in the market and which proposal best achieves the objectives of the Broadcasting Act.

1744 Our blend of classic and modern alternative rock is the most balanced approach to delivering the format that almost all of the applicants have concluded is missing in the market. That's a rock format.

1745 Given the wide arrange of music we propose to play, we will appeal to a greater proportion of the rock fans and be better positioned to serve a larger group within the population.

1746 Consequently, of all of the applications before you, we believe our proposal most directly reflects the needs of this market.

1747 Secondly, by blending a higher level of modern and alternative rock, we can create a station that addresses the most frequently heard concerns about radio generally. We will provide more variety, less repetition, and more new music. These are not catch phrases, they are programming tenants that are both reasonable and achievable in the format we propose.

1748 Our 40‑percent Canadian content will include a higher percentage of new and emerging artists because Canadians working in both the modern and alternative rock genres are producing world‑class material at unprecedented rates.

1749 Our CTD initiatives cover a range of worthwhile endeavours, but, most important, have a strong local component.

1750 In the market, we will be funding education at Medicine Hat College, exposure through additional staging at the Medicine Hat Exhibition and Stampede, and travel assistance through ARIA for Medicine Hat and, more broadly, Alberta bands.

1751 These three initiatives represent real benefit to the market and advances our strategy of creating opportunities for discovery, exposure, and support for Canadian artists.

1752 In addition to our local contribution, we will provide funding to FACTOR with a specific request for allocation to Alberta applicants.

1753 And we believe that our commitment to contribute to the newly established Aboriginal Media Education Fund will help create a pool of broadcast talent within the Aboriginal communities, a talent pool that will bring the Aboriginal perspective to both radio and television sectors for years to come.

1754 In doing so, our proposed contributions to the Broadcasting Act objective that the Canadian Broadcasting System should reflect the special place of Aboriginal peoples in our society.

1755 In assembling this application, we sought to design a station that would meet the unique needs of Medicine Hat. Rock 92 addresses the need for a new voice and perspective on news and information, it meets the need for a service that targets males, and incorporates programming strategies to attract a younger audience. It fills the programming gap in the market, while respecting the unique demographic characteristics.

1756 In short, we believe we have accomplished what we have set out to do, and we're confident that our proposal represents the best use of a broadcast frequency.

1757 Madam Chair, Members of the Commission, we hope that you will agree. Thank you very much.

1758 THE CHAIRPERSON: Thank you, Mr. Cowie and Mr. Hill and Panel.

1759 And another reminder, ringy dingy tomorrow morning, 8:30. We start at 8:30.

1760 Thank you.

‑‑‑ Whereupon the hearing adjourned at 1843,

to resume on Wednesday, November 2, 2006,

at 0830 / L'audience est ajournée à 1843,

pour reprendre le mardi 2 Novembre 2006

à 0830

REPORTERS

per

Shania Zuck

Verbatim Court Reporter