ARCHIVED -  Transcript of Proceeding

TRANSCRIPT OF PROCEEDINGS BEFORE

THE CANADIAN RADIO-TELEVISION AND

TELECOMMUNICATIONS COMMISSION

SUBJECT:

Call for comments following a request by the Governor in Council to prepare a report on the implications and advisability of implementing a compensation regime for the value of local television signals

HELD AT:

Outaouais Room

140 Promenade du Portage

Gatineau, Quebec

December 9, 2009

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.

Canadian Radio-television and

Telecommunications Commission

Transcript

Call for comments following a request by the Governor in Council to prepare a report on the implications and advisability of implementing a compensation regime for the value of local television signals

BEFORE:

Konrad von Finckenstein   Chairperson

Michel Arpin   Commissioner

Len Katz   Commissioner

Rita Cugini   Commissioner

Timothy Denton   Commissioner

Elizabeth Duncan   Commissioner

Suzanne Lamarre   Commissioner

Peter Menzies   Commissioner

Candice Molnar   Commissioner

Michel Morin   Commissioner

Marc Patrone   Commissioner

Louise Poirier   Commissioner

Stephen Simpson   Commissioner

ALSO PRESENT:

Jade Roy   Secretary

Valérie Dionne   Legal Counsel

Crystal Hulley

Donna Gill   Hearing Manager

HELD AT:

Outaouais Room

140 Promenade du Portage

Gatineau, Quebec

December 9, 2009

- iv -

TABLE OF CONTENTS

   PAGE / PARA

PRESENTATION BY:

Friends of Canadian Broadcasting   636 / 3500

Canadian Conference of the Arts   644 / 3531

Stornoway Communications   676 / 3712

Pelmorex Media   686 / 3748

Crossroads Television System   693 / 3778

Sarah Braund   723 / 3937

Ari Berman   730 / 3972

Kari Vierimaa   736 / 4003

Russell McOrmand   742 / 4035

Nicole Viens   748 / 4058

Steven James May   752 / 4074

ACTRA   778 / 4223

Canadian Media Guild   787 / 4270

Serge Prévost   824 / 4467

Shaw Communications   841 / 4580

TONAC   898 / 4926

   Gatineau, Quebec

--- Upon commencing on Wednesday, December 9, 2009 at 0902

3495   THE CHAIRPERSON: Good morning. Bonjour.

3496   Commençons, Madame la Secrétaire.

3497   THE SECRETARY: Thank you, Mr. Chairman.

3498   We will start with the presentation of Friends of Canadian Broadcasting. Please introduce yourself and you have 10 minutes for your presentation.

--- Pause

3499   THE SECRETARY: Please open your mike. Sorry.

PRESENTATION

3500   MR. MORRISON: Mr. Chair, my name is Ian Morrison. I speak for the Friends of Canadian Broadcasting and I want to say that I stand behind everything in my presentation except the date, okay?

--- Laughter

3501   M. MORRISON : Monsieur le Président et Conseillers, les Amis de la Radiodiffusion canadienne servent de chien de garde pour la programmation canadienne. Nous sommes appuyés par 100 000 Canadiens. Merci de nous permettre de comparaître aujourd'hui.

3502   In an April 2008 study commissioned by Friends and collaborating groups, Pollara found that 76 percent of Canadians believe that local news is very important.

3503   Corroborating findings emerged from CMRI's 2008 TV Trends and Quality Survey, a report on Canadians' attitudes towards TV which found that 64 percent of Anglophones 18 years of age and over indicated that they were very interested in local news, a far higher percentage than for any other type of television programming.

3504   As well, during the 2008 broadcast distribution; that is, BDU specialty public hearing, the Commission heard from analysis research that 78 percent of respondents indicated that having local news was of high or very high value to them.

3505   Canada's conventional television broadcasters are the only participants in the audiovisual system with the capacity to deliver local news programs with high standards of journalism and production values.

3506   These locally produced programs are expensive compared with similar national network programming because the base costs of production are duplicated and must be borne by individual stations rather than being amortized across a national system.

3507   Canada's local television stations are an irreplaceable source of reflection and local news for each community, playing an essential role in the information infrastructure and therefore the economy of every Canadian city.

3508   They are also essential to the expression of important stories in each community and the transmission of those stories to national audiences and to serving the needs of those millions of Canadians who rely on over-the-air signals for their television reception.

3509   CBC has reported a shortfall of 171 million this year. CanWest has hit the ropes and mandatory information published quarterly by its parent company's 20 percent shareholder Torstar reveals that CTV has incurred huge losses in the past year.

3510   The Commission's financial summaries indicate that profit before interest and taxes, PBIT, of the private conventional television industry was only 0.4 percent in the broadcasting year ending August 31st, 2008 before the onset of the recession.

3511   Local stations have shuddered in Brandon and Red Deer and several more have teetered on the brink of closing before emerging at the last minute under new ownership in Montreal, Hamilton and Victoria.

3512   From a position of strength one decade ago, the economic engine of conventional television has tanked in recent years because advertisers now have many more choices to reach their desired demographic targets and are less willing to pay large fees across the board to reach less defined and shrinking mass audiences.

3513   This crisis in local conventional television is alarming because it threatens both diversity and local presence in communities across the land, hence the urgency of developing a new stream of revenue to sustain an essential link in the Canadian audiovisual system.

3514   Four-tenths of cable and satellite viewing is to conventional stations. Therefore, the economic value of conventional signals to distributors is beyond dispute.

3515   The line on financial statements "cost of goods sold" suggests that a company pays for what it sells. For five decades, cable monopolies have generated substantial profits from the sale of a product for which they have not paid. Perhaps during the early growth years of cable this might have been an equitable bargain for both parties because cable extended the audience reach of local stations and advertising agencies paid for full coverage area audiences. Advertisers no longer do so.

3516   Furthermore, the BDU's carriage of distant and time-shifted signals has fragmented local audiences with negative impacts on conventional stations local numbers and therefore advertising revenues. When viewers choose to watch a program on a station in another market or in another time zone, local stations lose both ends of the transaction because ad agencies pay for audiences on the local station only and do not recognize the out-of-market audience and they reduce what they pay when local viewership declines.

3517   As well, public policy has allowed cable monopolies to require program undertakings and thereby compete directly with conventional broadcasters for limited ad revenues. And the cumulative impact of audience fragmentation has hurt the bottom line of Canadian conventional broadcasters, all the while adding to the distributors' profits. As a result, conventional television can no longer survive nourished by advertising revenue alone.

3518   In the neighbouring American jurisdiction, public policy pays great respect to the concept of program rights protection. If U.S. rules applied in this country no American conventional stations would be carried on the Canadian system and there would be no carriage of out-of-market signals in the same time zone and no carriage of time-shifted signals. And in the United States, of course, distributors pay for local conventional signals.

3519   One result of this difference is that Canadians enjoy a much greater range of viewing choice than Americans. While this difference is of substantial benefit to Canadian distributors, through the ensuing audience fragmentation it damages the economic viability of Canadian conventional broadcasters, especially those operating in the English language.

3520   There is overwhelming evidence that cable monopolies can afford to pay for local signals. Based on your Commission's data, the cable industry's profit before interest and taxes, PBIT, was 25 percent in the 2008 broadcasting year. Note that the DTH; that is satellite and MMDS distributors on the other hand, enjoyed a comparatively modest 4 percent PBIT in 2008.

3521   Data from the big four cable distributors annual reports further illuminates the cables' financial capacity and the cable industry is in no position to argue that internet and local phone profits are irrelevant to the discussion because both businesses have been built on infrastructure paid for by cable subscribers under past capital expenditure charges approved by your Commission.

3522   Distributors have misled the public about the impact of paying for local signals. They have falsely characterized signal compensation as a TV tax which might add $10 a month to monthly cable or satellite invoices. They have falsely suggested that Canadian conventional television operators had an operating profit of $400 million last year and they have falsely suggested that cable companies are profitable only when programming services are combined with other services such as internet and home phone.

3523   While posing as a consumer advocate big cable has gouged consumers in recent years. For example, since your Commission ended the regulation of basic cable rates in 2002 Rogers and Shaw have increased their basic price by 85 and 68 percent respectively during a period when the Consumer Price Index rose by only 4 percent.

3524   Friends; therefore, recommends that the Commission re-regulate the basic service of the big four cable monopolies and ensure that cable distributors do not pass along signal compensation charges to their subscribers. Satellite distributors, on the other hand, should be allowed to pass along without mark-up signal compensation costs to their subscribers until such time as they achieve a 10 percent PBIT.

3525   We also recommend that signal compensation should be allocated among the local conventional broadcasters based on each broadcaster's total audience for Canadian programs in the preceding broadcasting year. Each television market should be assigned a proportion of the total compensation based on population. Markets such as Montreal or Ottawa with a significant presence of both official language groups should be considered as two distinct markets.

3526   The following chart indicates how this would work in the Toronto/Hamilton extended market area. It is based on the total audience for Canadian programs in the 2008 broadcasting year. Note that the percent of Canadian viewing is in bold type in the second column.

3527   We understand that the Commission may not wish to employ the term fee for carriage but may be prepared to consider some form of signal compensation. The choice of vocabulary is not of primary importance. What is significant and essential is that the Commission involve itself sufficiently in supervising the negotiating process so as to ensure that the interest of smaller broadcasting players, including those without specialty and pay assets which the BDUs may covet, are protected. This protection must include but not be limited to a solid commitment to arbitration on a timely basis.

3528   Merci de nous avoir donné la possibilité de présenter ces conseils.

3529   THE SECRETARY: Thank you, Mr. Morrison.

3530   We will now hear the presentation of the Canadian Conference of the Arts. Please introduce yourself and you have 10 minutes.

PRESENTATION

3531   M. PINEAU : Merci.

3532   Good morning, Mr. Chairman and Commissioners. My name is Alain Pineau and I am still National Director of the Canadian Conference of the Arts, just as I was two weeks ago when we last discussed this topic.

3533   THE CHAIRPERSON: Is this about to change?

3534   MR. PINEAU: Sorry?

3535   THE CHAIRPERSON: Is this about to change?

--- Laughter

3536   MR. PINEAU: For 65 years, I will say for the record, that the CCA has been the national forum for the arts and cultural community in Canada. Close to 600 organizations, artists, founders and cultural activists are members of the CCA and contribute to our work.

3537   I am delighted to be at these hearings because it gives the voice of Canadian arts and culture a chance to be heard once again on issues that are important to the broadcasting policy for Canada enunciated by Parliament in the Broadcasting Act.

3538   Before I outline the CCA position on the issues in the Notice, let me make two comments about the Order in Council you have received from the Governor in Council. The OIC requests the Commission to seek public comment on, and I quote:

"...the impact of value for signal on consumers."

3539   Under section 15 of the Act the Governor in Council may request the CRTC to hold hearings or make reports but we note there is an important limitation on this ability.

3540   The matter must be within the jurisdiction of the Commission under the Act. The CRTC jurisdiction is found in section 5, which states that the Commission -- and I quote:

"...shall regulate and supervise all aspects of the Canadian broadcasting system with a view to implementing the Broadcasting Act policy set out in subsection 3(1)."

3541   Mr. Chairman, we have searched the Act carefully, particularly the broadcasting policy, and we can find no reference to consumers. We find many references to Canadians, of course, and see them variously described as "the public" "men, women and children" "citizen" "resident" "person" and "individual."

3542   We also find reference to distribution undertakings providing, and I quote:

"...delivery of programming at affordable rates."

3543   But nowhere can we find any reference to consumers. While I am not a lawyer, I cannot help but wonder if the OIC is valid.

3544   Is it taking you to -- is it asking you to inquire into something over which you do not have jurisdiction since the effect of your decisions on Canadians as consumers per se is irrelevant to the broadcasting policy for Canada?

3545   Having said that, I will proceed on the assumption that the matter is properly before you and you will review the interests of Canadians as citizens have in the broadcasting policy. And after all, like most of you, I suspect, I am a consumer also in this battle.

3546   The second observation I would offer about the Order in Council is that it is unreasonably selective in noting that the Act -- and I quote:

"...provides amongst other things that the programming provided by the Canadian broadcasting system should be varied and comprehensive, providing a balance of information and that distribution undertakings..."

3547   It is essential to our argument that you look at the entirety of section 3(1)(i) which in subsection (1) says this, and I quote:

"...the programming provided by the Canadian broadcasting system should be varied and comprehensive providing a balance of information, enlightenment and entertainment for men, women and children of all ages, interests and tastes."

3548   This section is thus calling for balances between these three types of programming. Other sections provide that at the very heart of this balance section of programming should be programs that are made by Canadians.

3549   The Canadian Oxford Dictionary defines consumer as:

"...a purchaser of goods and services."

3550   When Canadians pay a subscription fee to a cable or a satellite company what are we purchasing? We are purchasing certain packages of broadcasting services and we are purchasing the right to watch the programs that are aggregated by these broadcasters.

3551   CCA submits that when you look at the broadcasting policy for Canada the key issue for you to consider in this process is the programming content that Canadians have access to through their cable and satellite subscription fees.

3552   We are certainly not alone in having pointed out in response to your Notice that Canadians are already paying very hefty subscription fees and that distribution undertakings are making very hefty profits from these fees.

3553   The Order in Council might prove valuable indeed if it encourages you to examine this issue at greater length because it may be that distribution undertakings are in fact in violation of section 3(1)(t)(ii), which obligates undertakings to -- and I quote:

"...provide efficient delivery of programming at affordable rates."

3554   Three times in previous hearings on this matter over the past several months we have tabled our support for a payment by the BDUs to conventional broadcasters to compensate for the redistribution of their signal. The fact is that 90 percent of the viewing of conventional television is done via cable and satellite.

3555   We also told you two weeks ago that in doing so we do not support a television tax. Rather, we say that Canadians already pay substantial subscription fees for cable and satellite services. As consumers we also undoubtedly pay for the television advertising which is essential for broadcasters. Canadians already pay enough but we do not receive a sufficient return in the form of Canadian content programming choices.

3556   As CCA has said to you many times in the past few years, Canadian broadcasters and cable companies do not provide viewers with a good enough supply of the following genres, particularly in the English-language markets; drama and scripted comedy, long form documentary, children's, local news and information and arts.

3557   Since the Local Programming Improvement Fund is directed at responding to the shortage of local news and information, CCA and others have proposed that the value for signal fee should be directed to the other underrepresented programming categories.

3558   Furthermore, the CRTC should establish the fee paid to conventional broadcasters by distribution undertakings should come from the profits of these companies and should not be passed along to the subscriber. In 2008 Canadian cable television companies collectively had a profit before interest and taxes of more than $2 billion, roughly 25 percent of gross revenues from their cable operations alone.

3559   Paying for the local signals which they retransmit should become a regular part of the cost of doing business. Instead, and against your voiced opinion, they have started adding this to their monthly billings an additional cost to their subscribers and, like so many other Canadians, because I get a consolidated bill from my provider for cell phone and television, cable and internet and everything, I had not noticed until it was brought to my attention. That's the way basic rates creep up.

3560   As I told you two weeks ago, we believe the CRTC should seriously consider re-regulating cable rates in order to rebalance the system. By doing so and providing conventional broadcasters with a value for signal you would achieve the following outcomes:

3561   You would indeed protect Canadian consumers who would continue to receive all the services they presently receive at no additional cost. So no television tax would be imposed on consumers.

3562   Conventional broadcasters will have an additional revenue stream, part of which would support local and national programming operations which most people recognize as being underfunded.

3563   Two weeks ago we discussed the CCA proposal to reintroduce Canadian programming expenditure requirements of 30 percent of the overall revenues of private conventional networks. You must ensure that the money Canadians pay is allocated to fulfilling their obligations to provide Canadian programs and is not simply transferred to their bottom line or, worse, used to bid up the price of foreign programs which they then write off.

3564   Finally, a portion of the additional revenues would be used by conventional broadcasters to require more high quality Canadian drama and scripted comedy programs. Drama is the genre of programming that is most watched by Canadians and there is presently a ludicrously small amount of Canadian programs for us to choose, particularly in the English market.

3565   This sounds to CCA like a win-win scenario that would go some way towards implementing the Broadcasting Act's broadcasting policy for Canada while at the same time protecting the interests of consumers as the government is wanting to do.

3566   By reintroducing appropriate regulation to both distributors and broadcasters you will fulfil your duties as custodians of the cultural objectives of the Act and you will get the support of Canadian citizens and consumers all wrapped in one.

3567   Thank you for your attention. I look forward to your questions.

3568   THE CHAIRPERSON: Thank you both for your presentations.

3569   Mr. Morrison, I followed you until paragraph 21 of your presentation; perfectly logical. You always count -- you point out some of the policy mistakes we have made in the past and why, where we are, et cetera.

3570   THE SECRETARY: Sorry, please open your mike.

3571   MR. MORRISION: I say that's further than I have got with you before, Mr. Chair.

3572   THE CHAIRPERSON: I said I follow you. I didn't say I accept, but anyway.

--- Laughter

3573   THE CHAIRPERSON: But then it seems to me there is a logical disconnect. On the one hand you suggest that we should re-regulate basic rates. On the other hand you suggest there should be evaluation -- there should be negotiation for signal compensation.

3574   How do you reconcile the two? I don't quite understand; either you have a system where people agree on their rates and then obviously to the extent that they have negotiations they pass the cost on to the subscriber, to the extent that the subscriber will bear it. But I don't see how you can mix a mandated rate and a free negotiation at the same time.

3575   MR. MORRISON: If I had to dispense with one of those considerations I think it would be the free negotiation. We do not believe that negotiations between these immense distributor institutions and the broadcasters are on a level playing field.

3576   THE CHAIRPERSON: So essentially we do -- we would set a fee for carriage for conventional, okay.

3577   MR. MORRISON: Or you would encourage the process that would come to that result.

3578   THE CHAIRPERSON: Mr. Pineau, you are the first person who actually focuses on the wording of the OIC, and I thank you for that. You think it may not be within our jurisdiction. You are clear to look at the OIC -- the government is asking us. It's not directing us. It's not telling us what to decide. It's asking us to look at two issues. They can pick any issue they want. They could ask us as long as it's within the broadcasting universe.

3579   And clearly, you know, consumers are part of the broadcasting universe even if they are -- but they then also ask us to make recommendations, but surely not recommendations to ourselves. It is recommendations to what the Minister should do or et cetera.

3580   I mean I can't believe that they asked us to look at these two issues, which is affordability and migration to digital TV and then make recommendations to ourselves. No, surely, the recommendations are to the government. So if you look at it that's what the Order in Council says.

3581   So assume, yes, they can ask us to look at affordability. Assume and what then should we recommend to them, because you end up basically making recommendations to us what we should be doing?

3582   I am asking you, what should we recommend to the government since they have asked us for recommendations on these two points?

3583   MR. PINEAU: Well, I'm no lawyer and I could not afford to check with legal advice on this particular issue. I am, however, aware of the fact that you --

3584   THE CHAIRPERSON: You are an English speaker and you can read the lines. You don't have to be a lawyer. It says "make recommendations".

3585   MR. PINEAU: Yes -- no, no.

3586   THE CHAIRPERSON: It doesn't say make recommendations to yourself. So it must be recommendations to the person who requests.

3587   MR. PINEAU: Yes, and I understand that it's advice that you are being asked to do.

3588   However, I thought it was worth flagging because, you know, you have to pay attention to consumers no doubt as, at the end of the day, you also have to pay consideration to the bottom line of the industries that pay for it.

3589   I keep coming back here to tell you that it is one consideration. It is not the main consideration. And we are concerned about a drift, particularly in this particular area of Canadian culture that the consumers and market laws -- the market rules are the basic policy which should direct everything and we disagree with that.

3590   THE CHAIRPERSON: So we in our report should recommend to the Minister, according to you, what? Don't repeat your presentation to me in November.

3591   What do you feel that we as an institution should recommend to the Minister who asked us for recommendations?

3592   MR. PINEAU: Well, I'm not quite sure what the purpose of the recommendation is. I mean will you recommend that the government ask you to regulate? It seems it is already in your jurisdiction to decide whether, you know, how this process will go whether you regulate or whether you don't.

3593   So when the government is asking for your advice on what to do, I'm puzzled as to what it would do. Would it pass legislation to say that you can -- I have no idea. I have no idea what you are being asked to do, quite frankly, except to take that into consideration.

3594   THE CHAIRPERSON: The Order in Council doesn't specify recommendations on what to what extent or anything. It's open-ended "and make recommendations". That's the wording in the Order.

3595   So therefore my question to you, what would you think we should recommend?

3596   MR. PINEAU: Well, unless I misunderstand fundamentally I would write them back and say, thank you, we have had the opportunity to listen to hundreds of thousands of Canadians on this issue and we will fulfil our role as a quasi-judiciary -- quasi-judiciaire -- sorry, I can't pronounce that --

3597   THE CHAIRPERSON: Quasi-judicial.

3598   MR. PINEAU: -- yes, body, which I believe you are, and therefore we will take our responsibilities. You know, thank you, Minister.

3599   THE CHAIRPERSON: And I presume we will add onto it that we have heard from organizations like the CCA that -- the dangerous drift away from meeting the objectives of the Broadcasting Act and over focus on commercial goals or something like that?

3600   MR. PINEAU: Yeah, I mean, that's essentially our argument, which is just to say, you know, the kind of thing that we keep repeating.

3601   THE CHAIRPERSON: Suzanne?

3602   CONSEILLÈRE LAMARRE : Merci, Monsieur le Président. Bonjour, Messieurs.

3603   Mr. Morrison, I will start with your representation. Like the Chairman I have followed you through a little bit longer than needed. I followed your reasoning until paragraph 23 and 24 when you are outlining how a compensation regime would work. And I would like for you to expand a little bit on this.

3604   Are you proposing that whatever compensation regime, if there were one was put in place, that it would be driven in such a way that it's not necessarily the number of subscribers that would drive the amount but it would be the scheme of the percentage of Canadian viewing on each of the local stations that would determine the amount that would go to each broadcaster?

3605   MR. MORRISON: You have properly understood our position.

3606   And just to make that more concrete and to give an example, suppose you or the Government of Canada decided that it would be appropriate that $3.00 per subscriber should go towards compensation for local signals -- just take that as an example. It's an example that's not out of the blue. There have been studies that your Commission has sponsored where a figure of that magnitude has been used.

3607   We provide you with data from the Toronto/Hamilton extended market which just shows you how the various over-the-air signals there -- what their audience is, and we are suggesting to you that the most constructive way for public policy to give incentives to all the parties concerned is to take that percentage -- in the case of the Toronto/Hamilton market I recall the biggest beneficiary would be CTV. The second largest would be the CBC. Global is somewhat smaller.

3608   It's all based on the audience that the broadcasters assemble in the preceding broadcasting year for Canadian programs and we think that that would be a fair way to allocate a compensation regime and a way that is consistent with your Broadcasting Act values.

3609   COMMISSIONER LAMARRE: So, by doing it this way, the question of negotiating value for signal is actually out of the picture, hence, the necessity to regulate, as you are proposing, the basic rate for cable, because it's not a question of finding the right value of each and every one of the signals in a given market, it's a question of defining what would be the correct rate or fee for a given market to redistribute among broadcasters?

3610   MR. MORRISON: The amount would be -- in our plan would be allocated in each Canadian market. Market is a little bit like consumer, Alain, it's each Canadian territory by population and within each territory would be allocated based on the audience assembled for Canadian programs.

3611   That's the policy suggestion that we are giving to you and you would be perfectly free to adopt it as your own and pass it on to the Government of Canada if you wish.

3612   COMMISSIONER LAMARRE: And how do we ensure that consumers' interests are protected in that, through the regulation of the rate?

3613   MR. MORRISON: Yes. What the distributors are saying to you is essentially, in our view, based on a notion that what is happening in the future should be an extension of what has happened in the past. In other words, they're looking backwards.

3614   The situation for conventional television has tanked. The assertion that somehow everything is going to return to normal is not sustainable.

3615   Your own data preceding the recession demonstrate how the profitability of conventional television has got to effectively a zero level. Eight million dollars, I think, was the figure from your year ended August 31st, 2008.

3616   So something has to change and we think the policy tool that is available to you and that you employed for more than three decades is the regulation of the basic cable rate. After all, every one of the conventional broadcasters that we're talking about here is on the basic tier.

3617   And so you have the capacity, if you have the will -- and some of my colleagues would say courage -- to adopt a position that that can be controlled by this Commission, as it has been controlled by this Commission in the past, and you could weave into that whatever signal compensation regime you deem appropriate.

3618   Does that explain it to you in a broad brush?

3619   COMMISSIONER LAMARRE: Yes. And you also in paragraph 22 reference only the big four cable monopolies. So you are of the opinion that we should leave the smaller cable systems alone if such a scheme were to be implemented?

3620   MR. MORRISON: Yes.

3621   COMMISSIONER LAMARRE: Okay.

3622   MR. MORRISON: And you may have noted, leave the other distributors alone at the moment too.

3623   COMMISSIONER LAMARRE: At the moment?

3624   MR. MORRISON: M'hmm.

3625   CONSEILLÈRE LAMARRE : Monsieur Pineau, je pense que vous avez quand même... dans votre discussion avec monsieur le président, vous avez bien répondu à une des questions que j'avais, mais il m'en reste une autre.

3626   Vous faites référence... et je pense qu'on en a aussi discuté, il y a deux semaines là. Vous faites référence surtout aux difficultés du marché anglophone.

3627   Donc, est-ce que vous êtes d'avis qu'on devrait, pour l'instant, moins se préoccuper du marché francophone en ce qui a trait à un différent régime de compensation ou si vous pensez que c'est quand même autant applicable?

3628   M. PINEAU : Non. Le fait que je concentre mes présentations sur le côté anglophone indique que c'est là que les problèmes sont les plus grands, mais ça ne veut d'aucune façon suggérer qu'on n'a pas les besoins similaires du côté francophone. À cause des réalités de ce marché-là, c'est quand même différent.

3629   Il y a d'autres sortes de considérations, qui ne font pas l'objet de ces audiences-ci, qui devraient peut-être concentrer sur le marché francophone actuellement.

3630   Mais je pense que toute mesure que vous pourriez adopter, puis que si, par hasard, c'était celle qu'on vous recommande, c'est-à-dire de réglementer de façon... de rééquilibrer le système, ce système-là devrait être rééquilibré également dans le cas du marché québécois.

3631   Évidemment, là, le principal bénéficiaire est à la fois le principal contributeur, mais c'est la réalité de ce marché-là, essentiellement.

3632   Je ne veux en aucune façon laisser entendre qu'on ne doit pas se préoccuper du marché francophone actuellement.

3633   CONSEILLÈRE LAMARRE : Il y a une question à laquelle vous ne touchez pas, ni un, ni l'autre, mais je tiens quand même à vous demander votre opinion pour voir si vous y avez pensé un peu.

3634   La question de la conversion des radiodiffuseurs au numérique va changer la donne pour beaucoup de citoyens consommateurs qui auront à défrayer, soit pour un nouveau récepteur, soit pour un convertisseur. Il y a des gens qui, à la rigueur, vont perdre les signaux hertziens dont ils bénéficient présentement.

3635   Est-ce que vous estimez que présentement les citoyens sont informés de cette situation-là de façon adéquate, et sinon, qu'est-ce que vous proposeriez comme méthode ou comme solution pour que la situation s'améliore?

3636   M. PINEAU : Votre question s'adressait à nous deux?

3637   CONSEILLÈRE LAMARRE : À vous deux. À vous deux, oui, tout à fait.

3638   M. PINEAU : O.K. Aux deux. You want to go first?

3639   M. MORRISON : Non, toi.

3640   M. PINEAU : De notre côté, je dois dire que c'est un aspect sur lequel on n'a pas eu ni le temps, ni les ressources de se pencher.

3641   Je sais qu'un certain nombre d'intervenants ici au cours des... particulièrement, The Canadian Media Guild a fait toute sorte de propositions. Il y a eu des propositions également faites par d'autres.

3642   Mais je n'ai pas d'avis de quelque intérêt à vous fournir là-dessus, je regrette.

3643   COMMISSIONER LAMARRE: Mr. Morrison?

3644   MR. MORRISON: I guess fundamentally your Commission for a long, long time has played the role of balancing contradictions in the audiovisual system, the goals of the Broadcasting Act versus the financial capacity of the licensees or the interest of the broadcasters versus the interest of the viewers or the interest of the broadcasters vis-à-vis the distributors.

3645   And so I think what you have to really -- and in terms of the advice that you extend to the Government of Canada what you really have to look at is what is wrong right now, what is threatened in the system. That's what you should be keeping your eye on and you should be -- and therefore, you should be very concerned about the continuing health of the conventional television stations.

3646   COMMISSIONER LAMARRE: In regards to the coming conversion to digital, do you see any role for the government in being more proactive in helping consumers make that conversion?

3647   MR. MORRISON: Well, on that specific issue, we could do well to look south of the border. In fact, my organization has support, as I mentioned, from approximately 100,000 Canadians, which means people who live in families that send money. That's what I'm talking about.

3648   And many of those people were under the impression that we had a program in this country that would provide them with a subsidy for a conversion that was taking place earlier this year in another country, just because of the penetration of American media.

3649   I have seen -- and I've mentioned this to parliamentary committees -- I have seen no evidence of any initiative by the Government of Canada to help the 3 million Canadians who live in families where they depend on over-the-air -- in fact, mostly over-the-air analog signals for their access to the audiovisual system and it seems to me that we could do well to look at the kind of subsidy program that happened south of the border and we could do well to learn from the mistakes and problems that it had.

3650   I think your Commission has already begun -- in fact, our organization has begun to try to engage in a public education exercise around the issue. It's very hard for people to wrap their mind around the issue. So there's room for explanation of what this will actually mean to people. And, of course, affordability is a big issue.

3651   And I would remind you that ultimately anything that happens in the digitization process will -- the redundancy position is that it will benefit the distributors.

3652   COMMISSIONER LAMARRE: Thank you.

3653   Ce sont toutes mes questions, merci.

3654   THE CHAIRPERSON: Michel?

3655   COMMISSIONER ARPIN: Thank you, Mr. Chair.

3656   Mr. Morrison, just following up on a previous discussion that you had with Commissioner Lamarre and the Chairman as well, I'm bringing you to the table in your submission, which is also in your oral presentation, which is called "Canadian Programs and Foreign Programs."

3657   Let's assume that -- and as you said, you are asking us to regulate and set a fee and then distribute it to the various parties. Am I right to understand that?

3658   MR. MORRISON: I guess I said that to the Chair. I'm sympathetic to the CRTC's position that treating your licensees as if they were responsible adults, so to speak, that they would sit down and negotiate in the best interest of the system.

3659   If that negotiation process is abused and takes too long and we get to a situation where we're going to have more stations going off the air, particularly in smaller and medium-size communities, you have, in my judgment and the judgment of those who support the cause I'm working for, you have a responsibility -- put another way, Canadians expect the CRTC to step in and play a leadership role.

3660   We have, through polling over 10, 12, 15 years, proven to our satisfaction that your Commission has -- that Canadians have that expectation of your Commission.

3661   So it is not that we are opposed to negotiation, it is that we are discouraged by the self-serving aspects of the various players, particularly on the distributor side, and feel that ultimately you may have to intervene.

3662   COMMISSIONER ARPIN: I noted that Mr. Pineau wants to say something but before I want -- as you said, CTV will get most of the money --

3663   MR. MORRISON: Twenty-eight is not most. They would get more in the Toronto market because they deliver more Canadian programming to more viewers than any other broadcaster.

3664   COMMISSIONER ARPIN: Yes. However, if I'm taking -- well, to correct something on your table, CP24 is not over the air, it's a cable channel. So your table, we should not use the -- and you have allocated 13 percent to --

3665   MR. MORRISON: Yes. Mr. Arpin, thank you for that.

3666   COMMISSIONER ARPIN: However, it doesn't change --

3667   MR. MORRISON: Our message to you is -- like I know that you have access to all the BBM data. You can work it --

3668   COMMISSIONER ARPIN: No, no, I have no problem with that --

3669   MR. MORRISON: Yes.

3670   COMMISSIONER ARPIN: -- but only to note that there are some that will not get --

3671   Let's say that the regulated rate -- and it's only an assumption -- is $1.00 and let's say that CP24 for that matter is an over-the-air operation so that it will get money, I see from your table that OMNI.2 will only get .6 of a cent. Obviously, .6 of a cent of 2 million viewers may at the end of the day mean something but it will be --

3672   MR. MORRISON: They would get .6 of a cent, Mr. Vice-Chair, and a new incentive to try to gather more audience to Canadian programming --

3673   COMMISSIONER ARPIN: Yes, well --

3674   MR. MORRISON: -- which is, of course, one of your priorities.

3675   COMMISSIONER ARPIN: Now, did I hear you answer the Chair that we will be doing that on a yearly basis? That means that every year we will be reopening the can of worms to redistribute the money?

3676   MR. MORRISON: Well, I remember a line from Jean-Jacques Rousseau saying once something: I'm here to discuss principles, I will not dispute the facts.

3677   You may find a way to design this in practice better. Our going-in suggestion is that every broadcasting year, as the data come out, you look at the performance and you adjust the allocation of the available funds based on the audience that is assembled for Canadian programming.

3678   COMMISSIONER ARPIN: It's going to turn out to be a nightmare.

3679   MR. MORRISON: I think a good computer programmer could probably handle it in about three hours.

3680   COMMISSIONER ARPIN: Yes, maybe.

3681   MR. MORRISON: Okay.

3682   COMMISSIONER ARPIN: No, no, I think doing the program is easy, it's the application of the program that --

3683   Broadcasters need to forecast. They need to know -- and it's the argument of the CBC for the last four years, they want to have three-year planning or five-year planning in order to do forecasts.

3684   But you're saying here -- with your methodology, nobody will be able to forecast because each year it will change.

3685   MR. MORRISON: Somewhat. CBC is a good example. They are devoting quite a bit of their prime time to American programming now. Such a regime would reduce their incentive to deliver American programs to Canadians in prime time. "Jeopardy" wouldn't count.

3686   COMMISSIONER ARPIN: Now, the community access groups that came here earlier this week did say that they were the ones doing local programming, so they were the ones who should be getting the value for signal, because the over-the-air broadcasters are the network providers and their local programming is supported by the LPIF.

3687   Do you have any view on that?

3688   MR. MORRISON: I'm sympathetic to their need for resources. We are talking here about conventional over-the-air television signals and that's the problem that we're addressing today and that's why we offered the advice we did.

3689   COMMISSIONER ARPIN: Mr. Pineau, do you have something to add?

3690   M. PINEAU : Oui, si vous permettez, j'aimerais ajouter quelques commentaires.

3691   Je suis un peu divergent de mon collègue ici. Je pense que, comme je l'ai dit la dernière fois, nous avons passé le temps des négociations. Il y a urgence dans la demeure, et je pense qu'on est rendu au niveau de la réglementation pour la valeur du signal.

3692   Je ne crois pas que... compte tenu du climat qui existe entre les protagonistes et compte tenu de la difficulté de faire un level playing field pour une négociation, je pense que vous seriez aussi bien de cut to the chase, comme on dit, et d'aller directement à la réglementation.

3693   J'ai également... je trouve intéressante la proposition de distribuer l'argent qui serait collecté en vertu des parts d'écoute à de la programmation canadienne. Cependant, je pense que ça peut... puis, je ne pense pas que ça soit si difficile que ça de faire les ajustements, année par année là, parce que ça varie, mais ça ne varie -- enfin, il faudrait voir les chiffres là, je vais être prudent là-dessus -- mais je ne sais pas si ça varie tant que ça.

3694   Ce qui m'inquiète, cependant, dans les chiffres qu'Ian propose, par exemple, dans le marché de Toronto, j'imagine que la part de CTV est considérablement augmentée à cause des nouvelles régionales et ne reflète pas nécessairement la cote d'écoute des autres émissions à contenu canadien.

3695   Je pense que, au minimum, si vous adoptiez cette suggestion, qui est certainement intéressante, il faudrait également considérer la recommandation qui vous a été faite par un certain nombre... par un grand nombre d'intervenants, dont la CCA, à savoir que vous devriez réintroduire -- je ne connais pas l'acronyme en français là -- mais un CPE de 6 pour cent pour les émissions à caractère dramatique.

3696   CONSEILLER ARPIN : Ça, je pense qu'on en a discuté abondamment, il y a deux semaines.

3697   M. PINEAU : Oui.

3698   COMMISSIONER ARPIN: Mr. Morrison, one question that arises from the -- and you're alluding to it in a way in your oral presentation in your paragraphs 16 and 17, where you're describing the U.S. model of retransmission consent.

3699   Now, we have been offering the U.S. signals for more than 50 years in this country and removing them will create another type of crisis, I would suggest.

3700   MR. MORRISON: M'hmm.

3701   COMMISSIONER ARPIN: But are you favourable to blackouts on U.S. programming, other than the non-simultaneous substitution, which appears to be something very hard to do, not only technically, the cable guys are saying, but also from a -- Mr. Waddell told us that the U.S. unions will always ask to be paid if we were to initiate a non-simultaneous substitution program but blackouts --

3702   MR. MORRISON: If Steven Waddell said it, it must be true.

3703   But I would say the following. If you go into this as a negotiation between partners in a system and ask them to do something responsibly in the interest of the Broadcasting Act and Canadians, and one party is very, very powerful and the other party is less so, the one weapon that the less powerful party has is blackouts. They can invoke their programming rights.

3704   So blackouts, which would be a failure of the process were that to occur, would be the result of a preoccupation with negotiation. So we do not think of blackouts as a desirable outcome because they're not in the interest of the viewing public.

3705   But if the regime begins from the point of view of negotiation, you cannot ask the broadcasters, the weaker party, financially weaker as well, to enter the negotiation with one hand tied behind their back.

3706   COMMISSIONER ARPIN: Thank you.

3707   THE CHAIRPERSON: Okay, thank you, those are our questions for you.

3708   We will take a five-minute break before we do the next panel.

--- Upon recessing at 0953

--- Upon resuming at 1002

3709   LE PRÉSIDENT : Bon, commençons.

3710   THE SECRETARY: We will now hear the presentations from Stornoway, Pelmorex Media and Crossroads Television System.

3711   We will start with the presentation from Stornoway. Please introduce yourself, and you have 10 minutes.

PRESENTATION

3712   MS FUSCA: Good morning, Mr. Chairman, Commissioners, and Commission Staff. Before I begin today actually I would like to wish you all a Merry Christmas, Happy Hanukah, Happy Holidays and the best for the New Year.

3713   THE CHAIRPERSON: And before you continue, I think you get the award for having the greatest staying power. You have been here everyday of this hearing, everyday of the last hearing, every hearing that I have shared, you have always been in the audience listening dutifully, so my compliments to you.

3714   MS FUSCA: Thank you very much.

3715   I am Martha Fusca, President and CEO of Stornoway Communications. We thank you for the opportunity to appear before you to elaborate on the concerns and recommendations Stornoway, along with S-Vox Group of Companies and Fairchild Television have put on the record of this proceeding.

3716   Stornoway is one of the few remaining small independent broadcasters which hare neither affiliated with the larger consolidated Canadian broadcasters nor cross-owned by BDUs. Stornoway has participated as part of the unaffiliated Independent Broadcasters Group, the IBG, and on its own in a number of CRTC proceedings.

3717   Each time we have stressed the need of independent services such as ours for inappropriate regulatory balance if we are to continue our contribution to the Canadian broadcasting system in the ever increasing consolidation and vertical integration of the broadcasting industry in Canada.

3718   We do contribute. We provide diversity of programming to viewers, we provide diversity of ownership, we invest in Canadian programming. Stornoway alone has produced thousands of hours of Canadian programming, some of which is exported around the world, and we acquire thousands of hours of programming from independent producers from every region of Canada.

3719   We provide employment opportunities, we provide a platform to and act as an incubator for Canadian creators and producers. And, as you know, we support a regulated fee for OTAs, other than publicly funded ones, which should seek increased funding from their respective governments.

3720   It is critical, in our view, that we avoid a situation where only conventional television stations owned and operated by BDUs remain available to Canadian consumers. Our comments and concerns have been consistent, the need for an appropriate regulatory balance among the various industry groups licensed and regulated by the Commission, including independents, if the objectives of the Broadcasting Act are to be met.

3721   We participated in the 2006 review of the regulatory framework for over-the-air television and expressed our concern respecting the negative impact that the fee-for-carriage regime proposed at the time could have on our services absent mitigating regulatory measures.

3722   We participated in the 2007 Diversity of Voices proceeding where, at paragraph 25 of its policy, the Commission considered that the Broadcasting Act requires that there be a diversity of Canadian voices through diverse broadcasting services, that there be a plurality of ownership within the Canadian broadcasting system, and that Canadian consumers have access to a diversity of programming.

3723   We participated in 2007 review of the regulatory frameworks for BDUs and discretionary services where the appropriateness of a fee-for-carriage regime was re-examined. Again, we urged the Commission to take into account the vulnerability of small independent broadcasters in establishing any new relationship between BDUs and discretionary services, including the negative impact that a fee-for-carriage regime would have on the ability of small broadcasters to meet their respective obligations absent mitigating regulatory intervention.

3724   And we, along with the independents, also participated in last month's proceeding on, among other issues, the advisability of a regime of compensation by BDUs for the value of the conventional signals they distribute. We reiterated our concerns with respect to the impact that the payment of a fee by BDUs would have on the viability of independent discretionary services.

3725   We requested, as a precursor to any compensation regime, a public review and reconsideration of the regulatory framework established or to be implemented particularly as it affects the discretionary services of independents.

3726   We and other independents also filed a submission in the current proceeding to respond, first, to the order in council requesting comments in light of the objectives of the Broadcasting Act on the impact a compensation regime for the value of local television signals would have on the various components of the communications industry. And secondly, to the Commission's request for proposed mechanisms to mitigate such impact.

3727   There is no doubt that without a rebalancing of the system the fee being considered will have a negative impact on discretionary services, particularly on the most vulnerable services with no bargaining power.

3728   The positions of the major participants in this proceeding with regard to whether compensation paid by BDUs to conventional broadcasters would have an impact on Canadian pay and specialty services remain largely the ones expressed as early as 2006. They reflect the Commissions own stated concern in 2007 and 2008 with respect to the effect that a fee for OTA services may have on the financial health of speciality services on their ability to fulfil their regulatory obligations and eventually on the continued availability of diverse Canadian programming services to Canadian consumers.

3729   The positions expressed in this proceeding can be summarized as follows. The BDUs will pass onto consumers in their monthly invoices any fee, negotiated or imposed, paid to conventional broadcasters. The cost of a compensation regime will have a significant impact on the Canadian broadcasting system, they will lead to reduced subscriptions for discretionary services and reduced numbers of BDU subscribers.

3730   A compensation regime will exert downward pressure on wholesale fees paid by BDUs to pay and specialty services and will lead to compensatory reaction by BDUs, including reduced access, suboptimal packaging and channel repositioning, pressured video-on-demand negotiations, and calls for greater rights to sell commercial advertising on VOD platforms and foreign avails and on community channels.

3731   And the broadcast groups affected first and foremost by this ripple effect will be those, like Stornoway, who have no ownership interest in larger broadcast conglomerates or affiliation with a BDU.

3732   We are not alone in submitting that a regime of payment by BDUs to conventional broadcasters would necessitate a review and likely revision of the combined impact of a number of regulations pending CRTC decisions and regulatory measures yet to be implemented for the digital era.

3733   Both BDUs and programming licensees have expressed the view that the regulatory balance among the interrelated components of the broadcasting system will require reassessment and rebalancing in light of the change contemplated.

3734   In our written submission at page 30 we have listed the tsunami of regulatory changes implemented, pending or proposed to which could be added a new economic environment for the independents created by the compensation regime proposed. At paragraph 35 we have listed some of the matters that need a reassessment to meet our concerns.

3735   In the short time allowed today, I will expand on the devastating impact that the increased packaging flexibility proposed for BDUs will have on the existing business models of independents like Stornoway and recommend how to mitigate it.

3736   The independent services were licensed and their regulatory obligations were imposed on the basis of, among other things, the benefits of packing with other services. There remains a near unanimous view here and in the U.S. that packaging delivers more benefits to consumers at less cost. And experience has shown that, even with the option of a small basic service, most consumers subscribe in addition to what has come to be known as extended basic.

3737   It is often where the BDU-owned specialty services not already on basic are found. In the new economic landscape proposed, the independents, like Stornoway, cannot be left to negotiate BDU access in a regulatory environment where post-2011 only discretionary services operating under a 9.1(h) order will have a regulated wholesale fee.

3738   Even Category A services can be sold on a standalone basis and in a package of as few as two services. Preponderance of Canadian services is no longer assessed at the level of individual tier of services. All foreign packages of services can be sold by BDUs. BDUs control directly or indirectly an increasing number of programming services they distribute.

3739   For small independent services the marketing and promotion of their services and, with them, the availability of Canadian voices from every region of Canada rests almost exclusively with the BDUs, as does the ability of Canadian consumers to access our services.

3740   Resolution of access disputes are left to a post-facto dispute resolution system of little, if any, practical use for small independent licensees. We are not the only parties requesting rebalancing and new regulatory intervention. The conventional broadcasters want compensation for their signals and a number of parties even asked for a re-regulation of basic BDU rates. Even with the so-called skinny basic the BDUs can control the price they charge for basic regardless of the services it contains without the Commission's intervention on behalf of Canadian consumers.

3741   The Category A services of the independents, such as iChannel, the only independent public and social affairs issues channel in Canada require, at a minimum, a regulated wholesale rate and guaranteed access if not in the basic service, to the tier of services with the largest penetration offered by BDUs in the economic environment proposed.

3742   Without packaging synergies and an established wholesale rate their viability will be impaired, with it diversity of programming, of voices and of ownership.

3743   The Commission has a number of regulatory tools at its disposal to meet the concerns we have expressed. They include regulations, conditions of licence and regulatory orders pursuant to section 9.1(h) of the Broadcasting Act. We note that although the Commission generally uses 9.1(h) to require that certain services be distributed as part of the basic service, it is not the only type of order this section authorizes.

3744   Both the Commission and the government have an obligation in rebalancing the broadcasting system to put Canadian consumers and section 3.1(e) of the Broadcasting Act first and ensure that, as the section requires, each element of the Canadian broadcasting system shall contribute in an appropriate manner to the creation and presentation of Canadian programming.

3745   Thank you very much for the opportunity to appear before you and I welcome your questions.

3746   THE SECRETARY: Thank you.

3747   I would now invite our second presenter, Pelmorex Media to make its presentation. Appearing for Pelmorex Media is Mr. Paul Temple. You have 10 minutes for your presentation.

PRESENTATION

3748   MR. TEMPLE: Good morning, Mr. Chair, Vice-Chair, Commissioners. My name is Paul Temple and I am the Senior Vice-President, Regulatory and Strategic Affairs for Pelmorex Media Inc.

3749   Pelmorex will focus our comments today primarily on two issues specifically raised in the order in council; consumer affordability and the impact on the other components in the communications industry. I will also close with some comments about consumer choice.

3750   Assuming a compensation regime for local signals is implemented, the order in council calls on the Commission to report on the impact such a regime would have on consumers in terms of affordability, particularly as it relates to the accessibility of local programming.

3751   Pelmorex believes that if compensation for local signals takes the form of fees paid by BDUs to over-the-air broadcasters directly by means of negotiation or indirectly to a fund, as required by regulation, then these increased costs will be passed on directly to the consumer. Fees paid by consumers will go up, this is inevitable.

3752   The comments made by consumers on the Commissions online consultation are quite clear on what their reaction would be to such a fee increase. In proportion to the size of the increase in subscriber fees the impact would be as follows.

3753   First, each consumer's willingness to continue to purchase programming services from BDUs or to add to the packages of services they currently purchase will be negatively impacted. Second, some consumers will be encouraged to look to alternative means of accessing programming, particularly local information through unregulated alternatives like the internet. And third, an increase in fees, if significant, would also encourage still more consumers to seek their programming through grey and black market alternatives.

3754   Like Newton's third law of motion, to every action there is an equal and opposite reaction, and so it will be with any increase in subscriber fees.

3755   Efforts to mitigate increases to basic rates by mandating a small basic television service and/or by reregulating the price of basic service will not be successful. BDUs will simply pass the cost increases onto discretionary tiers or increase system access fees or other such meaningless charges such as wireless carriers do today.

3756   We will then have the inequitable situation where consumers subscribing only to basic service will not be paying any compensation for the value of local signals, while all other subscribers will be paying such compensation. As to the issue of whether any of this would improve access to local programming is yet to be seen.

3757   Additionally, the Commission requested comments on matters related closely to affordability, including issues related to the packaging of programming services. Pelmorex believes the broadening of these order in council proceedings to include packaging issues is inappropriate and unwarranted.

3758   If the compensation regime for local signals is accommodated, in whole or in part, through tinkering with other aspects of broadcasting regulation then the impact on other components of the system could be more significant and broader than a simple rate increase.

3759   Quick fixes, such as proposals requiring smaller discretionary packages, implementing pick and pay regimes, mandating a smaller basic service or taxing revenues of specialty services in the context of examining a regime to compensate over-the-air broadcasters for local signals have not been properly examined and indeed are inappropriate given the exhaustive exercise the industry has been through recently, culminating in the framework review decision last fall.

3760   Most of these options were examined and dismissed by the Commission as part of that review. And nothing has changed during the interim period that would make these proposals anymore appropriate today. This is not the time for hasty decisions.

3761   Similarly, allowing BDUs to obtain new revenue streams from ad avails and VOD advertising and then funding local programming indirectly through levies on these new BDU revenues would be short-sighted and fraught with unintended consequences.

3762   BDUs are not ATMs nor do they need any additional marketplace muscle when dealing with programming services on emerging business models. The field is unbalanced enough as is. More importantly, policy decisions regarding ad avails and VOD were the subject of their own proceedings. The rules governing these new business models should not be compromised as a means of mitigating any potential increase in rates because of compensation for the value of local signals.

3763   Finally, Pelmorex would like to address the issue of consumer choice, a theme that has become predominant in many of the consumer comments made on the Commission's online consultation and during this hearing itself, notwithstanding that is not mentioned at all in the order in council.

3764   Not surprisingly, consumers want choice and more affordable services. And of course we all knew this before the proceeding even began. The broadcasting industry, consumers and the Commission have discussed choice and affordability for decades. The problem is choice and affordability are often conflicting objectives, choice costs money.

3765   In the context of this hearing, regulating choice will add to the consumer's cost over and above any compensation that BDUs might be required to pay for local signals. Because choice comes with a cost, the Commission must carefully balance any measures it recommends to the federal government to regulate choice with the often competing goal of encouraging and promoting subscriptions to all licensed Canadian services.

3766   Therefore, any initiative to regulate smaller packages or to mandate an a la carte regime would have significant and drastic implications for the Canadian broadcasting system. Any consideration of such changes must be part of a larger comprehensive proceeding that would counter-balance these measures with others and would act to strengthen the Canadian broadcasting system as a whole.

3767   Pelmorex believes that the effects of implementing regulatory measures to increase consumer choice may have a far greater negative impact on specialty services than any compensation regime for local signals. Without appropriate measures to support and promote licensed Canadian programming services, Canadians may simply default to well-publicized, well-promoted and well-financed foreign programming options.

3768   In conclusion, Pelmorex would encourage the Commission's the report to the Government of Canada to include the following four recommendations.

3769   First, the Commission should reject any proposal that would disguise or mitigate a compensation regime for local signals through measures designed to change the packaging of the basic television and discretionary services.

3770   Second, potential new revenue streams from VOD, ad avails or other similar services made possible through digital technology should not be handed over to BDUs with a quid pro quo that they use a portion of those revenues to support local television.

3771   Third, measures to change rules to accommodate greater consumer choice, if taken, should be implemented only after a thorough examination of the implications that such measures would have on all aspects of the Canadian broadcasting system, and not just as a reaction to implementing a compensation regime for local signals.

3772   Finally, if there is a compensation regime that results in an increase in fees for basic service, steps should be taken to encourage the promotion of Canadian services with the aim of increasing the awareness and subscription of these services by Canadians to offset the negative increases of that rating increase.

3773   We simply do not believe that it would be appropriate or beneficial to the Canadian broadcasting system for specialty service operators like Pelmorex to be collateral damage that results from a fight between BDUs and over-the-air broadcasters.

3774   Thank you and I welcome any questions you might have.

3775   THE SECRETARY: Thank you.

3776   Our last presenter on this panel is Crossroads Television System. Appearing for Crossroads Television System is Mr. Glen Stewart.

3777   Please introduce your colleagues, and proceed with your 10-minute presentation.

PRESENTATION

3778   MR. STEWART: Thank you, Madame Secrétaire.

3779   Mr. Chairman, Commissioners, Commission Staff, good morning, my name is Glenn Stewart, Director of Sales and Marketing for CTS. And with me today on my right is Matt Hillier, our Chief Financial Officer, and Mr. Keith Campbell, our advisor whose expertise in and knowledge of the broadcast sector spans over half a century.

3780   We thank you for the opportunity to comment on several issues outlined during these proceedings that will no doubt shape the future of our industry so that we may continue to operate CTS in the best possible manner to advance the cause of religious television in Canada which is a valuable component of Canadian diversity.

3781   There are key issues that remain of paramount importance to CTS. Firstly, the priority, basic carriage of all local stations and 9.1(h) signals must be safeguarded through continued regulation and extended to DTH. Secondly, that the current religious policy of the Broadcast Act to be upheld. And thirdly, that equitable treatment of broadcasters be mandated within any form of value for service that may be established as a result of these proceedings.

3782   In our written submission, we noted that CTS has not participated in the public relations exercises triggered by Shaw Communications which became known as "Stop the TV Tax" responded to by broadcasters via "Local TV Matters."

3783   We are fully supportive of local television, but fundamentally disagree with the extreme and polarizing advertising campaigns launched by major broadcasters and BDUs. We are convinced of the value of local content, having increased relevant local production even in the face of a recession, part of our mandate to reach a growing number of viewers.

3784   We reject the doomsday scenario presented by the BDUs about a mass exodus of subscribers if fees went up, when they have such a wide selection of convenient services and broadcasts in other areas.

3785   We reject the notion that both sides speak for the consumer. BDUs talk consumer choice, while solely setting packages and rates. Major broadcasters talk consumer choice through preserving local television while buying up all the properties, or many of them, cross-purposing much of the programming, and then divesting secondary stations to whomever is willing to take on the programming obligations "when things didn't work out," paraphrase.

3786   Meanwhile, both sides are big enough to spend big money to tell consumers what to think. This is the sad reality of industry taking on an open-market approach to the widest possible field, an approach that creates cynicism by the Canadian public towards television in general, hardly the right environment to allow for fair negotiation between parties on value for service, carriage positions or any other matter.

3787   Matt.

3788   MR. HILLIER: Considering the issues of availability, affordability and sustainability, both sides have their points. Consumers dislike paying more. BDU and broadcast owners have a distaste for taking hits to their bottom lines. And over-the-air stations having the biggest role in reaching the most Canadians with the most Canadian content have now become the poor cousins of the broadcast system.

3789   While arriving at a workable solution that will strengthen the Canadian broadcast system and provide additional support for its participants, we should review some interesting facts, the history of how we got here. Some eye-opening changes since CTS was launched 11 years ago.

3790   View options. In 1998 there were 132 conventional over-the-air stations and 60 specialty networks available to Canadians. Now, there are 148 conventional stations and 218 specialty networks available, as well as pay-per-view services, a 90 per cent increase.

3791   Advertising availabilities. The increase in specialty networks, as well as an escalation of the allowable commercial minutes per hour for specialty channels and conventional broadcasters has seen the industry available inventory rise from 36+ million units in 1998 to over 84 million units in 2008, 133 per cent increase.

3792   In the same timeframe, TV advertising revenues grew from $3 billion to $3.6 billion, a 20 per cent increase.

3793   Advertising revenues. Private sector broadcasters and CBC advertising revenues have declined $161 million from $2.7 to $2.5 billion, while speciality advertising revenues have increased over 300 per cent to over $1 billion. When adding pay and subscriber revenue, their total revenue now exceeds $2.9 billion.

3794   Production and programming. Over-the-air broadcasters spent $2.5 billion in 1998, increasing to $3.3 billion in 2008. Specialty and pay networks spent $700 million in 1998 and $1.5 billion in 2008.

3795   Now revenue, less programming production and programming expense. Over-the-air broadcasters have a deficit of over $500 million in 2008 compared to a surplus of $136 million in 1998. Specialty channels have increased their surplus from $142 million in 1998 to $1.4 billion in 2008, a 10-fold increase.

3796   Another significant change observed has been the general morphing of specialty stations from original niche genres to general interest channels, particularly in primetime. Given major ownership groups are able to cross-purpose so much programming and cross-subsidize so many channels, program offerings and the ad avails within them by channels such as TVtropolis, CMT, W, Viva, OLN and Slice now look much closer to conventional stations.

3797   The conclusions from this analysis, the overall value of airtime has gone down. Specialties have grown their audiences and advertising through a firm foundation of subscriber compensation. Both developments have caused over-the-air stations to weaken.

3798   Further, BDUs have leveraged the explosion in services to enhance package options for consumers and generate more subscription revenue. Moreover, adding U.S. signals, despite the inconvenience of simulcast substitution, created even more opportunities.

3799   MR. STEWART: Putting aside the campaigns and looking at the history, we have some constructive recommendations for the future. One thing is clear, simply leaving major players to work it out in the marketplace is only going to do more damage to the industry and weaken the Canadian system.

3800   Only the CRTC can determine an objective and fair solution, free from inflexible positions.

3801   In our view, this involves a multi-tiered solution involving OTAs, and speciality broadcasters, BDUs, and the consumer.

3802   The most attractive option we have examined in re-balancing the system is one based on re-calibrating the wholesale rates paid to speciality channels. This suggestion, coupled with reducing the payments to US entities like A&E, for example, could be the most consumer-friendly approach.

3803   OTAs should use the funds to commit to local original programming to enhance the value for all the parties involved.

3804   As you heard yesterday, we believe there's a majority support from viewers to pay a modest amount, or increase.

3805   The strengths of allowing re-calibration include limited additional costs to consumers; recognizes contribution of over-the-air services; leaves packaging of services untouched.

3806   The only impact on BDUs would be via their direct revenue reduction on BDU investment in their own channels.

3807   Part of the transfer would be borne by CTV and Global because of their own specialities.

3808   The challenges, however, include: Needing to protect independent stand- alone services from revenue diminution. And this is not impossible to achieve.

3809   Mitigate the impact of providing needed -- sorry, mitigate the impact by providing needed special tax incentives for local programming and speciality Canadian programs beyond LPIF and CTF.

3810   With these priorities in mind, we submit the following constructive recommendations:

3811   One. Priority basic carriage for all local stations and 91H specialities be maintained by BDUs, whether via cable or DTH, so that local and critical Canadian voices are heard first. Such a priority should not be able to be traded away. To be clear, local stations should not embrace re-broadcast transmitters (for the purpose of negotiating value for signal), but should cover the entire primary coverage area. There was a mention yesterday, I believe, about a list of stations in Toronto that caused us a little concern, so stations like CTS and CHCH should be, or must be included in the Toronto station list.

3812   Secondly, BDUs should not be allowed to compete with broadcasters for any advertising revenues, including local US channel, VOD and community channel avails.

3813   Three. Should the Commission proceed with allowing value-for-service for OTA stations, yet not be willing to establish an exact value, establish the fair floor mechanism laid out in our submission 2009-4-11 hearing two weeks ago.

3814   Four. If a negotiated approach is favored by the Commission for OTA stations, speciality channels should be allowed, as well, to participate in negotiations for their fees from BDUs, effectively allowing a re-calibration of the entire rate system.

3815   Five. To protect both independent OTA stations and independent speciality channels, given our lack of negotiating power, arbitration should never result in a zero fee. Rather, the number of original hours should drive establishment of a fair fee. Further, independent specialities should get no less than what they now receive.

3816   Six. As a stating point, any fee should be no lower than the lowest of the low, paid to specialities currently, which happens to be nine cents per subscriber.

3817   These recommendations allow market opportunities and flexibility for the major players; provide key protection for any local station or speciality with no negotiation power; minimize the chances of consumer's paying more; and, ensure a system that is Canadian first in diversity of voices and original content.

3818   While this is not a complete solution, it goes a long way without harming the consumer relationship.

3819   We would be happy to answer any questions you may have of CTS, and we thank you for allowing us the opportunity to comment at these proceedings.

3820   And if I may, on a personal note, we have Keith Campbell with us today and his years of experience. I would encourage the Commission to take advantage of it.

3821   Thank you.

3822   THE CHAIRPERSON: Thank you for your submissions.

3823   Ms Fusca, on page four, it seems to me you make a contradiction, or maybe I misread you. The first bullet says. "The BDUs would pass on to consumers in their monthly invoices any fee negotiated paid to conventional broadcasters."

3824   In point 3. You say, "compensation regime will exert downward pressure on the wholesale fees paid by BDU's."

3825   If they pass it on to consumers, why will it, at the same time, exert downward pressure? If they pass it on, they don't feel it, so I don't quite get that. I have trouble reconciling these points.

3826   MS FUSCA: Well, I was listing there any number of possibilities that could happen, and I'm not suggesting that they would do one or the other. I'm suggesting that they could do any number of these. And they could do a number of them in tandem, as well.

3827   THE CHAIRPERSON: Oh, I apologize. So, this is your summary of what you heard, rather than your suggestion?

3828   MS FUSCA: It's also my summary of what I've experienced, in part.

3829   THE CHAIRPERSON: Okay.

3830   Mr. Temple -- what is it here -- you, on page 9 -- where was it -- paragraph 19, say, we should recommend to the government and you make four recommendations, each and every single one of them is something that we have the jurisdiction to do, that we have put under -- on the agenda for the November hearings. So, are you suggesting we should recommend to the Minister what we should be doing?

3831   I mean, surely, the Order-In-Council asked for recommendations what the Minister should do, not what we should be doing.

3832   MR. TEMPLE: I'm not sure what the Order is recommending. I think the Order just asks for recommendations, not necessarily what the Minister should do, but just what the recommendations should be.

3833    THE CHAIRPERSON: Well, then help me out here, how do I make recommendations that involves actions by the CRTC? How would I even phrase that?

3834   MR. TEMPLE: What recommendations could you make to the Minister that the Commission can't do?

3835   THE CHAIRPERSON: Take your very first point Roman Numeral I: "First, the Commission should reject any proposal that was discussed, or mitigate a comprehensive regime for local signals through measures designed to change the packaging of the basic television service and discussion of service."

3836   MR. TEMPLE: M'hmm. And that --

3837   THE CHAIRPERSON: Consequently, the CRTC recommends to the Minister that what?

3838   MR. TEMPLE: That the Government of Canada and the Commission should reject any proposals. If you want to add the Minister or the Government of Canada in those recommendations, that's fine.

3839   I certainly wouldn't want the Minister to issue some kind of directive to the Commission that the Commission should do these things.

3840   THE CHAIRPERSON: Well, that's my problem. How do I operationalize it without, in effect, calling for directions?

3841   MR. TEMPLE: What -- I guess, I'm not --

3842   THE CHAIRPERSON: You're really re-stating the November hearing in each one of these recommendations, what -- your points that you made at the November hearing.

3843   MR. TEMPLE: Yes, because they're the same. Our issues in the November hearing are these issues. They're the issue of the consequences of the -- of compensation for local signal that are -- those are our issues. Those are our issues as part of this proceeding. Those are our issues as part of the last proceeding.

3844   THE CHAIRPERSON: Okay.

3845   And, CTS, you, in your presentation on page 5 suggest, in the middle paragraphs:

"The most attractive option we have examined in rebuilding the system is one based on re-calibrating the wholesale rates paid to specialty channels. This suggestion, coupled with reducing payments to US entities like A&E."

3846   How do we actually operationalize it? How do we reduce payments to US entities like A&E by BDUs?

3847   I mean, are you suggesting that we interfere in their negotiations?

3848   MR. HILLIER: We had that same discussion ourselves and the answer is no. Obviously, this is all in the context of a negotiated approach, and the BDUs have a number of levers and a number of parties they have to negotiate with to decide what their costs are. So, one, just it's helpful to have that in the mix as a reminder for BDUs for when they are affording which stations that -- re-addressing the US specialty channels, and who they pay for what, --

3849   THE CHAIRPERSON: So this is an expectation --

3850   MR. HILLIER: -- as a part of that. Pardon me?

3851   THE CHAIRPERSON It would be an expectation, really. You expect that the BDUs, when negotiating, and if they have to pay for local signals, will, as a consequence, pay less for foreign signals?

3852    MR. HILLIER: It's just helpful to keep that on the radar screen. That's part of the mix. Not something that the CRTC should mandate.

3853   Okay, thank you.

3854   Peter, you have some questions?

3855   COMMISSIONER MENZIES: Just a question for CTS, for starters. Are you going to be, or are you an LPIF recipient?

3856   MR. STEWART: We do not qualify for any of the current programs, no.

3857   COMMISSIONER MENZIES: You do local programming, though?

3858   MR. STEWART: We do, but the definitions for both LTF and the other one preclude programs of religious origin or content.

3859   MR. HILLIER: And there's another layer to that. The markets that we serve are considered greater than a million people and wouldn't qualify for LPIF, as well.

3860   COMMISSIONER MENZIES: Right. Okay.

3861   MR. STEWART: So, we're not -- we don't have a strong batting average with that.

3862   COMMISSIONER MENZIES: No. I'm curious about your -- if you can expand at all on your point recommendation to the -- because it's helpful, certainly, in the context of this hearing -- Recommendations To The Government, "needed special tax incentives" that you mention. "Mitigate the impact by providing needed special tax incentives for local programming and speciality Canadian programs beyond LPIF and CTF," which, as you say, you don't get.

3863   What would those tax incentives look like? Can you give us a for instance, or is it just an enhanced write-down?

3864   MR. STEWART: Actually, I'd like, if you don't mind, Keith to answer that question. He's got an example from the US, a recent example from the US where there's been potential -- I won't say government intervention. Simply put, the government is creating some -- possibly creating some tax incentives that may benefit the industry.

3865   MR. CAMPBELL: And Commissioner Menzies, that can take a variety of forms. As you've suggested, a write-down, it can be whatever creative application the tax experts can indicate.

3866   The problem in the United States is not that dissimilar to what's happened here, you know, the erosion of protection of copyright, etcetera -- the migration of media viewing habits.

3867   The Federal Trade Commission just concluded, I believe at the end of last week, a two-day session on hearings that were designed to aid in the protection of and dissemination of local media, which the Minister of the Cabinet, United States Government, described as terribly important to democracy. And one of the considerations they had was to ensure protections that internet access could be properly paid for. I think you're all aware of the war that's going on between Rupert Murdoch and Google, which fortunately now seems to be winning in terms of having consumers pay for content.

3868   I know Cable has suggested that broadcasters should look to other forms of revenue generation like the Internet, like Voice-On-Demand. It's going to be a very, very long time before the size of that revenue pool available to anybody comes close to matching what's in the broadcast system today.

3869   I mean the real problem -- and I know your job doesn't get any easier -- the real issue here is money. Who gets what from whom?

3870   THE CHAIRPERSON: Could we stay on topic? Could we stay on topic, please.

3871   The questions was what tax measures you are suggesting.

3872   MR. CAMPBELL: Oh, well, the tax measures would be originated by tax experts. I am not a tax expert, but there are mechanisms available that can be examined to help. And we propose that, sir, to -- because one of the hits that's going to happen in the suggestion that our colleagues have made is to the BDU operators who own specialty channels, and to the Global and CTV stations. So, in part, they will be taking money from the right pocket into the left pocket. I think they acknowledged that in front of you yesterday. So, they may need other mechanisms beyond re-balancing what TSN might receive.

3873   COMMISSIONER MENZIES: So, to make a long story short, it's just a matter of asking and recommending to the government that it look at creating tax incentives for people who produce --

3874   MR. CAMPBELL: Correct.

3875   COMMISSIONER MENZIES: -- local programming.

3876   MR. CAMPBELL: -- local program content.

3877   COMMISSIONER MENZIES: Locally.

3878   MR. CAMPBELL: Yes,

3879   COMMISSIONER MENZIES: Okay, thank you.

3880   And then, I guess, to all of you, somewhat generally, I guess when Mr. Asper said yesterday that there may be losers in all of this, I was thinking you were thinking he was thinking about you in terms of how this works out. But, it becomes -- these things -- it's a bit of "the good of the many over the good of the one," and that might be the case. But, from a consumer point of view, what is so threatening to you about a regime in which consumers simply get a smorgasbord to choose from and choose it? And our role is to ensure that everybody has fair and equal access to their place on the table to choose from.

3881   MR. TEMPLE: I guess I have a couple of comments on that. The concerns I have are, it's who wants to be against consumer choice? Of course, everyone wants to say that's wonderful, and we're all supportive of it. But the implications are if that was -- if a true a la carte system was implemented, I don't think we have thought through what would happen.

3882   First of all, you can bet that no US service would go bankrupt or be taken off the channel lineup because their cost is zero and anything they get by distribution in the Canadian market is gravy. So, whether a whole bunch of people pick CNN or fewer people pick CNN, it won't stop CNN from broadcasting and being distributed in Canada.

3883   On the other hand, a great number of Canadian services will go through very difficult times and many of them will probably close up shop.

3884   So, the end result is that we will have a system that is predominantly American. They have the resources. They have the ability to promote themselves.

3885   At the same time, those who are hanging in will be the larger programming conglomerates because, if nothing else, they can cross-promote their services back and forth. So, if you're watching a sports programming channel that also happens to own a lifestyle channel or whatever, they can cross-promote.

3886   However, independent services don't have that. So, therefore, diversity to the system will suffer.

3887   Prices will go up because in an a la carte system everyone will lose a little bit of volume and, therefore, you know, to recover their costs they'll be forced to increase prices. So the end result will be far fewer Canadian services; more predominant distribution of American services; and, less diversity in the system.

3888   So, then I go back to the Broadcasting Act and I say I don't think that that is really what they had in mind. So if we're going to go to that system because we have to, because of market forces or some other thing, then we've got to change the whole regime and go to one that is actively promoting and helping Canadian services.

3889   If you're going to go to an a la carte, how is an independent service going to be heard above the roar so that people will want to take that programming service and enjoy that Canadian programming?

3890   So that means a complete overhaul of the regulatory regime. So, if that's where we're headed, then that's fine. But let's not do a la carte because we're faced with the compensation for value for local signals, because then we have the tail wagging the dog.

3891   COMMISSIONER MENZIES: And the consumer -- what is the consumer's -- why should he consumer care? I mean, I understand why the system should care, why the Act should care, why we should care, but that's a different hearing. This is sort of why should the consumer care?

3892   MR. TEMPLE: I think consumers care that there is a Canadian broadcasting system. If they don't, they should make that clear to the Parliament of Canada and they can amend the Act. But the law is the law.

3893   The law says there will be a Canadian broadcasting system. It will be predominantly Canadian, etcetera, etcetera. That's the law.

3894   If they don't like the law, then let's change the law and we'll toss the Act out and we'll just go to a la carte and have a bunch of American services.

3895   COMMISSIONER MENZIES: Okay, thank you.

3896   Anyone else care to comment?

3897   MS FUSCA: I just wanted to add that when we were licensed, it was under certain circumstances, obviously. And we, along with a lot of other people, have made, you know, tens of millions of dollars worth of investments. We understand that things change and we have to go forward, but when you go from a situation where you base your -- the people that invest in your company believe that they're investing under a certain set of circumstances, and then they're so violently changed. And this isn't a small "c" change, this is a violent change.

3898   I think, as Paul explained, what we would end up with are the American channels. We would also, more likely also end up with the BDU channels because there are all kinds of ways that they can protect themselves and perhaps some of the others, as well.

3899   You asked the questions about, you know, why would Canadian consumers care. I think quite apart from the fact that I at least like think, and I know many that do, you know, care about Canadian cultural and Canadian cultural sovereignty, we heard yesterday -- I was very moved by some of the witnesses that you had yesterday -- where there are all kinds of organizations right across the country, from every single region and so forth, that obviously and very clearly depend on the system that we have today to, you know, nurture all kinds of other social and political activities.

3900   COMMISSIONER MENZIES: Okay. How much -- oh, sorry.

3901   MR. HILLIER: Just from an over-the-air perspective, part of the reason why we applied for over-the-air channels was to reach everybody. And a couple of weeks ago we were asked about our transition to HD and that kind of thing. Reaching and being available to everybody is really part of our mandate. And the interesting thing about religious television is when you have that mandate from a consumer's standpoint, consumers may not realize that they want us until after they see us, as opposed to the other way around. So, it's about being available to people, and them getting a chance to examine the local programming and the comments made, and those kinds of things, from a religious angle and think about things they may not have thought about before.

3902   So, when you're thinking traditional consumer-driven focus, it's "I know what I want, first." Well, maybe after you see us, then you'll know you want us. That is kind of chicken and egg, so --

3903   COMMISSIONER MENZIES: Okay, thank you. That's all my questions.

3904   COMMISSIONER SIMPSON: Ms Fusca, in your written and oral submissions you had indicated that you had a grave concern over the consequence of any cost increases to basic, as a result of some form of compensation, and that the negative impact on independent specialities is considerable, or could be considerable.

3905   Given that the rate increases in basic cable have been rising pretty steadily, you know without our help at the CRTC. In looking at compensation, are you going to be looking at -- Are you going to be happy with the status quo in terms of how specialities are treated right now with BDUs in terms of packaging and subscription relationships, or is there something that we should be thinking about, anticipating there will be more increases in the future?

3906   MS FUSCA: Thank you for that question, it's a very big question.

3907   So, Commissioner Molnar asked me last time, and I will be putting in some recommendations with regards to 2009-4-11 for her. But, just suffice to say that we were actually discouraged as far back as the BDU and speciality hearings.

3908   We came to the Commission, as many people did, to indicate to the Commission that there was already an imbalance within the system. And, unfortunately, what happened at the end of those hearings was that the imbalance just got worse.

3909   That hasn't prevented me from supporting certain principles. I think that other broadcasters might have supported fee for carriage, or value for signal, or whatever we end up calling it, other than for fear of BDU repercussions. But I think certain values are really worth fighting for regardless of what happens. And I don't think it's going to get a whole lot worse, anyway, if we don't begin to address -- if we don't really take diversity of voices seriously. If we believe that a handful of companies can actually deliver the diversity, fair enough. But, I don't think so.

3910   I also think that it's really, really important to continue with diversity of ownership in the system. And, we only had ten minutes, but I had written other pages. I just pointed the Commission to the parts of the Act that you can use to re-balance the system and accommodate the survival of the -- of some very particular OTA channels.

3911   I am a big, huge, proponent obviously of Canadian culture and Canadian cultural sovereignty. I think that those are really important, and they are worth paying for. And, so there are two -- there are two ways that I think -- one specific way we can help the system, and that is to take very seriously that section that I quoted from, which is, every part of the system, whether they like it or not, really must support the rest of the Act. And so, you know the BDUs will have to, whether it's through an increased an sustained LPIF which I think I could work. I mean, consumers are already paying. I know my bill increased already. Nobody cancelled their bills -- nobody cancelled their service, so through an increased LPIF we might be able to accomplish what I think we've been struggling with for the last couple of years now. And the Heritage Committee had already suggested a greater than 1.5%, anyway. The consumers are already paying that 1.5%. Perhaps now it is time that the BDUs make a contribution.

3912   I am sympathetic, by the way, to Bell Express Vu, so there may be some mitigating circumstances. Then the broadcasters have to got to support, you know, independent production, drama and the priority programming. And it filters right through. I mean, there's a very pragmatic and I think it is a forward-looking approach.

3913   As C.S. Lewis once said, "You can't correct a mistake by going forward. You have to go back." And there seems to be this huge reluctance, which is beyond me. If we make a mistake we have to go back, we have to address it at the source and then move forward.

3914   COMMISSIONER SIMPSON: Thank you.

3915   My last question. Mr. Hillier, just a point of clarification. On page 4 of your submission this morning you had, on the production and programming expenditures of over-the-air broadcasters, your written document has $3.0 billion. And I think you said 3.3 in your oral. I'd just like you to clarify that.

3916   MR. HILLIER: To be clear, it was 3.0.

3917   COMMISSIONER SIMPSON: Okay, thank you.

3918   THE CHAIRPERSON: Okay, thank you very much. Those are our questions for you.

3919   MR. TEMPLE: Mr. Chairman, if I could just -- I would like to answer your first question perhaps better than I did, if I could just take one moment, and pardon me --

3920   THE CHAIRPERSON: Okay.

3921   MR. TEMPLE: Our recommendations -- I think the Commission in the Public Notice raised these issues and called for comments.

3922   All these issues that are raised in paragraph 9 and 10 are indeed within the jurisdiction and power of the Commission. But you raised them as part of this proceeding. You --

3923   THE CHAIRPERSON: Oh, absolutely. You are right.

3924   MR. TEMPLE: So you are -- that's why we are commenting on them and encouraging the Commission that in some of these cases these not be recommendations made to the Government of Canada and they not be action taken by the Commission. So, I just hope that's -- you understood why we were raising them as part of this proceeding.

3925   THE CHAIRPERSON: We raised them because I don't think you can talk about affordability unless you have a context. And this is the context. It still begs the question, what do I answer the Minister in terms or recommendations?

3926   And that's why I ask, you know, is there anything you want me to say to the Minister because everything you raised is what you want us to do.

3927   Ms Fusca took the opportunity to basically tell us our BDU decision is wrong and we should leave it as it is. That's fine. I appreciate that, but this is not what I'm going to tell the Minister, obviously.

3928   I wanted to see what exactly are you suggesting we should recommend, because you started phrasing as you would recommend to the Minister, and then each and every thing that followed was something that was in our jurisdiction. That's why I posed my question to you.

3929   MR. TEMPLE: All right. So, I understand. Thank you, sir.

3930   THE CHAIRPERSON: Okay. Thank you very much.

3931   I gather there's some video conferences, so let's take a five minute break before we proceed.

--- Upon recessing at 1100

--- Upon resuming at 1111

3932   LE PRÉSIDENT : O.K., commençons, Madame la Secrétaire.

3933   THE SECRETARY: Thank you, Mr. Chairman.

3934   We will now hear the consumer panel from Ontario. For the record the panel has contacted 85 citizens that have requested to appear at this hearing for the Province of Ontario. Six have confirmed their appearance today. Please note that there is a second panel of consumers for this province. This panel will appear on Friday of this week.

3935   We know that others may participate through the CRTC's online consultation that can be found on the Commission's website. This online consultation will close on December 21st.

3936   We will now hear the first presenter, Madam Sarah Braund. Please introduce yourself and you have seven minutes.

PRESENTATION

3937   MS BRAUND: Good morning, Mr. Chair and Members of the Commission.

3938   Canadian consumers, by and large, are a quiet group who take whatever they are handed without a whimper. I have decided that if I don't become involved and speak out I cannot then complain about the outcome. So here I am hoping to make a difference on the topic of the importance of television to the general Canadian consumer.

3939   My name is Sarah Braund and I live in Port Stanley, Ontario, approximately 25 miles from London.

3940   My husband and I are just average working people and we both travel to London to work. Over the past few years we have both experienced the loss of our jobs and have managed to find new employment. Needless to say, our incomes are lower than ever before and our budget for entertainment is limited.

3941   Our cable bill, however, has increased. I understand that both Rogers and Bell enjoy approximately 40 percent margin on their sales. I feel that is excessive especially when you look at how they gain that money.

3942   Television is very important to us. We both work fulltime at busy jobs and at which we give a lot of output. That means we both talk a lot. So when we come home we really value being entertained by receiving input. We have limited time for viewing so when we do have time we want to be able to choose programs that are important to us. And since it is our main form of entertainment, both local programming and bundling that the cable company offers us are of major concern.

3943   I should mention that our local TV station is A-Channel in London and our cable provider is Rogers Cable. So my comments come from this environment.

3944   I would like to comment on the following topics: The importance of local programming, fair payment for local station services, unbundling, eliminating monopolies and the importance that the CRTC construct and then polices the new model.

3945   On the importance of local programming my local station has not yet closed. However, on March 3rd, 2009 A-Channel suddenly discontinued their morning show. They began to rebroadcast the recorded news from the night before which we had already seen over and over and over. We came to learn that they had let go all the personnel from the morning show.

3946   We felt the morning show was very good and provided us everything we needed to get our day started. Now, we listen to the London radio station. We need to know if there is black ice on the roads, traffic tie-ups, school or other closings. These things are important to us, the London area residents who must travel to work and back.

3947   We are able to turn on Toronto's breakfast television and Hamilton and Detroit morning shows. That way we get an overview of the weather but have no useable information about local road conditions or other issues of importance.

3948   On pay local stations for their services, we always assumed that the cable company was paying their suppliers for all the various fees. To find out they are collecting but not paying local stations to us is ridiculous. When I look at the list of channels on my line-up I would expect that each of those entities gets a certain percent of my monthly payment. And if that fee is paid to a parent company it should be monitored to ensure that it ends up where it belongs.

3949   On bundling I feel that the cable company uses unfair bundling to force the consumer to purchase a larger package than they need when they just want to get one or two specific channels.

3950   If I went to our local fruit market I might like to buy an orange. The vendor might say to me, "Yes, an orange is included in our fruit basket. You get a banana, an apple, a pear, two apricots, some grapes, a kiwi fruit, a grapefruit and an orange". But I only want an orange. "We don't care. We only sell fruit baskets these days." And that is similar to several conversations I have had when calling Rogers to try and get my TV line-up a little closer to what my needs are.

3951   We have limited TV watching time. We would like to purchase a basic cable package and then add two or three specialty channels. In our area, basic is $29.99 a month. I have heard this referred to lately as skinny basic.

3952   My husband wants Speed Channel and TSN mostly to see Formula One racing but we have to purchase the VIP package, most of which we really don't use, at $57.49 per month just to get that one sport.

3953   I would like to have a travel channel. Now, to get that channel I have to buy the VIP Ultimate package at $96.47 a month and the CTV travel channel that was there has now been replaced by Travel and Escape. It's a mish-mash of a few travelogues mixed with Creepy Canada, Fishing with Shelley and Courtney, several cooking shows and a rather objectionable Anthony Bourdain. I see nothing worth paying extra for there.

3954   On the choice of channel inclusion we also enjoy and contribute separately to WQLN Public Broadcasting in Erie, Pennsylvania which appears on Channel 8 on our Rogers cable. They rely on donations from the public and corporations and their programming is excellent.

3955   Lately, we have heard rumours that it might disappear from our dial. I feel that is not fair. We have supported them for years. Yet, presumably, the cable company could choose to cut them from our line-up.

3956   Hopefully a new model for this industry might encourage new small stations to emerge with even more offerings and with potentially excellent new content.

3957   On monopolies versus competition, if we had any other options as far as carriers go we would definitely prefer an unbundled carrier. Right now we have a choice of Rogers Cable or Bell Satellite. Wouldn't it be great if there was a third or even a fourth carrier to choose from?

3958   THE SECRETARY: I'm sorry, you --

3959   MS BRAUND: Maybe one of --

3960   THE SECRETARY: I'm sorry, you have one minute left. Can you conclude?

3961   MS BRAUND: Thank you, yes.

3962   Maybe one of those carriers would offer skinny basic and a la carte channel selection. I predict that prices would drop and that all of the players' bundling policies would suddenly become much more flexible and cheaper too.

3963   Our cable provider dumped a programming bundle on us a few years ago and it was up to us to opt out. That negative marketing I feel is unconscionable and should be punished.

3964   Some time back when I contacted Rogers Cable I wanted to order a different bundle which was being offered with a discount to new subscribers. Since I was renewing at the time and had the option to go elsewhere, I felt I should be entitled to the discount.

3965   They wrote back that they do not tell existing subscribers about available deals and they only give a discount when they are asked for one. I consider that greedy and deceitful.

3966   We looked into the CRTC to protect us from unscrupulous tactics, unfair bundling and to ensure there is fair pay for service within the broadcasting system. I hope you will take away from my presentation the call for tighter scrutiny, stronger regulations and that you monitor strict adherence to your new regulations on an ongoing basis.

3967   I would also like to offer my participation in any consumer committees or work groups that might be formed as a part of a solution to these issues going forward.

3968   Thank you for your time.

3969   THE SECRETARY: Thank you.

3970   I will now invite the second presenter, Ari Berman, who is also appearing via videoconference from our Toronto regional office.

3971   Mr. Berman, you may now proceed with your seven minute presentation.

PRESENTATION

3972   MR. BERMAN: Good morning, Commissioners and Vice-Commissioners.

3973   My name is Ari Berman. I am a management consultant and I deal with change. A lot of the discussions that we are having lately are talking about that very subject.

3974   Today I have forwarded a document which I will be resending with minor textual corrections to it, but not in any way affecting the body and any substance.

3975   Largely what we are talking about in this change is the funding policies that have been put in place eons ago. You know, when director Ron Howard was running around in short pants and performing the role of Opie, that's about the time period when we figured out that cable needs a break in order to get it start-up funding. And at that time it seemed like a pretty good idea.

3976   So with that in mind, I'm going to talk about the compensation of local TV providers and the importance of local television signals to us.

3977   My first point is that local broadcast TV brings me important and timely information that I need. I will be talking in the first person because this is what it means to me. I don't get that kind of timely information from regional carriers, aggregators and cable companies.

3978   Morning rush hour for me is kind of important. I spend a lot of time stuck in it. So the traffic from outlying areas really has very little value to me. Knowing about what's happening in Hamilton or Ajax, Ontario -- don't get me wrong, lovely communities, but the fact is I want to know what's happening between where I am and where I have to get to go.

3979   Local traffic news, obviously it can't be something which I am exclusively interested in. And I suspect that across the country individuals who are dealing with wanting to get from point A to point B in their specific communities would certainly enjoy having a cyclical newscast that actually addressed their specific needs.

3980   Again, that does not seem to be provided for with regional providers such as cable or Satcom.

3981   Now, my second point has to do with local broadcast television and specifically it doesn't require individuals to have a paid for subscription. So those individuals who are least capable of dealing with increasing cable fees, those who are underserved in terms of affordable provision of carriage, well, it's available to them by local broadcasters.

3982   When we talk about people stay connected with their neighbourhoods it's through their celebrities. It's through their local TV personalities that they actually get a good feel and flavour of what's going on in their communities. Cable and satellite service, it doesn't provide that same kind of bond. You are not dealing with people from your own community.

3983   So what the implication is that since local target viewer markets are the value that advertisers are looking for and people bond to these local celebs and these local programs, what they are purchasing is access to that market. So essentially the receivers of that signal, they are getting advertising paid broadcast content when they are buying broadcast television versus that bought by cable or satellite.

3984   The target market is different in a broadcast area than it is for the cable or satellite distribution areas. So the advertisers aren't getting the same value as they are when they purchase their advertising dollar and a predictable advertising dollar when they obtain their advertising by way of their broadcast provider.

3985   On the third matter it's actually a matter of principle. I believe that broadcasters should pay for -- pardon me -- a broadcaster be paid for the content that they are providing to carriers and aggregators who are taking this and selling it for a profit. It seems a pretty simple concept but if I have a business and I need inputs I pay for them and then I mark them up and I sell them. It seems like a pretty straightforward deal.

3986   If I were to get to the habit of obtaining my products for free and making a clean margin of profit on it, I can understand the motivation and wanting it to stay that way but that was a start-up mode. That was the way that this business came to be; as how we created fabulous content providers in the highly dense population, of course mostly around the southern part of this country.

3987   But our service areas are larger than that. And, frankly, these companies are now mature and by far the more powerful in the relationships between the broadcasters and the carriers. So it would be time for these folks to mature their business model a little bit and start paying for their inputs like everybody else on this planet does.

3988   The fourth matter I would like to talk to has to do with the downloading of fees that likely should fall to the carriers. Again, cable and satellite carriers have been well paid for their service and continue to be, but they have enjoyed getting that content almost entirely for free.

3989   Having had many years of reselling this product it really is time for those industries to mature and to start assuming a proper cost in bringing signals to the viewers in their living rooms all across the country.

3990   Now, my final point has to do with the conversion to digital television signal. This is a bit problematic for me because it's a mandated change. It's not something where there really is a strong benefit to the broadcaster for moving in this direction but it's one that if they don't come across the divide and go digital they will be left out or they will not be able to be received along with the other broadcast content.

3991   And to that end, they are investing in a technology which doesn't bring them any additional revenue. So in that regard, though I don't favour the idea of gifting money, some sort of offset or incentive has to be applied to make that conversion viable for them.

3992   Notionally, this high capital requiring conversion is going to need some sort of -- as I mentioned, some kind of offset. Maybe it takes the form of a subsidy in terms of a tax credit or maybe it takes the form of some kind of guaranteed ability to draw loans or some kind of guarantee on bond issues.

3993   But the last thing I think that I would personally like to see is a repeat of what we did with the conversion from rotary telephone to DTMF, touchtone telephone, whereby we are still paying today for technology which has been long since paid for in its conversion.

3994   This digital conversion should not --

3995   THE SECRETARY: I'm sorry. Can you conclude, please?

3996   MR. BERMAN: -- take the form -- I will wrap up.

3997   THE SECRETARY: Okay, thank you.

3998   MR. BERMAN: This conversion should not take the form of a TV tax which remains on forever. So it should be funded from revenues and with assistance from the federal government in order so they can make this transition to the new technology as comfortably as possible and comparably with the same sort of assistance as was made for the cable companies for them to establish their businesses.

3999   Thank you.

4000   THE SECRETARY: Thank you.

4001   I would now invite the third presenter, Kari Vierimaa.

4002   Mr. Vierimaa, you have seven minutes for your presentation.

PRESENTATION

4003   MR. VIERIMAA: Thank you, Ms Secretary.

4004   Good morning, Mr. Chairman and Members of the Commission. My name is Kari Vierimaa. I was born in Timmins, raised in Sudbury and I'm currently a second year political science and geography student at the University of Toronto.

4005   I'm here today as a consumer of small market television and as a future broadcast journalist.

4006   Cette année, deux stations locales ont fermé et une troisième a annulé ses programmes locaux. Les citoyens de Brandon, Wingham et Red Deer ont perdu leur voix. Trois stations, toutes dans des petites régions, ont fermé parce que le modèle pour les stations locales est cassé.

4007   Monsieur le Président, combien de stations vont fermer avant que le CRTC prenne des mesures pour protéger les voix des citoyens dans les petites et moyennes régions?

4008   Ladies and gentlemen, the future of local television is not merely at a crossroads. We are approaching a point of no return where an action will seal the fate of many stations like my local station in Northern Ontario which is CTV. While the BDUs suggest that local television is not in dire straits and if the networks are mismanaging local stations, there is little evidence to support this.

4009   Long before CanWest bought Alliance Atlantis and long before CTV bought CHUM, networks began to centralize local television broadcasts, cut local programming or even close local stations because they were not cost-effective. Ultimately, the CRTC chose inaction over tackling such issues head on.

4010   In 2000 Robert Rabinovitch, the then newly President of CBC/Radio-Canada, slashed and essentially destroyed quality local coverage in every CBC market in this country. His cuts left a meagre 30 minutes of local news on weekdays and in conjunction with more cuts in 2008 left many CBC regional newsrooms decimated. But why cut local? Simply put, local television is no longer profitable.

4011   Less than a year later in 2001, massive claw backs at then CTV Incorporated resulted in the elimination of locally produced news in Northern Ontario, replacing it with a regional newscast based in Sudbury. Then CTV CEO Trina McQueen said it was due to "overstaffing".

4012   Local news coverage in all areas including Sudbury was slashed in mere minutes per newscast. Regional news is not local news, but the reality is it's the only feasible way to produce quality programming in markets like Northern Ontario.

4013   Mr. Chair, I can tell you firsthand that even though local news was cancelled in the north nearly a decade ago. The people of North Bay, Sault Ste Marie and Timmins still wish that they had Dennis Shippa, Louanne Young or Corina Warina sitting at the local station across town bringing them the news from their neighbourhood and city into their homes every night. The viewers didn't think that their stations were overstaffed. They considered such staff to be their local voice.

4014   At the end of the day, local television brings people together whether through local news by sharing the stories of our communities or by bringing such communities together for a cause. Local television is both the cornerstone of conventional broadcasting and a cornerstone of our communities.

4015   Private conventional broadcasters are under no obligation to keep unprofitable stations open and their losses have mounted to a point where if something is not done there will be no CTV Northern Ontario.

4016   The current local coverage will be axed in favour of centralized news in more profitable markets and that, Mr. Chair, is not local television. Local news is supposed to be relevant to our lives in the communities we live in.

4017   The recession of last year has shown us that government intervention is occasionally required to ensure future market stability.

4018   Ladies and gentlemen, intervention in the market of local television is required to ensure the future of conventional broadcasting and small and medium-sized markets.

4019   THE SECRETARY: I'm sorry. I apologize for the interruption. It's just you are going a little bit too fast for the interpreters.

4020   MR. VIERIMAA: Okay, no worries. Okay.

4021   THE SECRETARY: Can you please slow down? Thank you.

4022   MR. VIERIMAA: It's a matter of public record. CTVglobemedia has indicated that if the model isn't fixed 10 of 11 local stations in Ontario could close -- every station but Toronto. This would mean the elimination of local coverage in Sudbury, Timmins, Sault Ste. Marie, North Bay, Muskoka, Barrie, London and Kitchener-Waterloo as well as hundreds of other communities across this province while Ottawa and Windsor would be left with only the CBC as the sole broadcaster in those communities.

4023   Rogers argues that Citytv does not need a so-called bailout from the CRTC or from the cable subscriber. But outside of Toronto Citytv has no local news aside from breakfast television and a single news magazine in Calgary and Edmonton. No lunch, no evening, no late night and no weekend newscasts.

4024   Les distributeurs de câble et de satellite disent, soit que les stations communautaires sont assez ou que les stations de radio ou les journaux peuvent remplacer la télévision locale. Monsieur le Président, ceci n'est pas vrai.

4025   Rogers a annoncé qu'ils produisent 15 000 heures de programmes locaux dans 35 communautés, tandis que CTV et Global produisent en moyenne 912 heures, mais ce n'est pas la quantité qui est importante, c'est la qualité, et c'est grâce à ça que le CTV Evening News se place entre les 20 programmes les plus populaires au Canada chaque semaine.

4026   Les stations de télévision locales réunissent les communautés d'une façon que ni les journaux, ni la radio et ni l'Internet peuvent même approcher. En grandes heures, c'est CTV qui nous réunit.

4027   Si c'est pour aider aux pauvres enfants dans notre région ou pour donner de l'information durant les crises comme les inondations à Kashechewan ou le kidnapping d'un bébé à l'hôpital de Sudbury, le bénévolat dans la communauté et l'importance des émissions locales pour projeter visuellement l'information dans nos communautés est la raison pour laquelle les stations locales sont uniques et importantes.

4028   Now is the time for the CRTC to step up and protect citizens across this country by recommending compensation for their local signals to protect local television for the years and decades to come. Compensation should and must be directed towards local and Canadian programming.

4029   To protect the consumer the CRTC must ensure that any compensation paid to local television is not passed onto consumers by the BDUs. With something as precious as local television all too often you don't realize how important it is until it's gone. In Northern Ontario we have already seen that reduction. Local television is the cornerstone of conventional broadcasting and the communities we live in.

4030   In conclusion, Mr. Chair and Members of the Commission, please take into consideration that your decision will directly impact everyone not only in the immediate future but in the years and decades to come.

4031   Thank you.

4032   THE SECRETARY: Thank you.

4033   I would now invite the fourth presenter, Russell McOrmond.

4034   Mr. McOrmond, you have seven minutes for your presentation.

PRESENTATION

4035   MR. McORMOND: Commissioners, ladies and gentlemen, my name is Russell McOrmond and I am speaking as a private citizen.

4036   I will start by offering my opinions on the specific questions before you and then put these questions in context.

4037   I believe when it comes to local programming that the approach you took with the Local Programming Improvement Fund is the right direction with minor changes. If preserving and enhancing local programming is the goal, this needs to be focused on individual programs and not stations or broadcasters. LPIF should fund local programming independent of the delivery mechanism, which would include traditional broadcasting, cable access and internet distribution.

4038   I believe it is inappropriate for the broadcasters to suggest local programming is a fee for carriage issue. I understand that some channels are not bringing in the same advertising revenue as they have in the past, but this is more of an issue of convergence than local programming. As advertising revenue moves online from traditional media, content creators must move online as well.

4039   On the issue of fee for carriage I believe this historical agreement has two sides that create a symbiotic relationship. Cable companies were allowed to redistribute over-the-air signals without payment but were mandated to offer these stations as part of basic cable and on more prominent positions on the dial. It seems to be a simple matter of fairness that if one part of this arrangement changes the entire arrangement should change.

4040   The CRTC should allow over-the-air private broadcasters to designate themselves as specialty channels. This would mean that they would get fee for carriage but also that the cable companies would no longer be required to carry them in any specific bundle or on a low channel on analog service.

4041   The CRTC should mandate that the cable operators offer these channels a la carte and not require any specific bundle. This is the most common message from the online consultation website which is that audiences are fed up with bundles. The CRTC should mandate that all stations be available a la carte. It is clearly unfair to offer fee for carriage for any legislatively mandatory stations.

4042   Public broadcasters like the CBC or TVO should be considered separately as citizens already paid for them. They should not be able to designate local stations as specialty channels, would not receive fee for carriage and would be mandatory carriage.

4043   Cable or satellite companies should not be allowed to or mandated to manipulate the signal of third-party channels without the agreement of these third parties. The concept of a Canadian program rights market is a throwback to a past that should no longer be supported.

4044   If I am a subscriber to a specific channel that is scheduled to air a specific program, it must never be blacked out or otherwise manipulated simply because some other channel also wishes to air the same program simultaneously or at another time.

4045   We have the larger picture which is sometimes summarized with the title of convergence. The CRTC was formed at a time when broadcasting and telecommunications were two silos that each had their own legislation and regulation. In a recent submission from the CRTC you indicated that the Copyright Act should be reformed in a manner that defies a silo-based approach.

4046   The same needs to happen with broadcasting, telecommunications and the new converged infrastructure. We are moving towards there being one digital pipe into homes and offices where voice, streaming multimedia and other data are all simply types of information on that pipe. The internet should not be seen as a service offered by incumbent telecommunications and broadcast companies but as a common platform which will include traditional telecommunications and broadcasting services as a subset.

4047   For reasons clearly articulated in economics texts such as the Innovator's Dilemma by Clayton M. Christensen, these incumbent industries will have conflicts of interest and be least able to embrace this new medium.

4048   Let us look at the connections into my home. I have water and sewer which are fully municipal services. I have natural gas and electricity where the pipes are fully neutral and, yet, I have a choice of providers for these sources of energy. I have coax and twisted pairs that are allegedly fully owned by the phone and cable companies.

4049   Convergence should cause the government and regulators to ask -- sorry -- convergence should cause the government and regulators to ask whether we should abolish this communications exception. We need to ask if the broadcasting and telecommunications sectors are two massive government programs or if they are services that can exist in a minimally-regulated marketplace.

4050   The CRTC has indicated that it wants to rely on market forces but unfortunately these forces can never exist if the CRTC relies on inter-modal competition; cable and satellite for television, cable and DSL for internet access.

4051   We have experience with the type of transition we need to make in order to receive the full benefits of convergence. We have something to learn from the previous Progressive Conservative government of Ontario.

4052   The Energy Competition Act of 1998 aimed at establishing a deregulated market for the supply of electricity and continuing the deregulation of the natural gas supply market. This was partly accomplished by recognizing that energy distribution was a natural monopoly and expecting each potential competitor to put in their own pipes to our homes and offices would be impractical. This sector was split into a supply that would be a fully competitive private sector marketplace and distribution that would operate under a highly regulated utility model.

4053   We must do the same thing for our communications infrastructure, separating a highly regulated utility model for municipal distribution from minimally regulated services that are built on top. This will allow our free market to build services that actually meet the needs of consumers. This will allow local programming to become more local, lowering existing barriers to distribution of neighbourhood programming.

4054   I recognize this is not something the CRTC can create itself but this type of forward-facing vision should be part of your submission to government.

4055   Thank you.

4056   THE SECRETARY: Thank you.

4057   I will now invite the fifth presenter, Nicole Viens. Ms Viens, you have seven minutes for your presentation.

PRESENTATION

4058   MS VIENS: Hello. I represent two parties who are being negatively affected by the current state of the television industry as well as the proposed TV tax. A television and new media graduate who cannot find work in her field, I'm a struggling 20-something who can hardly afford her Rogers bill.

4059   I'm having a very hard time understanding how charging cable and satellite customers an addition $5 to $10 a month is going to help anyone but the big television networks like CTV and Global. Aside from the very obvious fact that most people in these hard economic times can't even afford to pay an extra $10 a month for cable, there are many other reasons why this proposed tax is not a good financial solution for the current state of the industry.

4060   The CRTC has already imposed a Local Programming Improvement Fund fee of 1.5 percent which took effect on September 1st, 2009. Rogers pointed out the fee is "a direct result of the CRTC requiring cable and satellite TV providers to fund local programming in smaller markets".

4061   If the money from this fund is directly going to help local television what is the reason for this new cost?

4062   The 1.5 percent fee on a $29.99 monthly cable fee works out to be 52 cents. The total of basic cable alone on my Rogers bill is $32.23 and that excludes PST and GST. That cost has been raised drastically over the years from $28.49 in 2008, $27.49 in 2007, $25.99 in 2006, $24.99 in 2005, $23.99 in 2004 and $21.99 in 2003, an increase of 36 percent over a six-year period.

4063   If I didn't have a roommate to split this cost with, my internet -- I mean my cable cost with -- I would not be able to afford it. I would not be able to afford basic cable, a home phone and basic internet service on my own. And if this new cost moves forward I will have to cancel my cable service.

4064   Many believe that this new tax is nothing more than a bailout for the big TV networks like CTV and Global who made almost $400 million in operating profits last year. The TV tax also provides no guarantee that these networks will do anything to keep local television on the air.

4065   The fact is CTV and Global average only 912 hours of local news each year, yet spend over $749 million in U.S. and foreign programming.

4066   This tax comes in addition to the close to $600 million in benefits the broadcast industry already receives from cable and satellite providers who actually only pocket less than 6 percent of an average TV bill. What many customers do not know is that the cable companies are required to carry broadcast networks. The big networks have earned billions in revenue as a result of being distributed by cable and satellite companies.

4067   So where is this money going? Local TV programming is still being cancelled and jobs are still being cut. I graduated from the Television and New Media program at Loyalist College in June 2007 and it's always a struggle to find jobs in the industry.

4068   Some of my classmates have lost jobs at CTV and Global as well as local stations. I excelled at specialization projects and internships that were supposed to leave me to a career as a producer but the work is just not there. I'm unable to make as much money right now as I would be if I had a job in my field and because of this I sometimes struggle to make ends meet and a higher cable bill is really the last thing I need.

4069   Times are hard for many Canadians right now and as an ambassador for the City of Ottawa's Green Bin program I have seen this firsthand. Many citizens, especially elderly who are on fixed pensions, are very upset and concerned about rising costs and are scared of not having enough money to survive.

4070   In conclusion, the proposed TV tax is unfair and unacceptable. The big networks need to stop collecting such a large profit from our bills and apply more of our hard-earned money to support local television. The answer is most definitely not to charge the people more money for a bailout.

4071   THE SECRETARY: Thank you.

4072   And finally, I would now invite our last presenter on this panel, Steven James May.

4073   Mr. May, you may now proceed with your seven-minute presentation.

PRESENTATION

4074   MR. MAY: Mr. Chairman, Mr. Vice-Chairman and Commissioners, thank you for my seven minutes.

4075   I am currently an over-the-air analogue television viewer. I was raised in Unionville, Ontario, I am currently renting a flat in Toronto as I have just started my -- I am in my first year of the PhD program in communication and culture jointly offered by York and Ryerson Universities.

4076   In terms of the value of local television, I am going to be focusing quite literally on the signals. And I understand that the digital transition is within the purview of this hearing, so I will be focusing on that.

4077   In order to guide my presentation I am going to be relying on a valuable interview that my father gave me on the weekend. He is a tax-paying resident of Copeland Lake, which is just outside Denby, Ontario, which is just south of Renfrew, Ontario, about two hours west of here.

4078   So I asked my dad to kind of go through his current analogue television viewing and -- oh, before I get to that, as a current Toronto resident, it does appear that I will be well served by the digital transition to over-the-air television. And the reason I am here today is because I have lived in and continue to visit areas of Canada that will not be as well served by either OTA digital television or the hybrid model that is hoped to help fill in the gaps.

4079   So back to my dad. So currently my father, with help from a booster that is like bolted to the roof, is able to pull in three analogue television channels and one French-language television channel. And on a good day he can actually pull in four analogue OTA channels.

4080   So in October my dad did an experiment. He brought up the necessary equipment, the converter, to convert digital over-the-air signals to analogue television and he even got the antenna that apparently is ideally suited for pulling in digital OTA signals, and he was able to pull in a grand total of zero over-the-air digital channels.

4081   So of course, all right, in that scenario, you know, what I often hear is well, I guess your mom and dad are just going to have to sign up to cable and satellite like the rest of us, like the 90 to 92 per cent of television viewing households in Canada.

4082   But my response to that is it is not that simple. Okay, let's look at cable. So at Copeland Lake, outside Denby, Ontario, cable television is not an option. I myself went to Cogeco's website, I typed in the address and it said, "Sorry, not available."

4083   Okay, satellite. Satellite does appear to be an option, however -- it is an option and it isn't an option. First of all, as you know, there is a fairly significant start-up cost to get rolling with satellite television, it is roughly $500, plus your ongoing subscription fees. And to be fair, my mom and dad could probably float that. But I do know that there are Canadians who couldn't or can't.

4084   Also, it does seem sort of unreasonable to me to expect people who are receiving their over-the-air television for free -- and I know it is not for free, but there isn't, you know, a bill on the credit card at the end of the month for their over-the-air signals -- to suddenly then have to pay $500 plus for television. It seems like quite a jump to me.

4085   Furthermore, on the technical end, again relying on my father's insight and on-the-ground research, due to terrain satellite signals, they are not that reliable necessarily. My father has experimented with both satellite cellular telephones and satellite radio and the results are not always satisfactory. Sometimes he has to literally paddle out to the middle of the lake to make a satellite cellphone call.

4086   So okay, what next? Well, the internet. Well, as the representatives who were here in November from the north discussing trying to watch television through the internet, I mean, even trying to check your email through dial-up can be a challenge, let alone watching TV. And you can try, but if you are going to try to watch your local news on the internet through dial-up, it is probably going to be a slide-show presentation.

--- Laughter

4087   MR. MAY: Okay, so what do we do with this 8 to 10 per cent of Canadians who will not be served by digital OTA television or the hybrid model, being cable and satellite? And the question I keep coming back to myself is, you know, if we are not doing this to the benefit of Canadian television viewers, why are we doing this?

4088   And I now know there are reasons deal specifically with regards to the protection and the harvesting of spectrum, and I understand that and that must be done. But I think there is more to it, certainly under the Broadcasting Act.

4089   So, you know, while the promise of this digital transition is crisper, better quality signals, the potential for HD and interactivity, if the signal isn't getting to a home, all homes, all Canadian homes, television-viewing Canadian homes, then I feel it is meaningless.

4090   And so, you know, yes, we are talking about a small number here probably. You know, conservatively a couple hundred thousand Canadians, generously maybe one and a quarter million Canadians. But I still feel that these viewers need to have access to television, and local television at that.

4091   And so where the market cannot serve these Canadians, I implore the CRTC to recommend to the minister that alternative technologies are used to help deliver television signals to these people. I am not convinced that the hybrid model is the fix.

4092   And while I don't think anybody expects a plan on par with the accelerated coverage plan that was rolled out in the 1970s to get television across the north, I do feel that there are options and we can talk more about that later if you like.

4093   Thank you.

4094   THE CHAIRPERSON: Well, thank you for your presentation, Mr. May. You see, you are mixing up two things that are the same, which is television and cellular phone. Your father surely can get satellite television at his place. He doesn't have to go out to the middle of the lake.

4095   MR. MAY: I think my dad would disagree with that. I mean, I can get back to you, and my dad is still doing testing, but apparently due to trees and other terrain -- perhaps you are right.

4096   You are absolutely right, satellite cellular telephone is different than television, but there is a concern as to whether or not the reception will be as satisfactory as analogue OTA.

4097   THE CHAIRPERSON: But reaching Canadians who right now receive that signal over-the-air, after digital conversion, assuming the station in their area has not been converted, really the only means of reaching them is satellite.

4098   And the question is what kind of satellite service, et cetera, and that is why we have been discussing something called Freesat where people like your father who could receive the signal that he so far receives over-the-air via satellite at no cost. And the question is, who pays for the installation of the set-top box and the antenna?

4099   And I gather your submission is the government should pay for it?

4100   MR. MAY: Yes. Yes, Mr. Chairman, and that is my recommendation. And yes, I have heard Freesat also referred to as, you know, $500, so it is not entirely free. And yes, I think the government must help, step in there.

4101   THE CHAIRPERSON: Okay. The other four of you who are generally talking about -- not the digital transmission, but the whole issue of value-for-signal. And we have had this massive campaign suggesting it would be $10 or something like that.

4102   Over the last few days I have spoken to both BDUs and broadcasters, and they say this is vastly exaggerated, I don't know what the amount is, you should negotiate it.

4103   But if you look at the rates that are being paid for specialty TV, and specialty TV don't have some of the advantages you have, so you have a partial compensation in kind. If you find it doesn't represent your full value then you should negotiate. We don't know where this will come out, it is going to come out somewhere. I suggested around 25 cents.

4104   And so that depends where you live, multiply that by the number of local stations that produce local content. It amounts to 75 cents, $1.00, $1.50, depending where you live. And obviously, the BDUs are not going to pay for it. They are going to pass it onto you or to the consumer.

4105   The question is, is that really a backbreaker, or can you afford it, or if you can't afford it, what will be your action, what will you do in terms of changing your consumption of TV or what you buy and what you don't buy?

4106   And so let me just put that to all of you. Assume it is between $1.00 and $1.50, what does that mean for you?

4107   MR. VIERIMAA: Well, Mr. Chair, we already pay for the LPIF which was at one point 5 per cent. Well, it is not a tax, but the way that the BDUs distributed it, it might as well be a tax, a tax on local television. We already pay basic cable. Yes, it does have some specialty channels associated with that. But essentially, we are already paying $30 for local television.

4108   Yesterday, Mr. Chair, you used an example of how much would it cost in the Ottawa area. You said it would be around $1.00 because we have four local stations here. I just have a question about that. What about Global, CHCH, and other local stations that are fed into the basic cable package in whether it be Ottawa or Northern Ontario?

4109   Would they also get the 25 cents? Because it also begs the question if you are digital cable or satellite and you have the time shift packages then it starts climbing in rates, because you will have for CTV 25 cents for Atlantic -- sorry.

4110   THE CHAIRPERSON: You are making all sorts of assumptions I didn't make. I was very specific. I said the local signal that produces the local news and local programming. That is not CHCH, that is Hamilton, we are in Ottawa. So the stations in Ottawa that produce local news and local programming.

4111   MS VIERIMAA: Okay. Then so the suggested 25 cents would be then directed to, depending on what region in the country you live in, would be determining. So like in Northern Ontario, because we only have one local broadcaster, it would be 25 cents? Okay then.

4112   I don't think it s a question of affordability because, you are right, 25 cents isn't very much. But when it comes to it, is should consumers have to pay? I already made the point that basic cable, we already -- the Local TV Matters argument is we already pay for local television. As a consumer I feel that.

4113   MS VIENS: I feel the same as well. I mean, I pay $30 for basic cable and I have my local news. It is pretty much all I watch on TV actually. So I just -- you know, paying the extra $1.00, on top of this 50 cents, an extra $1.50. It is not a lot of money, but I think it is more a matter of principle.

4114   And also, like in cancelling my cable service, I am not going to lie, I do watch a lot of streaming television on the internet and I can get the programs, like foreign and U.S. programming, that I want on the internet. So if I cancel my cable, then that is where I am going to watch my television.

4115   MR. McORMOND: I always find the conversation negotiating value-for-signal to be interesting because it is not really a negotiation if one side doesn't have an option. So to me, you can only talk about this negotiation if it is optional for the end consumer that will ultimately be paying for it no matter how we shuffle our spreadsheets, which is essentially what you are talking about when you say, wow, you know, it shouldn't add to the price. Well, it is not going to subtract from the profit either.

4116   So to me, it should be optional to me --

4117   THE CHAIRPERSON: I didn't say that. I said I will be passed onto you --

4118   MR. McORMOND: Yes.

4119   THE CHAIRPERSON: -- and I wanted to know your reaction as consumer. I didn't say somebody should eat it. I assume that people in business pass on their costs to their customers if they can do that.

4120   MR. McORMOND: But right now, unless we go to an a la carte, my only option is accept the price that was negotiated by other people or drop cable. I don't really like that option. Yes, I am actively looking for alternative sources to get my content.

4121   For me, I want it to be a legal options, let's be honest. And yes, there is a lot of content available on the internet. That is not a legal option. I want to use the legal options but, unfortunately, there is a lot of barriers between the content creators and me. And so if I am forced to choose, let's drop cable, well I am going to be losing a lot of programming that I would really like to access.

4122   THE CHAIRPERSON: Thank you.

4123   And you folks in Toronto.

4124   MR. BERMAN: Mr. Commissioner, from my perspective, I have taken cable, because I live in the difficult-to-service area for broadcast television, just because of the contours of the city.

4125   One of my offices on the other hand, I could not have cable because it doesn't actually make it all the way out into that far distant place called Don Mills, or just the small part of Don Mills where my office is located or was located, pardon me.

4126   So I have suffered on both sides of that equation. If I were to look at an increased fee, I would object to it and I would consider seriously other vehicles for me to get the news that I want, which is my local news; my traffic, my weather, the things which are important to me. I don't spend a lot of time finding artistic entertainment.

4127   I find most of my time spent with the essentials; what is happening in my neighbourhood, what is happening in my community, what is happening on the roads. And I should be able to get that with a stick up in the air, plugged into the back of my TV.

4128   And frankly, that is paid for by people that are selling product. So if it is paid for once and then I am paying for it again, and now I am talking about chipping in a little bit extra to pay for it again, it is really rankling me.

4129   THE CHAIRPERSON: Okay.

4130   MS BRAUND: I agree. I mostly watch it for the local news and weather conditions and that sort of thing. I was getting my local programming with my cable bill, which has gone up. Now, to me, there has been a reduction of service in that my station is having to cut back because they are not getting as much as they need to operate the morning show.

4131   And if the cable companies are indeed making a 40 per cent profit, then they are already charging us and not passing it on. And I think it should come out of that 40 per cent.

4132   THE CHAIRPERSON: Okay, thank you.

4133   Tim, you have some questions?

4134   COMMISSIONER DENTON: Mr. McOrmond, interesting brief. I see it is informed by an internet idea of the world.

4135   So in your preferred solution then there would be essentially some kind of bandwidth to the house, whether wired or wireless, it would be part of a municipal infrastructure such as sewage or water, and applications would float on top of that or through it.

4136   Now, what happens to the carrier in that instance?

4137   MR. McORMOND: I am essentially suggesting that we no long would have carriers in that instance. They would be replaced by a utility and a free market.

4138   COMMISSIONER DENTON: Right. So you realize this is formally heretical and they will be onto you for this?

4139   MR. McORMOND: Oh, of course. I have never been considered a fan of either of the telecom industry or the broadcast industry.

4140   COMMISSIONER DENTON: So then if you were asking us to advise the government, then you would ask us to say, look, the internet is here and the concept of the carrier is essentially finally superfluous?

4141   MR. McORMOND: Well, not yet.

4142   COMMISSIONER DENTON: Not yet?

4143   MR. McORMOND: So part of the problem is that we have this communications exception where there are two cables into my home and, you know, yes there is wireless options. But the two cables in my home are currently owned by a phone company or a cable company.

4144   COMMISSIONER DENTON: Yes.

4145   MR. McORMOND: So we don't have that third option yet. And in the case of Ottawa, Ottawa gave up its fibre-based telecommunications company, that was part of the electricity company, and just sort of handed that away. So that third option isn't there yet and I would like it to be there.

4146   The current bandwidth I have to my home for internet doesn't offer the option for me to subscribe to CTV and subscribe to CBC directly. The bandwidth just isn't there yet because those two monopolies don't offer that bandwidth.

4147   COMMISSIONER DENTON: Well, let's back up for a moment and go back to the prior proposition, which was that the carrier is a superfluous concept. Could you unpack that for us please?

4148   MR. McORMOND: Again, just like what we did with electricity in Ontario, we took a market that was one type of a monopoly where the generation and the distribution was all one company and they separated that into one part that was a free market and one part that was a utility.

4149   And once you have that free market, then different companies can offer different types of services. One of the obvious services is going to be an aggregator service that is going to, for some consumers, look identical to a cable company.

4150   For other people, they are not going to want that aggregator service, they are going to want to subscribe I want these three channels from CTV, I want these three channels from CBC, I want these three channels from Global.

4151   Different consumers will be able to choose different packages because we will no longer have that intermediary in the way imposing certain choices on us ahead of time. With cable, I have a choice, yes, no. That is not really the choice that I want.

4152   COMMISSIONER DENTON: So then if you were in our shoes and you were advising government you would say that a forward-looking policy would start to encompass these possibilities?

4153   MR. McORMOND: Obviously, this is a -- you know, I don't expect this type of thing to be possible in two years type of thing. You start with, hey, we have cable already, why not move to a la carte? Have that as an option that people want. You know, we are talking about a skinny basic, well why not a skinny basic that has no channels on it that have an incremental cost and have every other channel be a la carte?

4154   Yes, fine. The cable companies can say you have to have a minimum of 20 stations or something like that. If I look at the number of stations that I watch, I mean, I have a quite large cable package, but it would probably be only about 20 of those 50 some stations that I have that I have actually ever looked at.

4155   COMMISSIONER DENTON: Are you ready to pay a premium for this, of getting precisely the 20 channels that you want versus say 35 of which 15 are superfluous?

4156   MR. McORMOND: There is a presumption that there would be a premium. I think that there would be a short-term transition where there would be a premium and, yes, I would be willing to pay more to have the option to not be paying stations that I don't want.

4157   But in the long term, I think prices would go down because, yes, it would mean that stations that people are not watching would just be allowed to disappear. It is part of the question. Is the broadcasting sector a government program or is it a free market? Right now, it is neither, it depends on what somebody wants to ask you.

4158   Okay, it is a free market when they want to raise prices, it is not a free market when, you know, there is some other decision they want you to make.

4159   COMMISSIONER DENTON: Yes, I would say that most of the groups appearing before us would think it a form of government program, would they not?

4160   MR. McORMOND: I would. And I was listening to some of the broadcasters yesterday and finding it rather interesting. That is not the way it was presented to us.

4161   COMMISSIONER DENTON: Okay.

4162   Thank you. Those are my questions, Mr. Chairman.

4163   THE CHAIRPERSON: Thank you.

4164   Len, you have some questions?

4165   COMMISSIONER KATZ: Thank you, Mr. Chairman. And good morning, ladies and gentlemen.

4166   I want to move into the area of the future and not dwell with today. So if tomorrow you all moved to a new area not served by your cable and your internet provider, what factors would you take into consideration in making your decision?

4167   And I will give you a couple of them to mull over as well. Obviously price is one of them, local programming is another one, community program is another one, the quality of the network, the leading edge technology, whether they bundle internet and cable services together or they don't.

4168   I want to get a sense from you folks who are out there today what you would do in evaluating your choices. And again, don't look what you have today, because you are in a new area and you are starting off, and you are going to make a phone call, what are the things you are going to think about?

4169   MR. VIERIMAA: Well, so say I moved to Vancouver, a completely new market from Northern Ontario. Obviously price is a factor, moving to a new city, whether it is a high cost of living or low cost of living, price is definitely a factor.

4170   COMMISSIONER KATZ: So price is number one?

4171   MR. VIERIMAA: Price is number one -- price and then very close second would be quality, quality of internet service, quality of television service.

4172   And then afterwards I would look at the local programming, because Rogers TV in Toronto, because living in Toronto I see small and large BDUs and I kind of see the difference in the local distribution. Rogers TV is a fine station, it does provide things that CTV or City don't provide. So that would be another aspect to look at, because it is an additional voice and that, in my opinion, is key. The more voices we have the more Canadian dialogue we have, and there is nothing wrong with that at all.

4173   So those would be the three things that I would look at.

4174   COMMISSIONER KATZ: Okay. How about the folks in Toronto on the video, Ms Braund or Mr. Berman?

4175   MR. BERMAN: Again, from my perspective, my needs are quite simple. But what I do look for in my provider is the ability to fire them from time to time. When service becomes degraded, I like to be able to remove them from the equation and replace them with a competitor.

4176   When I buy bundled services, that becomes more difficult. So being able to swap in and swap out components of my package where, you know, content for viewing can be separated from internet, that is very handy to me.

4177   But in addition to that, I want to have the choice of what I see. And again, for the most part, what I have to see is that which is closet around, because that is what I interact with most. Certainly, broader information in terms of national coverage and things which are of breaking news value will be brought to us by just about any news source.

4178   But again, what is most important to me, or critical to me actually, is what is happening down the street or on the highway or between my home and my office. And this affects hundreds of thousands of people that are doing that same route at the same time I am. So that is what I have to say on that.

4179   COMMISSIONER KATZ: Your focus is local, you want to know what is going on locally, local news, local --

4180   MR. BERMAN: Very important, yes.

4181   COMMISSIONER KATZ: Okay. Ms Braund.

4182   MS BRAUND: My three top priorities are the same. In order, they would be cost of the service, being able to choose a la carte those things that are important to me and number three is that I absolutely need my local provider to be able to give me local programming for news, weather, sports and road conditions and that sort of thing, plus local happenings. There is a sense of community that is lost when the local station is not there.

4183   COMMISSIONER KATZ: Thank you.

4184   Folks over here.

4185   MR. McORMOND: I recently, well five years ago, moved and one of the first things I looked for was how close was I going to be to the phone switch. I wanted to make sure I was within five kilometres for DSL. And the reason why I was looking at DSL rather than cable is that I don't want to subscribe to either the phone or the cable company for my internet. Where do I get my local news? I get my local news online.

4186   For television, it is really about drama and so it is focused on those individual programs. If I could subscribe to the individual programs, I would. You know, the more realistic option is to able to choose the individual stations that I want. So the ability to do that, that is what I would want.

4187   COMMISSIONER KATZ: Thank you. Ms Viens.

4188   MS VIENS: If I was to move to a new area obviously price is definitely my first -- what I look at and the ability to like bundle my internet and my phone and my cable together, because you can save money that way. Also, yes, local programming is really important to me as well. And yes, also the quality, but probably the last one would be just the quality of overall like the single, the communication signal. And also customer service is a big one for me, but that doesn't really matter.

4189   COMMISSIONER KATZ: Thank you. Mr. May.

4190   MR. MAY: Speaking as a graduate student, price. But coincidentally, the over-the-air television provides me with the content I want, the local channels that I end up watching and that I want to watch anyway. So it actually is a price/local for me.

4191   COMMISSIONER KATZ: Thank you.

4192   My last question, you each mentioned local, I think most of you mentioned local anyways, maybe one who did not.

4193   My question is -- and you are well aware now with the record that the local over-the-air programming does not get any compensation from the cable company -- if tomorrow your local station went dark would you be expecting a reduction in the payment you are making to your cable company today or would you just think it is free anyways and if it is not there, it is not there. But I am not paying for, so I shouldn't be paying less money for it?

4194   MS BRAUND: Yes, I think I would want --

4195   MR. VIERIMAA: Go ahead.

4196   COMMISSIONER KATZ: Go ahead, Toronto.

4197   MS BRAUND: -- I would want reduction.

4198   COMMISSIONER KATZ: Mr. Berman.

4199   MR. BERMAN: I agree. If I am losing the service, the only service that I am actually desiring, I would want it for free or I would disconnect cable.

4200   COMMISSIONER KATZ: Folks here.

4201   MR. VIERIMAA: I would expect a cut.

4202   MS VIENS: I would expect a reduction as well.

4203   MR. McORMOND: I could say I would want one, but I wouldn't expect one.

4204   MR. MAY: As an OTA viewer, it doesn't really apply to me, but yes, if I had cable and suddenly my local channels disappeared, I would expect a reduction in rate.

4205   COMMISSIONER KATZ: Thank you.

4206   Those are my questions, Mr Chairman.

4207   THE CHAIRPERSON: Michel Morin, dernier question?

4208   COMMISSIONER MORIN: Yes.

4209   My question is for Mr. McOrmond. If the Commission agrees to allow the broadcasters to negotiate for the value of the signal, and if the Commission agrees to give them the right to withhold their signal, so there will be some possibilities of blackouts, but they can get also a value-for-signal, what do you think about the idea to have a very very skinny basic service? If they get value-for-signal, the basic service, as it is now, will stay as it is now, but they won't be on the skinny basic service.

4210   If, for example, Citytv gets value of 77 cents, they won't be on the skinny basic service. So the consumer will pay less than they pay right now for the basic service.

4211   MR. McORMOND: I don't think the negotiations should be with the BDUs. So to me, the negotiations should be between the broadcasters and the end consumer. So to me, yes, the broadcasters can charge whatever fees they might want to charge. And the BDUs would be given a regulated amount of mark-up. And then I as a consumer can then choose is that too much money or is that not to much money?

4212   But by having the BDUs in this mix, there really isn't a negotiation. I, as the consumer, should be the one that is deciding is that the right price for that channel? And then that channel can work in the way the rest of the world market works and sit there and say, well, is this is the right price? You know, they probably would get more money that way.

4213   But with the BDUs in the way, there is not actually a legitimate negotiation going on because the actual parties in the negotiation aren't there.

4214   COMMISSIONER MORIN: Thank you, sir

4215   THE CHAIRPERSON: Okay, thank you very much. All of you, thank you for your comments and taking the time to participate. As you know, we are in this hearing asked to ascertain the views of consumers, so it is very important to us that you actually took the time to come forward and share them with us. I thank you for that.

4216   We will now take a break and we will resume at 1:30 this afternoon. Thank you.

--- Upon recessing at 1217

--- Upon resuming at 1333

4217   THE CHAIRPERSON: Good afternoon.

4218   Commençons, Madam la Secrétaire.

4219   THE SECRETARY: Thank you, Mr. Chairman.

4220   We will now hear the presentations of ACTRA and the Canadian Media Guild who are appearing via videoconference from our Toronto regional office.

4221   We will hear each presentation which will then be followed by questions by the Commissioners to the participants. We will start with ACTRA.

4222   Appearing for ACTRA is Mr. Stephen Waddell. Please introduce your colleague and you have 10 minutes for your presentation.

PRESENTATION

4223   MR. WADDELL: Thank you. Thank you, Mr. Chair, Vice-Chairs, Commissioners and CRTC staff.

4224   I am Stephen Waddell, National Executive Director of ACTRA, the Alliance of Canadian Cinema Television and Radio Artists and with me here today is Joanne Deer, actress, Director of Public Policy and Communications.

4225   We are here as the voice of ACTRA's 21,000 members, English-speaking artists whose performances cross all delivery platforms, film, television, sound recordings, radio and digital media. We are also representing the views of 17,000 musicians who are members of AF of M Canada.

4226   Mr. Chairman, Commissioners, we are pleased to appear before you at these hearings where the impact of possible policy decisions on consumers and viewers comes first. Our members combined with those of AF of M Canada represent more than 38,000 consumers. We believe it's especially important for these Canadians to have their say before you.

4227   THE CHAIRPERSON: Hang on a second. There is no sound on the translation side --

4228   MR. WADDELL: Okay.

4229   COMMISSIONER ARPIN: I am not listening to the translation.

4230   THE CHAIRPERSON: Or the floor sound.

4231   Okay, say something else, Mr. Waddell.

4232   MR. WADDELL: Sure, I will say something else, yeah.

--- Laughter

4233   THE CHAIRPERSON: Okay, that's perfect.

4234   MR. WADDELL: Testing.

4235   Unfortunately, I think few Canadians fully understand the issues at stake. In recent months we have been bombarded by an embarrassing and very public slap-fest between the cable and satellite companies and broadcasters. Both broadcasters and the BDUs have been manipulating and confusing the public with half-truths and hypocritical rhetoric that's doing nothing but furthering public cynicism of our broadcasting system.

4236   Consumers can be forgiven for being confused and annoyed. Our own members have asked me, "So who is the bad guys here?" My answer, "They are both bad".

4237   Cable, satellite and broadcasters are all getting free rides and Canadian consumers are paying for these free rides and higher cable bills and less Canadian programming on our TVs. While they are arguing about which one of them is more hard done by regular Canadians are suffering because we are paying more and getting less.

4238   We have all seen the numbers. Since cable rates were deregulated in 2002 cable and satellite companies can charge consumers as much as they want to and they do.

4239   Rogers has increased its basic cable rates an average of 85 percent while Shaw customers are paying 68 percent more. The result is last year BDUs posted record profits of $2.1 billion. You have to admit, those are substantial profits especially when you consider we were in the beginnings of the worst global economic recession since the 1930s. But apparently that's not good enough.

4240   When the CRTC made the wise choice this year to create the Local Production Improvement Fund to support local programming, cable companies couldn't part with any of their $2.1 billion to make their contributions to the new fund. Instead, they turned to us, their customers. They passed the buck onto us instead of ponying up to pay their own regulatory obligations; this despite the fact that the CRTC said on its own website that the Commission saw "no justification" for the BDUs to pass these costs along to consumers.

4241   I for one haven't been paying the BDU's phoney TV tax. I sent Rogers and Bell, because I have both cable and satellite, a letter and told them to pay it for themselves. And I have urged others to do the same. In the face of record profits they can well afford it.

4242   For their part, it's no surprise the broadcasters want in on some of the BDU profits. It makes no sense that one part of the system is living high on the hog while the other is struggling.

4243   However, we are also not prepared to let broadcasters off the hook. The broadcasters have wanted to change the channel and talk about what the BDUs aren't doing because it takes the focus off what they aren't doing.

4244   What the broadcasters aren't doing is meeting their obligations under the Broadcasting Act. They are taking advantage of the relaxed regulations in the CRTC's 1999 TV policy and doing the minimum to meet their Canadian content obligations.

4245   They are spending obscene amounts of money importing American shows and your figures released yesterday just confirm that they are continuing to do that.

4246   When we appeared before you just two weeks ago we made our case, as we have done many times before, for more scripted Canadian programming, drama and comedy. Specifically, we urged you to take measures to repair the damage done by the 1999 television policy.

4247   To finally make broadcasters live up to their obligations under the Broadcasting Act, we were heartened when we were here a couple of weeks ago to hear the Chair and several Commissioners agree that the 1999 TV policy has failed Canadians.

4248   We hope that you will take steps required to fix this; impose a Canadian programming expenditure requirement on conventional broadcasters and force them to air two hours of Canadian drama in primetime each week. While Canadians might be confused about the nuances of this issue, one thing they are sure about is that they are tired of paying sky-high cable rates and getting less of their own programming in return.

4249   ACTRA believes that it's critical that Canadians have fair affordable access to cable. We feel it's equally critical that Canadians have full access to a full range of Canadian programming that reflects their values, experience and communities, including drama and comedy. Right now they are getting neither of these.

4250   Mr. Chair, I know you didn't write the Order in Council that led to these hearings but I do want to make a comment on it. The Order in Council speaks of consumers as having two interests; affordable access and access to a variety of local and regional news, information and public affairs programming.

4251   I know that the like many Canadians, is responding to the broadcasters' threats that if they don't get fee for carriage they are going to shutdown local stations. In our view, and as we have said, the CRTC has a variety of tools available to it to increase the amount of ad revenue available to broadcasters.

4252   What really needs attention is the dearth of Canadian drama in primetime. So how do we get more Canadian drama on the air and make sure that Canadians aren't being ripped off?

4253   Increase advertising revenues we say. Grow the ad pie by permitting commercials on VOD and local avails. This new source of revenue will provide conventional broadcasters with more resources which they should be using to produce more high quality and distinctive Canadian drama and comedy, giving audiences more choice of primetime.

4254   And in order to ensure that the broadcasters just don't take these new revenues and fly up to LA to blow their brains out on buying U.S. drama programming the CRTC, in our opinion, should implement Canadian programming expenditures.

4255   We also need to see exhibition requirements to make sure Canadian drama has a place in primetime schedules. We have suggested two hours a week in real primetime 8 to 11 p.m. Sunday to Friday.

4256   When taken together, these measures will create a situation in which Canadians will once again be able to see themselves and our stories, the drama and scripted comedy programs in primetime.

4257   In the alternative, if the CRTC decides to give broadcasters fee for carriage or permits value for signal negotiations, ACTRA submits these new fees should not be downloaded onto Canadian consumers. In recent months we have seen that the CRTC strongly encouraging cable companies not to pass fees down to consumers, hasn't worked.

4258   We submit that if BDUs can't control their urge to squeeze consumers for every last cent then it's time to impose control and regulate cable rates. BDUs can and should absorb the LPIF fees. They must also absorb any value for signal fee. With $10 billion in revenue and profits of $2.1 billion, BDUs can afford to pay these charges.

4259   The system has become unbalanced. It doesn't make sense that while one part of the system; the content providers are struggling, the other part, the distributors are making billions in profits. One way to restore the balance to the system and ensure consumers are being charged fairly would be to return to regulate the cable rates.

4260   Private broadcasters and BDUs have been getting a free ride for too long. The result has been less Canadian drama on TV and sky-high cable, satellite and wireless charges. Consumers already aren't getting what they have been paying for through their cable fees and taxes. It's time to make both private broadcasters and BDUs who have profited from the system to give back to Canadian consumers.

4261   So we are urging the Commission to permit advertising on VODs and local avails to increase the advertising pie.

4262   Second, if the CRTC decides to grant broadcasters value for signal, then make the BDUs do their part by having them pay for being able to carry conventional television signals without passing the buck onto consumers.

4263   Three, impose exhibition expenditure requirements on private broadcasters so that revenues from fee for carriage payments flow into programming, including drama and these programs have a pride of place on our television screens.

4264   And, finally, re-regulate the rates charged by BDUs.

4265   When these actions are combined with the new LPIF fund the interests of Canadian consumers will be protected. They will not only have access to the full range of programming they are entitled to under the Broadcasting Act but they will have access at fair affordable rates.

4266   Thank you very much.

4267   THE SECRETARY: Thank you, Mr. Waddell.

4268   I will now invite the Canadian Media Guild who is appearing via videoconference from our Toronto regional office to make their presentation.

4269   You have 10 minutes.

PRESENTATION

4270   MS LAREAU: Hello, I am -- hello, Mr. Chairman, Commissioners and CRTC staff. Thank you for taking the time once again to hear from the Canadian Media Guild on the very important issues before you.

4271   My name is Lise Lareau and I am the National President of the Guild and I am joined by Karen Wirsig, our Communications Coordinator and regulatory expert.

4272   The Guild represents 6,000 media workers across the country, including employees at CBC/Radio-Canada, TVO, TFO and APTN and others.

4273   We have a little something different to say than our colleagues from ACTRA, though we support ACTRA in everything it is putting before you. As you can guess, we are focussing today on the transition to digital.

4274   The consumers at the heart of the hearings this week are the citizens that the Commission is mandated to serve. So it's troubling that the Commission is contemplating cutting off some 600,000 Canadian households from their TV after the transition to digital. These are the people whose TVs will go dark once analog transmitters are shutdown. These are the people who won't be getting free over-the-air digital signals, unlike their fellow citizens who live in the big cities.

4275   Based upon your list of communities mandated for the transition to digital, viewers in regions such as the interior of B.C., northern Ontario, south-eastern Ontario, Cape Breton and Newfoundland and Labrador will be particularly hard hit.

4276   Under your current plan these 600,000 households with more than 1.2 million people are both second-class citizens and abandoned consumers. We know that some 2,000 Canadians sent comments to you on this issue and most live in these communities that will be left out.

4277   In our view, the future of OTA TV and the future of local TV are closely linked. To survive, local TV will have to demonstrate that it provides something that people, yes, citizens, can't get anywhere else, quality local programming including news, national and international productions that are event television, and live coverage of local events and local emergencies.

4278   To survive local TV will have to make sure people know how and where to find it. And local TV must survive.

4279   It continues to be one of the best means of informing citizens of what's happening in their communities, their province or territory, their country and their world. It continues to be one of the best ways for people to see themselves reflected in our culture.

4280   Local TV is also a good employer, offering good local jobs, providing a key entry point for people of colour, Aboriginal people and people with disabilities into the industry. And all surveys show that local TV is what Canadians value most about TV.

4281   As one of the written interventions to this proceeding pointed out, if there is not local TV left in a place like Sudbury, how will people know that AIDS is as much of an issue in northern Ontario as it is in Toronto and Montreal, for example?

4282   There is a popular notion that over-the-air TV is passé. In fact, what you are saying with your current plan for the transition and what major broadcasters are saying with their plans is that it's only passé in small town Canada. That's strange because the Commission's research on digital transition models placed on the public record a day before the last round of hearings began says that a higher proportion of small town and rural Canadians watch over-the-air than their big city counterparts.

4283   So we have to ask, what's the real deal?

4284   In major markets, such as Toronto, Vancouver and Montreal, OTA TV is certainly not passé. Broadcasters are so enthusiastic about it, or at least about the spectrum they tap for it, that they have been providing both analog and digital signals over-the-air there for several years. And guess what? Consumers seem to be catching on, despite that there is so little information about getting TV over-the-air.

4285   We phoned around to a few antenna retailers in the Greater Toronto Area recently and found out that one major independent retailer estimates they have helped 10,000 customers switch to OTA from cable or satellite in the past year.

4286   A store named Save and Replay in Mississauga has been selling 800 to 900 antennas per month this fall, up from 200 to 300 per month at this time last year. After some media coverage last spring, sales actually jumped to 2,500 per month for a time. Interestingly, they are currently lining up about one conversion to OTA per month in residential buildings in Toronto.

4287   A smaller Scarborough retailer, who now installs three to four rooftop antennas per week and sells another three to five over the counter, says his sales increased 47 percent between October 2008 and September 2009. Sells TV and Radio says that 90 percent of their customers are switching to OTA from cable or satellite.

4288   And Able TV & Antenna in Whitby installs 10 antennas per week and sells another 8 to 10 every week over the counter. They now make appointments for installations over a week ahead and are having a hard time getting the digital converter boxes people want. They say business started slowing down five years ago but it's been through the roof over the last 18 months. These are stories we don't hear very often.

4289   People are sick of paying ever-rising cable bills, yes, and they also like their OTA options. Does it really make sense for people in Toronto to have the choice to switch to OTA when people in Kingston, Sault Ste. Marie and Kelowna won't?

4290   It's not good public communications policy, we argue, to establish a rule that only benefits people living in the biggest cities.

4291   If this policy stands you are in fact opening yourselves up to the possibility of a Charter challenge if it results in cutting off OTA signals in all but Canada's major cities. It is blatantly discriminatory to Canadians living in smaller communities.

4292   South of the border digital over-the-air TV is also not passé. And in the U.K. Freeview standard definition service is so successful, used on 37.7 percent of primary TV sets there, that it's being upgraded to HD.

4293   The Freeview figure is interesting. In the Canadian Media Guild poll of Kamloops residents last summer, which we presented to the CRTC earlier this fall, 33 percent of people said they would choose six free channels over paying for cable or satellite. The number jumped to 42 percent for people under the age of 35. The U.K. Freeview experience is actually in line with these findings.

4294   Now, the last time we appeared before the Commission we were told that 80 percent of the 90 percent of Canadians who subscribe to a BDU take more than the basic package, as if to point out how irrelevant basic viewing is somehow.

4295   But look again at the math. 80 percent of 90 percent is 72 percent. That's the number of Canadian households who have subscribed to a BDU and pay above the basic tier. That leaves some 28 percent of Canadian households who either watch OTA or have a basic cable package. Canadian governments have been elected on a lesser proportion of the total population.

4296   This 28 percent is actually a good base upon which to build a proper local TV model that involves public, private and community elements, as we have suggested a model to make a decent amount of free local TV available over-the-air in communities across the country precisely to serve the significant proportion of Canadians that is interested in a modest selection of local and Canadian channels. It's called multiplexing which would allow up to six broadcasters to share a single transmitter and frequency to send out up to six standard definition signals. With incremental investments and no disruption to viewers, successful multiplexes here could be upgraded to HD as is happening in the U.K.

4297   We believe digital multiplexing is the most effective and affordable way to provide OTA TV in communities where the broadcasters don't see the immediate business case for securing their own OTA frequencies, i.e. in smaller communities where there is no scarcity of spectrum.

4298   It would be the way to make sure Canadians public broadcasters, as in CBC/Radio-Canada and the provincial broadcasters, continue to be widely available to Canadians for free over-the-air. We think it's also a good option for independent small town stations to help pay for the upgrade and improve the choice of free TV in their communities and, therefore, we believe, their viewership.

4299   So what are you asking you to do? Number one, work to ensure that digital OTA TV is available throughout Canada by endorsing shared multiplexing for smaller communities and especially those served by repeaters. If your final decision stands to leave inequities in the digital OTA coverage, we implore you to communicate those realities and the reasons for them clearly, to all Canadians and particularly to those who will be most affected.

4300   Number two; urge the government to participate actively in the digital transition including providing funding for the upgrade in smaller communities. We have estimated the cost of the upgrade in the repeater areas to be a total of between $140 and $227 million. This represents a very small portion of the proceeds from the last spectrum auction and therefore likely also from the next.

4301   And number three, confirm to the government that the CBC's role in local television is crucial and urge the government to provide additional funding to the national public broadcaster for this purpose.

4302   The Heritage Committee has recommended boosting per capita funding from $34 a year per capita to $40 and we urge you to endorse that recommendation.

4303   You have heard and will continue to hear a lot this week about how people are tired of paying ever higher cable and satellite bills. You will also continue to hear how much people value their local and their Canadian TV. Our proposal would help you ensure that virtually all Canadians would have a viable and affordable alternative to the 500 channel universe and a part in the local, regional and national conversations that continue to involve TV. This viable alternative also provides a crucial check on price increases by cable and satellite providers.

4304   You, the Commission, and the government are all that stand between a totally privatized and fragmented public airwave and a universal TV system that truly serves Canadian citizens no matter where they live.

4305   We would be happy to answer any of your questions.

4306   THE CHAIRPERSON: Thank you for your comments.

4307   Ms Lareau, I take some exception to your comments. We have been on record saying that we are worried about people being without over-the-air access. We have pushed for the Freesat model. I have personally asked every intervenor what are we going to do for these; we cannot have Canadians without over-the-air access.

4308   So you are making a presentation to me based on the assumption that we are prepared to forget about them, is not warranted on the record.

4309   MS WIRSIG: Well, I --

4310   THE CHAIRPERSON: I'm sorry, but in this --

4311   MS WIRSIG: Would you like me to respond?

4312   THE CHAIRPERSON: Yes, absolutely, because in this obviously I haven't gotten my message across because both in the previous hearing and in this one I have asked what do we do about the people who will be left -- who are not going to have over-the-air access? Obviously, we can't just leave them without any signal.

4313   MS WIRSIG: Right, I hear you on that. But if you were to ask the average citizen in a place like Kingston or Kamloops or any mid-sized community and ask them if they know what is about to happen to them in 2011, odds are very few and I would estimate less than 10 percent would be aware of what is about to happen to their choices.

4314   THE CHAIRPERSON: But that's not --

4315   MS WIRSIG: -- by 2011.

4316   THE CHAIRPERSON: --- not my question.

4317   MS WIRSIG: And that's the point I'm making.

4318   THE CHAIRPERSON: Yeah, but the point you are making is saying it's troubling that the Commission is contemplating cutting off 600,000 Canadian households from TV. We are not contemplating that. We have never contemplated -- on the contrary I have asked for submissions on how we could assure that that very thing doesn't happen, okay?

4319   Now, have we found a solution? Obviously not otherwise I wouldn't be asking the question. I'm grateful for your comment that you are suggesting we should recommend to the government that we fund -- that they fund and they put something in place.

4320   But please don't start from the assumption that the CRTC is prepared to see these people cut off. That's exactly the position we have not taken.

4321   MS WIRSIG: However, the position that you have taken, all of the options involve some kind of a price to the average citizen and so perhaps the line should have been cut off free TV.

4322   THE CHAIRPERSON: Well, if that's -- you know, now we are coming to the nub of the problem and you have identified it frankly. It will not be free unless there is some sort of subsidization. What kind of subsidization scheme is necessary and who should fund it? And that's what the big debate should be.

4323   And I have no problem with what you are saying. I just wanted to make clear that our position was not, you know let's forget about those folks.

4324   MS WIRSIG: Can I say something about the subsidization?

4325   THE CHAIRPERSON: Yes, absolutely, because everybody is struggling with it as you see. We have heard various positions being taken, various schemes being floated around, et cetera.

4326   The problem is nobody knows the exact number and, secondly -- the second question is, you know, where should the funds come and who should receive them?

4327   MS WIRSIG: Right.

4328   THE CHAIRPERSON: So please go ahead.

4329   MS WIRSIG: So you will notice in our submission or what we have said today, and it was in a previous submission -- our estimates for the cost of upgrading those multiplexes which is somewhere -- I should find the number here -- somewhere between 140 million and 227 million. This to us is a bargain compared to what you would have to start subsidizing if you were to do a Freesat model that it did involve all the people currently taking their signals over-the-air.

4330   So I mean if we are talking $500 a unit for those folks we calculated it based on 590,000 households and this would be just one unit for one TV -- this doesn't even include all the potential OTA hooked-up TVs that cable or satellite households have, additional TVs, but just for those alone it would cost about $295 million.

4331   And that also doesn't include the lost revenue that Bell, for example, is suggesting would come out of the LPIF to fund the administration of a Freesat program.

4332   So that's where we -- I mean this is actually a bargain. We heard a lot about how expensive the transition is going to be, but to us the digital multiplexing is a bargain compared to what the Freesat models we have heard about would cost. And it would maintain control of the local signals with the local broadcasters.

4333   And I think the community television people are kind of interested in that idea and might even be willing to partner in providing some of those multiplexes in communities where there aren't broadcasters or where the major broadcasters don't want to stay involved.

4334   So I just think it's something really worth looking at and it seems like a bargain to us compared to what you are contemplating.

4335   THE CHAIRPERSON: Okay. Well, I'm sure my colleagues will follow that up with you.

4336   Mr. Waddell, as you quite rightly put it, this is an Order in Council asking us for recommendations; presumably recommendations to the government on what they should be doing rather than what we, the CRTC, too will do ourselves, i.e. recommendations to ourselves.

4337   So what in the light of your submission are we to recommend to government?

4338   MR. WADDELL: Mr. Chairman, our basic submission is that there are additional -- there are tools available to the CRTC to increase the advertising pie and therefore increase the revenues to the broadcasters and, in some cases certainly, loosen the restrictions and regulations on advertising that would help -- help the --

4339   THE CHAIRPERSON: Those our actions. What do we recommend to the Minister?

4340   MR. WADDELL: Yeah, I understand. I'm just giving you a little bit of lead-up to the recommendation.

4341   Basically, we would have you -- we would ask that you recommend to the government that new fees if you choose to provide the broadcaster with fee for carriage or value for signal, not be downloaded onto consumers; that those fees should be taken from the profits of the BDUs. I think we made that point very, very clear to you.

4342   And in terms of the actual -- the interests of the Order in Council, affordable access, we suggest that be done through re-regulating the cable and satellite rates and with respect to access to a variety of local and regional news, information and public affairs programming the LPIF, the Local Production Improvement Fund is available and, as we discussed a couple of weeks ago, if you choose to increase that fund by a point that would be a good thing.

4343   THE CHAIRPERSON: You keep pointing at me. I am asking you what I should ask the Minister.

4344   MR. WADDELL: Yeah.

4345   THE CHAIRPERSON: What is the net result of what you are suggesting? Our recommendation to the Minister is that the government do or not do the following what?

4346   MR. WADDELL: That the government -- the government support the Canadian broadcasting system by ensuring that broadcasters have sufficient revenues to be able to produce Canadian programming, high quality, distinctive Canadian programming that Canadians want to watch. Right now, they don't have that opportunity.

4347   And of course here I go, I am going to hold up my prop again, this is this week's schedule, Mr. Chairman.

4348   THE CHAIRPERSON: No, I got the answer I wanted. Thank you.

4349   Marc.

4350   MR. WADDELL: It is getting worse, Mr. Chairman.

4351   COMMISSIONER PATRONE: Thank you, Mr. Chair.

4352   I want to thank everyone for their presentations. There is going to be a certain amount of overlap with regards to some of the comments you have already made to the Chair. I am going to ask you to indulge on this, some of these issues are fairly involved, and so you will have to forgive me if I ask you to just go over some of the issues that you have already raised.

4353   Ms Lareau and Ms Wirsig, I am going to have to reiterate and agree with the Chair, that some of the comments were frankly a little unfair. And I want to highlight the suggestion in page 2 of your submission, that the CRTC is relegating 1.2 million people to the level of second-class citizen and abandoning consumers.

4354   Is that really what you think?

4355   MS LAREAU: Well, what would you think? If I could start -- and we said this two weeks ago -- the plan you proposed in July basically treats people in urban Canada one way, it gives them the option of over-the-air television free, and the others not that option at all.

4356   It is a two-pronged approach to the Canadian public. I don't know how you can see anything else in that.

4357   COMMISSIONER PATRONE: Well, are you prepared to accept the fact that this is one of the things that we are looking at in this proceeding and other proceedings and that this is very much a work in progress, are you prepared to accept that notion?

4358   MS LAREAU: Absolutely, and we want to be part of that work in progress. And frankly, we wanted to get your attention on this.

4359   COMMISSIONER PATRONE: Well, you did.

4360   MS LAREAU: So maybe we have.

4361   COMMISSIONER PATRONE: You got our attention.

--- Laughter

4362   COMMISSIONER PATRONE: Can you talk a little bit more about your views about the use of public funds, as they may be made available in the whole view of what may come down the pipe, as far as it applies to the digital transition?

4363   Also when I am talking about providing monies to be put towards digital converter boxes, Freesat equipment and that sort of thing, is that included in the figure that you gave, the $140 million to $227 million? Was that all part of that?

4364   MS WIRSIG: No, no coupon program is contemplated in that figure. Our view is we know the transition is not going to happen by 2011. Obviously, the broadcasters themselves have said can we even do the 29 cities on the list by 2013, as I understand it. So already the date is moved back for those. We are suggesting that the repeater communities could even come phasing in during and after that point, so it would be a few years of transition or a phasing in.

4365   And our assumption is, frankly, by that time people will probably be able to purchase new televisions or find fairly cheap converter boxes for their old TVs. And our sense is -- you know, what I read in the research that you commissioned on the transition in the United States is that the coupon program actually made the boxes more expensive in the U.S., so it may not even be the best way to go.

4366   If we are looking at a few years down the road --

4367   COMMISSIONER PATRONE: What is a good way to go in your opinion? Is there a way to go as far as helping individual consumers make that transition vis à vis the purchase of equipment?

4368   MS WIRSIG: You know, if a box cost $50, and that is probably not necessary, people, especially people who are contemplating switching from cable that is, you know, probably one month or less worth of cable that they would have to spend to buy the box. For those current low-income OTA viewers, there may need to be some kind of assistance. And I am just not clear what -- we haven't done enough study into this and we are not experts in this, so I can't help you there.

4369   Perhaps there could be someway of helping, in particular, low-income people get the box covered, we don't have any suggestions. But our money is really about making sure the service is universal, that would be the more important thing. And if you stop --

4370   COMMISSIONER PATRONE: Okay, do you want to talk about that? Do you want to talk about multiplexing?

4371   MS WIRSIG: Sure.

4372   COMMISSIONER PATRONE: A little bit more about your proposal regarding that?

4373   MS WIRSIG: Sure. So we will be putting this research back on the public record. We had been asked to do that at the last hearing. But we commissioned research from Brian Olson, who is an engineer in the broadcasting field, who looked into whether shared multiplexing would work in Canada. And so multiplexing is the use of the digital transmitter with an extra piece of equipment on it called a multiplexer, which allows for the splitting of the bandwidth and the frequency into various channels.

4374   It is currently used in the United States, but as far as we know generally as a same-broadcaster multiplexing. So ABC will provide three channels on its frequency using a single transmitter or PBS will offer a couple of channels. So they would be, you know, like 15.1 and then they would have 15.2, 15.3.

4375   What we are suggesting for smaller communities, and we have given Kamloops as a very concrete example at previous hearings, is a shared model whereby, for example, the local CFJC station there could upgrade to a digital transmitter. Brian Olson found, based on actual quotes sought from suppliers, that it would cost around $88,000 to upgrade the transmitter in Kamloops.

4376   So on an $88,000 investment, that would open up capacity for six channels go over-the-air from that single transmitter. Currently, in Kamloops there are three channels available over-the-air. So presumably, Pattison could go to the two other broadcasters and ask if they would like to share and maybe charge them some rent, which would help first of all with the cost.

4377   Second of all, they could invite broadcasters, and we say notably the CBC and Knowledge Network to also come into the community, they are not currently available over-the-air, people lament that fact, these are both channels they paid for through their taxes, one through the B.C. public broadcaster and the national public broadcaster. They might be able to come in.

4378   And, again, for a very small investment upfront, it would improve over-the-air service in a place like Kamloops. And, as we said, polling suggests that one-third of TV viewers would probably be interested in that kind of service in Kamloops.

4379   So we have improved the choice at a very economical rate. So that is multiplexing in a nutshell.

4380   COMMISSIONER PATRONE: Okay.

4381   MS WIRSIG: It is probably not that complicated in a place like Kamloops because there actually is a broadcaster. Where it gets complicated I thin is in all of those communities served by repeaters that were, frankly, a lot of those communities are served because of the accelerated coverage plan of the 1970s.

4382   And so when we are talking about a public program, I guess we are thinking about a 21st Century accelerated coverage plan that would actually be better in the sense that using shared multiplexing would provide more over-the-air choice in these communities and a better alternative to other options.

4383   COMMISSIONER PATRONE: I want to move a little deeper into your written submission. If I read it correctly, you say that you are concerned that any adoption of a value-for-signal regime might lead to a reduction of local TV, especially in smaller communities.

4384   And I take it that is all within the context of what you had referred to in the digital transition. Do you want to talk a little bit about that? Because that is fairly new to me, the suggestion that somehow a value-for-signal regime would actually have the inverse effect of reducing local TV.

4385   MS WIRSIG: Our thinking here, I mean, is that -- let's take CTV. Our assumption is that in a value-for-signal negotiation distant signals would also be on the table probably, right?

4386   And so it is not clear to us, and we stand to be corrected, it is not clear to us what would stop CTV from actually then entering into these private negotiations with the five or six big BDUs across the country, seven or eight, whatever they are, and negotiate, for example, its Toronto signal directly into Northern Ontario.

4387   They would get some kind of value for that signal. And, by then shutting down their Northern Ontario service, would save themselves the operating costs of that service. So it is not clear to us, especially if they are not required to be over-the-air anymore to get priority carriage on cable and satellite, which is what we understand to be the case.

4388   It is not clear to us why that wouldn't happen. It is cheaper for them and they still get the value for that Toronto signal and it still will likely get covered in Northern Ontario if they negotiate properly with the BDUs.

4389   So we just worry about where these private negotiations would be headed. That is why in the previous -- I am sorry, this was in our previous submission -- we suggested bringing back the idea of a broadcaster programming fund instead of value-for-signal.

4390   COMMISSIONER PATRONE: Okay, thank you. I appreciate that. I am going to move onto ACTRA.

4391   Mr. Waddell, you say you have not been paying what you call your BDU phony TV tax. You sent them a letter saying you weren't going to pay it. I am rather curious about the reactions you were getting from BDU.

4392   MR. WADDELL: Both Rogers and Bell, yes, because I have Rogers at home and Bell at the cottage, yes. The reaction, well, I get some automated response telling me that, you know, giving the blather about why they choose to pass it onto --

4393   COMMISSIONER PATRONE: I am just curious how long it takes for you end up in collections.

4394   MR. WADDELL: That is fine, I hope we will end up in court.

4395   COMMISSIONER PATRONE: You support a value-for-signal regime, but you say you don't want it passed onto consumers. Is it necessarily fair to BDUs to bear, in effect, the entire burden of providing this?

4396   MR. WADDELL: Yes, I certainly believe that is the case, Mr. Patrone, that the BDUs should be assuming the cost, these potentially regulatory requirements. They make billions of dollars in profit and therefore should make a contribution to the broadcasting system.

4397   COMMISSIONER PATRONE: Well they would argue, I am sure, that they already are making those types of contributions.

4398   MR. WADDELL: I am sure they would, but I am not here on their behalf.

4399   COMMISSIONER PATRONE: Nor am I.

4400   You are suggesting the regulator should step in and prevent those being passed on, as I said. But at the end of the day, as well as LPIF. So in other words, not only should this fee not be passed on, but other ones should as well?

4401   MR. WADDELL: Yes, in my view, that is correct.

4402   COMMISSIONER PATRONE: Do you think the Canadians are prepared really to move into the realm of regulating cable rates though, especially living in a world as we do where sort of deregulation seems to be this sort of ongoing move in many sectors right across the country? You are saying that we should -- are Canadians prepared for that sort of thing, do you think?

4403   MR. WADDELL: Well, I am a Canadian, I speak for a number of other Canadians who are members of ACTRA and others and, you know, I have listened to what consumers are saying in these hearings. They are not interested in having fees downloaded onto them. People are looking for more choice, that is a good thing.

4404   There are restrictions currently, as we put to the Commission, restrictions on advertising that should be potentially removed so that there would be more opportunity for more advertising. I think there are ways in which the Commission could move to regulation light on those aspects.

4405   But there are others that do require regulation, and the one in our view is that the primetime schedules of the broadcasters, the major broadcasters, are appalling, there is no Canadian programming in real primetime and they are just rebroadcasting American --

4406   COMMISSIONER PATRONE: Which leads me to my next question, which is one of the arguments that has been put forth by the BDUs again is that, you know, there is no justification. If you are simply going to provide the status quo to consumers, that if they are not going to get anymore, then how do you ask them to pay more?

4407   MR. WADDELL: I take that point. And the fact is that if the broadcasters are just rebroadcasting American signals, what is the point of having the Canadian broadcasters. They have got to put some money back into the system.

4408   They have got to create, as we have been saying, high quality, distinctive Canadian programming that Canadians want to watch. And, you know, it has got to be distinctive, it has to be different from American product for people to be attracted to it, right? You know, it has to be high quality, that is to say it takes money, Mr. Patrone, to produce these productions.

4409   COMMISSIONER PATRONE: Just a couple more things, Mr. Waddell.

4410   MR. WADDELL: Sure.

4411   COMMISSIONER PATRONE: You advocate growing the ad pie by, among other things, allowing commercials on VOD and local avails.

4412   There are still a lot of questions around not only whether those things will happen, but who will actually end up benefitting from those, whether the proceeds from those go to BDUs, go to... And yet, you still see a direct tie-in between revenues generated through say local avails in terms of being able to fund organizations like yours.

4413   Can you elaborate a little bit more how that would take place, how that would happen?

4414   MR. WADDELL: Well, to begin with, we are not funded by production, we are funded by the dues of our members --

4415   COMMISSIONER PATRONE: Fair enough.

4416   MR. WADDELL: -- who can't pay their dues unless they are working, right?

4417   COMMISSIONER PATRONE: I stand corrected.

4418   MR. WADDELL: So it is important that our members have an opportunity to work and which they are not getting an opportunity to work because there is not enough production right now.

4419   And again, back to our point, the BDUs have to make their contribution and they are not making it.

4420   COMMISSIONER PATRONE: You may have heard some of the discussions earlier that spoke about value-for-signal regime in tandem with CPE commitments. Does that give you a degree of comfort?

4421   MR. WADDELL: If it is in tandem with CPE requirements, absolutely, yes.

4422   COMMISSIONER PATRONE: Those are my questions, Mr. Chair. Thank you.

4423   THE CHAIRPERSON: Elizabeth.

4424   COMMISSIONER DUNCAN: I just have a couple of questions/comments.

4425   I noticed, Mr. Waddell, when I was reading your submission that, and I thought it was very clear, you were satisfied with the LPIF and felt that it was addressing adequately the local news aspect of things.

4426   And the only thing that I wanted to point out there, that that was on a three-year and then review basis, it wasn't a permanent solution. So I just make that observation, because the focus of your comments, of course, is on the drama.

4427   And I think that the rest of your -- do you think it is realistic? You are saying the BDUs can and should absorb the LPIF and any fee-for-carriage. But do you think it is realistic to think that the business cost won't in some way or another manage to get its way worked into the retail price?

4428   MR. WADDELL: Well, that may well be the case, Ms Duncan, that they may well attempt to increase their prices, which is why we say reregulate their rates.

4429   COMMISSIONER DUNCAN: And again, just getting back to the task at hand here. That is not really something that would go then as a recommendation to the government, that would be a CRTC decision I gather.

4430   MR. WADDELL: Yes, I understand, Ms Duncan, thank you.

4431   COMMISSIONER DUNCAN: Okay, that is fine.

4432   And I did want to ask though, Ms Wirsig, about the program that you did in Kamloops -- that is Kamloops or Kelowna that you did your --

4433   MS WIRSIG: Kamloops.

4434   COMMISSIONER DUNCAN: Kamloops. And you say that thirty-some per cent of the people were willing to accept a free package, which was really surprising to me because most people, more than that, a higher percentage of that, are subscribing either to a satellite or a BDU service.

4435   So I am just wondering in your model or when you made the proposal in the survey, what were the services that you included?

4436   MS WIRSIG: When we did the poll -- first of all, just one little interesting note there. When we said if you could get three stations over-the-air what would you do? And although only 6 per cent of people in Kamloops currently in our poll say they watch TV over-the-air, 20 per cent said they would watch those three stations over-the-air instead of paying for cable.

4437   So I think there may be an actual knowledge gap in Kamloops about what is actually available over-the-air. And this is what we have noticed in a lot of places. In fact, we talked to some presenters earlier today who had no idea they could get stuff over-the-air, in the digital world in particular. So I think there is a bit of a knowledge gap there.

4438   But what we suggested was if you could get CBC, Radio-Canada, Knowledge Network, Global BC, CTV, and the current CFJC, which is the current private station that is now affiliated with Rogers, if you could get those six would you be interested? And that is when 33 per cent said yes. And again, that would be a doubling of what is available now. And clearly, more than anyone knew would be -- something that people had never thought about I am guessing when they said yes.

4439   COMMISSIONER DUNCAN: Okay, that is interesting.

4440   MS LAREAU: If I could add one thing. Is that we also put that questionnaire, that whole poll and the results of that poll on the record in the previous hearing. So if you would like, we can resubmit that again.

4441   COMMISSIONER DUNCAN: No, that is not necessary.

4442   What I was wondering, because there wouldn't of course be -- I am from Halifax, I wouldn't think there would be six stations there. But at any rate, you were truly talking about over-the-air signals and that is what my interest was.

4443   So there would be costs, so they would be provided free in your sample. But there are costs, there are operating costs, somebody has to coordinate it. And your proposal, if I understand it, is that that would be CBC, and the government would fund that? This is the cost of the multiplex operation I am referring to.

4444   MS WIRSIG: Given that our members work in CBC transmission, we would be the happiest people in the world if CBC were to be offering this service. We haven't heard a lot of enthusiasm from CBC on this front. I think they are worried -- I don't want to speak for CBC, but I think there is a worry that, you know, they have a lot on their plate and they are not particularly well-funded as it is. So do add this responsibility without the promise of new money would just be crazy. And if there were new money, they would rather spend it on content.

4445   So it is not clear to us that CBC is the answer here. We thought maybe in the Kamloops case that Pattison Group, the owners of CFJC, might be interested. And they have been given the research and they are looking into it and, you know, perhaps they might in fact be interested, I don't know.

4446   The other groups that might be interested are the community stations. I think you are going to be looking at that next I would guess or sometime in the spring, you will be looking at community TV policy and I believe they will be coming forward also with a recommendation for funding to become over-the-air stations and to provide over-the-air service. And they are interested in the whole idea of multiplexing.

4447   COMMISSIONER DUNCAN: I guess that just gets, and the nub of my question, is for nothing is nothing. So I am wondering who is paying? So if your suggestion is CBC will do it and you are suggestion is recommend to the government that they pay for it. But your other option you said Pattison might do it. What would be the business case for Pattison doing it?

4448   MS WIRSIG: Pattison would have an over-the-air signal, be able to reach more viewers in Kamloops with that signal potentially. And the business case for them to be sharing is presumably to get rent on that transmitter. So they would actually help cover their own costs by charging the participating broadcasters a little bit of money to be present on that multiplex.

4449   COMMISSIONER DUNCAN: Okay, that helps me, that gives me a better understanding.

4450   Thank you very much, those are my questions.

4451   MS LAREAU: I might add one other thing. I mean, we have tossed out the idea to the CBC and others who are interested the idea that perhaps the repeaters in the country, if the government truly was interested in this proposal, in offering a stable, free system, you know, skinny OTA for lack of a better word, to the Canadian public, that they could buy the transmitters and operate them as a not-for-profit perhaps and have a not-for-profit coordinate the rental and, you know, the sharing of these transmitters from coast to coast to coast.

4452   That would be another way of doing it. There is probably several more ways that we haven't contemplated.

4453   COMMISSIONER DUNCAN: Thank you very much.

4454   THE CHAIRPERSON: Okay, thank you very much for your submission. Those were all our questions.

4455   We will just take a short break and then proceed, five-minute break.

--- Upon recessing at 1424

--- Upon recessing at 1430

4456   THE CHAIRPERSON: Mr. Denton, would you, please, take your seat.

4457   Madame la secrétaire, commençons.

4458   LA SECRÉTAIRE: Merci, monsieur le président.

4459   Pour le dossier public, le Conseil a contacté 46 citoyens qui ont demandé à comparaître à cette audience pour la province de Québec. L'un de ces citoyens, monsieur Serge Prévost, a confirmé sa présence aujourd'hui.

4460   Nous notons que d'autres intervenants pourraient participer via la consultation en ligne du CRTC qui se trouve sur le site web du Conseil. Cette consultation en ligne se terminera le 21 décembre.

4461   J'aimerais maintenant vous présenter monsieur Serge Prévost qui fera sa présentation via audioconférence.

4462   Bonjour, monsieur Prévost, et bienvenue à cette audience du CRTC.

4463   M. PRÉVOST: Bonjour.

4464   LA SECRÉTAIRE: Bonjour.

4465   M. PRÉVOST: Merci pour l'invitation.

4466   LA SECRÉTAIRE; Merci. Vous disposez de sept minutes pour faire votre présentation qui sera suivie par une période de questions de la part des conseillers. Vous pouvez y aller.

PRESENTATION

4467   M. PRÉVOST: Parfait. Merci beaucoup. Donc, je vous remercie de m'accueillir. Tout d'abord, ce que j'aimerais vous dire, c'est dans le fond que, c'est certain que j'ai regardé un petit peu qu'est-ce qui s'était passé aux nouvelles puis tout ça. Je trouve que l'idée de monsieur Péladeau est quand même intéressante au niveau de prendre des forfaits sur mesure pour chacune des personnes qui veulent écouter la télévision.

4468   Sauf que, moi, ce que j'ai fait, j'ai une formation de comptable, ça fait que j'ai regardé un petit peu des comparatifs, j'ai pris les forfaits que Bell... que Vidéotron offrait, je les ai comparés à la France. Pourquoi la France? Parce que, dans le fond, ils sont francophones comme nous. Ils ont un programme qui est semblable un petit peu à qu'est-ce qui pourrait être instauré ici.

4469   Donc, au niveau des coûts j'ai remarqué que les coûts de la France étaient beaucoup moindres au niveau des forfaits que ceux du Québec pour des forfaits qui, parfois, sont supérieurs à ceux du Québec.

4470   Puis, là, je me suis demandé pourquoi; peut-être parce que les Français ont plus d'argent, ils ont des salaires moyens plus élevés. Non. C'est environ le même... même que...

4471   LA SECRÉTAIRE: Monsieur Prévost?

4472   M. PRÉVOST: Oui.

4473   LA SECRÉTAIRE: Je suis désolée. Peut-être est-ce que vous êtes en train d'écouter sur internet présentement?

4474   M. PRÉVOST: Non. Malheureusement, je n'ai pas accès à internet parce que la tempête fait en sorte...

4475   LA SECRÉTAIRE: Non. C'est correct. C'est juste qu'on a un petit peu d'interférence et je me demandais si c'était le cas.

4476   M. PRÉVOST: Okay, il y a de l'interférence. Est-ce que je suis obligé de recommencer?

4477   LA SECRÉTAIRE: Non. Vous pouvez continuer.

4478   M. PRÉVOST: Okay. C'est ça. J'ai regardé un petit peu au niveau des salaires moyens. Les salaires moyens que j'ai trouvé sur le site d'Immigration Québec au niveau de la France en 2003 était de 17 793,00 $ et puis on trouve à peu près le même salaire, mais deux ans plus tard, en 2005 pour 17 740,00 $ au Québec.

4479   Donc, je pense que, un, les forfaits sont un petit peu trop élevés comparativement à ce qu'on peut retrouver ailleurs dans le monde et puis eux autres, grâce à leur principe de redevance, ils font en sorte de faire vivre cinq postes de télévision puis deux postes de radio.

4480   Mais les postes de radio, je sais qu'il y en a un c'est sûr, mais il y a un groupe de radios où est-ce qu'il y a plusieurs postes plus un institut. Donc, je me demandais si ça ne pourrait pas être en principe semblable à la France, mais aussi il faudrait diminuer les coûts des abonnements qui sont présentement offerts ici au Québec. Donc, ça fait le tour de ce que je voulais dire.

4481   Alors je vous remercie beaucoup.

4482   LA SECRÉTAIRE: Merci beaucoup.

4483   LE PRÉSIDENT: Merci beaucoup. Vous avez dit que vous êtes intéressé dans l'idée des forfaits que monsieur Péladeau a suggérés. Au moment, si je comprends bien, à Québec ce qu'il offre est une base et un forfait de 15, 20 ou 30 stations et vous pouvez choisir quelles sont les 15, 20 ou 30 que vous voulez.

4484   Voyez-vous une raison pourquoi on doit commencer avec 15 et pourquoi on ne pourrait pas commencer avec un forfait de 10 ou 5?

4485   M. PRÉVOST: Bien, la principale raison que j'ai trouvée là-dessus pourquoi il y a un forfait de 30, c'est que, bon, d'une part, ils sont obligés de donner certaines chaînes de base comme Radio-Canada, Téléquébec, TVA, Canal V.

4486   Dans ce que monsieur Péladeau parlait, moi, je pense que ça serait plus approprié que la personne choisisse les chaînes qu'elle veut, comme ça elle va pouvoir écouter les postes qu'elle veut parce que, moi, je vais vous dire bien franchement dans le forfait de base qui est le 30 canaux, je suis francophone, je comprends assez bien l'anglais, mais j'écoute souvent des émissions en anglais, mais pas tous les postes, même chose pour les postes francophones, il y a des postes que je ne regarde même pas, un, ce n'est pas dans mes priorités puis, deux, ça ne vient pas me chercher, ce n'est pas mon créneau à moi.

4487   LE PRÉSIDENT: Okay.

4488   M. PRÉVOST: Mais je pense que peut-être que les forfaits de base devraient être diminués puis il devrait peut-être y avoir d'autres... des forfaits à la carte qui devraient être ajoutés. C'est pour ça. Oui, en gros, c'est pas mal ça.

4489   LE PRÉSIDENT: Okay. Merci. Louise, tu as des questions?

4490   CONSEILLÈRE POIRIER: Oui. Bonjour, monsieur Prévost. Je suis Louise Poirier, je vais vous poser quelques questions.

4491   M. PRÉVOST: Oui.

4492   CONSEILLÈRE POIRIER: Monsieur Prévost, vous nous appelez d'où en l'occurrence?

4493   M. PRÉVOST: De Québec.

4494   CONSEILLÈRE POIRIER: De Québec. Bon, j'espère que la tempête ne fait pas trop rage là-bas, c'est peut-être ça qui cause les interférences.

4495   M. PRÉVOST: Oui, sûrement.

4496   CONSEILLÈRE POIRIER: Vous êtes notre seul spécimen québécois, donc le poids du Québec repose sur vos épaules.

4497   M. PRÉVOST: Okay.

4498   CONSEILLÈRE POIRIER: J'ai donc plusieurs questions à vous poser pour compléter la courte présentation que vous avez faite et tant mieux si vous pouvez y répondre assez rapidement parce que j'en ai plusieurs.

4499   Qu'est-ce que vous regardez, vous, comme TV?

4500   M. PRÉVOST: Bien, moi, je regarde... comme poste ou...

4501   CONSEILLÈRE POIRIER: Oui. Donnez-moi des listes de canaux?

4502   M. PRÉVOST: Bien, moi, je regarde... les plus fréquents, là, je regarde TVA, je regarde Canal V, RDS, bon c'est ma génération le sport. Je regarde aussi le Canal Victoria, Z-Télé puis SériePlus. C'est pas mal les principaux que je regarde, là. Les autres, je vais vous dire bien franchement, je fais juste passer par-dessus

4503   CONSEILLÈRE POIRIER: Donc, vous êtes un abonné de Vidéotron?

4504   M. PRÉVOST: Oui.

4505   CONSEILLÈRE POIRIER: Et vous avez non seulement le bouquet de base, mais vous avez aussi un autre forfait. Pouvez-vous m'identifier le forfait que vous ave?

4506   M. PRÉVOST: Bien, moi, c'est parce que j'ai pris le forfait trio que Vidéotron offrait. Ça comprenait internet, la télévision puis le téléphone. C'était ce qui était le moins cher que je pouvais avoir les trois. Le forfait, c'est lui qui vient avec. Moi, je n'ai pas pris... je n'ai pas rajouté de canaux, rien.

4507   CONSEILLÈRE POIRIER: Télémax. Ah! aucun autre. Vous avez pris quand même des chaînes spécialisée?

4508   M. PRÉVOST: Elles venaient avec, c'était dans le package, là, je n'ai pas touché à rien. C'était le de base avec le forfait que j'avais, j'ai pris le moins cher.

4509   CONSEILLÈRE POIRIER: À Québec, où prenez-vous vos nouvelles locale?

4510   M. PRÉVOST: À TVA.

4511   CONSEILLÈRE POIRIER: À TVA. C'est la télévision. Il n'y a pas d'autre source d'information?

4512   M. PRÉVOST: La radio dans l'auto, là, mais c'est à peu près ça.

4513   CONSEILLÈRE POIRIER: Donc, radio et tél?

4514   M. PRÉVOST: Oui.

4515   CONSEILLÈRE POIRIER: L'interne?

4516   M. PRÉVOST: Bien rare, c'est rare, très rare, non, vraiment pas.

4517   CONSEILLÈRE POIRIER: Puis, pourtant, vous êtes de la nouvelle génération?

4518   M. PRÉVOST: Oui. C'est juste parce que je n'ai pas le temps. Je n'ai pas le temps de naviguer sur internet, avec une famille puis le travail puis le... je n'ai vraiment pas le temps de m'occuper des nouvelles.

4519   Je navigue sur d'autres choses vraiment ce qui m'intéresse le plus, là.

4520   CONSEILLÈRE POIRIER: Oui. Mais étant chef de famille, vos besoins d'information locale, ça se résume à quoi? Qu'est-ce que vous voulez savoir qui se passe dans votre quartier et pour votre famille?

4521   M. PRÉVOST: Bien, c'est sûr, les nouvelles, là, vraiment comme la Ville de Québec, qu'est-ce qui se passe au niveau des services de Police, des Incendies, qu'est-ce que monsieur le Maire veut faire comme projet, et caetera, vraiment les nouvelles qui touchent ma région à moi, là, mais les autres régions, c'est sûr que je vais regarder Montréal ou le Québec en général, là, mais c'est vraiment plus ce qui touche ma région.

4522   CONSEILLÈRE POIRIER: C'est vrai que votre maire, ça vaut la peine de le suivre?

4523   M. PRÉVOST: Oui, effectivement. Il est assez coloré.

4524   CONSEILLÈRE POIRIER: Il y a beaucoup de nouvelles de ce côté-là. Donc, l'information locale, ça reste important pour vous?

4525   M. PRÉVOST: Oui.

4526   CONSEILLÈRE POIRIER: Alors, est-ce que vous pensez que cette télé-là n'étant pas vraiment rentable... en tout cas, c'est ce que nous disent les radiodiffuseurs, pensez-vous que ça vaut la peine de trouver des façons de la supporter, parce que vous en êtes un consommateur?

4527   M. PRÉVOST: Bien, la supporter... moi, je pense que l'argent n'est pas dans les poches des consommateurs. Moi, il y a une de mes collègues de travail justement ce matin qui m'a dit qu'il y avait un article dans le journal qui vient de sortir que les câblodistributeurs faisaient des profits assez faramineux. Donc, je pense qu'en quelque part, il y a un problème au niveau de la redistribution de l'argent que le câblodistributeur facture au client puis, je veux dire, il facture... comme moi, ça m'en coûte 126,00 $ par mois pour le forfait que j'ai puis je pense qu'il n'y en a pas une grosse partie qui s'en va en redevance.

4528   Je pense que là-dessus, comme j'ai dit tantôt, il y a des forfaits en France qui sont beaucoup moins chers que ça et on parle d'une cinquantaine de dollars pour à peu près la même affaire.

4529   CONSEILLÈRE POIRIER: Il a dû y avoir un coup de vent parce qu'on vous a perdu un peu, mais vous êtes toujours là en tout cas.

4530   Est-ce que vous seriez prêt à payer jusqu'à un ou deux dollars de plus pour conserver votre télé local?

4531   M. PRÉVOST: Moi, je vous dis un ou deux dollars de plus, pas vraiment. Je pense que l'argent est vraiment déjà en place. Je pense qu'il faut juste redistribuer ce qui est en place.

4532   CONSEILLÈRE POIRIER: Mais ça vaut la peine de sauver la télé local?

4533   M. PRÉVOST: Je pense qu'il faut la sauver, mais au détriment d'aller re-facturer encore plus d'argent au consommateur, je ne penserais pas.

4534   CONSEILLÈRE POIRIER: Est-ce que la télé communautaire vous la regarde?

4535   M. PRÉVOST: Bien, oui, c'est vrai, j'écoute le Canal VOX où c'est un petit peu de la télé communautaire. Oui, il y a des émissions une fois de temps, je l'écoute, là, mais...

4536   CONSEILLÈRE POIRIER: Et est-ce que c'est elle qui pourrait répondre à vos besoins d'information local?

4537   M. PRÉVOST: Sûrement, mais il n'y a pas vraiment de nouvelles. C'est plus des émissions qui sont plus locales, mais il n'y a pas de nouvelle au sens d'un bulletin de nouvelles.

4538   CONSEILLÈRE POIRIER: O.k. Si on avait la télé à la carte, je suppose... parce que vous semblez bien informé, que vous êtes au courant que ça pourrait mettre en péril certaines télévisions spécialisées puis peut-être celles que vous aimez justement.

4539   Alors, si cela entraînait la disparition de chaînes spécialisées comme celles que vous aimez, vous ne trouvez pas qu'il y a un risque de prendre le modèle de monsieur Péladeau que vous préconisez, qui dit: bien, rééquilibrons les revenus, prenons un peu dans la poche de tout le monde pour que ça ne coûte rien, mais ça pourrait vouloir dire que certaines chaînes spécialisées seraient en péril.

4540   Alors, il n'y a pas un danger de perdre certaines chaînes que, vous, vous aimez, mais qui ne seraient peut-être pas assez populaires pour qu'elles survivent?

4541   M. PRÉVOST: Peut-être effectivement. Ça, je n'y avais pas pensé. Je vais vous dire bien franchement, je n'y ai pas pensé. Mais il y a un autre point aussi qui a joué là-dedans, c'est que ça se peut aussi que... je veux dire internet est présent puis, ça, on retrouve toutes sortes d'affaires sur internet, c'est certain qu'avec un forfait à la carte, il y a du monde qui vont prendre certains postes, ceux-là qu'ils écoutent le plus.

4542   Puis pour ce qui est des émissions qu'ils écoutaient à d'autres postes ou qu'ils ont juste un poste pour écouter une émission, bien ils vont aller la chercher sur internet puis ils vont l'écouter sur internet, là.

4543   Moi, je pense que ça va... ça peut faire en sorte justement qu'il y a certains postes spécialisés qui vont disparaître ou peut-être aussi qu'il y a d'autres postes généralistes qui peuvent peut-être disparaître, là.

4544   CONSEILLÈRE POIRIER: Oui. Et il y aurait peut-être un prix plus cher pour les avoir aussi et, à ce moment-là, seriez-vous prêt à payer plus cher, ce qui voudrait dire que votre forfait finirait par vous coûter possiblement la même chose, même en vous offrant un forfait à la carte?

4545   M. PRÉVOST: Bien, c'est sûr que pour moi, même si j'ai un forfait à la carte et ça me coûte le même prix qu'il y a actuellement, je serais plus encouragé à prendre ça que de garder le service actuel et payer encore plus, vous comprenez.

4546   CONSEILLÈRE POIRIER: Oui.

4547   M. PRÉVOST: C'est... où est-ce que je veux en venir, c'est que dans le fond, je pense qu'on paie déjà assez pour, qu'il ne faudrait pas encore augmenter pour encore garder le même service, mais s'il y a un remaniement des services, c'est peut-être une solution qui peut être envisagée.

4548   Mais avant, je pense qu'il faut regarder qu'est-ce qui se fait dans d'autres pays, faire des comparatifs au niveau des prix aussi puis peut-être faire un ajustement de prix.

4549   CONSEILLÈRE POIRIER: Il me reste quelques questions, monsieur Prévost.

4550   Est-ce que vous avez regardé votre facture de Vidéotron récemment et est-ce qu'elle vous donne suffisamment de détail, d'information, surtout que vous avez pris une sorte de bouquet de bundle plusieurs service?

4551   M. PRÉVOST: Bien, moi, je pense que oui. Je trouve que ma facture est correcte, là. Je veux dire, on me facture un certain montant pour la télévision, un certain montant pour l'internet et le téléphone. Mes appels sont détaillés, j'ai ma bande passante pour l'internet qui est détaillée quasiment à tous les jours. La facturation, moi, ça me convient comme tel.

4552   CONSEILLÈRE POIRIER: Parfait. Et ma dernière question: vous savez que le milieu de l'industrie a toujours préconisé la déréglementation, le libre marché pour que, bon, il y ait plus de compétition puis, semble-t-il, la compétition peut aider le consommateur.

4553   De l'autre côté, on entend beaucoup les consommateurs nous dire l'opposé; c'est-à-dire qu'eux veulent plus de réglementation parce qu'ils sentent le besoin d'être protégés, surtout dans cette période-ci où il y a une guerre un peu entre les deux.

4554   Trouvez-vous d'une façon générale que le consommateur est suffisamment protégé?

4555   M. PRÉVOST: Moi, je vous dirais que non parce que, regardez, il y a Vidéotron, il y a Bell, il y a peut-être StarChoice, bon, okay, trois... StarChoice c'est plus juste pour la télévision, là, mais ça en fait trois puis les prix sont quand même assez comparables. Peut-être Vidéotron qui est un petit peu en bas à cause de ses forfaits trio, là, mais ce n'est rien d'extravagant.

4556   Moi, je pense que, justement, peut-être que ça devrait être plus réglementé vu qu'on a quasiment un oligopole, c'est quasiment un monopole, là, je veux dire.

4557   Donc, je pense qu'il devrait y avoir plus de réglementation puis peut-être que les tarifs devraient être réglementés davantage.

4558   CONSEILLÈRE POIRIER: Et, donc, plus de réglementation pour protéger le consommateur, au détriment de l'industrie qui veut autre chose, elle?

4559   M. PRÉVOST: Oui. Moi, je pense que oui, parce que, de toute façon, on peut regarder selon l'article que j'ai parlé tantôt qui est sorti, que les câblodistributeurs font quand même assez d'argent, là.

4560   CONSEILLÈRE POIRIER: Alors, j'ai entendu un signal de monsieur président qui me dit de passer la carte tout de suite à monsieur Tim Denton?

4561   M. PRÉVOST: Merci.

4562   LE PRÉSIDENT: Tim?

4563   COMMISSIONER DENTON: Je n'ai pas de questions, monsieur.

4564   LE PRÉSIDENT: Alors, merci pour votre participation et j'espère que la tempête n'arrive pas à Quebec City où vous êtes?

4565   M. PRÉVOST: Elle est déjà là, monsieur.

4566   LE PRÉSIDENT: Ah! Elle est déjà l?

4567   M. PRÉVOST: Oui.

4568   LE PRÉSIDENT: Tant pis. Merci. Madame Roy, est-ce que vous pouvez continuer avec la prochaine présentation.

4569   THE SECRETARY: Yes, thank you. I would ask Shaw Communications to come to the presentation table.

--- Pause

4570   THE CHAIRPERSON: I see some familiar faces. Madame Roy.

4571   THE SECRETARY: Thank you. Before you start, I would like to announce that as a follow-up to the Chairman's interchange with Canwest, I wish to make the following announcement.

4572   Parties that have appeared at this hearing may table written comments by next Friday, December 18, on the specific recommendation the CRTC should make in relation to the two issues set out in the Order in Council, as attached to Notice of Consultation 2009-614.

4573   Comments should be no longer than five pages. These comments are in addition to any request for information made at the hearing by commissioners.

4574   Parties that did not appear before us can avail themselves of our online consultation to file their comments. This consultation closes on December 21st.

4575   Pour faire suite à la discussion entre le président et Canwest, j'aimerais faire l'annonce suivante.

4576   Les parties qui ont comparu peuvent déposer des commentaires écrits d'ici vendredi le 18 décembre sur les recommandations spécifiques que le CRTC devrait faire concernant les deux matières identifiées dans l'Ordonnance en Conseil joint à l'Avis de consultation 2009-614.

4577   Les commentaires ne doivent pas dépasser cinq pages. Ces commentaires sont en plus de toute demande d'information faite à l'audience par les conseillers.

4578   Les parties qui n'ont pas comparu devant le Conseil peuvent utiliser la consultation en ligne pour soumettre leurs commentaires. Cette consultation se termine le 21 décembre.

4579   You may now proceed with your presentation. You have ten minutes.

PRESENTATION

4580   MR. STEIN: Good afternoon, Mr. Chairman and commissioners. I am Ken Stein. Our panel is led by Peter Bissonnette, President of Shaw Communications Inc. and to his right, Michael D'Avella and to my left, Rhonda Bashnick and Jean Brazeau. And then, in the table behind we have Michael Ferras, Cynthia Rathwell, Dean Shaikh and Gregg Kayne.

4581   Today, we are pleased to assist the Commission as it prepares its Report to the government in response to the Order in Council as outlined in the Commission's Notice.

4582   The government has directed the Commission to hold this hearing and to provide recommendations that consider the implications and the advisability of implementing a compensation regime. These orders are rarely used and are therefore exceptional. Clearly, the government is expressing its desire to move the debate forward and to take responsibility for the needs of consumers and the future structure of the industry.

4583   Many companies are innovating to serve customers in the digital world. Google, Apple, Sony, Microsoft, Researching motion. We do not want our broadcasting system to be left behind. We strongly support increased regulatory flexibility for broadcasters within the context of group licensing. This will provide them with the ability to develop innovative new business models.

4584   We agree with the government that with any proposed changes to the regulatory framework the most important considerations are the impacts on consumers and the impact on the industry's ability to turn to transition to a digital environment.

4585   Just as consumers are the cornerstone of the broadcasting system, they are also the cornerstone of this transition. Last October in regulatory frameworks for broadcasting distribution undertakings and discretionary programming services the Commission introduced a modernised and balanced approach that embraced customer choice, competition, investment and innovation. This decision will help facilitate the digital transition.

4586   The government is clearly encouraging the Commission to remain focused on the future. However, we are concerned that many of the proposals made in these hearings would reverse the progress of the last decade and lock the broadcasting system into the past.

4587   Regrettably, much of the discussion during these hearings has been about finding ways to impose more costs on Canadians, to remove value from their television offerings and to limit rather than increase their viewing options.

4588   For this reason, we would like to refocus the discussion by responding directly to the Order in Council with positive recommendations to serve consumers and to maintain the strength of the system into the digital future.

4589   Peter.

4590   MR. BISSONNETTE: The two questions in the Order in Council are closely related. A compensation for value regime will harm consumers and will undermine the system's ongoing success in the digital environment.

4591   We would like to make the following positive recommendations to support the strength and relevance of the broadcasting system in the digital world.

4592   The first recommendation would be to increase customer choice. Shaw has consistently advocated a regulatory framework that provides consumers with increased choice. We want to respond to their request to choose more services on an A la carte basis.

4593   The restrictions on offering pick-and-pay services are largely a function of historical regulations that were based on a concern that specialty services would not survive if offered on a stand-alone basis.

4594   Pick-and-pay should be governed by market demand and competition. Contrary to statements that there is no competition among cable companies, there is significant competition between terrestrial and satellite providers as well, every distributer competes with new technologies, the black market and over-the-air alternatives.

4595   Similarly, the composition of the basic service must be determined by market demand. Last year, the Commission rejected the small or skinny basic or what we call the "less for more proposal" because it would be contrary to its approach of relying on market forces wherever possible.

4596   Competition was considered to be sufficient to ensure affordable rates and there was insufficient evidence to suggest any consumer interest. As noted by several commissioners, there is absolutely no reason to reverse this decision.

4597   The small basic proposal is simply a device created by CBC and others to disguise the negative impact of a value for signal.

4598   Our second recommendation would be to require broadcasters to complete the digital transition on time and without subsidies. We strongly support the Commission's efforts to move to a totally digital broadcasting environment by 2011 in order to ensure a maximum choice for consumers.

4599   Shaw and Shaw directive offered to make available low cost alternatives to over-the-air reception where broadcasters decide that there is no business case to support the build-out of their digital facilities. The potential cost savings of a hybrid approach coupled with the business opportunities created by new platforms obviate any need for a consumer subsidy of broadcasters digital transition.

4600   The third recommendation would be to embrace the new digital revenue opportunities. The Commission took positive and forward looking steps in the October 2008 BDU framework decision to respond to consumer expectations for choice in the digital era. There are opportunities to explore new business models to increase revenue by developing broadband video, video on demand advertising and commercializing local avails in U.S. specialty services.

4601   The best way to meet consumer needs and expectations and to ensure the health of the system is to rely to the greatest extent possible on market forces, evolve business models, innovate and make the best use of available resources.

4602   Our fourth recommendation would be to address satellite capacity limitations. During our last appearance Commission Molner asked us to provide solutions to the capacity limitations of satellite companies. We are hopeful that a change to the extended K.U. policy for which the Chairman has expressed his support will allow us to invest in the capacity to offer additional local stations.

4603   However, a complete overhaul of network design and capabilities to accommodate carriage of all local stations or local and to local is not feasible.

4604   Furthermore, such an overhaul would not be consistent with the need to meet customer demand for choice and direct to home ability to remain competitive nor is it necessary to protect signal integrity.

4605   The clear answer to the capacity limitations is to allow the use of many channels as a means of enhancing the accessibility of local programming.

4606   Our fifth recommendation would be to review the ALPIF. Before its implementation, the local programming and proven fund evolved from a mechanism to increase local programming into another fee for nothing new. After one year, the ALPIF should be rigorously reviewed and assessed to determine whether it is serving its intended purpose and it should be discontinued if it's not.

4607   If the ALPIF is maintained, the deficit return to one per cent which should be consistent with the principle of affordable access.

4608   And finally, our sixth recommendation would be to further modernize the regulatory frameworks. Recently, the competition policy review panel observed that the commercial reality of cultural businesses is changing. Canada will not remain internationally competitive in the internet age if we continue to maintain a close regulatory system.

4609   Consistent with the recommendations of the panel, we suggest that cultural policies require urgent and systematic review in light of new technologies. This means greater alliance and market forces and no new taxes, including no value for signal tax and no levy on ISP revenues.

4610   The Commission has proposed an overall licensing approach that is flexible and that recognizes that broadcasters own the majority of profitable pay and specialty services. The entire regulatory framework should adapt based on the market reality that the broadcasting industry has become part of the modern highly converged and integrated communications environment.

4611   MR. D'AVELLA: The other question in the Order in Council asked the Commission to consider the implications and the advisability of implementing a compensation regime for the value of local television signals, taking into account the impact on consumers and in particular, its impact on affordable access to local programming.

4612   We have already answered this question in our numerous submissions over the last year and during our appearance of the November hearing. A signal compensation regime must be rejected for the following reasons:

4613   First, consumers will be harmed. Any fee means that consumers will pay more and receive nothing in return. Canadians are telling the Commission that this is unacceptable.

4614   Second, there is no uncompensated value in the signal. Through capital expenditures, distributers contribute more than as required under the Act. Broadcasters earn billions of dollars in advertising revenues because they rely on free, mandatory and priority distribution of their local and regional television stations, which provides them with exceptional signal quality and greatly expanded reach to over 90 per cent of their viewers.

4615   Finally, the proposals from CTV, CanWest and CBC are clearly demands for fee for carriage. Any framework for negotiation that includes preconditions such as mandatory carriage, binding arbitration and the threat of punishing consumers with the removal of U.S. network programming is not in the best interests of consumers.

4616   Customers will bear this cost in the form of higher prices or reduced choices. There are better options.

4617   The Commission's report to the government should include a recommendation to embrace and recognize the contribution of community television. Community channels will ensure affordable access to 100 percent local and 100 percent Canadian news, information, public affairs programming in large and small markets across Canada.

4618   MR. BRAZEAU: Mr. Chairman, the evidence on the record is clear. Creating a new compensation regime will alienate consumers and harm the system. The broadcasters have been given four opportunities before the Commission to demonstrate that consumers will benefit from or, at least, not be harmed by a compensation regime. Despite the repeated requests of the Chairman, they have failed each time.

4619   Broadcasters will only commit to meeting the bare minimum of their regulatory obligations and only if these obligations are financed by a tax on Canadian.

4620   With increased regulatory flexibility, broadcasters can and should be responsible for their own business model and their own obligations under the Act. A recommendation against value for signal is consistent with the evidence commissioned by the CRTC itself, the substantial evidence of harms submitted by the industry participants, the total failure of broadcasters to justify the demands and the overwhelming opposition of Canadians.

4621   In the report to the government the Commission should put this matter to rest once and for all.

4622   Finally, the requirement of the Order in Council to consult on this matter and make recommendations precludes the Commission from arriving at a final decision on the implementation of any single compensation regime until the government has responded to the Commission's report.

4623   Overall, Mr. Chairman, we urge the Commission to use this and the related previous proceedings to embrace positive recommendations, to respond to the needs of consumers and to support the strength and relevance of the broadcasting system in the digital world.

4624   Thank you. And we are pleased to answer your questions.

4625   THE CHAIRPERSON: Your first recommendation on page 4, what does it amount to? I'm sorry. Reading it through I don't -- what are you recommending there?

4626   MR. STEIN: Number two, are you saying?

4627   THE CHAIRPERSON: One.

4628   MR. STEIN: Number one.

4629   Well, number one, our recommendation is that there should -- the basic should remain as it is and there should be a move to a pick 'n' pay environment as you have described in the October 2008 framework.

4630   THE CHAIRPERSON: No skinny basic, basically, is what you are suggesting?

4631   MR. BISSONNETTE: No, we don't think that, as we have mentioned before, that the skinny basic -- in fact we see the skinny basic or the pay more for less is not in the best interests of our consumers and that would result in them having to pay more for less.

4632   THE CHAIRPERSON: Okay.

4633   MR. BISSONNETTE: We are --

4634   THE CHAIRPERSON: No, I understand the point. It's just it didn't come out.

4635   MR. BISSONNETTE: Okay.

4636   THE CHAIRPERSON: And number two, you say Shaw in short have offered to make available low cost alternatives to over-the-air reception.

4637   I understood that Shaw Direct has withdrawn the whole issue of a Freesat. I'm not aware of any offer by you to make available low cost alternatives to over-the-air television.

4638   MR. STEIN: Yes, we -- the last time we appeared before you, Mr. Chairman, we indicated that both on the cable distribution as well as in the satellite distribution that we are prepared to make that offer and then --

4639   THE CHAIRPERSON: Have you since filed something with us? I'm sorry. At the hearing I remember you said that but there was nothing concrete.

4640   Have you or you intend to file something to that effect?

4641   MR. D'AVELLA: At any rate, I mean, there were obviously some conditions attached to it and one of them was the availability of extended KU band capacity, which we don't know the answer to yet.

4642   But we are prepared to do it and we will file whatever we need to file.

4643   THE CHAIRPERSON: Just in a snapshot, assume there is a KU what would this mean?

4644   MR. D'AVELLA: Well, what it would mean is that we would provide anywhere from -- you know, we currently carry about 78 local signals now. We would probably put up another 30 or 40 depending on capacity and --

4645   THE CHAIRPERSON: At what cost to the consumer?

4646   MR. D'AVELLA: It would be similar to the Bell model. Somebody would have to pay for the satellite dish and the installation and there would have to be some recovery of the cost, the operating cost of the transponder.

4647   THE CHAIRPERSON: Okay.

4648   And on page 8, last paragraph:

"...requirement of the Order in Council to consult on this matter and make recommendations precludes the Commission from arriving at a final decision on the implementation of the signal compensation regime until the government has responded to the Commission's report."

4649   THE CHAIRPERSON: I do not see anything in the Order in Council that says anything to that point. They ask us for a report. They ask us for recommendations.

4650   There was not a wisp of -- to what -- regarding our decision. As you know, we are an independent tribunal. We make decisions on the evidence filed before us. If the government wants to give us direction it's their right. They can do it, et cetera, but there is a methodology for that.

4651   There is nothing that I see in this Order in Council that says, "Don't do anything until the government has made a decision". Where do you get this from?

4652   MR. STEIN: Well, our first comment -- and I think Jean and Mr. Kane may wish to comment on this as well.

4653   But I think the comment that we would make in that regard is that the Order in Council does say the advisability. And it would seem to me that if the government is asking as to the advisability of implementing it, then that would mean that they would have some role in terms of making a decision about that advisability. Otherwise, the report doesn't really mean very much.

4654   I mean this right in the Order is that they want to know, what is the advisability of implementing it? So it's on that basis.

4655   THE CHAIRPERSON: Well, the government can ask a question. They are perfectly entitled to it, and I will gladly answer it.

4656   But I don't follow the next steps that just because they ask us for giving it that may then lead them to take whatever action they think is appropriate. But I don't know where you make the connection that by them asking for a report means automatically that we cannot proceed with our own decision.

4657   MR. STEIN: Well, that would be our view. Our view would be -- I mean you are quite right. You are an independent Commission. You can take what steps you wish to take.

4658   But our view would be that given that the government asked with respect to the advisability of it that that's what they would be receiving from you as a report on that advisability as to whether to implement it or not. That's simply our view.

4659   And as you also note, because we said it at the last hearing, we do think there are copyright implications in this which we think would be proper for the government to consider because it may involve necessity of legislation.

4660   THE CHAIRPERSON: So this is an interpretation of yours. This is not --

4661   MR. STEIN: Yeah, that's our interpretation.

4662   THE CHAIRPERSON: Okay.

4663   MR. KANE: Mr. Chairman, maybe I could add --

4664   THE CHAIRPERSON: Obviously I don't share that interpretation, but I think you know that from my --

4665   MR. STEIN: Obviously we are not surprised.

--- Laughter

4666   THE CHAIRPERSON: Mr. Kane.

4667   MR. KANE: Mr. Chairman, what I hear you saying, sir, is that you are going to continue to make decisions on matters that are within your jurisdiction.

4668   And our position is that if you read section 15 you are asked to make a report and recommendations on matters that are within your jurisdiction.

4669   First of all, section 15 is an extraordinary power relative to an independent regulatory agency. Clearly, it's on a matter within your jurisdiction. But our point is that once the Order in Council has been issued that effectively stops the Commission from making a determination on a matter within its jurisdiction that has been identified in the Order in Council.

4670   And in our view, that is reinforced by the timing because if you look at the way in which the Commission has proceeded, the amended consultation 411-3 was issued on August the 11th and that's when you made the determination or you said that you would make a decision whether or not a negotiated solution for the compensation for the fair value of local conventional television signals is appropriate.

4671   Then on September the 16th the Governor in Council issued an Order in Council specifically addressing that particular issue and, as Mr. Stein has indicated, asked you to hold hearings on the implications first of all; but more than that, and the advisability of implementing a compensation regime for the value of the local television signal regime, precisely the issue that you identified in 411-3.

4672   And in our submission, section 15 then requires you to make that report, to make your recommendations and then to wait for the Governor in Council to respond to it before you make any decision on that issue.

4673   THE CHAIRPERSON: I hear what you are saying. I don't accept it. I think these are two separate -- we can make the decision when and where we see please, and we shall do that. I am not making any ruling as to when we will do that. We will deal with that one in the full time when we are considering it and we will make the report to the government as soon as possible.

4674   That's it. Those are two separate issues. The mere fact that they are issued one after the other does not lead me to the conclusion that you are reading.

4675   You may be right. I may be right. We shall see. I am going by what the law says. The law makes it quite clear. They ask for a report and I will make them up a report.

4676   The law also makes it quite clear that we are competent to hold the hearing that we had in November and issue a decision thereon. We will see what happens, and et cetera.

4677   But I do not accept at all that by the fact that we are being asked to report I have to draw the implications that you are drawing.

4678   MR. KANE: And just for the record, Mr. Chairman, we respectfully disagree.

4679   THE CHAIRPERSON: Well, I know. I know. And hopefully neither of us will ever have to litigate this issue but it will be resolved in some other way.

4680   But I mean it is -- the thing that makes me quite comfortable in our position is there are specific provisions in the Act by which the government can give us direction in no uncertain terms what we have to do and we will have to do it. And they have not been used in this instance.

4681   But, anyway, let's not discuss this. This is for a court for another time, another day, or not at all as the case may be.

4682   Len, you have some questions?

4683   COMMISSIONER KATZ: Thank you, Mr. Chairman, and good afternoon.

4684   I'm going to try and clean up one issue on the table that you talked to the Chairman about and that is the issue of satellite capacity. And on page 5 of your submission this afternoon you mention the term, "the use of omnibus channels as a means of enhancing the accessibility of local programming". And I'm assuming that is in the absence of the decision on extended KU band but a solution that can be readily at hand.

4685   Can you expand upon it, please?

4686   MR. BISSONNETTE: Yes, so omnibus could work in both environments. If we get extended KU transponders, as Michael has indicated, we would be adding more local television stations to our complement on Shaw Direct.

4687   But, as well, to provide even more coverage that we could use omnibus channels which essentially -- wafer the distinct programming that is available -- would be available on Shaw Direct onto one channel so that, for instance, local news seems to be, if you look at all of the CBCs that we previously carry, the actual local content of the distinct programming is local news, that those could be actually carried in some fashion on an omnibus channel.

4688   COMMISSIONER KATZ: So would you actually be injecting the local news into a national CBC feed, for example?

4689   MR. BISSONNETTE: Yeah, so we would take what currently might take eight channels to distribute, could be actually carried on one channel.

4690   COMMISSIONER KATZ: Could you do that tomorrow?

4691   MR. BISSONNETTE: We have actually asked to do that and previously we were doing it at one time. And we were asked not to do it, so we complied. But, yeah, we could do it tomorrow.

4692   COMMISSIONER KATZ: Okay. I'm not familiar with the situation.

4693   MR. BISSONNETTE: Yes.

4694   COMMISSIONER KATZ: So if it's internal to the CRTC I will find out about it.

--- Laughter

4695   MR. BISSONNETTE: Yeah, great. Thank you.

4696   COMMISSIONER KATZ: On the LPIF I recognize your position on it, and you suggested that it be reviewed and I think the plan is to review it. But I want to take you back to a conversation that the Chairman had with Mr. Lind yesterday as well. I don't know if you were there or not but it basically talked about the issue of value for signal, fee for carriage issues at the exclusion of the issue of what LPIF was intended to do.

4697   And I believe, without reading into Mr. Lind's comments, he recognized what the intent of LPIF was and actually implied that he supported the notion that where it's necessary to supplement local programming he felt there was a recognizable opportunity to do that.

4698   Can I get your opinion on that and your views?

4699   MR. STEIN: Well, we don't support the LPIF as it is currently structured because we have seen no commitments to actually deal with local broadcasting issues within that. I mean you have very much waived improvements. So for us the jury is still out in terms of whether this is something that will be feasible.

4700   Now, we do know that on the satellite side for the grand sum of $2.5 million we provide it to small stations in western Canada and in Quebec -- right, Quebec -- and as well support for their initiatives. And I think when they appeared before you they called that a very successful program.

4701   So there seems to be a big difference between that amount of money and the amount of money that's in the LPIF.

4702   But the other thing too is we don't want to get into the kind of situation we ended up with the Canadian Television Fund where there was no transparency in it and we never knew where the money was going and who it was going to and for what purposes. And the Minister has taken very excellent measures -- steps -- to restructure the fund and to build in the transparency and accountability.

4703   So that's what we would like to see with something like the LPIF. So we feel very much that we aren't yet in a position to support that.

4704   COMMISSIONER KATZ: But you do recognize what it's intended to do and, to the extent that local broadcasting and local programming remains in the smaller markets that we have identified, that it is accomplishing at least one of the objectives?

4705   MR. STEIN: Well, as we indicated at the last hearing, we do believe that there are alternative sources for local news and information of any communities and fundamentally, as a company, we do not believe in subsidies.

4706   We have been required over the past 10 years to build out our systems in the small communities throughout western Canada. We have done an amazingly successful job at it and nobody gave us any subsidies or handouts to do that. So we have developed high speed internet, telephony services in small communities throughout western Canada and we have done it in the face of competition from TELUS, SaskTel and MTS.

4707   And, you know, as Jim said last hearing nobody --

4708   COMMISSIONER KATZ: We won't get into how you finance your investments. I mean your net worth is integrated.

4709   MR. STEIN: Well, broadcasters, we think, have obligations. They should meet them too. They can raise money. We do. They can.

4710   COMMISSIONER KATZ: Okay. The LPIF, have you passed that through now to your customers?

4711   MR. BISSONNETTE: No, our customers aren't even aware what LPIF is. So we haven't -- we have done a rate increase but it had no reference to LPIF.

4712   COMMISSIONER KATZ: You say you have done a rate increase and how have you structured that rate increase?

4713   MR. BISSONNETTE: As we have every -- in the previous rate increases we have essentially attributed it to increasing costs. We haven't taken -- we have not indicated to our customers that the rate increase that they have received had anything to do with LPIF.

4714   COMMISSIONER KATZ: And when did this go through?

4715   MR. BISSONNETTE: September the 1st, I believe.

4716   COMMISSIONER KATZ: For both Shaw TV and Shaw Direct?

4717   MR. BISSONNETTE: That's correct.

4718   COMMISSIONER KATZ: And how much was it for, if I could ask?

4719   MR. BISSONNETTE: I think it was -- Michael Ferras, do you know?

4720   MR. FERRAS: It was $2.00 on the Shaw Cable.

4721   MS RATHWELL: And $2.00 as well on Shaw Direct.

4722   COMMISSIONER KATZ: It was $2.00 on Shaw Cable and how much on Shaw Direct?

4723   MS RATHWELL: $2.00.

4724   COMMISSIONER KATZ: $2.00. And what does that equate --

4725   MR. STEIN: It wasn't attributed strictly to the LPIF. That was also attributed to costs.

4726   MR. BISSONNETTE: General cost increases.

4727   MR. STEIN: General costs overall. We look at those on an annual basis and on the basis of the cost increases that we have to deal with we restructure our rates.

4728   COMMISSIONER KATZ: Could I ask you to file with your final submission, or at some point, the actual reference to the consumers as to what you have passed through and the rationale for it, just so we have it on the record what the explanation was?

4729   MR. STEIN: Sure.

4730   COMMISSIONER KATZ: Please?

4731   MR. STEIN: Absolutely.

4732   COMMISSIONER KATZ: Did you notice any change at all in the churn or the impact on discretionary services when that went through?

4733   MR. STEIN: Well, our penetration of basic cable service continues to go down and typically around a rate increase there has been churn.

4734   But as we have mentioned to you in the past, there are ways that customers can actually offset any rate increases. And if you look at, as we have said before, the costs of our services in 2004 compared to the cost of our services in 2009, taking into consideration bundling discounts they are actually -- our customers are paying less today than they would have been paying in 2004 by taking advantage of basically bundling products together.

4735   So tiers, basic services, Shaw high speed internet and telephone services, that basket of services actually costs less today than it did four years or five years ago.

4736   COMMISSIONER KATZ: No, the reason I'm asking the question is I know that Shaw is extremely customer focused and customer conscious as well. And so what I'm asking is when you put through that increase what was the response from your customers? Did your calls --

4737   MR. BISSONNETTE: Calls we receive --

4738   COMMISSIONER KATZ: -- go up?

4739   MR. BISSONNETTE: Oh, yeah.

4740   COMMISSIONER KATZ: Were there people who abandoned the service at all?

4741   MR. BISSONNETTE: Yes. Sorry, we have had some people disconnect. You know that typically happens with increases.

4742   We also work -- we are in a very, very, very competitive environment right now. You know we have seen some of the pricing that our competitors have introduced into the market.

4743   In Vancouver, for instance, we have lost considerable ethnic customers in the last three weeks -- sorry, three months by virtue of a pricing that our competitors have put into that market. So sometimes it's hard to differentiate between what the competitors are doing in terms of the offers and the attractions of their offers and the services that we provide for our customers and the value that they see in those services.

4744   COMMISSIONER KATZ: Could I conclude that to the extent that you raised your rates and your churn didn't offset the increase that the elasticity is less than one and, in fact, this was a net positive, obviously, or you wouldn't have done it anyway, I would imagine?

4745   MR. STEIN: No, I don't think you can go that far because the basic issue with -- as our penetration has gone -- in the last seven years has gone from 72 percent to 62 percent for cable. And so we have to deal in a competitive environment.

4746   In that competitive environment it's a mixture of things that you have to compete with. So if SaskTel is offering a really good price on basic, well, we would have to respond to that. But if they are also doing something on high def we would have to respond to that as well.

4747   So we respond in different ways to what's happening in the marketplace. So it's not just basic versus basic. It's a whole combination of what we are offering out there, whether it's a combination of -- for example, our digital -- we have expanded our digital penetration phenomenally over the past year in order to be competitive.

4748   COMMISSIONER KATZ: But with regard to this specific increase, I'm assuming it's a net positive to the corporation or you wouldn't have done it, or you have learned that you won't do it again because you have reached a threshold that consumers' patience, if I can call it that --

4749   MR. STEIN: Well, we can talk about that in terms of what we call the less or more proposal on -- or what's called a skinny basic.

4750   Because our basic cable, as you would know, or as you will find out as you go through our numbers that we filed in this proceeding, on basic cable we do not make money. Basic cable -- there is no margin on basic cable.

4751   So our price increases on basic are there to meet programming cost increases and costs of installation; increased costs, service calls, expansion of the market. All those costs have to be covered and that's what the rates do.

4752   COMMISSIONER KATZ: Okay. So it was a net benefit, though, to the corporation? Do you have -- you haven't hit the wall yet?

4753   MR. STEIN: -- the corporation is that we are able to compete in telephony and internet and cable and digital and high definition. It's a total package and focusing on customer service and focusing on bundles is the kind of situation we are in.

4754   But just to give an example of costs, I mean, in the last year we have increased by 1,000 employees and you know we have got --

4755   COMMISSIONER KATZ: No, I am not questioning your business. What I'm simply saying is --

4756   MR. STEIN: I'm just saying the business model works.

4757   COMMISSIONER KATZ: Yeah, but what I'm trying to understand is --

4758   MR. STEIN: It's a great business model --

4759   COMMISSIONER KATZ: Great. And I'm glad.

4760   MR. STEIN: -- love it. So there is --

4761   COMMISSIONER KATZ: Yeah, and that's --

4762   MR. STEIN: So there is obviously a benefit to the corporation if you have a rate increase.

4763   COMMISSIONER KATZ: Yes, so you haven't hit a wall yet in terms of consumers sort of saying enough is enough, at this point now?

4764   MR. D'AVELLA: But bear in mind that, as Ken has said, I mean basic penetration has gone down from 72 percent to, in some systems, probably just over 50. So yeah, we have hit the wall in certain markets, in certain cases.

4765   But this is not the way they are looking at it. 90 percent of our consumers buy more than just basic service.

4766   So when they look at us and they look at the basket of services we provide, they make the analysis on is this good value for the money that I'm paying for -- you know, whether it's the extent of basic tiers, whether it's the digital services we provide, whether it's the high speed internet services or telephony or whatever, it's no longer viewed in isolation. And basic service is simply one component. 10 percent of our customers take basic only.

4767   COMMISSIONER KATZ: Okay.

4768   MR. FERRAS: I was just going to add that even though we have done a rate increase it hasn't changed the profitability of basic. Basic is just basically a breakeven proposition because every year there is new costs that we roll into the network in terms of building out the network and rebuilding drops to subscriber premises, head end costs, et cetera, et cetera. So the costs are rising and they are not rising as fast as the revenue.

4769   COMMISSIONER KATZ: I know in your comments on page 3 that you are very supportive of a pick 'n' pay, and I believe it was Mrs. Parsons yesterday from Port Alberni who said that to get her Sci Fi Channel would cost her an inordinate amount of money.

4770   First of all, how do you package your services, and is that really the case and as you move hopefully towards the pick 'n' pay, are you going to make that easier for your customers?

4771   MR. BISSONNETTE: We are -- actually, it's funny because we -- on one hand we have tried to be as consumer friendly as possible. And so when we launched the diginet we were the only broadcast distributor that, in fact, had true pick 'n' pay for our customers. If a customer wanted one service, three services, eight services, 10 services, they had the ability to put together packages that met their interests and not necessarily falling within the structure of a thematic package.

4772   So we have tried to be, if you will, on the packaging side of things, within the context of those dignets, as flexible as possible and as consumer friendly as possible.

4773   And we have been castigated for taking that approach by broadcasters because they have told us that, you know, on one hand from the average revenue that they are deriving from other BDUs it's significantly more than you derive from Shaw because our customers are exercising the ability to do the a la carte pick 'n' pay selection.

4774   There are still, of course, limitations on the analog side of the business and you should know that in the last two years very quietly we have converted our entire cable system to a digital platform. And so as more and more customers have available to them that digital platform and we get through that 80 percent threshold, we will be able to start offering much more flexibility in terms of the way customers put together their packages. And we are very, very supportive of that notion.

4775   So those that want themes -- and there is a pricing advantage to taking some of the larger packages -- they have the choice of doing that. But those that maybe just want to watch TSN and nothing else, they may pay a little bit more for TSN but that's -- they are quite happy to do that.

4776   And so we think that the future is really, really positive with the abilities that we derive through the boxes that we have. And so we are great supporters of that pick 'n' pay.

4777   Customers pick what tiers they want on internet. They pick what tiers they have in telephone. So to the extent that we can offer that in digital we do that as well.

4778   COMMISSIONER KATZ: Your Shaw Direct is totally digital; is it not?

4779   MR. BISSONNETTE: Yes, it is.

4780   COMMISSIONER KATZ: So do you offer pick 'n' pay today to those customers?

4781   MR. BISSONNETTE: Yes, we do.

4782   MR. D'AVELLA: No.

4783   MR. BISSONNETTE: Sorry, we have thematic packages on Shaw, on Shaw Direct.

4784   COMMISSIONER KATZ: So how much would Mrs. Parsons have to pay if she subscribed to Shaw Direct to get Sci Fi Channel?

4785   MR. D'AVELLA: Well, it would depend on what package Space is in, and I can't think off the top of my head. It's probably in a very popular package. I mean Space is generally a very popular service.

4786   So if they -- you know if they purchase the entry level Shaw Direct service essentials -- we have got so many metals in Shaw Direct that I can't remember if it's called platinum, bronze --

4787   COMMISSIONER KATZ: You said platinum --

4788   MR. D'AVELLA: -- bronze or nickel or whatever, anyway.

4789   So you know probably they are looking at somewhere in the order of say $40 to $45 for a service offering that would include, you know, a fairly broad selection of programming services in a package that would include Space.

4790   Space in particular, by the way, we are not allowed to sell it on a standalone basis. The programmer won't allow it. I mean these are the historical specialty services that have been around forever and they just don't allow pick 'n' pay.

4791   COMMISSIONER KATZ: Can you elaborate on that whole issue of the programmers won't allow it? Is there a contractual requirement for you to package everything and not provide consumers with the choice?

4792   MR. D'AVELLA: It's both regulatory and contractual. You know they tend to have a lot of clout from a contractual point of view, especially the popular ones.

4793   But I don't think from a regulatory point of view these analog specialty services were actually permitted to offer those. I'm not the regulatory guy.

4794   Ken?

4795   MR. STEIN: Well, there is -- I mean you have a dual status situation. You also have 9(1)(h).

4796   So when we put together our basic cable package, for example, what do we have on it? We have our Canadian -- we have all the Canadian services which we are required through the regulations to carry. We have the U.S.A. networks which we are approved to carry and then we have the 9(1)(h)s which -- and then we now have the digital 9(1)(h)s. For example, you have Weather Network and made them mandatory on a digital basic.

4797   THE CHAIRPERSON: With due respect that's not the question. The question is not the ones you have to carry but whether they can offer pick 'n' pay or not on satellite. And if you can is there regulatory prohibition or is it a commercial prohibition that you negotiated? That's what we want to know.

4798   MR. STEIN: Well, I will let Cynthia deal with this as well.

4799   Most of the criticism directed at Shaw over the past five to 10 years has been because we offered pick 'n' pay. Most of the time, the criticisms have been that when we have offered packages that were too selective, whether they are themes or not, that we are -- that we have been -- people have criticized about it.

4800   When we had our consultation with the Commission a year and a half ago -- well, Mr. Chairman, let me just finish -- I mean it was one of the issues that the Commissioner raised: Why are people so -- why are programmers so annoyed with Shaw? And the reason that they are annoyed with us is because we kept pushing to offer a pick 'n' pay environment.

4801   Now, in a contractual basis they argue against that. There are certain services where we enter into commercial negotiations and where they say, "We want to be on the highest penetration tier. We do not want you to offer us on a discretionary basis".

4802   MR. D'AVELLA: It's a combination of both. So there are regulations in place that guarantee a certain level of carriage. I mean you are familiar with them, obviously. And from a contractual point of view, rates are obviously based on volume and they are not -- they are generally not interested in higher rates at lower volume because they are dependent on both advertising as well as subscriber fees.

4803   So most of these services are looking for very highly penetrated tiers and that tends to drive both a better rate discussion or a more cost-effective rate discussion and gives them what they want in terms of exposure.

4804   COMMISSIONER KATZ: But --

4805   MS RATHWELL: If I may?

4806   COMMISSIONER KATZ: Sure.

4807   MS RATHWELL: Excuse me. On Shaw Direct, just with respect to Pick 'n' Pay options. Where the regulatory framework permits it and where commercial arrangements permit it, currently subscribers do have the ability to either select individual channels or to take two channels.

4808   The price of an individual channel is $2.49 for a month, and the price of a pair of specialty services that fall within, you know, for which we have the capability to offer them on that basis, it is $2.99 a month. So there is essentially a Pick 'n' Pay option currently on Shaw Direct.

4809   COMMISSIONER KATZ: So some of your programming deals have got conditions on them and some do not, and presumably that is confidential information?

4810   MR. D'AVELLA: That is correct. I will give you an example --

4811   THE CHAIRPERSON: I have to go back to what Mr. Bissonnette said. You say it, you would like to offer Pick 'n' Pay?

4812   MR. D'AVELLA: Yes.

4813   THE CHAIRPERSON: I happen to be a Shaw Direct customer, so you are talking about something I know something about.

4814   When I talk to your sales representatives I am always being offered thematic packages, et cetera, and I know it makes good business, et cetera. What I wanted to know is whether the thematic package is because of -- cut a deal with the provider and he says, you can only sell it as a package or in a higher tier or whatever it is, or whether this is because we imposed it upon them.

4815   Because as far as I understood in the digital world, certainly passed 2011, there is no such tiering anymore, no such packaging, so you could be doing what you want, Mr. Bissonnette, from a regulatory point of view, if I understand it correctly.

4816   MR. BISSONNETTE: In many cases we could. As you remember, because you being a Shaw Direct customer as well, the packaging actually evolved over the last 10 years. Ten years ago thematic packaging on satellite was much more of a competitive kind of thing where, you know, Bell ExpressVu at the time had thematic packaging and Star Choice at the time had thematic packaging.

4817   We support having packing that customers want. So if it is a la carte, Pick 'n' Pay and we can facilitate it, that is what we will do and that is what we have tried to do.

4818   We are actually trying to move one service onto the basic service in Vancouver and the programmer will not let us do that because they want to be on a tier. So there are certain programming restrictions. And to the extent that 2011 or whenever that happens, we are going to take advantage of the opportunity to be as consumer-friendly as possible in a way that they can select services.

4819   THE CHAIRPERSON: Subject to commercial reality --

4820   MR. BISSONNETTE: Yes, absolutely.

4821   MS RATHWELL: Sorry, just to conclude on that though. I believe in our October 26 filing we have a list of the services that are available on an individual basis on Shaw Direct and it is approximately 45 services.

4822   COMMISSIONER KATZ: Thank you. I want to get a couple of comments from you on your Harris/Decima study and some of the key findings on here just to understand them.

4823   On page 4, I guess it is the key finding, there is a second bullet on here saying, "impact of CRTC regulations on personal choices." And the first bullet here says, "More than eight in 10 want to be able to choose what stations to pay for should the fee-for-carriage charge be introduced."

4824   Isn't that irrespective of whether what you call a fee-for-carriage and what we designate as being value-for-signal is introduced? More than eight and 10 customers certainly want to have choice anyways, so this finding is not related necessarily to this issue, it is a general finding of all of your customers.

4825   MR. BISSONNETTE: That has been a, I will call it, a song for the last -- since I have been in the industry for 35 years customers would like to be able to pay for what they watch and not pay for what they don't watch.

4826   COMMISSIONER KATZ: Okay. But it sounds like, when I read this over the first time, I read it over under the impression you did a survey and the added burden, if there was one, if there is a burden there at all with value-for-signal, or fee-for-carriage as you call it, is imposed upon them eight in 10 would want to pick and choose. But the reality is probably eight in 10 want to pick and choose anyways, if not 10 in 10.

4827   MR. BISSONNETTE: I think if you look at the context of that, that eight out of 10 people would choose to opt out if they were told they had to pay for an over-the-air signal for which they get free right now.

4828   COMMISSIONER KATZ: Eight in 10 would want to opt out?

4829   MR. BISSONNETTE: Yeah, they would want to have the choice of saying I will pay for that if it is whatever, you know, the fee would be and I can choose not to. If I choose not to, I don't have to take it. And if I choose to take it, then I will pay for it.

4830   COMMISSIONER KATZ: I am not sure that is what it says, but I will read it over again.

4831   MR. BRAZEAU: But I think Mr. Bissonnette agrees that consumers are really looking for choice and if there is a price increase they would like to Pick 'n' Pay and have that choice, and I think that is what the survey is suggesting.

4832   COMMISSIONER KATZ: My last question is around community channels. And you talked a lot about being local and being in the community and offering community channels. I don't know if you were here before the noon hour, but I actually asked six consumers, albeit not in Western Canada, to rank their top three big issues and I actually listed community channels as well as local, regional, price, quality and everything else as well. Not one of them mentioned community.

4833   Not to say that it is not important, but then I looked on page 12 of your survey, the Decima/Harris survey and there is a question here and I guess you obviously commented on it. And it says, "I can rely on my community channel to provide me with entertaining and informative local programming." And 54 per cent either were in the top two boxes, strongly agree or agree.

4834   The question as it is framed says, "I can rely," it doesn't say, "I do rely." And I guess the proof is in the pudding. Did you ask the question "do they rely" on your community channel for local news and programming and information?

4835   MR. BISSONNETTE: I think that when it all comes down to viewership, if you look at the viewership that we were talking about at the last hearing is our community channel in Western Canada -- and one of the things we are renowned for is carrying local programming, WHL programming, is in fact seen as a vital source of local programming that is relevant to those that live in those communities.

4836   I mean, earlier on today you saw people from Sault Ste. Marie and Thunder Bay who were complaining that there was no local broadcaster, they were basically fed a regional feed. Those people in those communities are very very appreciative of the local programming that we provide to them that they actually participate in providing.

4837   And so to the extent that viewership does tell a story, in Western Canada with Shaw TV our viewership numbers are very very very positive.

4838   COMMISSIONER KATZ: Does your community channel provide weather, traffic in the morning?

4839   MR. BISSONNETTE: Yes, yes. We have -- I don't know if you have had the privilege of coming out to Calgary but, you know, we invite you to come out sometime, but Shaw TV basically has a banner that has weather, it has regular weather forecasted about every 15 minutes during the morning drive time or watching time, provides that kind of information to customers so they can go about their day knowing what to expect from the weather.

4840   COMMISSIONER KATZ: Do you provide that in French as well as English on the banner or is it just one language?

4841   MR. BISSONNETTE: It depends on where we are, in some we do have French, in Calgary we don't.

4842   COMMISSIONER KATZ: Okay, those are my questions.

4843   THE CHAIRPERSON: Peter.

4844   MR. FERRAS: I could give a little more clarity on that question, Mr. Katz if you wanted, on the question of can or do. Part of the problem was the survey when it was conducted to get satellite responses and cable customer responses. And obviously, on the satellite side there is no channel, so those people would just be disregarded completely. So we just wanted to put into their minds the notion that there is a community channel and what their response was.

4845   And secondly, not to mix proceedings, but we did file lot of information in the last proceeding that showed the Shaw TV channel does rank in our markets and we would be happy to file that.

4846   THE CHAIRPERSON: I have to remind you that there is a snowstorm outside, the public service has closed and sent its employees home. So let's be relatively quick, because some of my staff are here now voluntarily, they are actually entitled to go home. Okay, so none of us can do anything about it, I just found out over the net.

4847   MR. BISSONNETTE: No. And we were hoping to fly somewhere afterwards.

--- Laughter

4848   THE CHAIRPERSON: I think, Mr. Bissonnette, you may have a night in Ottawa.

4849   MR. BISSONNETTE: Well, we booked train tickets.

--- Laughter

4850   THE CHAIRPERSON: Okay. Rita.

4851   COMMISSIONER CUGINI: I guess that means I will talk fast. I do have just about a handful of follow-up questions.

4852   And I want to go back to the Pick 'n' Pay discussion that you had with both the Chair and Vice-Chairman Katz. You guys know my history, you know where I used to work, you know the relationship that we used to have with American cable channels. Is it no longer true that American cable channels do not permit Pick 'n' Pay? I mean, it was certainly true with A&E, it was true with National Geographic.

4853   MR. BISSONNETTE: Yes, the Americans are violently opposed to Pick 'n' Pay and we are violently opposed to people who are opposed to Pick 'n' Pay and so we have had some difficult discussions.

4854   COMMISSIONER CUGINI: So if you don't come to a Pick 'n' Pay agreement with the American cable channels will you drop them?

4855   MR. BISSONNETTE: We were faced with that with one channel about a year ago and we were able to -- they wanted I think a 10-year agreement that would have us agree to that notion. And we said we are not prepared to sign an agreement that would have that notion.

4856   We will agree to first of all disagree that an a la carte isn't a good thing and recognize that in 2010/2011 we won't have the capability of doing that. We have basically structured an agreement around those dates.

4857   COMMISSIONER CUGINI: So it is possible?

4858   MR. BISSONNETTE: Yes.

4859   COMMISSIONER CUGINI: I want to take you back to your recommendation number two, where you say obviate any need for a consumer subsidy of broadcasters, digital transition. Just confirm for me that that relates to a value-for-signal compensation regime, does it?

4860   MR. BISSONNETTE: No, we were talking about the actual cost of conversion to digital.

4861   COMMISSIONER CUGINI: I thought you were referring to the broadcasters, saying that a compensation regime would also help to fund their digital transition and building out of digital transmitters.

4862   MR. STEIN: No, we don't agree with that.

4863   COMMISSIONER CUGINI: Okay. So that is, in essence, what it is referring to?

4864   MR. STEIN: Yes.

4865   COMMISSIONER CUGINI: Thank you.

4866   THE CHAIRPERSON: Can you just clarify? You say no to subsidy for digital transition? For instance your Ku or expanded Ku, assuming you get that up, and the government would be willing to pay the consumers for the cost of installation, et cetera, are you against that too?

4867   MR. STEIN: Well, we think a subsidy program would be difficult to implement with a non-over-the-air approach. The American service system is pretty straightforward, because it gave people a coupon, and they were able to proceed with that.

4868   To be able to decide in a community that somebody who doesn't have a cable or satellite subscription that now they are entitled to a subsidy, but somebody who has saved up their money and has bought a cable box or a satellite box doesn't get a subsidy would, in our view, not be appropriate.

4869   So I think that if there was going to be such a program it would have to be one that would make it available to all Canadians and not just be selective on a means test or some other test.

4870   THE CHAIRPERSON: What about communities that had a station before and has closed? So there is no terrestrial cable, you wouldn't --

4871   MR. STEIN: Well, in that kind of a community you would probably find that most of the people now have a have a satellite dish.

4872   THE CHAIRPERSON: And there goes the same argument, okay.

4873   MR. STEIN: Yes.

4874   COMMISSIONER CUGINI: Well, thank you, that was going to be my follow-up question as to whether or not you were going to ask us to make a recommendation to the government to subsidize a coupon program. But your answer is no, you wouldn't want to see that recommendation in our report?

4875   MR. STEIN: Well, depends what the government wants to do. I mean, our view of it has always been that broadcasters should build digital facilities. We don't think that the expense of it is -- we think they over-stated the numbers. I mean, we are going to do Kenora for $100,000.

4876   MR. BISSONNETTE: For $100,000, we will do one transmitter.

4877   MR. STEIN: We are calling it the new technology of the future, wireless Television.

--- Laughter

4878   COMMISSIONER CUGINI: And Mr. Bissonnette -- you couldn't let that one go.

4879   Mr. Bissonnette, you did say that you had converted the whole cable plant to digital?

4880   MR. BISSONNETTE: Yes, we have at a cost of about just over $100 million. And virtually all of our cable systems can now receive signals in a digital format and we will ultimately have the flexibility to actually use that digital format to package services.

4881   COMMISSIONER CUGINI: So do you down convert analogue signals now?

4882   MR. BISSONNETTE: What we have done is we have assigned spectrum to analogue and we have taken the analogue signals that are there and we duplicated them in a digital format.

4883   COMMISSIONER CUGINI: So I am on both your Shaw Direct and your site and I see there is a digital basic package.

4884   MR. BISSONNETTE: Yes.

4885   COMMISSIONER CUGINI: So you don't even offer an analogue package to your subscribers?

4886   MR. BISSONNETTE: So if you take basic in that system, you actually get a digital basic.

4887   COMMISSIONER CUGINI: And the customer gets a digital box and everything else with --

4888   MR. BISSONNETTE: Yes, if they choose. If they choose not to right now, they basically get an analogue basic. But if they have a box they get it in digital as a matter of course.

4889   COMMISSIONER CUGINI: And the analogue basic is also at $35.95?

4890   MR. BISSONNETTE: Yes.

4891   COMMISSIONER CUGINI: Okay, thank you.

4892   Your idea --

4893   MR. STEIN: I would go for the bundle.

4894   COMMISSIONER CUGINI: Pardon me?

4895   MR. STEIN: I would go for the bundle.

--- Laughter

4896   COMMISSIONER CUGINI: I don't live in the Shaw cable area.

4897   Your idea of the OmniBus channel, how would broadcasters that provide programming to that OmniBus channel, how would they be able to monetize and/or promote the fact that their shows are on that OmniBus channel?

4898   MR. D'AVELLA: Well, in that particular scenario, so we would effectively be uplinking the local content from that particular community would be on one channel or two channels or whatever the requirement is.

4899   We would certainly promote it to our customers that all the local news or all the local information from this particular community is available on this particular channel. I mean, we did this before and we did it with the HDs and it was very very popular.

4900   COMMISSIONER CUGINI: But how would your customers be served? Let's take the example of this snowstorm today, where probably everyone is tuned into their local television station to see what school buses have, you know, shutdown their routes or what highways are shutdown because of the snowstorm. How would your customers get this information, let's call it breaking news, on an OmniBus channel that is relevant to the community in which they live?

4901   MR. BISSONNETTE: Well, there are still some imperfections that have to be worked out.

4902   COMMISSIONER CUGINI: That would be a big one.

4903   MR. BISSONNETTE: So essentially, the distinct programming that is scheduled, so news is one of the distinct programs. They would receive that and if they watch that news program, they are going to see what you just described.

4904   But if it was a, let's say, out of the sort of scheduled slot, at 1000 in the morning when they're also on the same thing and something happens, you know, in a local region, that would be something that wouldn't get covered. And so, that's one of the compromises you will have to have when you look at all of those channels, but at least the local news is available in communities that otherwise, it wouldn't be available.

4905   COMMISSIONER CUGINI: I see Ms Rathwell at the microphone, keep going on now.

4906   MS RATHWELL: Thank you. Thanks. Just on the point of weather, I mean that is an ongoing thing that one wants to track on a local basis. In September, we introduced an interactive localized weather service for all Shaw direct customers and so, from that perspective it would be covered off on a very localized basis for all of our customers and then, there would be the added benefit we would propose along the channels.

4907   With respect to the monetization of the local programming on those channels, as Ken was saying earlier, we believe that the measures that are put in place currently for the small market independent programmers have been very successful and they acknowledge that.

4908   Beyond that, you know, the groups in certain localities, the large groups that have local affiliates in areas where they are not up on the satellite because of capacity levitations, we would submit that because they are national groups and they buy for the most part national rights and they have in the context of various other proceedings, including complaints about our simulcasting practices essentially conceded that they are able to monetize national viewing.

4909   So, we think that we do put a lot of measures in place for small market independent local broadcasters, they are very effective with respect to the larger groups. Quite honestly, we believe that they should be able to figure out ways to monetize their viewing in doing, and they do that currently.

4910   COMMISSIONER CUGINI: One final question. And Ms Rathwell, since you have the microphone, on page 7 again, the Commission's Report to the government should include a recommendation to embrace and recognize the contribution of community television.

4911   What about Shaw direct customers, how would they benefit from such a recommendation?

4912   MS RATHWELL: Well, further to the comments of interactive weather, we would continue to look at the development of various kinds of interactive applications.

4913   COMMISSIONER CUGINI: No. I'm talking about the recommendations focused around community television.

4914   MS RATHWELL: In terms of community television, I believe that we are on the record in previous proceedings that we would like to come forward with a proposal for a community television service on our satellite system that provides if not, you know, highly localized on a constant basis service enough localized information that is both of service to various local customers and also as a added benefit of pursuing Broadcasting Act objectives of assisting the regions and the people with getting to know each other.

4915   COMMISSIONER CUGINI: Thank you very much. Those are my questions, Mr. Chairman.

4916   THE CHAIRPERSON: Ms Rathwell, just a small correction here. Your interactive HD weather service is only available to customers who have an HD set-up box, right?

4917   MS RATHWELL: Yes. At this time, that's right. Those are being, you know, every year a greater and greater proportion of our subscribers have access to this.

4918   THE CHAIRPERSON: This omnibus proposal, I am sorry, I am -- this is the first time I've heard about it. You proposed it and we turned it down I understood your words to say, Mr. Bissonnette?

4919   MR. BISSONNETTE: As broadcasters, we haven't met support about it and so, I think it was two regimes ago and so we would be very pleased to --

4920   THE CHAIRPERSON: I would appreciate it if as part of this hearing, you could file with us some information of what -- give me the matter of technology since what omnibus proposal would look like.

4921   MR. BISSONNETTE: We will.

4922   THE CHAIRPERSON: Thank you. I think those are all of our questions for you. I hope you make it home and we won't have it before we have the last intervener right away. Thank you.

--- Pause

4923   LE PRÉSIDENT: Commençons.

4924   LA SECRÉTAIRE: Aux fins du dossier public, veuillez noter que l'Association des professionnels de la chanson et de la musique et le Conseil régional de la culture de l'Outaouais ont avisé le Conseil qu'ils ne comparaîtront pas aujourd'hui.

4925   Nous entendrons maintenant la présentation de la Table des organismes nationaux des arts et de la culture (TONAC). S'il vous plaît vous présenter et vous avez dix minutes pour votre présentation.

PRESENTATION

4926   Mme VOYER-LÉGER: Bonjour, monsieur le président, messieurs les vice-présidents, mesdames les conseillères, messieurs les conseillers.

4927   Je veux d'abord vous remercier de nous donner ces dix minutes pour nous adresser à vous. La TONAC est une coalition de huit organismes nationaux représentant les artistes ainsi que les organismes artistiques et culturels des communautés francophones et acadiennes en situation minoritaire du Canada.

4928   LA SECRÉTAIRE: Je suis désolée. S'il vous plaît, juste peut-être parler un petit peu moins vite pour les interprètes en arrière. Merci.

4929   Mme VOYER-LÉGER: Donc, cette coalition fait front commun sur des enjeux nationaux qui touchent les arts, les industries culturelles et le développement culturel. Chacun de ces organismes membres représente les intérêts d'une discipline artistique ou d'une industrie culturelle spécifique à l'exception de la Fédération culturelle canadienne française qui représente les intérêts des milieux artistiques et culturels de la francophonie canadienne dans leur ensemble.

4930   Je ne vous ferai pas la liste des membres, vous les avez devant vous.

4931   Je veux surtout souligner que les membres de la TONAC représentent à travers leur propre membership la vaste majorité des artistes, des travailleurs culturels et des intervenants des arts et des industries culturelles, des communautés francophones et acadiennes. Ce sont donc des milliers de personnes qui s'expriment à travers elles.

4932   Dans les grandes lignes, la TONAC souhaite principalement l'instauration d'un modèle de télédiffusion durable qui assure un reflet des réalités des communautés francophones et acadiennes, l'amélioration de la production et de la diffusion et distribution des oeuvres produites par les artistes et les communautés francophones et acadiennes ainsi qu'un appui financier adéquat et prévisible à la Société Radio-Canada pour lui permettre de pleinement réaliser son mandat.

4933   Plus précisément, la TONAC pense que l'existence d'une télévision généraliste forte et qui soit le reflet des communautés, de leurs préoccupations et de leur milieu de vie est nécessaire au développement culturel et économique de nos communautés.

4934   Une télévision généraliste doit aussi être au coeur du rayonnement de notre culture et du travail de nos artistes, de nos créateurs et de nos travailleurs culturels.

4935   La TONAC ne peut que constater qu'au Canada, dans le paysage télévisuel national, la Société Radio-Canada est la seule à réellement refléter la réalité des communautés francophones et acadiennes.

4936   Bien entendu, TFO fait un travail important et remarquable, mais ses contenus reflètent davantage les réalités franco-ontariennes et contrairement à la SRC, son signal n'est pas diffusé partout au pays.

4937   Notre intervention aujourd'hui vise essentiellement à réitérer l'importance de la SRC et de ses services régionaux et locaux pour nos communautés. Il nous apparaît nécessaire que la SRC puisse recevoir un appui financier adéquat et prévisible qui lui permettra de pleinement réaliser son mandat qui, rappelons-le, est extrêmement large.

4938   La SRC doit couvrir le territoire d'un océan à l'autre, assurer une diversité de contenus à des auditoires très différents, y compris dans nos communautés en situation minoritaire et sur de multiples plate-formes.

4939   En ce sens, nous nous inscrivons en faux contre tout argument qui souhaiterait priver la SRC d'une source de revenu en s'appuyant sur les subventions, toujours grandement insuffisantes qu'elle reçoit.

4940   Nous approuvons donc l'idée d'un système de compensation pour la valeur des signaux de télévision locaux puisqu'il nous apparaît que l'une des façons d'atteindre cet objectif est de permettre aux télévisions généralistes de négocier un juste prix pour l'utilisation de leurs signaux par câble et par satellite.

4941   Par contre, il nous semble aller de soi que les consommateurs ne devraient pas avoir à écoper de ces coûts. Nous osons donc la question: s'agit-il vraiment de nouveaux coûts ou d'une meilleure redistribution des revenus ici de la distribution?

4942   Dans tous les cas, nous laisserons à d'autres les modalités précises de la répartition des enveloppes des redevances, vous comprendrez que ce n'est pas notre premier champ d'expertise.

4943   Nous ajouterons deux commentaires quant aux redevances tout de même. D'une part, il nous apparaît que les télévisions généralistes canadiennes devraient recevoir des compensations pour le contenu canadien qu'elles diffusent et qu'en ce sens le système de compensation devrait tenir compte de ce critère de façon prioritaire.

4944   Malgré la satisfaction des membres devant la mise sur pied du Fonds d'amélioration pour la programmation locale, nous doutons vraiment que ce soit suffisant pour soutenir les stations régionales et locales de la SRC dans les défis majeurs qu'elles doivent confronter. Rappelons que ces stations sont très nombreuses et qu'il y a des défis vraiment systémiques qui se posent à leur survie et à la qualité de la programmation.

4945   C'est en ce sens que la TONAC croit que si un système de compensation est instauré, le CRTC devrait s'assurer que ces sommes soient investies dans les services de télévision régionale et locale. Cela permettrait aux composantes de l'industrie télévisuelle des communautés francophones et acadiennes que nous représentons de maintenir et d'accroître l'offre des contenus télévisuels et ainsi, de participer à la diversification et à l'enrichissement des programmations offertes aux communautés francophones et acadiennes.

4946   En terminant, nous nous permettons un aparté pour souligner que l'importance que nos communautés accordent à la télévision généraliste rend nécessaire que celle-ci soit diffusée et en ce sens la TONAC croit que les diffuseurs satellitaires devraient aussi avoir l'obligation de diffuser les signaux locaux francophones, comme c'est le cas pour les câblots. Permettez-nous d'insister sur le fait que les enjeux comme ceux qui nous réunissent aujourd'hui ne sont pas uniquement des enjeux économiques, nous discutons de distribution des signaux de télévision, mais ce faisant, nous discutons aussi de la culture et de l'identité canadienne.

4947   Si la diversité culturelle du Canada est une si grande richesse, c'est aussi parce que nous avons su la protéger. Un modèle de télédiffusion durable ne peut pas exclure cette idée. S'en remettre aux lois du marché, ce serait éliminer du radar l'existence des communautés minoritaires qui ont aussi droit à une télévision de qualité qui reflète leurs réalités, leur culture et ce, dans leur langue.

4948   Je vous remercie, dont monsieur Henry et moi-même Catherine Voyer-Léger on représente la TONAC. Je suis de la FCCS, monsieur de l'Alliance national de l'industrie musicale, donc nous sommes les deux personnes qui ont été mandatées pour représenter les huit organismes aujourd'hui et, évidemment, nous sommes disposés à répondre à toutes vos questions.

4949   LE PRÉSIDENT: Merci pour votre présentation. Vous savez que nous sommes ici à cause d'un Ordre en Conseil que le gouvernement a fait et nous a demandé de faire des recommandations sur toute la question de valeur pour le signal et la transition au numérique.

4950   Maintenant, votre présentation essentiellement s'adresse à des choses que nous pouvons faire comme Conseil, mais qu'est-ce que vous voulez que nous fassions des recommandations au Ministre, ce qu'il doit faire ou les choses qu'il doit adresser parce que, évidemment, il nous demande des recommandations, pas une recommandation sur ce que nous voulons faire, sinon ce qu'il peut faire pour -- en collaboration pour soutenir, pour appuyer ce que nous voulons faire et la politique que nous suivons. Quels sont vos conseils dans tout cela? Qu'est-ce que vous voulez que nous fassions comme recommandation au Ministre?

4951   Mme VOYER-LÉGER: Bien, écoutez, je pense que je peux répéter. Je ne pense pas qu'on aurait quelque chose à rajouter, mais je pense que je peux répéter essentiellement les grandes lignes.

4952   C'est sûr que pour nous, je l'ai dit, je le répète, l'importance c'est la survie et c'est la santé de la Société Radio-Canada, sans la SRC, nos communautés perdent le principal reflet qu'elles ont de leur culture et nos créateurs perdent le principal moyen de diffusion qu'ils ont de leurs créations.

4953   Donc, ce faisant, le système de compensation nous semble une des réponses. Cela dit, vous pouvez faire savoir au gouvernement, de notre part, qu'une augmentation des subventions à la SRC sera toujours la bienvenue par chez nous.

4954   LE PRÉSIDENT: O.k. Merci.

4955   CONSEILLÈRE LAMARRE: Merci, monsieur le président. Bonjour, bienvenue et merci d'avoir bravé la tempête pour être avec nous en fin d'après-midi.

4956   Pour continuer sur la même veine, là, que vous discutiez avec monsieur le président, je vous dis que des recommandations, vous estimez qu'on pourrait faire dans le cadre de notre rapport, ce serait de souligner qu'une augmentation de subvention du pouvoir parlementaire à la Société Radio-Canada serait toujours bienvenue pour les communautés en situation minoritaire.

4957   Et de ce que je comprends aussi de votre présentation, c'est que c'est non seulement le montant de la subvention, mais aussi la prévisibilité des montants qui sont importants pour vous?

4958   Mme VOYER-LÉGER: Oui, en effet.

4959   CONSEILLÈRE LAMARRE: Dans votre mémoire -- je vais revenir un petit peu à la situation que vous vivez là avec les artistes et les gens que vous représentez vivent, vous avez mentionné que c'est surtout Radio-Canada qui va vous permettre de diffuser ce que vous créez.

4960   Mais dans votre mémoire, vous parlez aussi de TFO et vous faites quand même, là, une ouverture. Vous dites: «À l'exception de quelques heures de programmation dans d'autres télévisions généralistes.»

4961   Pouvez-vous nous donner quelques exemples?

4962   M. HENRY: Bien, c'est-à-dire qu'il y a des... bien, ce n'est pas nécessairement des télévisions généralistes, mais il y a certains télédiffuseurs privés. Je pense, par exemple, à Rogers en Ontario qui présente aussi des programmations, des contenus francophones, mais ça reste très limité, souvent ponctuel sur des événements précis, alors que...

4963   Donc, effectivement, Radio-Canada est la seule à travers souvent dans bien des endroits vous comprendrez aussi que c'est même le seul diffuseur francophone, par exemple, dans l'ouest, ce qui fait que ça revêt une importance toute particulière.

4964   Bien sûr, on l'a mentionné pour l'identité culturelle, mais aussi pour, par exemple, des industries comme l'industrie musicale, on sait très bien, mais si mes collègues de l'Association des professionnels de la chanson et de la musique avaient été là aujourd'hui, ils vous auraient dit que l'impact de programmation locale comme, par exemple, lorsque Radio-Canada capte et diffuse un gala des trias qui est un gala qui récompense l'excellence en chanson et musique, le lendemain de la diffusion d'un gala comme celui-là, il y a un impact réel sur, par exemple, la vente de disque, des albums, donc à la fois pour le distributeur qui est Distribution APCM et pour les artistes il y a un impact considérable.

4965   Donc, ça va même et ça va aussi au-delà de, je dirais, ça va au-delà d'une simple diffusion, ça vient appuyer le développement dans les communautés elles-mêmes, leur développement culturel et économique.

4966   CONSEILLÈRE LAMARRE: Donc, c'est un rôle qui est très pro-actif pour les artistes de la francophone à travers le pays, c'est ça.

4967   M. HENRY: Absolument. Et finalement on l'a tous compris, là, quand on parle des communautés francophones et acadiennes, je précise, mais on parle évidemment des communautés francophones et acadiennes en situation minoritaire.

4968   CONSEILLÈRE LAMARRE: Minoritaire, donc généralement hors Québec.

4969   M. HENRY: C'est ça.

4970   CONSEILLÈRE LAMARRE: Maintenant, quand vous parliez, là, de certaines émissions que Rogers diffusait, est-ce que vous faisiez référence à la télévision, le poste communautaire du câblodistributeur?

4971   M. HENRY: Oui, c'est ça.

4972   CONSEILLÈRE LAMARRE: Et est-ce qu'il y a seulement Rogers, là, qui vous offre une telle disponibilité. On avait les gens de Shaw, là, tout à l'heure, ils sont partis pour leur avion, mais est-ce que Shaw aussi vous offre ça? Est-ce que COGEGO en Ontario vous offre ces possibilités-là aussi?

4973   M. HENRY: À ma connaissance, c'est un vaste pays. À ma connaissance, non; c'est-à-dire qu'il n'y a pas de programmation comme on pourra en retrouver dans une chaîne comme Radio-Canada où il y a une programmation définie qui ferait en sorte qu'on est en mesure de construire une audience et sur cette audience-là aussi de construire, comme je le mentionnais, le développement des communautés francophones et acadiennes.

4974   À ma connaissance, donc, toutes les autres chaînes c'est des événements ponctuels.

4975   CONSEILLÈRE LAMARRE: Et en ce qui concerne l'impact qu'un système de compensation pourrait avoir sur les consommateurs, vous êtes des consommateurs, vous avez aussi, là, des... vous représentez des gens qui le sont aussi et vous êtes en contact aussi avec le milieu.

4976   Comment vous pensez que les gens réagiraient si éventuellement ce système de compensation-là se traduisait par une augmentation des tarifs de distribution de câblodistribution si minime soit-elle, est-ce que vous pensez que ça pourrait être une réaction hostile ou est-ce que c'est une... ou que si c'était expliqué, la raison en étant expliquée, que les réactions pourraient être différentes?

4977   Mme VOYER-LÉGER: Bien, écoutez, là on fait un peu de la prospection. Cela dit, ce qu'on soulignait dans le mémoire c'est qu'il ne nous semble pas si évident que les coûts doivent être refilés au consommateur, ça d'emblée.

4978   Ensuite, si on se fie à ce qui s'est fait avec l'augmentation de coûts du Fonds d'aide à la production locale, c'est sûr que si l'explication est donnée sur la base de la forme dont elle a déjà été donnée dans ce cas-là, c'est-à-dire en pointant du doigt une législation qui oblige les distributeurs à augmenter leurs coûts au détriment des consommateurs, bien c'est sûr qu'on va s'attendre à une réaction hostile et il y a une façon de présenter les choses aussi.

4979   Mais je reviendrais à notre position de base qui est pour l'instant à la hauteur de nos compétences sur ces sujets. On n'est pas convaincu que la facture doive être refilée au consommateur. Je pense qu'il y a de la marge, là, dans les enveloppes dont on parle pour que ça soit absorbé ailleurs.

4980   M. HENRY: Si vous me permettez, j'aimerais ajouter que quand, par exemple, Radio-Canada, suite à la diminution de ses revenus de publicité récemment a dû procéder à des coupures dans ses programmations locales, il y a aussi un coût à ça. Il y a un coût qui est... qui touche tous nos milieux, qui touche nos publics, qui touche nos audiences, qui touche notre capacité à se voir et à s'entendre, à se développer et ce coût-là me semble aussi très important à considérer.

4981   CONSEILLÈRE LAMARRE: En ce qui concerne un autre sujet différent, la conversion des émetteurs au numérique, là, qui doit se faire d'ici 2011, et pour lequel même Radio-Canada a pour l'instant comme position que tous les émetteurs ne seront pas convertis au numérique, comment est-ce que vous envisagez que ça puisse affecter, là, les communautés et les gens que vous représentez?

4982   Mme VOYER-LÉGER: Bien, je vais faire une petite réponse très rapide, là, parce que ce n'est pas un sujet sur lequel on s'est beaucoup penché, mais c'est sûr que d'emblée, il y a toujours une inquiétude de notre part parce que d'habitude, finalement, c'est que quand justement les changements se font progressivement, c'est souvent dans nos petites communautés que les changements sont les derniers à se faire. Donc, on a peur que les communautés soient perdantes, mais je n'ai pas assez fouillé la question, là, pour vous amener une réponse complète aujourd'hui.

4983   M. HENRY: Mais il y a toujours, comme le mentionnait Catherine, je dirais une certaine méfiance parce que puisqu'on est souvent en situation minoritaire si on applique des logiques de marché, très souvent ça a des impacts considérables sur nos communautés.

4984   L'apparition de la télévision à l'Île-du-Prince-Édouard, la télévision CBC anglaise est apparue presque 10 ans avant Radio-Canada français et ça a eu un impact considérable sur les transferts linguistiques puis sur aussi les habitudes d'écoute. Les Acadiens de l'Île-du-Prince-Édouard pendant dix ans ont d'abord écouté Radio-Canada en anglais avant d'avoir le service en français.

4985   Alors, à chaque fois qu'il y a des changements comme ça, là, on est souvent en queue de priorité et ça peut avoir des impacts.

4986   Mme VOYER-LÉGER: J'ajouterais juste que c'est un peu le sens de la conclusion de la présentation qu'on a faite aujourd'hui aussi, c'est que quand on parle de cote d'écoute, quand on parle de sondage des consommateurs, nos communautés sont nécessairement des virgules dans ces chiffres-là.

4987   Donc, c'est comme impossible que leurs besoins se reflètent là-dedans et c'est pour ça qu'il nous semble que la Loi sur la radiodiffusion puis le cadre de télédiffusion de façon générale au Canada vise plus qu'à refléter les besoins d'une cote d'écoute ou les besoins d'un sondage qui vise aussi à refléter une diversité puis on est là pour ça.

4988   CONSEILLÈRE LAMARRE: Donc, est-ce que je peux extrapoler à ce moment-là ce que vous venez de me dire en une recommandation possible au Ministre à l'effet que tout programme d'encouragement à la conversion au numérique ne devrait pas s'en remettre justement uniquement au droit du marché et devrait encourager l'établissement de ces mêmes installations-là, ces infrastructures-là dans les localités où est-ce qu'il y a des communautés en situation linguistique minoritaire?

4989   Mme VOYER-LÉGER: Oui.

4990   CONSEILLÈRE LAMARRE: Merci. Ce sont toutes mes questions. Merci, monsieur le président.

4991   LE PRÉSIDENT: Michel

4992   CONSEILLER ARPIN: Merci, monsieur le président. Il n'y a pas une contradiction dans votre présentation? Je prends votre paragraphe 16 où vous dites que... attendez, il ne faut pas que je me trompe là, s'en remettre au... non, ça c'est votre conclusion, pardon. Je vais commencer par votre paragraphe 9 et je vais citer les deux paragraphes.

4993   Dans le paragraphe 9, vous nous dites que «La compensation par valeur, ça vous apparaît une des façons d'atteindre l'objectif, donc ça... et que ça amène les télévisions généralistes à négocier un juste prix»

4994   Et vous dites au paragraphe 16:«S'en remettre aux lois du marché parce que la négociation c'est la loi du marché, ce serait éliminer du radar l'existence des communautés minoritaires.»

4995   Où est votre position là parce que dans le paragraphe 9 vous dites que vous avez une position, dans le paragraphe 16 vous en avez un autre.

4996   Mme VOYER-LÉGER: Attendez; je vais essayer d'expliquer notre position puis vous me direz si ça résout la contradiction ou si je l'augmente.

4997   Donc, pour nous, ce qui semble évident, c'est qu'il faut que les télévisions généralistes soient compensées par les distributeurs pour la valeur de leur signal. Cela dit, sur quel critère vont-elles être compensées? À ma connaissance, ce n'est pas résolu encore, là, c'est un peu de tout ça qu'on discute.

4998   C'est pour ça qu'il nous apparaît que la question du pourcentage de contenu canadien chez les télés généralistes devrait être prise en compte dans le niveau de compensation.

4999   Cela dit, notre mémoire ne vise pas à mettre au banc des accusés les lois du marché à tout profit et sur toutes les questions. Ce qu'on dit, c'est qu'on ne peut pas s'en tenir uniquement aux lois du marché à cause de ce que je viens de dire. C'est que chaque fois que les gens amènent, puis j'écoute vos audiences depuis trois jours, chaque fois que les gens amènent des sondages, ils amènent des cotes d'écoute, nous, on n'est pas présent, nous on n'est pas dans ce radar-là, jamais, là. C'est impossible qu'on soit là.

5000   Puis à ce moment-là, bien, la voie des communautés francophones en situation minoritaire ne se fait pas entendre.

5001   Cela dit, il faut trouver un moyen pour que la SRC soit capable de faire son travail qui, pour nous, est essentiel puis je pense que... nous pensons que ça passe par la compensation pour le signal.

5002   CONSEILLER ARPIN: Parce que ce matin, on a entendu le groupe qui s'appelle «Friends of Canadian Broadcasting» qui sont les grands défenseurs de la radiodiffusion publique au Canada et en utilisant le marché de Toronto à titre d'exemple et en utilisant le critère que vous venez de donner du succès de la programmation canadienne.

5003   La station de langue française de Toronto recevrait sur une base d'un dollar à se partager, .02 $. Est-ce que selon vous ça rend compte des besoins de Radio-Canada à Toronto? Mais il y a quand même probablement un million de foyers, 1,500 000 foyers, là, à Toronto.

5004   Mme VOYER-LÉGER: Et, excusez, la division a été faite sur la base du contenu canadien?

5005   CONSEILLER ARPIN: Oui.

5006   Mme VOYER-LÉGER: Là, j'avoue que... Donc, ce que ça veut dire, c'est que la SRC de Toronto ne diffuse pas de contenu canadien?

5007   CONSEILLER ARPIN: Non, non, mais c'est parce que CTV en a pour 0,29 $, CBC en a pour 0,16 $é.

5008   Mme VOYER-LÉGER: Et quels étaient les autres critères?

5009   CONSEILLER ARPIN: C'était le critère, c'est le même que le vôtre.

5010   Mme VOYER-LÉGER: O.k. Je n'ai pas de réponse.

5011   M. HENRY: On n'a pas véritablement de réponse sur des spécifications comme celle-ci là. Notre préoccupation, encore une fois, c'est de s'assurer que... c'est de s'assurer que Radio-Canada dispose des financements nécessaires pour établir des programmations locales qui reflètent les communautés francophones et acadiennes en situation minoritaire. Et là, on ne pourrait pas répondre sur...

5012   CONSEILLER ARPIN: Mais est-ce que... certainement vous allez conclure que dans les marchés minoritaires la règle de la négociation n'est pas nécessairement porteuse.

5013   M. HENRY: Effectivement.

5014   CONSEILLER ARPIN: D'accord. Merci, c'est tout, monsieur le président.

5015   LE PRÉSIDENT: O.k. Merci beaucoup. C'était la dernière présentation aujourd'hui. On va commencer demain à 0900.

--- Whereupon the hearing adjourned at 1615, to resume on Thursday, December 10, 2009 at 0900

   REPORTERS

____________________      ____________________

Lynda Johansson         Jean Desaulniers

____________________      ____________________

Monique Mahoney         Madeleine Matte

Date modified:

2009-12-10