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Decision CRTC 2001-628
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Ottawa, 4 October 2001
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Newcap Inc.
Ottawa, Ontario and Hull, Quebec
2001-0287-2
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22 May 2001 Public Hearing
National Capital Region
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New FM dance station for Ottawa/Hull
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At a public hearing in the National Capital Region, the
Commission considered eleven applications for FM stations to serve
the Ottawa/Hull area. In this and other decisions published today,
the Commission has approved a total of four applications for new FM
stations: one English-language dance music station, one that will
have an Aboriginal focus, a multicultural station, and an
application for a French-language classical music service. The
Commission's overall approach to the competitive applications for
new radio stations to serve Ottawa/Hull is discussed in Public
Notice CRTC 2001-105 issued today.
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1. |
The Commission approves the application by Newcap Inc. (Newcap)
for a broadcasting licence for an English-language FM radio
programming undertaking at Ottawa/Hull. As proposed, the new FM
station will operate on the frequency 89.9 MHz (channel 210C1) with
an effective radiated power of 27,000 watts. The licence, when
issued to Newcap, will be subject to the terms and conditions set
out in the appendix to this decision, as well as those in the
licence to be issued.
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2. |
Newcap is the licensee of a number of radio stations serving
communities in Newfoundland, Prince Edward Island, Nova Scotia,
Ontario and Alberta. Newcap's parent company, Newfoundland Capital
Corporation, which is controlled by Harry R. Steele, owns a number
of weekly community newspapers in Newfoundland.
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The new station
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3. |
The new station, to be known as "The Planet", will
offer a Dance music format aimed at an audience in the 18-44 age
range, with a particularly strong interest from those aged 25-34.
The applicant stated that the musical focus of the new station will
be "very cutting edge, very new music", and described the
Dance music to be played as "a diverse blend of European pop,
urban, world beat rhythms and Latin music."
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4. |
Also according to the applicant, the station’s music will be
accompanied by spoken word programming that will appeal to a
diverse, multicultural, professional and educated audience that is
very aware of and interested in the world around it.
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Assessing the applications
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5. |
The Commission assesses all applications for new radio stations
by taking into account the objectives set out in the Broadcasting
Act (the Act), the public interest and the various policies that
it has established.
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6. |
In recent decisions involving competing commercial radio
applications, the Commission has identified four main factors as
being relevant to its evaluation of such applications. While their
relative importance may vary according to the specific circumstances
of the market, these factors are: the likely impact of a new entrant
or entrants upon existing licensees; the competitive state of the
market; implications with respect to the diversity of editorial
voices in the market; and the quality of the individual
applications.
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Impact of a new entrant
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7. |
The Commission generally seeks to assure itself that the
competitive impact of a new entrant to a radio market will not
impinge unduly on the ability of existing stations to meet their
programming responsibilities under the Act. Otherwise, the
Commission’s predisposition lies clearly in favour of increased
competition and diversity, and the improvements in the overall
quality of available services that these promote.
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8. |
The Ottawa/Hull radio market is performing well, with its
stations having achieved higher than average profits before interest
and taxes (PBIT) since 1998. In 2000, the average Ottawa/Hull PBIT
was 20%. Projections are that future increases in advertising
revenues should enable the market to absorb an additional
English-language commercial station without undue impact on existing
stations. The Commission is therefore convinced that the Ottawa/Hull
market can support the new station licensed in this decision.
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Competitive state of the market
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9. |
The Commission is satisfied that its approval of Newcap’s
application has no negative implication with respect to the
competitive state of the Ottawa/Hull English-language radio market.
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10. |
The competitive state of a market, as a factor in the Commission’s
consideration of applications proposing new commercial radio
stations, is generally most relevant where the applicant is the
licensee of an existing station in that market. In such cases, the
Commission’s concern is that its licensing actions not create an
undue competitive imbalance in the market.
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11. |
The Commission notes that since Newcap will be a new player in
Ottawa/Hull, the establishment of its new station will serve to
enhance the level of competition in the market.
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Diversity of editorial voices
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12. |
The Commission notes that Newcap, as a new entrant to the
Ottawa/Hull market, will provide an additional editorial voice in
the community.
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Quality of the application
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13. |
The Commission generally considers four main criteria when
assessing the quality of an application for a new radio station.
These are: the applicant’s local programming proposals and plans
for providing reflection of the local community; its Canadian
content commitments; the quality of its business plan (including the
proposed format); and its commitments in support of the development
of Canadian talent.
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14. |
The Commission is satisfied that the applicant has presented a
high-quality application, as measured against these criteria, and
that, overall, it has put forward the best application for a new,
English-language commercial station in Ottawa/Hull.
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Community reflection
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15. |
The new station’s spoken word programming will be entirely
locally-originated, and will focus on the Ottawa/Hull community.
According to the applicant, a minimum of 50% of all news stories
presented on the new station will be devoted to local news.
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16. |
As noted earlier, the applicant stated that the audience for the
new station is expected to be ethnically and racially diverse and
well educated, and Newcap plans to relate its news coverage
"not only to Ottawa but also to listeners within individual
communities by gender, race, ethnicity or sexual preference."
At the hearing, the applicant explained that, in order to accomplish
this, it intends to have reporters from different ethnic and racial
minority communities, in order that relevant domestic and
international news stories may be focused on and communicated more
effectively to local communities.
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Level of Canadian content
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17. |
As part of its application, Newcap indicated that it will ensure
that at least 40% of all popular music aired during the broadcast
week and between 6:00 a.m. and 6:00 p.m. Monday to Friday is
Canadian. This commitment exceeds the minimum of 35% of all popular
music required of all commercial radio stations under the Radio
Regulations, 1986. Newcap’s commitment is set out as a condition
of licence in the appendix to this decision.
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18. |
In addition, the Commission notes Newcap’s commitment that at
least 50% of all Canadian content musical selections, or 20% of all
musical selections broadcast, would be new music, released within
the preceding 12 months.
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Business plan and programming format
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19. |
The Commission considers that the Dance music format proposed by
the applicant is growing in popularity and reflective of the
changing racial and ethnic composition of the region. The Commission
is convinced this format will be attractive to listeners, will add
to the diversity of programming available in the market, and is
satisfied that the applicant has adequate financial resources to
implement the new station.
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Development of Canadian talent
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20. |
As part of its application, Newcap made a commitment to
participate in the Canadian talent development (CTD) funding plan
created by the Canadian Association of Broadcasters (CAB), which
prescribes a yearly contribution of $8,000 for stations in markets
such as Ottawa. Adherence to that commitment shall be by condition
of licence, as set out in the licence to be issued.
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21. |
In addition to the amount prescribed by the CAB plan, the
Commission notes Newcap’s commitment to contribute a further
$742,000 annually in direct contributions to CTD, amounting to a
total of almost $5.2 million over the licence term. Of that amount,
Newcap proposed to devote over $2.6 million to the development of
the Aboriginal Voices Radio Network (AVRN), whose flagship Toronto
FM radio station was approved in Decision CRTC 2000-204. Included in
this development support for AVRN was a commitment to direct
$588,000 over the licence term to AVRN for the establishment of a
news bureau in Ottawa. If, for any reason, the news bureau was not
implemented, Newcap stated that the amount for the news bureau would
be redirected to FACTOR.
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22. |
Consistent with its treatment in similar cases, the Commission
has assessed the AVRN initiatives and has concluded that they do not
directly develop Canadian talent, in that the funds will be
dedicated to the support of a radio network. Nonetheless, this
initiative would contribute to the fulfilment of paragraph 3(1)(o)
of the Act, and as such the Commission considers that it is
beneficial to the broadcasting system as a whole.
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23. |
As part of the $5.2 million contribution to CTD over the licence
term, Newcap proposed to devote at least $367,000 per year to
FACTOR, to be used solely for the production or marketing of new
dance music by Canadian artists and musicians from Ottawa. The
various commitments are set out as conditions of licence in
the appendix to this decision.
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24. |
Newcap stated that, if Ottawa-based talent does not use all of
the funds designated for this purpose in any given year, the unused
funds will be rolled over into the next year’s fund, to be used
for the production or marketing of new dance music by Canadian
artists and musicians, regardless of where in Canada they are based.
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Interventions
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25. |
A number of interventions in opposition to this application were
submitted by various organizations in the francophone community in
the Ottawa area. These interveners expressed concerns related to the
impact that licensing this and other applications might have on the
future development of French-language radio services to serve
Ottawa-Hull. This matter is discussed in detail in Public Notice 2001-105, also published today.
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26. |
An intervention was also submitted to this application by Global
Television, expressing concern related to potential interference to
its transmitter in Ottawa. In response, Newcap stated its belief
that its proposal should not create any technical problems for the
Global signal in Ottawa/Hull because it was engineered with a safety
margin sufficient to protect the Global signal. Moreover, Industry
Canada has found Newcap's technical proposal to be acceptable from
its consideration of the spectrum assignment rules.
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27. |
Christian Hit Radio Inc. (CHRI), also submitted an intervention
in opposition, stating that it wished to submit an application for
the use of the same frequency requested by Newcap. In response,
Newcap noted that CHRI had had sufficient time to submit a competing
application and failed to do so. The Commission concurs with this
view.
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28. |
Standard Radio (a competing applicant), submitted an intervention
to the Newcap application, seeking clarification of statements
related to employment equity contained in Newcap’s written
application. The Commission notes the applicant’s response.
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29. |
The Commission also acknowledges and has considered all other
interventions submitted in support of this application.
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Related CRTC documents
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• Public Notice 2001-105 – Introductory
statement to Decisions CRTC 2001-625 to
2001-629: Radio applications
considered at the 22 May 2001 public hearing in the National Capital
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• Public Notice 2000-14 – Revised
content categories and subcategories for radio |
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• Public Notice 1999-137 – New
licence form for commercial radio stations |
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• Decision 2000-204 – New Type B
FM native radio programming undertaking |
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Secretary General |
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This decision is to be appended to the licence. It is available
in alternative format upon request, and may also be examined at the
following Internet site: http://www.crtc.gc.ca
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Appendix to Decision CRTC 2001-628
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Terms and conditions of licence pertaining to the licence to be
issued to Newcap Inc. for a new FM station to serve Ottawa/Hull
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Terms
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The Department of Industry has advised the Commission that this
application is conditionally technically acceptable. The Department
will only issue a broadcasting certificate once it has determined
that the proposed technical parameters will not create any
unacceptable interference with aeronautical NAV/COM services.
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In accordance with section 22(1) of the Broadcasting Act,
the Commission will only issue the licence and grant the authority
to operate when it receives notification from the Department of
Industry that its technical requirements have been met, and that a
broadcasting certificate will be issued.
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The licence will only be issued and effective when the new
station is ready to begin operation. When the licensee has completed
construction and is prepared to commence operation, it must advise
the Commission in writing. If the station is not constructed and
ready to operate within 12 months of today’s date,
extensions to this time frame may be granted provided that the
licensee applies in writing to the Commission before the 12-month
period or any extension of that period expires.
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The licence, when issued, will expire 31 August 2008.
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The Commission notes that Newcap Inc. is subject to the Employment
Equity Act and therefore files reports concerning employment
equity with Human Resources Development Canada.
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Conditions of licence
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The licence will be subject to the conditions specified in the
licence to be issued, as also set out in Public Notice CRTC 1999-137. The licence will also be subject to the following
conditions:
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1. The licensee shall, as an exception to
the percentage of Canadian musical selections set out in the Radio
Regulations, 1986, devote 40% or more of its musical selections
from content category 2 to Canadian selections, during the broadcast
week and between 6 a.m. and 6 p.m., in any period beginning on a
Monday and ending on Friday of the same week. |
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2. The licensee shall devote a minimum of
$367,000 per year to FACTOR, to be used solely for the production or
marketing of new dance music by Canadian artists and musicians from
Ottawa. If Ottawa-based talent does not use all of the funds
designated for this purpose in any given year, the unused funds will
be rolled over into the next year’s fund, to be used for the
production or marketing of new dance music by Canadian artists and
musicians, regardless of where in Canada they are based. This
contribution is in addition to the licensee’s contribution to
third parties associated with Canadian talent development as set out
in the Canadian Association of Broadcasters’ Distribution
Guidelines for Canadian Talent Development. |
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3. The licensee shall devote a minimum of
$2,625,000 over seven years to the development of the Aboriginal
Voices Radio Network (AVRN). Of that amount, the licensee shall
direct $588,000 over the same period to AVRN for the establishment
of a news bureau in Ottawa. Should the news bureau not be
implemented, an amount of $588,000 over seven years, ($84,000 per
year) shall be directed instead to FACTOR. |