The Canadian Radio-television and telecommunications commission is opening the door to adding another commercial FM radio station in Quebec City.
On Thursday, the commission issued a call for comments, prompted by two applications for new commercial radio stations in the provincial capital — one French, one English. The first step in the process is for people to comment on whether they believe the market can handle another station, and if so whether there should be a general call for applications from all interested parties.
The commission published basic information for the two applications it received. Both are for the same frequency, 105.7 MHz, with a power of a few thousand watts.
The French-language station is proposed by Gilles Lapointe and Nelson Sergerie. The English-language one is proposed by Dufferin Communications, a subsidiary of Evanov Radio Group.
Another chance for Evanov?
This isn’t Evanov’s first attempt at a Quebec City station. In 2010, the CRTC denied a similar application — for the same frequency — for an English-language commercial station using the same easy-listening format of Evanov’s Jewel network of stations. (The commission also denied an application by Evanov for a sister French-language station.)
The decision was controversial, even within the commission itself, prompting a dissenting opinion from commissioner Timothy Denton. The majority found, as it had with a similar application from Standard Radio in 2006, that because Quebec City’s anglophone population is so small, a new English-language music station would necessarily have to target francophone listeners, and would introduce unfair competition because English-language stations don’t have French-language music quotas. (A policy the commission is in the process of reviewing.)
Denton argued that it’s not up to the commission to protect French-language stations from competition from English-language stations, nor to protect Evanov from the danger of trying to make money by targeting only the anglophone community.
Has anything changed?
In the six years since that decision, there’s been enough turnover at the CRTC that none of the commissioners who were part of it are still there, including Denton. That could prompt a change in mentality.
The market, meanwhile, appears to have changed fairly little in the past half-decade. Its nine stations have had a profit margin around 20% over the past five years, which is actually down from 30-40% margins when the CRTC made its decision. And advertising revenue is also flat at around $45 million for the market.
The economics are the same, so if the commission does decide to go ahead with a new station, it will be because of a change of mentality of the commissioners or the strength of the applications.
What’s next?
Interested parties, including incumbent radio stations who want to stop competition, and others who might be interested in applying, have until May 30 to comment. After that, the commission will decide if it makes sense to add a new station. If it does, and there’s clear interest from other parties, it will issue a call for applications and set a hearing. If it’s just those two applicants that express interest, it could simply consider those applications without issuing a call or having the parties appear at a public hearing.
If you wish to add your two cents about whether Quebec City can handle another commercial radio station, you can file your comments here until 8pm ET on May 30. Note that all information submitted, including contact information, becomes part of the public record.
The CRTC should never rule about the potential profitability of a station. There is no way to know what a new station in the market will do. Perhaps it will sink and died in a few months (Radio Fierte) or it will catch on rapidly and make a good profit. Either way, if a company is willing to invest and willing to take the risk, then why not?
The CRTC works too hard to find ways to say no, to protect incumbents from having to deal with actual competition and fresh blood in the marketplace. It’s truly sad to say that 10 years ago, the license could have been granted to Evanov and they might have a popular, profitable station. It shouldn’t be up to the CRTC to decide winners and losers on the financial side.
That was essentially Denton’s argument. But the CRTC’s concern isn’t so much whether the individual station will be successful, but whether adding a new station to the market will do more harm than good in terms of the broadcasting system. The fact that there’s not much space left on the FM dial in Quebec City is also a major consideration here.
“whether adding a new station to the market will do more harm than good in terms of the broadcasting system. ”
I think that is a problem. The public (aka, the marketplace) should be the ones deciding this, and not suits in another city. The harm (if any) would be to make it harder for stations that don’t meet the public’s desires to go under. If adding a new station can do that, then that new station would be more than popular enough to pay for itself, and the old station closed, to be replaced at some point with another new competitor.
The current system gives a huge advantage to the incumbent players. Your own story says 20% profit margins in the market place. Why does the CRTC think that profitable companies should not face competition?
Perhaps another example of regulator capture by the big players and existing station owners.
Unfortunately the broadcasting system is not a pure free market, so that’s not going to happen. The commission needs to decide who gets a licence, which means it needs to set criteria.
Yes it does.
The commission has said nothing of the sort. If the market, and the majority of the stations in it, are profitable, and revenue to them is growing at least as much as inflation, then the market has passed the three basic tests before a call for applications. The notice of consultation allows people to make other arguments in support of (or opposition to) licensing additional stations.
Considering the CRTC has consistently favoured new entrants when licensing new stations in a market, that doesn’t make sense.