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Broadcasting Decision CRTC 2006-128
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Ottawa, 5 April 2006 |
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Rainbow Media Group Inc.
Toronto, Ontario |
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Application 2003-1912-0
Public Hearing in the National Capital Region
16 January 2006 |
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English-language FM radio station in Toronto
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In this decision, the Commission
approves an application by Rainbow Media Group Inc. for a
broadcasting licence to operate a new English-language commercial FM
radio station in Toronto, Ontario. |
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The application
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1. |
The Commission received an application by
Rainbow Media Group Inc. (Rainbow) for a broadcasting licence to operate
an English-language commercial FM radio programming undertaking at
Toronto, Ontario. The station would operate at 103.9 MHz (channel 280A1)
with an effective radiated power of 50 watts. |
2. |
Rainbow is a corporation equally owned by
CKMW Radio Ltd. (CKMW) and Mr. George Marchi. It is controlled by its
Board of Directors pursuant to the terms of a Pre-Incorporation
Shareholders’ Agreement, dated 15 December 2003 (Shareholders’
Agreement). CKMW is a wholly owned subsidiary of Evanov Radio Group Inc.
(Evanov Group), a corporation controlled by Mr. William Evanov. Evanov
Group owns and controls 100% of Dufferin Communications Inc. (Dufferin),
licensee of CIDC-FM Orangeville. It also controls, directly or
indirectly, a number of other radio undertakings in Ontario, namely CIAO
Brampton and its transitional digital undertaking CIAO-DR-2, CKDX-FM
Newmarket, CJWL-FM Ottawa, and in Nova Scotia, CKHZ-FM Halifax. |
3. |
The frequency proposed for use by Rainbow
entails a zone of interference with CIDC-FM, which uses the second
adjacent channel to 280A1. As an existing operation, CIDC-FM has the
right to veto all proposals which would cause such interference. When
licensees exercise this right, the Department of Industry (the
Department) does not issue certificates of technical acceptability. In
this case, however, Mr. Evanov, who controls Dufferin, the licensee of
CIDC-FM, accepts this zone of interference. The Department has indicated
that it will issue a certificate of technical acceptability, conditional
on certain issues being resolved, including the potential for
interference to NAV/COM services in the area. |
4. |
The proposed station would serve the gay
and lesbian community of Toronto. Its spoken word programming, which
would include news, publicity for daily events, and open-line programs,
would reflect the interests, concerns, and activities of this community.
Approximately 7 hours per week would be dedicated to newscasts and an
additional 21 hours to talk and information programs. |
5. |
The applicant indicated that it would
establish an advisory committee of between 10 and 12 members "to ensure
that the operations and services provided by Rainbow Radio are best
suited to the interests and needs of the gay community in Canada" as
well as the broader society of Canada. The advisory committee would make
recommendations concerning programming policies and would participate in
or oversee the handling of all complaints. The advisory committee
members would each "have experience in broadcasting and in the handling
of issues relevant to the gay culture and community." |
6. |
Rainbow also stated that it has developed
guidelines that will ensure balance and high standards in its open-line
and interactive programs, and that will ensure the absence of abusive
language. |
7. |
During the daytime, the proposed station
would feature a mix of Top Forty music, pop, and classic hits from the
1970s, 1980s, and 1990s. In the evenings and on weekends dance music,
Rhythm and blues, club mixes, easy listening, contemporary jazz, Latin
beat and world music would also be offered. The applicant indicated that
during the broadcast day and between 6:00 a.m. and 6:00 p.m. on weekdays
it would devote 40% of all music drawn from category 2 (popular music)
to Canadian selections. This level would exceed the minimum level of 35%
required by the Radio Regulations, 1986. |
8. |
The applicant indicated that it would not
participate in the Canadian talent development (CTD) plan created by the
Canadian Association of Broadcasters. Instead, Rainbow proposed an
independent CTD plan with several components. In each broadcast year, a
$5,000 scholarship for journalism, artistic, or music studies would be
awarded by both the School of Media Studies at Humber College and the
School of Journalism at Carleton University. An annual expenditure of
$30,000 would be made for musical artists to be showcased at the Pride
Week celebrations. Rainbow would fund workshops and seminars at Canadian
Music Week, at a cost of $10,000 per year during the first four years of
the licence term, and $20,000 in each subsequent year. Rainbow would
also fund a gay community showcase and art exhibit, beginning in the
fifth year of the licence term, at a cost of $40,000 in that year and in
each subsequent year. |
9. |
Rainbow projects that its proposed station
would generate advertising revenues amounting to $1.3 million in the
first year of a seven-year licence term, increasing to $2.9 million by
the seventh year. Rainbow stated that there are a large number of
diverse advertisers that currently target the
Lesbian/Gay/Bisexual/Transsexual market, and that many of these
advertisers are currently not advertising on radio. Rainbow stated that
advertiser support has been offered by local businesses and by large
national clients that believe they would be well served by a targeted
local broadcaster. |
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Interventions
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10. |
The Commission received numerous
interventions in support of this application as well as opposing
interventions. |
11. |
Harkanwal Thind opposed the Rainbow
application as well as other radio applications to serve Toronto
submitted by A. Fitzroy Gordon, on behalf of a corporation to be
incorporated, and Canadian Hellenic Toronto Radio Inc., noting that the
Commission was dealing with these applications without issuing a call
for other applications to serve communities that are in greater need of
radio service. |
12. |
Eric Cartman pointed out that FM
frequencies in Toronto are scarce, and that a call for other
applications should have been issued. He also expressed the opinion that
radio licences should not be granted on the basis of sexual practices. |
13. |
Maureen Moss expressed the view that the
music mix proposed by Rainbow is no different from that offered by
existing radio stations. |
14. |
A joint intervention opposing all of the
applications for new Toronto radio stations was filed by CHUM Limited
(CHUM), licensee of CHUM and CHUM-FM Toronto, and Rogers Broadcasting
Limited (Rogers), licensee of CFTR, CJCL, CHFI-FM, and CJAQ-FM Toronto.
The interveners submitted that none of these applications are consistent
with the exceptions set out in The Issuance of Calls for Radio
Applications, Public Notice CRTC 1999-111,
8 July 1999 (Public Notice 1999-111),
where the Commission stated that applications for new radio licences
would generally result in a call for other applications. In the interveners’
view, the importance of respecting the guidelines set out in Public
Notice 1999-111, thereby
ensuring that the best possible proposals are considered, is magnified
by the scarcity of vacant commercial radio frequencies in the Toronto
market. |
15. |
CHUM and Rogers recommended that, in the
event that no call for applications was made, conditions of licence
should be imposed to ensure that any new station would provide diversity
through the provision of a niche service, rather than one directed to a
mainstream audience. In the case of Rainbow, CHUM and Rogers pointed out
that Rainbow had not proposed any limits on the types of music it would
offer, leading to the possibility that the station could compete with
existing stations to attract mainstream listeners. |
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Applicant’s reply
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16. |
The applicant did not respond to the
interventions filed by Harkanwal Thind, Maureen Moss, and Eric Cartman. |
17. |
In its reply to the joint CHUM and Rogers
intervention, Rainbow pointed out that, due to CKMW’s right to veto any
proposal to broadcast on 103.9 MHz that would cause interference to CIDC-FM,
a call for applications to use this frequency would not have been
successful and would have therefore been a misuse of the public process.
In the applicant’s view, the Rainbow proposal is a creative way to serve
the gay and lesbian community without reducing the number of frequencies
available to other potential applicants. |
18. |
With respect to the proposed station’s
ability to compete for a general audience, Rainbow pointed out that,
unlike most Toronto mainstream stations, its 3 mV/m signal will reach
only 14% of the population of the Toronto central market area. Of this,
only a fraction would represent the station’s target audience in the gay
and lesbian community. In Toronto, with many stations covering the
entire market, Rainbow indicated that the proposed station would have
very little commercial potential, and would therefore qualify as an
exception under the Commission’s practices regarding calls for
applications, even if CKMW had no veto rights due to potential
interference. |
19. |
In Rainbow’s view, the 50 watt signal of
the proposed station would ensure that such a station would only be
viable through serving a small but cohesive audience. |
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Commission’s analysis and determination
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20. |
With respect to the Commission’s decision
not to issue a call for other applications, the Commission has considered
the interventions as well as the applicant’s reply, and determined
that it was appropriate to proceed with consideration of this application
without issuing a call for further applications. In Public Notice
1999-111, the Commission
listed a number of exceptions to its general policy of issuing calls
for competing radio applications. One exception was for "low
power and other proposals with very little commercial potential." |
21. |
In 2005, the Toronto radio market generated
total revenues of about $242 million. The Commission notes the
applicant’s limited coverage of the Toronto area, as Rainbow’s response
to the intervention pointed out, and that the applicant projects total
first-year revenues of $1.3 million, rising to $2.9 million by the
seventh year of operation. The latter figure would amount to about 1.2%
of the total revenues of the existing 25 Toronto commercial radio
broadcasters during 2005. |
22. |
Further, based on the information submitted
in Rainbow’s application, it is reasonable to assume that the moderate
levels of advertising revenue anticipated are achievable. Taking into
account the size of the Toronto radio market and amount of advertising
revenue that the proposed station is expected to generate, the
Commission concludes that the proposed station would have very little
commercial impact upon existing Toronto radio broadcasters. |
23. |
Given the specialized nature of the proposed
service and its limited commercial potential, as compared with other
Toronto stations, the Commission finds that the Rainbow application
qualifies as one of the exceptions announced by the Commission in
Public Notice 1999-111. |
24. |
Moreover, the Commission considers that
Rainbow has proposed a sound business plan, based on providing radio
programming currently unavailable in Toronto, and that reflects the
particular concerns and activities of a target audience. |
25. |
The Commission notes Rainbow’s plans for an
Advisory Board which would meet at least twice each year. The Advisory
Board would be chaired by the General Manager of the proposed station,
although no other member of the Advisory Board would have any connection
to Rainbow. The Advisory Board would review all complaints, and the
manner in which each was resolved. The applicant also indicated that
minutes of Advisory Board meetings would be made available to the
Commission upon request. |
26. |
The Commission also notes the applicant’s
plans for spoken word programming, its commitment to the broadcast of
Canadian musical selections that exceeds the regulatory minimum, and its
plans for the development of Canadian talent. |
27. |
In making its decision, the Commission
notes that the licensing of this proposal would not reduce the number of
frequencies that might be available on the FM band for other applicants
wishing to serve Toronto. |
28. |
The Commission also notes the applicant’s
plans for the development of Canadian talent. A condition of licence
is set out in the appendix to this decision requiring the applicant to
adhere to the above noted minimum annual financial contributions to CTD
following the commencement of operation. The Commission notes that the
applicant has proposed to contribute a total of $500,000 over a period
of seven consecutive broadcast years and will expect the applicant to
fulfill this total commitment over such a period. |
29. |
Accordingly, the Commission approves
the application by the Rainbow Media Group Inc. for a broadcasting
license to operate an English-language commercial FM radio programming
undertaking in Toronto. |
30. |
In line with the applicant’s proposal, the
Commission expects that spoken word programming, including newscasts,
open-line and discussion programs, and promotion of local events and
activities, will consistently incorporate material of direct and
particular relevance to the gay and lesbian community, and reflect its
perspective and its particular needs and interests. |
31. |
The Commission notes that, pursuant to
sections 4.1(b)(i) and 4.1(b)(ii) of the Shareholders’ Agreement, Mr.
George Marchi and CKMW may designate other members of their respective
group as the holder of the shares initially allocated to them. The
Commission reminds the applicant that should these options be exercised,
they will be subject to section 11(4) of the Radio Regulations, 1986. |
32. |
The licence will expire
31 August 2012 and will be subject to the conditions set
out in New licence form for commercial radio stations,
Public Notice CRTC 1999-137,
24 August 1999, with the exception of condition of licence number
5. The licence will also be subject to the conditions set out
in the appendix to this decision. |
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Issuance of the licence
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33. |
The Department has advised the Commission
that, while this application is conditionally technically acceptable, it
will only issue a broadcasting certificate when it has determined that
the proposed technical parameters will not create any unacceptable
interference with aeronautical NAV/COM services. |
34. |
The Commission reminds the applicant that,
pursuant to section 22(1) of the Broadcasting Act, no licence may
be issued until the Department notifies the Commission that its
technical requirements have been met, and that a broadcasting
certificate will be issued. |
35. |
Furthermore, the licence for this
undertaking will be issued once the applicant has informed the
Commission in writing that it is prepared to commence operations. The
undertaking must be operational at the earliest possible date and in any
event no later than 24 months from the date of this decision, unless a
request for an extension of time is approved by the Commission before 5
April 2008. In order to ensure that such a request is processed in a
timely manner, it should be submitted at least 60 days before that date. |
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Other matters
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36. |
The Commission reminds the applicant that,
before implementation of the station, it must file a signed and executed
copy of the Shareholders’ Agreement, and a revised Board of directors
(pursuant to Section 6.1 of the Shareholders’ Agreement). |
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Employment equity
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37. |
In accordance with Implementation of
an employment equity policy, Public Notice CRTC 1992-59,
1 September 1992, the Commission encourages the applicant to consider
employment equity issues in its hiring practices and in all other
aspects of its management of human resources. |
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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 in PDF format or in
HTML at the following Internet site: http://www.crtc.gc.ca
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Appendix to Broadcasting Decision CRTC 2006-128
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Conditions of licence
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1. The licence will be subject to the conditions
set out in New licence form for commercial radio stations,
Public Notice CRTC 1999-137,
24 August 1999, with the exception of condition number 5. |
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2. The licensee shall, as an exception to
the percentage of Canadian musical selections set out in section 2.2(8)
of the Radio Regulations, 1986 (the Regulations), in any
broadcast week: |
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a) devote, in that broadcast week, a minimum of 40% of its
musical selections from content category 2 (popular music) to
Canadian selections broadcast in their entirety; and
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b) devote, between 6:00 a.m. and 6:00 p.m., in the period from
Monday to Friday of the same broadcast week, a minimum of 40% of its
musical selections from content category 2 (popular music) to
Canadian selections broadcast in their entirety.
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For the purposes of this condition, the
terms "broadcast week", "Canadian selection", "content category", and
"musical selection" shall have the same meaning as that set out in the
Regulations. |
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3. The licensee shall contribute a minimum
of $5,000 in each broadcast year for a scholarship in journalism,
artistic, or music studies at the School of Media Studies at Humber
College, and $5,000 in each broadcast year for a scholarship to the
School of Journalism at Carleton University. |
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4. The licensee shall contribute a minimum
of $30,000 in each broadcast year to payments to musical artists
showcased at the Pride Week celebrations. |
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5. In each of the first four broadcast
years, the licensee shall contribute a minimum of $10,000 to fund
workshops and seminars for musical artists at Canadian Music Week. In
the fifth broadcast year and in each subsequent broadcast year the
licensee shall contribute $20,000 for this purpose. |
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6. In the fifth broadcast year, and in each
subsequent broadcast year, the licensee shall contribute $40,000 to
artists for their participation in a gay community showcase and art
exhibit. |
Date Modified: 2006-04-05 |