Broadcasting Decision CRTC 2008-101 Ottawa, 9 May 2008 Neeti P. Ray, on behalf of a corporation to be incorporated Windsor, Ontario Blackburn Radio Inc. Windsor, Ontario Application 2006-1236-8, received 3 October 2006 Application 2007-1123-5, received 7 August 2007 Public Hearing in London, Ontario 10 December 2007 Licensing of new radio stations to serve Windsor, Ontario The Commission approves the application by Blackburn Radio Inc. for a broadcasting licence to operate a new FM radio station to serve Windsor. The Commission also approves the applicant’s request for an exemption from the regulatory requirement regarding the level of hit material that may be broadcast. The Commission approves in part the application by Neeti P. Ray, on behalf of a corporation to be incorporated, for a broadcasting licence to operate a new FM ethnic radio station to serve Windsor. Within 90 days of the date of this decision, the applicant must submit an amendment to the application proposing the use of an FM frequency other than 95.9 MHz (channel 240B1) that is acceptable both to the Commission and the Department of Industry. Introduction 1. At a public hearing commencing 10 December 2007 in London, Ontario, the Commission considered two applications for new radio programming undertakings to serve Windsor, which are mutually exclusive on a technical basis. The applicants were Blackburn Radio Inc. (Blackburn) and Neeti P. Ray, on behalf of a corporation to be incorporated (Neeti Ray). 2. As part of this process, the Commission received and considered interventions with respect to each application. The public record for this proceeding is available on the Commission’s website at www.crtc.gc.ca under “Public Proceedings.” 3. After reviewing the applications and interventions, the Commission is of the view that the primary issues to be considered are the following: • Can the Windsor radio market sustain additional radio services without an undue negative impact on existing stations? • If so, which of the applications should be approved, in light of the factors identified in Broadcasting Public Notice 2007-61, as amended by Broadcasting Public Notice 2007-61-1 (the Call)? The Windsor radio market and its ability to sustain new stations 4. The Windsor radio market consists of two commercial AM radio stations and two commercial FM radio stations, all of which are owned by CTVglobemedia Inc. (CTVgm) through CTV Limited (CTV), the licensee of the four stations.1 CKLW Windsor operates under a News/Talk format; CKWW Windsor, under an Adult Standards format; CIMX-FM Windsor, under an Alternative Rock format; and CIDR-FM Windsor, under an Adult Contemporary/Jazz format. 5. Out-of-market tuning to Detroit area stations by Windsor area residents 12 years of age and older accounts for 70% of their total tuning.2 Among the Detroit radio stations available to Windsor listeners are two FM stations that offer a Country Music format (WYCD-FM and WDTW-FM Detroit) and three AM stations that offer ethnic programming (WNZK Detroit, a multilingual radio station; WSDS Detroit, a Spanish- language music station; and WPON Detroit, an oldies station with South Asian and Spanish programming on weekends). 6. From 2002 to 2006, the compound annual growth rate of total revenues was 1.1% in the Windsor radio market, compared to 6.4% for the province of Ontario and 6.4% for all of Canada over the same period. 7. According to the Conference Board of Canada, real growth in the Windsor Census Metropolitan Area’s (CMA’s) gross domestic product (GDP) was flat in 2007, the seventh year in a row in which the economy has disappointed. Further, it projects that the economic struggles will persist into 2008, with real GDP growth of 0.9% forecast, and that an expected increase of 1.8% in employment in 2008 will not be enough to compensate for the estimated 4.5% decrease in employment in 2007. 8. Although the Windsor radio market experienced, from 2006 to 2007, a slight decrease in its profit before interest and tax (PBIT) margin, it was above average in terms of profitability relative to the 2006 aggregate PBIT for all commercial radio stations in Canada. Further, of CTV’s four radio stations in Windsor, only one was unprofitable in 2007. 1 In Broadcasting Decision 2007-165, the Commission approved the transfer of effective control of these and other programming undertakings from CHUM Limited (CHUM) to CTVgm. On 31 July 2007, CHUM changed its name to CTV Limited (CTV). Due to the unique circumstances of the Windsor radio market, the Commission had granted CHUM an exception to its Common Ownership Policy in Decision 93-37, where it approved its acquisition of the assets of the radio programming undertakings CKLW and CKLW-FM Windsor (the latter now CIDR-FM) from Trillium Cable Communications Limited; when Decision 93-37 was issued, CHUM already owned CKWW and CIMX-FM Windsor. As such, in Broadcasting Decision 2007-165, CTVgm inherited from CHUM this exception to the Commission’s Common Ownership Policy, and thus owns and operates one more station than would be permitted without that exception. 2 BBM Canada, Fall 2007 9. According to Statistics Canada’s 2006 Census,3 the population of the Windsor CMA was about 331,600. The population had increased by 0.9% between 2003 and 2006, as compared to 3.1% for Canada and 3.6% for Ontario during the same period. The 2007 Windsor radio market population 12 years of age and older was estimated to be 290,635.4 According to the Financial Post Survey of Markets, 2007, the size of this segment of Windsor’s population is expected to increase by 0.2% annually from 2007 to 2012. 10. Although the Commission recognizes that incumbent Windsor radio services would experience some negative economic impact from the licensing of new stations, it is satisfied, based on the evidence set out above, that the Windsor radio market could support the licensing of one new commercial radio station and one niche radio station (one not directed to a mainstream audience) without becoming unprofitable. Assessment of the applications 11. Having determined that there is room in the Windsor radio market for two additional services, the Commission has considered the two applications to serve Windsor in light of the factors relevant to the evaluation of the applications outlined in the Call, which include the factors set out in Decision 99-480: • the diversity of news voices; • the quality of the application; and • the level of market impact. 12. In the case of the Neeti Ray application, the Commission also considered the applicant’s plans with respect to meeting the objectives set out in Public Notice 1999-117 (the Ethnic broadcasting policy). 13. In assessing the applications for the proposed services, the Commission has also taken into consideration the special circumstances of the Windsor radio market. In Public Notice 1984-233 (the Windsor Radio Review), the Commission acknowledged that Windsor radio licensees, who compete for local listeners with many stations located one kilometre away in Detroit, operate in an environment unparalleled anywhere in Canada. The Commission therefore stated that it was prepared to regulate radio licensees operating in Windsor in a flexible manner. However, the Commission also established the following principle that would govern its approach to the regulation of Windsor radio stations: […] the Commission is of the view that its objectives in Windsor will be achieved by programming services that reflect a firm Canadian orientation in their approach to the provision of spoken word and music programming. 3 www.statscan.ca 4 BBM Canada, 2007 14. As noted in Broadcasting Decision 2003-603, in view of the unique circumstances of the Windsor radio market, CTV’s four commercial radio stations in Windsor are regulated in a manner that differs from the regulation of other commercial radio stations. Further, whereas minimum requirements with respect to the level of spoken word and news programming that commercial FM stations must broadcast were generally eliminated in 1993,5 such requirements were retained for Windsor stations due to the fact that all of the city’s radio stations were owned by one licensee and because the Windsor Radio Review’s call for radio stations reflected a firm Canadian orientation to the provision of spoken word programming. Neeti Ray 15. In Broadcasting Decision 2007-117, the Commission approved an application by Neeti Ray for a broadcasting licence to operate a new ethnic AM radio programming undertaking in Mississauga, Ontario. As of the date of this decision, that undertaking has not commenced operations. 16. In the present case, Neeti Ray proposed to establish an English- and third-language commercial FM ethnic radio programming undertaking that would operate at 95.9 MHz (channel 240B1) with an average effective radiated power (ERP) of 2,900 watts. The proposed station would offer ethnic programming to a minimum of 21 ethnic groups in Windsor, in a minimum of 12 languages, and would also offer programming targeting an Aboriginal audience. In addition, the applicant indicated that at least 7% of musical selections broadcast during ethnic broadcast periods would be Canadian selections as specified in section 2.2(4) of the Radio Regulations, 1986 (the Regulations), and that at least 10% of all Category 3 (Special Interest Music) musical selections would be Canadian musical selections played in their entirety. 17. Neeti Ray indicated that at least 105 hours per broadcast week would be devoted to local programming, and that, by condition of licence, a minimum of 105 hours per broadcast week would be third-language programming, with the remainder being English-language programming. The applicant also indicated that, by condition of licence, at least 105 hours per broadcast week would consist of ethnic programming, and that six hours per broadcast week would be devoted to Aboriginal programming.