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TRANSCRIPT OF PROCEEDINGS
FOR THE CANADIAN RADIO-TELEVISION AND
TELECOMMUNICATIONS COMMISSION
TRANSCRIPTION DES AUDIENCES DU
CONSEIL DE LA RADIODIFFUSION
ET DES TÉLÉCOMMUNICATIONS CANADIENNES
SUBJECT / SUJET:
PUBLIC HEARING EXAMINING NEW MEDIA /
AUDIENCE PUBLIQUE SUR LES NOUVEAUX MÉDIAS
HELD AT: TENUE À:
Place du Portage Place du Portage
Conference Centre Centre de conférences
Outaouais Room Salle Outaouais
Hull, Quebec Hull (Québec)
December 4, 1998 Le 4 décembre 1998
Volume 10
tel: 613-521-0703 StenoTran fax: 613-521-7668
Transcripts
Transcription
Afin de rencontrer les exigences de la Loi sur les langues
officielles, les procès-verbaux pour le Conseil seront
bilingues en ce qui a trait à la page couverture, la liste des
membres et du personnel du CRTC participant à l'audience
publique ainsi que la table des matières.
Toutefois, la publication susmentionnée est un compte rendu
textuel des délibérations et, en tant que tel, est enregistrée
et transcrite dans l'une ou l'autre des deux langues
officielles, compte tenu de la langue utilisée par le
participant à l'audience publique.
tel: 613-521-0703 StenoTran fax: 613-521-7668
Canadian Radio-television and
Telecommunications Commission
Conseil de la radiodiffusion et des
télécommunications canadiennes
Transcript / Transcription
Public Hearing / Audience publique
New Media / Nouveaux médias
BEFORE / DEVANT:
David Colville Chairperson / Président
Vice-Chairperson,
Telecommunications /
Vice-président,
Télécommunications
Françoise Bertrand Chairperson of the
Commission / Présidente du
Conseil
Martha Wilson Commissioner / Conseillère
Cindy Grauer Commissioner / Conseillère
Joan Pennefather Commissioner / Conseillère
David McKendry Commissioner / Conseiller
ALSO PRESENT / AUSSI PRÉSENTS:
Carolyn Pinsky / Commission Counsel /
Karen Moore Avocates du Conseil
Ted Woodhead Hearing Manager / Gérant de
l'audience
Daphne Fry Manager of Convergence
Policy / Responsable de la
politique sur la
convergence
Diane Santerre / Secretaries / Secrétaires
Carol Bénard
HELD AT: TENUE À:
Place du Portage Place du Portage
Conference Centre Centre de conférences
Outaouais Room Salle Outaouais
Hull, Quebec Hull (Québec)
December 4, 1998 Le 4 décembre 1998
Volume 10
tel: 613-521-0703 StenoTran fax: 613-521-7668
ii
TABLE OF CONTENTS / TABLE DES MATIÈRES
PAGE
Presentation by / Présentation par:
Friends of Canadian Broadcasting 2569
Core Curriculum Group 2599
Canadian Conference of the Arts/ 2641
La conference canadienne des arts
Canadian Film Centre 2672
Canadian Independent Film Caucus 2699
Communications and Diversity Network 2733
Bell Satellite Services Inc. 2771
Ms Leslie Regan Shade 2831
tel: 613-521-0703 StenoTran fax: 613-521-7668
2569
1 Hull, Quebec / Hull (Québec)
2 --- Upon resuming on Friday, November 4, 1998,
3 at 0900 / L'audience reprend le vendredi,
4 4 décembre 1998, à 0900
5 11106 THE CHAIRPERSON: Good morning,
6 ladies and gentlemen.
7 11107 We will return to our proceeding now
8 looking at the issues related to new media and the
9 Internet.
10 11108 Madam Secretary, our first party for
11 the day.
12 11109 MS BéNARD: Thank you, Mr. Chairman.
13 11110 The first presentation will be
14 Friends of Canadian Broadcasting, Mr. Ian Morrison.
15 11111 THE CHAIRPERSON: Good morning, Mr.
16 Morrison.
17 PRESENTATION / PRÉSENTATION
18 11112 MR. MORRISON: Mr. Vice-Chair, thank
19 you, and members of the Commission. Thanks for the
20 opportunity to appear.
21 11113 We are here to applaud this
22 initiative, the first that this Commission has
23 undertaken on the issue of convergence in digital
24 technologies.
25 11114 The parameters you have set are not a
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1 road map to regulation. Rather, they are an important
2 first effort at charting the issues, determining where
3 stakeholders and the interested public stand and
4 avoiding the mistakes of regulators in other
5 jurisdictions. We regret that these laudable
6 initiatives have been misconstrued by some intervenors
7 and commentators.
8 11115 We see this hearing process as an
9 important learning opportunity for the Commission, for
10 intervenors, for other governmental bodies in this
11 country and abroad and for the Canadian public.
12 11116 The record of your discussion with
13 interested parties over two weeks should be considered
14 a state-of-the-art textbook for students of new media.
15 This will add still more traffic to your Web site.
16 11117 Based on data compiled by the OECD
17 for the period December 197 to June 1998, almost one in
18 every 12 Internet users the world over resides in this
19 country. Canadians are 50 per cent more likely than
20 Americans to use the Internet, three times as likely
21 than Japanese or U.K. residents and four times as
22 likely as Germans.
23 11118 The issue for Friends is the impact
24 of the convergence of new media and television. The
25 cultural and industrial goals that underlie Canadian
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1 broadcasting were framed with television in mind. As
2 new media carry increasing amounts of entertainment
3 programming, Friends' concern is to ensure that these
4 important policy goals are sustained.
5 11119 How or whether the Commission chooses
6 to define new media will be an important outcome of
7 these hearings. The Commission observed in its call
8 for comments that the term is likely to be defined in
9 different ways.
10 11120 Friends notes a range of options
11 before you: the Internet in its current, largely text
12 and graphics form; a future high-bandwidth Internet
13 rich in audio/video; multimedia distributed by private
14 networks; digital television and digital audio, and a
15 complete migration of television to the Internet.
16 11121 Friends urges the adoption of an
17 expansive and forward-looking definition that can
18 accommodate future technological developments.
19 Regulating new media mat by premature, but so too would
20 be inadvertently ruling out such regulation.
21 11122 Friends also supports the
22 recommendation of Netstar Communications that initially
23 at least broadcasting should include all new media
24 intended for reception by the general public. Certain
25 kinds of interactive and bi-directional services that
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1 are integrated with television programs might also be
2 included.
3 11123 Numerous intervenors advocate a more
4 narrow definition on the logic that new media content
5 will be non-scheduled and on-demand. Scheduling or
6 simultaneity are not required elements of broadcasting.
7 11124 Problems of definition obscure the
8 more important issue of classification. In its
9 submission, Call-Net Enterprises suggested three
10 categories into which new media services might fall:
11 telecom-analogous services, e-mail, telephony, things
12 of that nature; interactive services,
13 information-oriented Web sites for example and
14 broadcast-analogous services. The latter, of course,
15 is what is of great interest to us.
16 11125 Without underestimating the
17 challenges posed by the first two, Friends expects most
18 controversy to arise from the third. The exhibition of
19 exclusive content through new media in a manner similar
20 to its exhibition on television raises substantial
21 regulatory questions both about new media and
22 traditional television.
23 11126 Friends broadly concurs with the
24 majority of industry stakeholders in their opposition
25 to applying traditional broadcast regulations to new
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1 media. These intervenors are persuasive in their claim
2 that regulation may discourage growth, disadvantage
3 canadian companies vis-à-vis international competitors
4 and drive content producers and aggregators to other
5 jurisdictions.
6 11127 Monitoring would be costly and
7 difficult and with unlimited shelf space, Canadian
8 content in theory should thrive in a competitive
9 environment.
10 11128 Yet the majority of
11 broadcast-analogous content is likely to originate from
12 within the regulated industry. We noted with great
13 interest Mr. Grant's comments yesterday about the
14 copyright as a magnetic field in which this would
15 operate.
16 11129 The Specialty and Premium Television
17 Association has noted that many broadcasters have taken
18 advantage of new media as a cross-promotion and
19 branding tool to attract audience.
20 11130 Increasingly, broadcasters' Web sites
21 offer integrated content such as interactive
22 programming, interactive program guides, discussion
23 forums and electronic commerce. The trend has
24 progressed much further in the Untied States where
25 vertically integrated broadcasters have an enormous
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1 Internet presence.
2 11131 We congratulate the CBC and a
3 substantial number of specialty channels for their
4 innovative use of Web sites as complements to their
5 broadcast services. These have provided some excellent
6 Canadian content on the Internet. We also note with
7 dismay the failure of Canwest Global or CTV to act on
8 this opportunity.
9 11132 Although full convergence may
10 eventually happen, Friends suggest that the Commission
11 not hold its breath for the technology that will make
12 it possible. We are still waiting for digital
13 television.
14 11133 I passed up a Wall Street Journal
15 from yesterday showing the likely penetration of
16 digital television in the United States to the year
17 2005.
18 11134 Moreover, according to the Specialty
19 and Premium Television Association, no working model
20 yet exists to produce cost recovery, let alone profit
21 from new media.
22 11135 It is questionable, regardless of
23 what is technologically possible, whether viewers will
24 want to be entertained on the same screen that they use
25 to download information on stock prices or the weather,
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1 or compose e-mail on a television set for that matter.
2 11136 For now, the advent of new media
3 presents traditional broadcasters with unprecedented
4 opportunities to capitalize on technological change,
5 perhaps even to lead it. Yet several intervenors,
6 notably the Canadian Association of Broadcasters,
7 express substantial concerns about new media. They
8 fear losing audience to it and they fear competition
9 from unregulated Internet broadcasters.
10 11137 To the extent that CAB's expressed
11 fears are genuine, the threats they outline are far off
12 if just about all the experts, and we are not among
13 those, appearing before you are to be believed.
14 11138 Notwithstanding these trends, CAB
15 would have us believe that its members stand to face
16 fierce competition from unregulated Internet
17 broadcasters. It argues that its members cannot
18 continue to meet a heavy regulatory burden if this
19 competition is unregulated.
20 11139 In the recently concluded television
21 policy hearings, CAB called for reduced regulation. It
22 now tells the Commission prepare one day to eliminate
23 regulation entirely or jeopardize the survival of the
24 Canadian broadcasting industry.
25 11140 Friends strenuously opposes any
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1 diminution of existing regulation on traditional
2 broadcasters, now or in the foreseeable future.
3 Somebody once said what is foreseeable future? It's
4 when the Income Tax Act is repealed and you hold your
5 breath ten years.
6 11141 We are supported in our contention in
7 this position by several industry intervenors,
8 including IBM Canada, whose December 1996 discussion
9 paper on convergence explicitly recommended maintaining
10 and preserving the regulatory framework in recognition
11 of the role traditional broadcasting continues to play
12 in furthering cultural policy.
13 11142 Regarding the regulating of new
14 media, we share the view that any regulation of new
15 media must be structured differently from traditional
16 regulation. We suggest the following principles as
17 points of departure, and only points of departure.
18 11143 Viewer access. If and when
19 significant broadcasting content moves to the Intenet,
20 the Commission should facilitate inexpensive access,
21 especially in remote and rural Canada.
22 11144 We believe that limited public
23 infrastructure funding should focus on access. We note
24 that the industry has already achieved substantial
25 infrastructure progress without public funding.
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1 11145 Content production. Friends believes
2 increasing content production is the best way to ensure
3 a Canadian presence in new media, keeping in mind the
4 need for a balance between content and infrastructure
5 development.
6 11146 We support the idea of a new media
7 production fund, but in agreement with the Directors
8 Guild and others, do not wish to see money diverted
9 from existing funds.
10 11147 We also oppose a blanket tax on
11 Internet providers, many of which remain text based and
12 information oriented. Telefilm Canada has identified
13 preferable funding sources: extending the Canadian
14 Film & Video Production Tax Credit to include new media
15 and using the significant benefits test to raise new
16 funds. We also believe priority funding assistance
17 should go to indigenous productions.
18 11148 Shelf space. Recognizing the
19 substantial resources that traditional broadcasters can
20 bring to new media ventures, Friends supports the
21 removal of barriers whose specific effect is to
22 discourage broadcaster entry into new media.
23 11149 At the same time we endorse Netstars'
24 recommendation that in exchange Canadian content
25 providers be guaranteed fair access to shelf space and
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1 at least comparable profile to that of non-Canadian
2 content.
3 11150 Prominence. Friends believes
4 prominent positioning of Canadian content should go
5 hand in hand with shelf space. We support Sun Media's
6 proposal that Internet broadcasters and distributors be
7 required to give priority placement to Canadian content
8 on program guides and links pages.
9 11151 We note with great concern, for
10 example, the failure of the major cable companies to
11 offer Canada-firs t platforms in their @home service.
12 Shaw's service, for example, is baldly American in
13 nature, livened up with Newsworld ads. It demonstrates
14 Shaw's true values when they engage in unregulated
15 activities.
16 11152 Promotion. Just as it is on
17 television, Canadian broadcasting on new media will
18 need to be promoted effectively to attain maximum
19 audience and, therefore, cultural value.
20 11153 The CRTC might consider providing
21 regulatory certainty for fledgling broadcast analogous
22 services by an exemption order for broadcasting
23 services found on the internet.
24 11154 Such an order might contain a
25 definition which could address the extent of the
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1 exemption. The demarcation point could be when
2 licensed broadcasting suffers a significant loss of
3 advertising share based on market requirements.
4 11155 Again I note Mr. Grant's comments on
5 behalf of the Directors Guild. Yesterday he used the
6 word threshold, perhaps a better word than we came up
7 with here.
8 11156 Finally, the policy framework.
9 Friends shares the views of many intervenors that the
10 existing statutes may be inadequate to address certain
11 issues raised by new media. A positive outcome of this
12 public hearing will be a recommendation from your
13 Commission to the government on legislative amendments
14 that may eventually be required to bring your governing
15 statutes up to date.
16 11157 We also endorse the recommendation of
17 Netstar and others that the Commission monitor the
18 progress of convergence, perhaps by convening a
19 further hearing in, say, two years or so.
20 11158 The technology application and
21 content of new media continue to develop at a rapid
22 pace and will require continued vigilance. If you
23 accept this recommendation, we will be there.
24 11159 Thanks.
25 11160 THE CHAIRPERSON: Thank you, Mr.
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1 Morrison, for your presentation.
2 11161 I particularly note your
3 characterization of a purpose and focus of this
4 proceeding. While I agree with you it has been
5 misconstrued in several fora, that has probably helped
6 to create greater public awareness of the fact that the
7 proceeding is going on and probably resulted in a lot
8 more people participating in the process than otherwise
9 might have been.
10 11162 In that sense it might have been a
11 little bit helpful.
12 11163 MR. MORRISON: It's a new venture for
13 the Commission, a kind of marketing strategy.
14 11164 THE CHAIRPERSON: Yes. For
15 discussion of your views on this, I will turn to our
16 Chair, Madam Bertrand.
17 11165 THE CHAIRPERSON OF THE COMMISSION:
18 Good morning and thank you very much for participating.
19 11166 Unless I was not totally awake, I
20 thought that your presentation this morning followed
21 the chapter heads that you had outlined and began to
22 describe in your Phase II comments as well as
23 incorporating comments on what you have been hearing
24 during the course of the hearing.
25 11167 I see that you have been following
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1 quite closely.
2 11168 MR. MORRISON: Yes, sometimes when I
3 am very tired, I insist I have the right to be
4 inconsistent.
5 11169 THE CHAIRPERSON OF THE COMMISSION: I
6 didn't read any inconsistency but rather you were
7 responsive to what you heard in the proceeding. That
8 is very much the experience we have had in this dynamic
9 hearing that has evolved from intervention to
10 intervention, trying to really understand the main
11 objective of the hearing, that of exploration.
12 11170 MR. MORRISON: We have been
13 distracted by Liberal caucus committees and challenges
14 to your authority in the courts, but other than that,
15 you have had our complete attention.
16 11171 THE CHAIRPERSON OF THE COMMISSION:
17 We appreciate your intervention at that caucus. Thank
18 you.
19 11172 Coming back to your presentation in
20 this hearing, the definition of new media that you
21 propose, as I see it, elements under the umbrella or
22 the wings of new media, is that how we should read the
23 five points you have made from Internet to complete
24 migration of television to the Internet. For you, it
25 is the whole array of those elements that constitute
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1 new media.
2 11173 MR. MORRISON: Yes. I will try to
3 restate more clearly. You would be performing a public
4 service, we believe, in doing something that would have
5 longer term viability were you to cast a broad net in
6 your description and definition of new media.
7 11174 THE CHAIRPERSON OF THE COMMISSION:
8 You seem to leave out in that broad net the element
9 that many intervenors have talked about, the digital
10 distribution and the physical distribution, the CD-ROM,
11 the multimedia form that is on the shelf and the
12 problem of it being distributed because it is swallowed
13 up in the corporate world, the global economy, mainly
14 American.
15 11175 You seem to exclude that from what
16 you call new media. Am I right?
17 11176 MR. MORRISON: Perhaps we should not
18 have done so. By analogy, I suppose, it's a little bit
19 like the role of the videotape and traditional
20 regulation. Our concern is as broad as the audiovisual
21 system, if you want to put it that way. It is some
22 concern to other physical forms of distribution.
23 Content should be the focus.
24 11177 THE CHAIRPERSON OF THE COMMISSION:
25 Do you include e-mail and electronic commerce in the
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1 definition of new media?
2 11178 MR. MORRISON: Yes. We would
3 certainly include it, but with respect to the focus of
4 your attention, we picked up the phrase from others, I
5 think it was Call-Net -- I hope I'm not misquoting
6 then -- the phrase broadcast analogous services. That
7 is in our view the area where the focus of our concern
8 should arise because that is where the two worlds are
9 touching.
10 11179 THE CHAIRPERSON OF THE COMMISSION:
11 In terms of definition, you would be as broad as can
12 be, but when it comes to our focus and attention that
13 would be under the wing of the Broadcasting Act, that's
14 where you concentrate your attention on some form of
15 expression of new media which would be broadcast
16 analogous.
17 11180 MR. MORRISON: Yes. I suppose we are
18 making a distinction which may be somewhat artificial.
19 You have studied this more than we, but between a
20 definition in new media and a classification of new
21 media, in that classification which Call-Net proposed
22 to you, which appealed to us, the focus of our concern
23 will always be on the broadcast analogous.
24 11181 THE CHAIRPERSON OF THE COMMISSION:
25 What is broadcast analogous? Can you take us by the
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1 hand and tell us when we consider the capacity of
2 broadband services what you see as the expression of
3 that. It's not strictly what we see now, migrated on
4 the Internet. I suppose it's a bit different than
5 that.
6 11182 What would you say?
7 11183 MR. MORRISON: I am reminded of Jean
8 Jacques Cousteau saying he was here to discuss
9 principles. He would not debate the facts. You have
10 given me an opportunity to depart from the floor here,
11 so I will.
12 11184 THE CHAIRPERSON OF THE COMMISSION:
13 Be my guest.
14 11185 MR. MORRISON: It seems to me that
15 our concern is with audiovisual content that is
16 directed at the public, at the broad public out there I
17 suppose to certain targeted audiences. That is the
18 principle that guides our attention to the meaning that
19 Parliament intends around the word broadcast.
20 11186 THE CHAIRPERSON OF THE COMMISSION:
21 Let me challenge you here on your principle here. If
22 we take, for example, community channels that are
23 presently available in the distribution of
24 broadcasting, would the capacity of the net to have
25 community net, targeted almost to the street you live
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1 on or the neighbourhood in which you live.
2 11187 Where would draw the line in terms of
3 what would be public without being intimate like a one
4 on one, but still very targeted and limited in
5 distribution?"
6 11188 MR. MORRISON: It seems I am
7 worshipping at the feet of Mr. Grant here, but I noted
8 in some of the comments that were put before you
9 yesterday, and I think other intervenors have said this
10 as well, that there is a tendency for broader bandwidth
11 in the foreseeable future to be available in more local
12 arrangements and that the bandwidth is like the
13 bottleneck for audiovisual quality visual distribution.
14 11189 Likely the first onset of television
15 quality signals will take place not on a global basis,
16 but on a community basis. With that in mind your
17 question is particularly apropos.
18 11190 I suppose the analogy to community
19 channel -- I don't like the word that has crept into
20 our presentation, traditional broadcasters, but until
21 we find a better one -- the analogy to the community
22 channel is interesting.
23 11191 You don't actually license community
24 channels. You provide kind of a policy framework to
25 encourage their application. There are a lot of
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1 problems with that. We will talk about them, I hope,
2 some other day.
3 11192 Those are in our judgement
4 broadcasting.
5 11193 THE CHAIRPERSON OF THE COMMISSION:
6 Without necessarily bringing the whole apparatus of
7 heavy handed regulation.
8 11194 MR. MORRISON: Yes. Some of those
9 instruments right now, one of their strengths and
10 defining characteristics is not too much heavy handed
11 production value added, that they are accessible to
12 people in an inexpensive way.
13 11195 We will on other occasions be coming
14 back to you with concerns about the directions of cable
15 companies, Shaw in particular regarding cable channels,
16 for another day. There is a particular value in having
17 less production added or accessibility in those
18 channels.
19 11196 THE CHAIRPERSON OF THE COMMISSION:
20 Taking your point it is under the umbrella of
21 broadcasting when we come to that category of new
22 media, understanding that it is not your view that we
23 should import and impose what exists as the framework
24 as we know it for lack of a better word than media,
25 that we have known since we were young, and we are not
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1 any more -- we learned that over the two weeks -- what
2 would be the kind of elements that you would see more
3 appropriate from your understanding of what is new
4 media and, more so, what is broadcast analogous
5 services? What kind of different regime and tools? Do
6 you see a self-regulatory environment? Do you see
7 strictly exemption? What is your view?
8 11197 MR. MORRISON: I think you are in a
9 very good situation right here. You are doing the
10 right thing in that you are looking forward and you
11 have time on your side.
12 11198 Anyone who knows the answer to that
13 question right now is probably wrong. We are all
14 groping towards that answer.
15 11199 With that caveat, we have decided, I
16 guess along with some others, that one of the
17 mechanisms at your disposal which should be used as,
18 not an immediate but a short term measure, and I
19 referred to it and you in your question, the notion of
20 some type of exemption order which contains within it
21 some type of threshold or demarcation line regarding
22 some type of audience surrogate like advertising
23 revenues, the one that occurs to us.
24 11200 We have noticed in the Commission';s
25 behaviour before on the telecom side -- Mr. Vice-Chair,
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1 you are the expert on all of these things -- you used
2 market share as an instrument to determine when certain
3 things would apply to the predominant formerly
4 monopolistic telephone company in your policies over
5 the years.
6 11201 I have heard as big cable barons as
7 Ted Rogers use market share as "We will be in trouble
8 with our shareholders if the competition gets beyond 10
9 per cent", some type of measure. It seemed to us that
10 the measure might come out of the advertising pie. It
11 might be the point at which some of these emerging
12 services pass a threshold where they ought to concern
13 you and where we think at best premature concerns of
14 the Canadian Association of Broadcasters might come
15 into play.
16 11202 That's our first cut at some specific
17 policy advice.
18 11203 THE CHAIRPERSON OF THE COMMISSION:
19 What would you answer to people, and there are many in
20 this proceeding who have told us of the necessity for
21 more certainty, that they need to know where Canada is
22 going, where the CRTC is going, so that they can invest
23 heavily.
24 11204 Do you think an exemption order, even
25 with a threshold that would be transparent to everyone,
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1 would not prevent some interesting investments in the
2 creative world as well as the commercial world?
3 11205 MR. MORRISON: Just to understand
4 you. Are you expressing a concern that such a device
5 might frustrate or inhibit some investments that are
6 important investments?
7 11206 THE CHAIRPERSON OF THE COMMISSION: I
8 am repeating what some intervenors have said. Yes.
9 That is the idea of my question.
10 11207 MR. MORRISON: That is the tension, I
11 guess. There are two values that you have to weigh.
12 11208 It would respond to one of the needs
13 of investors, which is a greater degree of certainty
14 and understanding the rules and at the same time not
15 laying a trap down the road, undermine the bedrock
16 cultural policies of the Canadian government expressed
17 through your Commission and otherwise.
18 11209 You have to have great concern for
19 not frustrating investment. I think that you would be
20 making a contribution by giving the potential investor
21 some certainty of what the rules would be. That's the
22 course that we recommend in any event.
23 11210 THE CHAIRPERSON OF THE COMMISSION:
24 Kind of a reassurance for a few years, giving the rules
25 yet not answering totally to the clarity of the
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1 situation.
2 11211 MR. MORRISON: And a very active
3 watching brief on the situation -- many of our
4 suggestions are derivatives of those of others -- and
5 that you announce at an appropriate time that you are
6 going to revisit the subject.
7 11212 You have a three year planning
8 mechanism.
9 11213 THE CHAIRPERSON OF THE COMMISSION:
10 It should be part of our next Vision II.
11 11214 MR. MORRISON: Vision II.
12 0930
13 11215 Let's come to the opportunity you see
14 there for broadcasters, once we kind of discuss what is
15 new media, what should be under the Broadcasting Act
16 and what kind of treatment. You talk also about the
17 great opportunity for broadcasters. You underlined
18 that Global has not been involved much, or at all. CTV
19 has been from my recollection. From the Olympics it
20 seems to me that they had a Web site and they talked
21 about it.
22 11216 MR. MORRISON: I visited their Web
23 site, Madam Chair, on occasion and I was getting home
24 pages that were a year old. So, I suppose it
25 physically exists, but it might as well not. At least
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1 Global is more forthcoming because what Global has
2 available is strictly nothing, and I think CTV was
3 something -- nothing masking as something. So, I think
4 they are essentially the same position.
5 11217 THE CHAIRPERSON OF THE COMMISSION:
6 Maybe that's an element in terms of criteria that we
7 should have if ever we go a route like you are
8 proposing, that kind of investment that traditional
9 broadcasters are doing on new media is a sign that
10 something is happening and until that day, even if some
11 advertising revenues are on the net, that doesn't
12 mean --
13 11218 MR. MORRISON: I like where you are
14 going because it seems to me that we have appeared here
15 with charts and graphs trying to persuade you that you
16 should pay more attention to local and regional
17 expression on television, and our idea is that in the
18 normal course of your work when people come before you
19 saying that they want to acquire somebody else, or that
20 they want to acquire a licence that you have it on the
21 list prominently.
22 11219 It could be that this issue which you
23 are now raising is something else that you would put on
24 the list and that there should be some linkage, just as
25 forcefully I draw to your attention because I happened
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1 to be in a Shaw market on the weekend and saw their
2 at-home service and it was shocking. There wasn't even
3 the kind of thing that some person with Internet
4 knowledge who would be in our operation could have done
5 to Canadianize the interface. I mean, it was baldly
6 and quite apparently an American important that they
7 were offering to the public, in Victoria in this case.
8 And price of place for Canada, nothing.
9 11220 So, that ought to be embarrassing to
10 Jim Shaw, Jr. and the next time he is sitting up here
11 and one of you asks him about it.
12 11221 THE CHAIRPERSON OF THE COMMISSION:
13 How do you make sure -- what are your ideas on how it
14 is possible to make more visibility and that echoes a
15 lot of interventions we have had on the necessity for
16 better promotion, better marketing because it is new
17 and the branding is not Disney of course, so what are
18 your ideas on how the Commission or governments that
19 will be doing recommendations could encourage so that,
20 you know, Shaw has a better presentation of the
21 Canadian reality or the other players in that world.
22 How do you see that?
23 11222 MR. MORRISON: Knowing the political
24 orientation of their owners, I was impressed, if we are
25 not misquoting them, that Sun Media used the word
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1 "required". That major service providers and Web sites
2 should be required to put pride of place for Canada, or
3 words to that effect.
4 11223 I think I would -- I mean we did
5 endorse that and we do right now. So, there must be
6 some -- I am not sure what the mechanisms are at your
7 disposal, but the goal ought to be to strongly
8 influence the behaviour of ISPs and Canadian sites,
9 especially major ones, to give more to Canada.
10 11224 I suppose you can also -- I mean
11 there's a push/pull dimension to this as well, or an
12 upward vacuum pulling people to behave properly and we
13 have to give credit where credit is due.
14 11225 At this point, for example, the
15 presidency of the CBC is very much up in the air. We
16 are talking about a new President and we have been
17 thinking about metaphorically the obituary for the
18 current President, and one of the things on the plus
19 side would be the emphasis on new media that the CBC
20 has developed and perhaps there will be some
21 competitive pressure in the world of television from
22 the behaviour of the CBC and the specialty channels
23 leaving the other people behind here.
24 11226 THE CHAIRPERSON OF THE COMMISSION:
25 Tell me, if money was to be made available, and I
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1 understand from your original presentation, as well as
2 this morning, that you don't see that the actual funds
3 should be either way, to the more traditional form,
4 drama, documentaries and so on, or on site, on the
5 Internet. For you it's different funds and a different
6 approach to it. You wouldn't like to have funds that
7 are kind of limited derived towards the new media. Am
8 I --
9 11227 MR. MORRISON: Yes, that's right.
10 11228 THE CHAIRPERSON OF THE COMMISSION:
11 But if we were to find ways to create new funds or if
12 money was made available by government to support, what
13 would be for you the appropriate criteria or what do
14 you see that should be put forward in terms of the
15 engine of creating a real development in supporting the
16 initiatives?
17 11229 MR. MORRISON: I suppose I am not
18 really departing from the brief message or the text
19 here to say that there are two competing things. One
20 is infrastructure funding which should be focused on
21 attempting to equalize access in a country such as
22 Canada where there are more geographic barriers to
23 participation in the audio-visual world than elsewhere,
24 that is one of the issues.
25 11230 The other is Canadian content of an
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1 audio-visual nature in new media, but I am also
2 persuaded that we have some time to address this
3 because of the kinds of factors including that issue
4 regarding copyright, which suggests that much of our
5 attention should be directed at the behaviour of
6 existing broadcasters using new media today.
7 11231 THE CHAIRPERSON OF THE COMMISSION:
8 This will be my final question, the actual behaviour
9 into the new world. Do you think they are the best
10 players we have in order to really have the full
11 flourishing of the promises of the new media; my first
12 question.
13 11232 My second question: How can it be
14 encouraged concretely by the Commission without
15 impairing the capacity of doing all the other things we
16 have talked about in the TV policy, either local
17 programming and the famous 7, 8, 9 categories? Where
18 do you see our role and do you have any ideas to
19 suggest to us?
20 11233 MR. MORRISON: That's a really big
21 one. I guess -- I think the very fact that you are
22 listening and you seem to be listening is a first step
23 and I wouldn't want to denigrate that. That is in and
24 of itself important.
25 11234 The public statements that you make
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1 following digestion of this important hearing are a
2 first step. You can make a difference with that and
3 you are asking me perhaps about the content of some of
4 those statements, but I just stress for a moment that
5 it seems to us from where we sit and as we have learned
6 from watching the dialogue between you and intervenors
7 before and during this hearing, and we will learn
8 because of the record, that it may decay rather
9 rapidly, but the knowledge that you have acquired and
10 enabled others to share is in and of itself quite
11 valuable and you might consider some efforts to go
12 beyond perhaps what you would otherwise do in a hearing
13 to package or make accessible that knowledge, to
14 indicate what you heard or to commission others to
15 comment on it. Maybe that's a suggestion that should
16 be directed to government, beyond the Commission, I am
17 not sure. That's one.
18 11235 Moving into the content of what you
19 might do, I mean you have to keep your eye on the ball
20 of the current world, the world of 1998 to 2001 and
21 your television hearings. I guess what I am giving you
22 more of a process than a content answer. Your learning
23 from this hearing is something that you put on kind of
24 a matrix; how do decisions we make in the present
25 tense, in the real world, how will they influence these
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1 new considerations that are now on our radar scope and
2 vice versa.
3 11236 I think that people who could quickly
4 answer your question are probably much wiser than us,
5 or perhaps they have the wrong answers. I guess you
6 are going to play some kind of leadership role by
7 making a first stab at that.
8 11237 The good news is that you will have
9 an opportunity to revisit it because we have got some
10 time. It will be very interesting in a couple of years
11 to see what is happening. First off, that exemption
12 order and working on the threshold and it seems to us
13 that's the concrete thing you could do right now.
14 Otherwise you are more defining issues and
15 understanding territory, your mapping in this exercise.
16 11238 THE CHAIRPERSON OF THE COMMISSION:
17 My last, last question. The CBC is proposing to do a
18 super site for promotion and creating attention from
19 Canadians about Canadian sites. Do you think it is a
20 good idea and do you think it should be done with the
21 existing money of the CBC or should it be funded
22 separately if it was to be the case? Do you think the
23 question can be asked whether it is diversification or
24 what is expected of the CBC?
25 11239 MR. MORRISON: Yes. In principle our
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1 judgment there would be a little bit like a Jeffrey
2 Simpson column this morning, trust the board of
3 directors of the CBC. That ought to be their decision.
4 I wouldn't want the government -- the Commission would
5 have more right because of your licensing capacity to
6 lean on the CBC I suppose, but number one we welcome
7 it. We think it's a good idea and it begs questions
8 about scarce CBC resources. But it is a leadership
9 role. Somebody has got to do it. We think the CBC is
10 well placed to do it and we actually agree with that
11 initiative, but that is a decision that ought to be
12 left with the CBC.
13 11240 THE CHAIRPERSON OF THE COMMISSION:
14 Thank you very much, Mr. Morrison.
15 11241 Thank you, Mr. Chair.
16 11242 THE CHAIRPERSON: Thank you, Mr.
17 Morrison. We appreciate your presentation here.
18 11243 MR. MORRISON: Thank you for hearing
19 me, Mr. Chair.
20 11244 Madam Secretary.
21 11245 MS BÉNARD: Thank you, Mr. Chairman.
22 11246 The next presentation will be by Core
23 Curriculum Group.
24 11247 THE CHAIRPERSON: Please begin.
25 11248 MR. GUMLEY: Thank you.
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1 PRESENTATION / PRÉSENTATION
2 11249 MR. GUMLEY: Mr. Chairman,
3 distinguished members of the Commission, I am delighted
4 to be here this morning. My name is Gary Gumley. I am
5 the President and CEO of the Core Curriculum Group of
6 companies. Our group consists of Ingenuity Works Inc.
7 and Software Plus, two Canadian owned and operated
8 companies that have been positively impacting the use
9 of digital technology in education since 1983.
10 11250 Supplementing our initial submission,
11 I intend to provide a perspective this morning on some
12 of the issues that we feel are germane to the survival
13 of educational and cultural content creation in Canada
14 through new media. If you could bear with me, I would
15 like to read the brief this morning into the record
16 that I have prepared, as I think there are a number of
17 points that are pretty valid that I would like to
18 discuss with you this morning.
19 11251 As a teacher for 10 years and then as
20 a businessman delivering digital technology to schools
21 for the past 15 years, I am able to present a unique
22 perspective on the challenges faced by the new media
23 industry today.
24 11252 The focus of this presentation is to
25 describe two specific challenges faced in delivering
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1 Canadian produced content to Canadians through current
2 and emerging distribution channels. If Canadian
3 culture and content are to be delivered in the future,
4 it is imperative that the CRTC be aware of these
5 challenges and create unique methods of assisting the
6 fledgling industry to survive during these formative
7 years.
8 11253 To be specific, the mission of our
9 company is "to improve the delivery of education
10 through the creation of technology based educational
11 tools that promote understanding through involvement in
12 the process of learning."
13 11254 Since 1983, we have been producing a
14 catalogue of educational software that has been our
15 main marketing vehicle. The catalogue is in the kit
16 that has been provided to you and this is our latest
17 version. This catalogue has assisted thousands of
18 technology-oriented educators across Canada to choose
19 appropriate material for use with their students. If
20 you browse through this catalogue you will find that
21 most of the content is from U.S. based software
22 developers and publishers.
23 11255 In a concerted effort to reverse the
24 dominance of U.S. publishers, we have been producing
25 award winning digital content for education for the
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1 past 15 years and that's the reason for me putting the
2 display out behind me this morning. I wanted to share
3 some of that with you.
4 11256 In addition, in the kit I have also
5 added what we call our CD sampler which if you have an
6 opportunity to look through it shows all of the product
7 that we have on a CD sample product flyer that we send
8 out to our customers and end users.
9 11257 We have created and/or published six
10 titles with specific Canadian content. Three of these
11 titles have been developed in both French and English.
12 In addition, we have produced a keyboarding title that
13 is the standard used in over 70 per cent of Canadian
14 schools.
15 11258 Of all of the challenges we have
16 faced in the past 15 years, perhaps the greatest is now
17 upon us. How do we attract our customers to our
18 product in the "Internet Age"? IN order to transition
19 from floppy disk and CD-ROM based content delivery, we
20 have for the past three years been creating and
21 publishing content for delivery over the Internet.
22 11259 In 1997, we followed the successful
23 ascent of Mount Everest by two Canadian climbers, Jamie
24 Clarke and Alan Hobson. Their exploits were updated
25 daily during the climb and students could communicate
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1 with them and their support teams as they made their
2 summit bid. In 1998, we followed the first disabled
3 attempt to climb Mount Everest and happily reported
4 that dreams can come true when Tom Whittaker, a climber
5 with only one foot, successfully reached the summit in
6 late May of this year. Over 2,000 schools purchased
7 access to these products. The feedback that we had was
8 terrific.
9 11260 Now, in 1999 and 2000, our company is
10 embarking on the most difficult stage of our challenge.
11 That challenge is to effectively and profitably deliver
12 Canadian content over the Internet. We have embarked
13 on a project supported by both Industry Canada through
14 Schoolnet and Heritage Canada through Telefilm.
15 Without the support from these government programs we
16 would not have been able to embark on our Canadian
17 Heritage interactive Journey.
18 11261 I brought along something else to
19 show you. If the Commission would like copies of the
20 posters they could take them later. This is the poster
21 for our journey. It is intended to include students in
22 the process of learning about our country by producing
23 digital technology and putting it over the Internet.
24 Their projects, learning about their community, telling
25 Canada what Canada is like from their eyes, stimulated
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1 by bicycle teams travelling across the country and
2 stopping at 75 host schools across the country. It's a
3 huge project that launches next April.
4 11262 Already over 2,000 schools have
5 access to the journey, even though the event does not
6 begun until next April. The details of the journey are
7 available at our Web site www.ingenuityworks.com. I
8 invite you to review what we are doing. Please explore
9 the creative way our Canadian programmers and content
10 creators are helping children become involved in the
11 process of learning about Canada.
12 11263 The challenge, as I stated earlier,
13 is to make the transition to this new medium. While
14 you have heard numerous submissions about why the
15 Internet should not be regulated, there will be a
16 tremendous number of consumers that will want to access
17 content and make purchases through the media of CD-ROM
18 and DVD. Tens of thousands of these consumers for the
19 foreseeable future will want to purchase the product by
20 "going shopping". To make a twist on the famous quote
21 of Mark Twain "The death of the shopping mall has been
22 greatly exaggerated, in my opinion."
23 11264 I would like to focus on two
24 initiatives that I feel the Commission needs to address
25 in order to promote the continued success of Canadian
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1 owned new media companies such as Ingenuity Works and
2 Software Plus during this period of transition.
3 11265 The first initiative is one that has,
4 in my opinion, been exceptionally well outlined by Mr.
5 George Goodwin of McClelland and Stewart, the producer
6 of The Canadian Encyclopedia on CD-ROM.
7 11266 Mr. Goodwin in his submission to this
8 hearing has outlined the difficulties of getting
9 Canadian produced software bundled with hardware sold
10 in Canada. If you have not had a chance to review his
11 comments, I would urge you to do so. I would like to
12 add to his submission some of our findings.
13 11267 In 1996, we concluded eights months
14 of negotiations with Apple Computer Inc. to bundle our
15 award winning educational CD-ROM Adventure Canada with
16 selected Apple titles -- Apple hardware offerings
17 across the country. We negotiated with other hardware
18 suppliers but to no avail, usually because the product
19 they sell is assembled in the United States.
20 11268 Our contract with Apple lasted for
21 one year and then was cancelled because we were told it
22 was not cost effective for Apple in a time of severe
23 constraint to make their software bundles generic to
24 Canada. Since the bundling of Adventure Canada with
25 Apple we have been totally unsuccessful in convincing
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1 the large U.S. hardware companies to bundle any of our
2 product line, even though it is used widely in Canadian
3 schools.
4 11269 I believe it is imperative that the
5 CRTC initiate action similar to steps taken in the
6 broadcast arena. I wonder if we would ever have heard
7 of David Foster, Celine Dion and Shania Twain, just to
8 name a few fantastic Canadian talents, if the CRTC had
9 not ruled that Canadian radio stations had to have a
10 minimum of 30 per cent Canadian content played over the
11 airwaves. The same goes for the television medium. I
12 submit that our new media industry is no different.
13 Our content combines text, video and voice and will
14 continue to do so as DVD and Internet pipelines have
15 greater capacity.
16 11270 A decision by the CRTC to recognize
17 Canadian developed content for new media in the same
18 way as broadcast media would facilitate an action. In
19 our opinion, a mandate from the CRTC that the hardware
20 manufacturers bundle a minimum amount of Canadian
21 content with their hardware would be of tremendous
22 support to the protection of our culture in the new
23 media age.
24 11271 Obviously, it would be much better if
25 the hardware companies would take this initiative on
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1 their own. In my opinion, the CRTC could take
2 immediate action to assist this inequity by initiating
3 rules similar to those in the radio and television
4 industry for software bundling in Canada. Over 1
5 million computers will be sold in Canada next year.
6 11272 I would now like to address the issue
7 of gaining retail shelf space for Canadian developed
8 and published software. Ingenuity Works and its
9 predecessor companies have worked tirelessly to
10 penetrate the retail market in Canada. As of this
11 date, our complete retail product line is only carried
12 by Chapters book stores in Canada. We have been able
13 to position only half of our product with The Future
14 Shop chain. Even though for the past five months we
15 have been greatly assisted by Ingram Micro, the largest
16 distributor of computer products in the country, we
17 have effectively missed the Christmas season again for
18 our product line.
19 11273 I would just like to draw your
20 attention to one of the initiative that we attempted to
21 take to make our product stand out, which is a sticker
22 which is on our product called "Great Canadian
23 Software -- Meets Canadian School Standards". We have
24 stuck this on all of our product line to make it stand
25 out and show the difference between our product and the
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1 U.S. publishers' products.
2 11274 We have created that initiative. We
3 have participated in presentations to resellers in the
4 last seven or eight months. We have provided our
5 product to all of the buyers for all of the major
6 chains in Canada last spring. We agreed to participate
7 in advertising campaigns and other promotional events
8 and we are slowly succeeding, but we have been advised
9 that once we get the shelf space that's only half of
10 the battle. We will have a window of no more than six
11 months to ensure that the consumer seeks out the
12 product and purchases it from the retail locations.
13 11275 I have brought along some recent
14 pre-Christmas flyers from some of the major companies
15 in Canada. I won't bother holding them up at this
16 point in time, but in those flyers if you have looked
17 at them or if you have been into any of the retail
18 stores in Canada, 99 per cent of the software
19 advertised in the flyers originates in the United
20 States. Many of the store shelves have that same kind
21 of product mix on those shelves as well.
22 11276 There are three major points here.
23 You may well ask what is so special about our software
24 that means that it should be carried and advertised in
25 Canada? Well, there are three major points I think
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1 that we can address.
2 11277 Our keyboarding program "All The
3 Right Type" is used in over 70 per cent of the schools
4 in Canada, as I mentioned earlier. The product seen on
5 almost all of the retail shelves in Canada is "Mavis
6 Beacon Teaches Typing" from The Learning Company. It's
7 a good product, but our product has ben used
8 extensively in Canadian schools for over seven years.
9 Our product has consistently been chosen over Mavis
10 Beacon by educators in this country and it deserves a
11 place on the retail shelves of Canada. We can't get it
12 there.
13 11278 Our math series, "Mathville," is the
14 only product line available to retail that meets
15 Canadian standards for math in Canadian schools. We
16 are consistent in our treatment of metric issues in our
17 math curriculum, as well as correct Canadian spelling.
18 While it may seem unimportant o many, the spelling of
19 "colour" and "centre" among other words in our culture
20 is different from the U.S. spelling. The constant
21 reinforcement of the spelling of these words in the
22 U.S. form will eventually lead to Canadians spelling
23 them in the U.S. way. This has already been happening
24 consistently in the Canadian press.
25 11279 While I admit that this is a
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1 relatively minor issue, the problem is, in my opinion,
2 that it is indicative of other less visible changes in
3 our culture. We must not allow ourselves to be
4 dominated by other cultures when the product we produce
5 is as good as, if not better, as defined by the
6 consumer who is aware of the Canadian alternative.
7 11280 The third point that I would like to
8 make with respect to the value of our software is that
9 our Canadian content software has been widely sold in
10 the school market. The Museum of Civilization has
11 collaborated with us to secure distribution to the
12 retail market of two Canadian content CD-ROM products
13 that they built and distributed and developed, "Totem
14 Poles" and "Land of the Inuit". We also did the
15 Canadian Treasures program in conjunction with the
16 National Archives of Canada. It is extremely difficult
17 for us to get these products onto the retail shelves.
18 11281 Other producers are approaching us to
19 assist them in positioning their product line in the
20 retail market in Canada, that's other Canadian
21 producers. We must continue to work hard to get
22 Canadian content for Canadian developers on to Canadian
23 retail shelves. Individually, we have no hope of
24 gaining market share from the large players in the
25 industry. We deserve the right to have that market
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1 share. Canadian developers make excellent product.
2 That is why so many of our programmers are being drawn
3 to the United States. It seems ironic that Canadian
4 programmers cannot get their product sold in Canada
5 first, so that we can keep our valuable intellectual
6 property in this country. By creating a market for our
7 Canadian talent, we will be able to leverage our
8 Canadian success and launch our product to compete
9 globally.
10 11282 What we require as a first step is
11 the ability to let the Canadian consumer know that
12 Canadian produced and Canadian content digital material
13 is available. Our product must get exposure to the
14 marketplace.
15 11283 In order to assist all Canadian new
16 media publishers, my hope is that the CRTC will make a
17 recommendation to either the Heritage Ministry or to
18 Industry Canada to set up an initiative similar to the
19 ones that Industry Canada has created to promote travel
20 in Canada. Generic advertising purchased through the
21 huge discount structure that the Canadian government
22 has negotiated with the media in Canada could be shared
23 with Canadian content new media developers and
24 publishers to more effectively promote their products.
25 Our intellectual property is worth promoting just as
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1 much as our physical property such as the Canadian
2 Rockies and Atlantic Canada. There is nothing wrong
3 with Ottawa either, by the way. I should add that.
4 It's worth promoting.
5 11284 Such a promotion program would, in my
6 opinion, expand consumer awareness and supplement our
7 efforts to secure shelf space in Canadian retail
8 stores.
9 11285 As we have seen, once our talent is
10 accepted in Canada, we are recognized worldwide for our
11 creativity and our products. Our musicians and musical
12 talent is the prime example of that.
13 11286 In closing, I would like to state
14 that our company and our owners and employees believe
15 that Canadian new media companies must have an equal
16 opportunity to show the Canadian consumer what we are
17 able to accomplish. Initiatives like insisting on a
18 percentage of Canadian content in radio and television
19 broadcasting have been highly successful in raising the
20 profile of Canadian talent. The music industry and the
21 film industry are thriving as a result.
22 11287 In a recent "live chat" with Mr.
23 Colville over the Internet site CANOE that I had a
24 chance to review recently, I was very interested to
25 note the comment that you stated, "our fundamental
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1 concern," that is the CRTC's fundamental concern, "is
2 to try and ensure access for Canadian content creators
3 to the Canadian broadcast system." I hope I am not
4 taking you out of context, Mr. Colville. I believe
5 that is what you stated.
6 11288 THE CHAIRPERSON OF THE COMMISSION:
7 It comes as a surprise.
8 11289 THE CHAIRPERSON: My colleague is
9 getting tired of hearing it.
10 11290 MR. GUMLEY: Since our new media
11 industry is so young, I believe the mandate of these
12 hearings is to ensure exactly the same thing for our
13 emerging industry. Should the CRTC decide that new
14 media content creation and distribution must evolve
15 outside of the existing parameters of the Commission --
16 in other words, you haven't defined what new media is
17 in terms of the Commission structure at this point in
18 time, I believe this could be a recipe for devaluing
19 our culture in the new media age.
20 11291 For our part, we are determined to
21 find the answer to effective delivery of digital
22 technology for education, so that students, teachers
23 and parents will not forget our culture, our heritage
24 and the significance of our position in the world
25 order.
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1 11292 As Canadians, we must continue to
2 celebrate our culture and our heritage and place it in
3 the context of the Internet for the world to see. As
4 you know, we are rated by the United Nations as the
5 number one country in the world in which to live. We
6 must continue to be able to tell our children about our
7 story so that they can become ambassadors to the world,
8 proud of their heritage as Canadians.
9 11293 We have a passion in our company,
10 over 40 of us are dedicated to our work, many of us
11 since 1983. Our struggle has been to maintain our
12 Canadian identity while surviving as a profitable
13 business. So far we have survived and succeeded. Now,
14 however, with the Internet, e-commerce and massive
15 consolidation of educational software publishers in the
16 United States, our existence as a Canadian company is
17 severely threatened.
18 11294 In my opinion, these hearings are not
19 about regulation. They are more about evolution.
20 Hopefully, my suggestions today will move the CRTC to
21 act quickly and assist the Canadian new media industry
22 to evolve effectively to compete in the global economy
23 of the new millennium.
24 11295 I thank you for your attention.
25 1000
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1 11296 THE CHAIRPERSON: Thank you for your
2 presentation, Mr. Gumley.
3 11297 I had a whole bunch of questions that
4 I was going to ask you based on your first round
5 submission that was signed by Mr. Stephen Smith.
6 11298 MR. GUMLEY: Yes. He regrets his
7 inability to be here this morning.
8 11299 THE CHAIRPERSON: Your presentation
9 today has pretty much answered all the questions that I
10 had that turned on that. Let's turn to some of the
11 other issues that arise out of your presentation here
12 today.
13 11300 I was curious by your reference to
14 George Goodwin's comments from McLellan & Stewart
15 regarding the CD-ROM business. Having read the
16 submission and also read some newspaper interviews that
17 were conducted with him, my understanding of his views,
18 and I invite your comments on this, while it was
19 interesting that the CRTC was looking at this issue of
20 new media and the Internet, and CD-ROM can be
21 characterized as a form of new media, he acknowledged
22 that there is probably little the CRTC can do in the
23 creation and marketing promotion of CD-ROMS themselves
24 but it was a good forum to raise public attention to
25 the issues, but that there was probably directly we
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1 could do given our mandate under the Broadcasting Act
2 to deal with content as it relates to broadcasting and
3 the transmission vehicles that fall within that
4 definition and so on.
5 11301 I wonder what your own views are on
6 that.
7 11302 MR. GUMLEY: I thank you for the
8 opportunity to respond to that. It's a good question.
9 11303 I quoted the CANOE comment that you
10 made specifically because it did say in broadcast
11 media. The problem that I have in distinguishing the
12 difference and why I hope actually that the CRTC
13 expands its mandate to include new media is that the
14 content that is delivered over the airwaves in Canada
15 is what the issue is.
16 11304 You mandated that the Canadian radio
17 stations in particular play a certain number of
18 Canadian songs produced in Canada or produced by
19 Canadian talent. In effect by doing that, you were
20 saying that the product that is produced by the singers
21 and the producers of records get their exposure to the
22 Canadian marketplace through the action that you have
23 taken.
24 11305 We don't have that opportunity. We
25 do through the Internet in the future perhaps, but
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1 that's not where I'm going. I believe there's a fairly
2 significant transition period here that is defining the
3 use of the Internet with respect to Canadian content.
4 11306 What we have right now is a situation
5 where we are producing product that we can't get
6 exposed to the Canadian marketplace. There are a
7 number of companies in Canada that have been producing
8 software that are not here any longer. It's
9 unfortunate because they had so many people. They had
10 exactly the same struggles that we have been struggling
11 with for 15 years.
12 11307 I think that the issue for me is that
13 we are producing the content that you have basically
14 given a market share for, a voice for, through the
15 radio mandate that you have given. I'm suggesting that
16 because this is a completely new industry that you
17 perhaps have to look at your mandate slightly
18 differently and look at the delivery mechanism that is
19 going on here, how are Canadians being affected by the
20 content that is being delivered to their homes through
21 the purchase of computers.
22 11308 I know it's a bit of a difficult
23 stretch, but hey, it's new territory. We have got to
24 look at this. That's why you are looking at this
25 material.
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1 11309 THE CHAIRPERSON: Well, as others
2 have said over the past two weeks, in some respects we
3 are the only game in town here, so if you have an issue
4 here's the place to raise it.
5 11310 If I go back to the question of the
6 record industry or the film business, we have been able
7 to achieve that because of the specific mandate we have
8 in the Broadcasting Act as it relates to those
9 technologies, if you will.
10 11311 To the extent one might consider some
11 aspects at least of the new transmission or
12 distribution media, the electronic distribution media
13 if you will, and to whatever extent one might see some
14 aspects of the Internet to relate to that, there may be
15 some role for us -- underscore "may".
16 11312 I am having difficulty seeing where
17 through our mandate, either under the Broadcasting or
18 Telecommunications Act, we could get involved in the
19 case of the manufacturer of computers and packaging of
20 the computer and software and the retail marketing of
21 that, which I take it is largely your problem. Witness
22 your example with Apple computer and so on.
23 11313 MR. GUMLEY: Yes.
24 11314 THE CHAIRPERSON: My problem is when
25 you suggest that we -- somewhere here -- take some
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2618
1 specific action with respect to this, by what authority
2 do you feel we would be able to get involved in
3 ordering some computer manufacturer to package and sell
4 this array of software, which is probably excellent
5 software for Canadian schools, with their computers and
6 whether it is in Future Shop or whatever?
7 11315 MR. GUMLEY: I agree with your
8 interpretation. Currently you don't have that
9 authority. I think that was Mr. Goodwin's point.
10 11316 The point that I am making here and
11 trying to stress is that I think as a hearing, you are
12 looking at all different opportunities. This is a new
13 medium. When the CRTC was created, radio had been
14 around for quite a long time. Television had too. I
15 don't remember quite when the CRTC was created.
16 11317 THE CHAIRPERSON: 1968.
17 11318 MR. GUMLEY: Those two mediums were
18 in place. You had an opportunity to define what was
19 already there, define your role with that. Multimedia,
20 CD-ROM and new media development have come along in the
21 marketplace since the Commission was created, so now
22 instead of looking what was there and setting up the
23 terms of your mandate based on what is there, you are
24 now in place and you have got a new industry that has
25 come along that you have to try and define your terms
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1 to.
2 11319 I am saying I think you have to
3 expand the terms of the Commission. I think you have
4 to argue that the Commission needs to be expanded in
5 its mandate and scope. Otherwise we are going to get
6 buried.
7 11320 You were able to define the use of
8 Canadian talent and Canadian produced material in the
9 radio and television mediums because they were already
10 there. Yes, there was a big broo-ha-ha about doing it.
11 I understand that. But it was a darn good thing to
12 happen, in my opinion, as I said in my submission.
13 11321 The problem is that the medium has
14 changed and the delivery of that medium has changed.
15 We don't take the DVDs and the CD-ROMS that we are
16 putting together and put them over the television and
17 radio.
18 11322 I am suggesting that the Commission
19 needs to seriously look at its mandate and look at
20 expanding its mandate to incorporate this new delivery
21 of cultural content and cultural material. I think we
22 are similar to the record industry that way.
23 11323 Our talented programmers who don't
24 have a voice because -- they are extremely talented
25 people in front of manipulating a computer and doing
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1 the wonderful things that they can do -- they aren't
2 getting the same exposure as the artists in Canada
3 through the Radio and Television Commission things that
4 you have decided.
5 11324 THE CHAIRPERSON: Assuming we were
6 able to do that, what sort of action do you think we
7 would be able to take in order to overcome the problems
8 you have identified?
9 11325 MR. GUMLEY: Specifically I think the
10 action should be first a recommendation that computer
11 hardware vendors in particular bundle Canadian content
12 software when they are delivering the computers to the
13 Canadian homes.
14 11326 One of the things that Mr. Goodwin
15 mentioned was that in Quebec they have to bundle the
16 French content and they do it there because they are
17 forced to. They can't sell their English computers to
18 the French marketplace. They do that kind of thing.
19 It's just that they don't have any impetus to do it for
20 the rest of Canada for the English speaking parts of
21 Canada to put English-oriented content in with the
22 bundles.
23 11327 We would like them to take our French
24 and English titles and put them with both their
25 offerings in both Quebec and the rest of Canada, but we
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1 can't get their ear.
2 11328 THE CHAIRPERSON: I take it that's
3 not because the government has taken any particular
4 action. It is because the nature of the consumer
5 marketplace there demands that they do that, in Quebec
6 I mean.
7 11329 MR. GUMLEY: Yes, that's right, but
8 the point is, in my opinion, it is not equal. It is
9 not equal access. It's inequitable there. It's not
10 fair.
11 11330 THE CHAIRPERSON: I take your point.
12 11331 What about the Internet in terms of
13 overcoming this? A lot of people I guess have sort of
14 taken the view that this whole business of CD-ROMS --
15 set aside DVDs that may be a little bit of a different
16 situation, I don't know, but you can comment on that --
17 that there has been a bit of a window of opportunity
18 there for that. In fact, the Internet is probably
19 going to take over in terms of its ability to deliver
20 and provide access to software and the kind of content
21 you have created here.
22 11332 Do you see the Internet as displacing
23 the particular marketing techniques that you have been
24 using?
25 11333 MR. GUMLEY: No, I don't. I see it
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1 being supplemental. I have seen a number of
2 presentations. Lots of people continue to buy books
3 today. The book business is doing better than it ever
4 has. They haven't dropped reading books because the
5 computer has come along.
6 11334 I said it in my presentation that
7 people will not stop shopping. I think the malls,
8 there's too much invested in the structure of the
9 shopping mall process. People want to handle things
10 and hold things and buy them.
11 11335 Also, I think the Internet, while it
12 is a very hyped medium today with respect to the
13 delivery of material, is not as vast as it would like
14 to be. I heard things about the Internet as long as
15 seven, eight years ago about delivering content over
16 the Internet.
17 11336 I believe it will be probably 10 or
18 15 years before they can start putting content over the
19 Internet effectively and quickly. That's a long time
20 in this business. Lots of things can happen in 10 or
21 15 years.
22 11337 You mentioned DVD. That is
23 compacting more and more information on the CD-ROM
24 delivery mechanism. It will continue to happen. I
25 don't think that we will be downloading material that
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1 we can create.
2 11338 We are looking at combining, for
3 instance, textbook material that has been produced over
4 the years to assist in education, correlating that with
5 curriculum.
6 11339 Those are the kinds of things that
7 will be facilitated by the Internet, not the content.
8 The content, I think, will be delivered in harder form.
9 11340 THE CHAIRPERSON: Doesn't your
10 content particularly lend itself to that? I can
11 understand if I am going to buy a new suit or a new
12 car, I want to go our and try it on or take it for a
13 drive.
14 11341 It seems to me with this sort of
15 content I can "take it for a drive" by downloading it
16 from the Internet to my computer and presumably go
17 through the sampler which I presume is not worth in
18 itself $795.
19 11342 MR. GUMLEY: No, no, that's a
20 promotion.
21 11343 THE CHAIRPERSON: We wouldn't be
22 allowed to keep it if it was.
23 11344 MR. GUMLEY: No, there's a gift
24 inside.
25 11345 THE CHAIRPERSON: This particular
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2624
1 technology would seem to lend itself to delivering it,
2 selling it, sampling it, using the Internet.
3 11346 MR. GUMLEY: I agree with you it is,
4 but I don't believe it is going to happen as
5 ubiquitously as the industry is saying it is going to
6 happen. I think there is going to be a considerable
7 length of time of transition. It is that transition
8 period that I am most concerned about. That's what I
9 addressed in my presentation.
10 11347 If you were to open the starting
11 gates today to deliver material over the Internet, we
12 could deliver some of our software that was built
13 probably five and seven years ago over the Internet
14 quite effectively.
15 11348 But at Venture Canada and some of our
16 650 megabyte CDs and Canadian Encyclopedia, no. That
17 can't be delivered. There's too much text. There's
18 too much video in it. It won't be transferred easily.
19 56-K bought modems just won't download and upload the
20 material quickly enough for it to be cost effective and
21 efficient.
22 11349 It's just not secure enough a way of
23 transferring to make sure that there are no bugs that
24 are going to be transferred across as well.
25 11350 With all due respect to CISCO and
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1 ThreeCom and the rest of the companies that are doing
2 wonderful things with the Internet, it is not going to
3 be widely accepted. The transactions of reviewing the
4 material that we have, sure. They will come to our Web
5 site, they will look at a preview. That's what the CD
6 sampler will do. Yes, that will be available through
7 the Internet, but they won't purchase the product that
8 way.
9 11351 It's the content issue that I am
10 concerned about in this transition period. My biggest
11 concern is that we are struggling so hard to gain
12 market share, gain mind share from the Canadian
13 consumer for the Canadian products that we produce. We
14 are just inundated with American product.
15 11352 I know that you are the only game in
16 town. You mentioned that earlier. It's a forum for a
17 lot of people to speak about these issues, but if a lot
18 of people had been addressing this, there's a very real
19 reason for it. It is that there is a very deep concern
20 by many of us that we are getting shut out.
21 11353 It's absolutely true. I don't want
22 to publicly go into all of the situations that we face,
23 but there are many and they are difficult and they are
24 going to impact Canadian culture. I think that is
25 what's behind the original purpose of the CRTC, the
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1 protection of Canadian culture. You said it yourself.
2 11354 That's why I'm saying yes, you are
3 right, it doesn't fit the existing mandate of the CRTC.
4 It's a new medium. In my opinion, you need to try and
5 figure out how it can. Otherwise, the development of
6 content in this new media is going to disappear.
7 11355 THE CHAIRPERSON: You mentioned in
8 your presentation, and you were showing us a label on
9 one of them, the typing one I guess --
10 11356 MR. GUMLEY: Yes.
11 11357 THE CHAIRPERSON: You said the label
12 says that it satisfies or is in accordance with
13 Canadian school standards.
14 11358 MR. GUMLEY: Meets Canadian school
15 standards, yes.
16 11359 THE CHAIRPERSON: Do you think
17 parents understand the value of that trade mark or that
18 brand that you have got on there that that is a
19 Canadian product and it meets Canadian school products?
20 11360 MR. GUMLEY: That's exactly what we
21 want help with. No. We don't yet, but we think we can
22 help Canadians understand. They don't see this.
23 11361 THE CHAIRPERSON: Do you think if
24 Canadian parents better understood that sort of thing
25 that you would have, let's say in English Canada, the
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1 equivalent of the market driven approach that you end
2 up with in Quebec because of the language situation?
3 11362 MR. GUMLEY: I'm sorry, sir, I didn't
4 understand your question.
5 11363 THE CHAIRPERSON: If Canadian parents
6 understood that they could buy these products for their
7 children when they are buying computers for them to
8 use, after they have bought the computer, when they go
9 to Future Shop or wherever they are going to buy their
10 software, that here's a particular product that
11 satisfies school standards, that that in and of itself,
12 if they were better aware of that, they would be
13 overcoming some of these problems and be more market
14 driven, if you will, just like the market driven
15 approach was in Quebec because of the language
16 situation.
17 11364 MR. GUMLEY: I agree with that, yes,
18 and we have proof of that in the fact that we do sell
19 them into the home through the schools now which is the
20 only opportunity that we have to get to the home user.
21 11365 We sell thousands of CDs to the homes
22 through the schools, but we have to leverage off the
23 schools and that's problematic. We don't think that's
24 a good use of the school's time, to be selling product.
25 11366 It's effective because what it does
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1 is it helps the children to keyboard more effectively.
2 That's why we encourage it and why the schools do it.
3 We think we should also be using the traditional
4 mechanisms of distributing product through the retail
5 marketplace.
6 11367 We just can't get it on the shelves.
7 Like I said earlier, it is extremely difficult.
8 Parents have told us "Why haven't we seen your product?
9 Why haven't we found it before?" We have been asked
10 that question many, many times.
11 11368 Does that answer your question?
12 11369 THE CHAIRPERSON: It does. I guess
13 what I'm struggling with is how best do you think that
14 we, and I don't necessarily mean we the CRTC, I mean we
15 collectively, through federal and recognizing that
16 education, to what extent some of these packages fit
17 within normal school curriculum. Education is a
18 provincial responsibility to the extent when we get at
19 that level.
20 11370 MR. GUMLEY: Right.
21 11371 THE CHAIRPERSON: To what extent can
22 the governments, federal or provincial, be of help in
23 this respect.
24 11372 MR. GUMLEY: Significantly, I think
25 in the purchasing of advertising and promotion
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1 situations. I used the example of the tourism industry
2 and what Industry Canada does on behalf of the tourism
3 industry in my presentation.
4 11373 I have racked my brains, believe me,
5 and so have our group of people at the office in the
6 company trying to figure out ways of effectively
7 letting the Canadian consumer know we have this
8 product. That's why I asked if the CRTC could make a
9 recommendation to other departments in the government
10 saying "Look, you need to look at this. You need to
11 address this issue".
12 11374 The Heritage Ministry has appointed
13 Mr. Rene Bouchard as one of the people to look at this.
14 We have been very encouraged by the support that we
15 have had from that, but it's a beginning process.
16 11375 I think generic advertising about the
17 fact that we have extremely talented, very effective
18 Canadian programmers of content, not just Canadian
19 content but just Canadian software in general, would
20 really assist us in getting the message out to the
21 Canadian consumer that there is excellent software that
22 is just as good, if not better, than a lot of the
23 American software that comes up.
24 11376 THE CHAIRPERSON: Do you have some
25 specific ideas as to -- you used the analogy of Travel
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1 Canada or whatever.
2 11377 MR. GUMLEY: Yes, the Industry Canada
3 initiative through tourism.
4 11378 THE CHAIRPERSON: Do you have some
5 specific initiative in mind that could be developed
6 either through Heritage and/or Industry Canada with
7 respect to making the Canadian public more aware that
8 we have got the software that does meet Canadian
9 education standards?
10 11379 MR. GUMLEY: Yes, and I am not just
11 talking on our own company's behalf. Obviously there
12 are a lot of other smaller companies that need this
13 exposure. There are people in Atlantic Canada.
14 11380 Fortress of Louisburg was produced by
15 a company, Fitzgerald Studios. They also produced
16 Alexander Graham Bell. There is Inuva in Newfoundland.
17 It is producing great Canadian software. There are
18 lots of companies across the United States that are --
19 across Canada that need this assistance.
20 11381 THE CHAIRPERSON: Strike that from
21 the record.
22 11382 MR. GUMLEY: The specific initiative
23 would be, in my opinion, newspaper and magazine
24 advertising that could be purchased by the Canadian
25 government whereby we could take sections of it. There
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1 are two components of advertising that are very
2 expensive, the creation of the content, the creation of
3 the ads in particular, the background.
4 11383 We partner with Corel to do this.
5 They took their designers to do that because our
6 company doesn't have the talent to be able -- they have
7 the talent to be able to do it, but they are working on
8 all kinds of other things like the box art and the rest
9 of it.
10 11384 These are the problems that we have.
11 We don't have the art departments, we don't have the
12 graphics departments to do this material effectively.
13 The Canadian government has access to those as shown
14 through what they do with the tourism promotions that
15 they do.
16 11385 Then we can take sections to promote
17 particular components of our product mix as it relates
18 to math or as it relates to English skills or spelling
19 skills or Canadian content issues. Then what I think
20 we would be doing and achieving in that is giving a
21 forum in media which is a place where lots of Canadians
22 see this material and say look, it is different.
23 11386 Like I said, the flyers -- there's
24 one right here. I just quickly point to it. "It's kid
25 days". On that cover which says kid days, there's not
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1 one Canadian product. There's even spelling blaster
2 plus. I know what centre is going to be like in
3 spelling that. Blaster plus, it's not going to be the
4 Canadian spelling.
5 11387 As I said in my presentation, that
6 may be a small point, but doggone it, it's symptomatic
7 of the erosion of our cultural difference between the
8 United States and Canada. It's one of the few places
9 you can really point to that kind of a difference. In
10 my opinion, it's dangerous.
11 11388 We need to do more collectively,
12 together, to get these initiatives to Canadian people
13 and let them know what's out there so that we can
14 survive and continue to grow with our passion of
15 continuing to make a difference in education and
16 Canadian technology.
17 11389 THE CHAIRPERSON: Is this a problem
18 that you think needs sort of a short term government
19 assistance in order to kick-start it to get you to a
20 stage where the industry could sustain itself because
21 you would have the revenues that you could support your
22 own advertising programs and so on?
23 11390 MR. GUMLEY: At this point in time I
24 think so. The most dangerous challenge that we have is
25 the Internet. It's a wonderful medium. It's going to
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1 have incredibly terrific opportunities for us to go
2 global with what we have.
3 11391 Our business plan calls for some
4 great excitement and initiatives with respect to that,
5 but there is a transition. While the schools are
6 connected to the Internet at this point in time, they
7 are not using it effectively.
8 11392 There are four, five, maybe ten years
9 of this transition that are to take place. Five years
10 ago, CD-ROM was just coming on the marketplace. Now
11 it's ubiquitous and all the schools have CD-ROM
12 players. Five years is a long time in our business.
13 It is definitely this transition period that we are
14 struggling with.
15 11393 We have to fund the Internet
16 strategies to maintain Canadian culture for education.
17 At the same time, we have to sustain our existing
18 business model. We can't do it because we can't get
19 the shelf space.
20 11394 In the longer term, you are correct.
21 If we can generate these initiatives and we can form
22 these partnerships, I think that it will sustain the
23 industry to allow us to take our cultural content
24 internationally.
25 11395 I think we have a wonderful platform
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1 in Canada to let the rest of the world know how we have
2 dealt with our cultural differences and our cultural
3 relations. We can create this content and export it
4 over the Internet. It is going to create huge
5 opportunities for our Canadian industry to let the
6 world know how our country survives and does as well as
7 it does.
8 11396 THE CHAIRPERSON: What about the
9 extent to which some of your product might have legs to
10 travel in global markets? You have emphasized that a
11 lot of it is uniquely Canadian because it serves the
12 Canadian educational standards.
13 11397 Some of your products, I presume,
14 would have international appeal. What's the potential
15 there do you think?
16 11398 MR. GUMLEY: It's really exciting for
17 us. May I just reach down here for a second. It's
18 right here.
19 11399 This particular product, Cross
20 Country Canada, has been wildly successful. May I take
21 a second to give you a wonderful story about it?
22 11400 THE CHAIRPERSON: Sure.
23 11401 MR. GUMLEY: It was created about ten
24 years ago. We wanted to upgrade it. We are creating a
25 Cross Country Canada platinum version. It's coming out
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1 after being on the market for ten years. It was
2 originally created for the Apple II.
3 11402 When we put out the application for
4 the graphics artist to come in and help us with it, one
5 of the applications came in that said "Look, I've got
6 to have this job. I've got to have this job. When I
7 was in grade six, they kept kicking me out of the
8 computer lab because I was wanting to play Cross
9 Country Canada all the time".
10 11403 It was a wonderful way for the kid to
11 apply. We hired him right away. He's sitting there.
12 He's now 21. He played with this program ten years
13 ago. He is poring over the details of this program. I
14 give you that example because that's the importance of
15 what Canadian technology can do to inspire Canadian
16 kids to grow up and become artists in technology. This
17 particular person is working for us now to upgrade the
18 program so that other kids will hopefully do that in
19 the future.
20 11404 This program lends itself to our
21 Cross Country U.S.A. program which has done extremely
22 well. It has been one of our flagship products. It
23 also can be easily taken over to the Cross Country
24 Europe, Cross Country Australia, because of the kind of
25 engine that it is.
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1 11405 So yes, a lot of our product has the
2 capability to be transported. So does our Internet
3 journey. It doesn't have to be the Canadian Heritage
4 interactive journey. It can be the castles of Britain
5 or the United Kingdom or Europe or whatever.
6 11406 We need to be able to generate the
7 concepts and ideas. The lesson plans that we create
8 around this content assist teachers to teach this
9 material more effectively. Bringing education alive in
10 the classroom is the crucial component of what this can
11 do.
12 11407 We can't let that die. It has to
13 happen from here in Canada because we are good at what
14 we do. We have to let the world know how good we are.
15 11408 THE CHAIRPERSON: When you go to the
16 U.S. market with --
17 11409 MR. GUMLEY: Cross Country U.S.A.
18 11410 THE CHAIRPERSON: Cross Country
19 U.S.A., are you able then to convince either the retail
20 stores, the Future Shops or whatever or the computer
21 manufacturers to either give you shelf space or bundle
22 the packages with their computers at the point of sale?
23 11411 MR. GUMLEY: To be perfectly blunt,
24 we are just not strong enough. The retail market in
25 the United States has incredible demands with respect
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1 to NCAP, costing, commitments to advertising. It's
2 tough enough getting into the Canadian marketplace with
3 the promotion dollars that are required to get space on
4 the shelves and in the advertising flyers.
5 11412 THE CHAIRPERSON: You talked about
6 the partnership here with Corel. I was wondering
7 whether the opportunities for partnerships there might
8 be greater if they see the value in the content itself.
9 11413 MR. GUMLEY: Yes, they are and we are
10 exploring them actually. That is an excellent
11 suggestion and we are exploring those opportunities.
12 11414 To be perfectly frank, Corel
13 struggles with exactly the same issues that we do
14 because they are fighting in a market share perspective
15 with the largest company in the world. They have their
16 own issues at this point in time.
17 11415 THE CHAIRPERSON: Thank you. Those
18 are all my questions.
19 11416 I think Commissioner Grauer has a
20 question.
21 11417 COMMISSIONER GRAUER: Thank you.
22 11418 I want to go at this from a slightly
23 different angle. Earlier last week we had IMAT, the
24 interactive multimedia arts, some of these new media
25 companies, content producers. We had a lot of
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1 discussion about the issues of branding, marketing
2 promotion and how important those elements are with
3 respect to new media companies.
4 11419 In fact, IMAT had recommended what
5 they called four pillars of support, two of which were
6 access to capital for investment, interactive new media
7 products and companies and support for marketing and
8 promotion.
9 11420 I guess what I'm really wondering is
10 when you go to a Future Shop or some of these
11 companies, what you are up against with the large
12 multinationals or American companies is that they have
13 much more cash available to support the distribution,
14 as you say, whether it's buying shelf space, whether
15 it's advertising to support the activities of being on
16 those shelves and whether -- I guess what I'm asking,
17 and I would appreciate your comments on this, is
18 whether some form of support or access to tax
19 incentives or funds to support marketing and promotion
20 along the lines of what Commissioner Colville was
21 saying would go some distance in assisting you in the
22 growth and development of your company.
23 11421 MR. GUMLEY: Yes. Thank you for the
24 question. The tax incentive would be terrific.
25 11422 One of the things we are burdened
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1 with currently in our company is the amount of debt we
2 have to incur to be able to get into the marketplace.
3 There is a fair amount of capital available from the
4 Business Development Bank who have taken some great
5 initiatives.
6 11423 Telefilm has recently been terrific.
7 Without them we wouldn't have made a couple of the
8 products we have put on the marketplace. They have
9 recently begun to recognize the importance of
10 marketing.
11 11424 Their support comes in the form of
12 debt to our company and we have to repay it, not that
13 we are averse to doing that, but it does make it
14 problematic because it reduces the amount of money that
15 we can put into the investment of more intellectual
16 property and the creation of more content.
17 11425 To answer your question specifically,
18 absolutely. I know that our industry in British
19 Columbia, New Media B.C., is approaching the British
20 Columbia Government for a tax credit similar to what
21 the film industry has been able to secure in British
22 Columbia and initiatives like that.
23 1030
24 11426 One of the initiatives that has long
25 been taken is the initiative for scientific tax
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1 research, but we have found, unfortunately, in the last
2 few years there has been a significant tightening of
3 the parameters of the tax research from a content
4 development perspective for our industry and new media.
5 Much of our applications for content creation have been
6 turned down for tax credit, which kind of defeats the
7 purpose. It is kind of frustrating. We go back and
8 forth on issues, the definition of what does qualify
9 for tax credit. We can't understand what it is. It
10 seems to be like trying to figure out -- put a nail in
11 jello. It's that amorphous.
12 11427 I think a clearer definition of
13 support for our industry, recognizing the cultural
14 importance of the industry I think would take it out of
15 some of the scientific parameters that the tax credits
16 are currently in and that I think would be an important
17 initiative and recommendation that the CRTC could make,
18 if you can make those kinds of recommendations to other
19 departments of the government.
20 11428 COMMISSIONER GRAUER: Thank you very
21 much.
22 11429 MR. GUMLEY: You are welcome.
23 11430 THE CHAIRPERSON: Thank you very
24 much, Mr. Gumley. We appreciate your presentation here
25 today.
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1 11431 We will take our morning break now to
2 give you an opportunity to take down your product
3 display.
4 11432 MR. GUMLEY: I sincerely thank you
5 very much for the opportunity to be here today.
6 11433 THE CHAIRPERSON: Thank you.
7 11434 We will take our break now and
8 reconvene at a quarter to eleven.
9 --- Short recess at 1030 / Courte suspension à 1030
10 11435 THE CHAIRPERSON: We will return to
11 our proceeding now.
12 11436 Madam Secretary, the next party.
13 11437 MS BENARD: Thank you, Mr. Chairman.
14 11438 The next presentation will be the
15 Canadian Conference of the Arts, la conference
16 canadienne des arts.
17 11439 THE CHAIRPERSON: Thank you.
18 PRESENTATION / PRÉSENTATION
19 11440 MR. CRAWLEY: Thank you. Thank you
20 once again, ladies and gentlemen.
21 11441 My name is Alexander Crawley. I am
22 the Director at the Board of the Canadian Conference of
23 the Arts for Film and Television -- for Film and
24 Broadcasting.
25 11442 I am sure you have all had a chance
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1 to look at our submission. In watching the proceedings
2 of this hearing we are quite gratified that a lot of
3 your intervenors seem to be feeling towards a model.
4 The other day we were discussing a model when I was
5 here as the Executive Director of the Canadian Screen
6 Training Centre -- I have to remember which Canadian
7 thing it is. I wasn't empowered to support any
8 particular model at that time. However, there are some
9 very specific recommendations that this committee
10 report -- basically, this submission comes out of a
11 committee because like many organizations we have been
12 feeling towards this moving target called new media for
13 some time.
14 11443 However, we are very happy now that
15 finally and, in fact, this is the first time we have a
16 representation specifically from the sector and some
17 real expertise from the new media sector, in the person
18 of Ana Serrano who is with me. Ana is the Director of
19 the Medialinks Habitat new media development centre at
20 the Canadian Film Centre in Toronto, and also now is
21 serving at the Board of the CCA as a new media
22 representative.
23 11444 So, without further ado I would like
24 to turn this time period over to her to talk about our
25 submission and how our thinking has developed since we
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1 gave you this submission. Also, since she is the next
2 one our list for the Medialinks Habitat, we could just
3 treat this, with your permission, as a block of time
4 that you have here to discuss the issues with Ms
5 Serrano and ask her any questions that you may have.
6 So Ana.
7 11445 MS SERRANO: Thank you very much,
8 Sandy.
9 11446 I should have brought two hats today,
10 so that you will know from which mouth I am speaking,
11 but I will obviously start with the CCA.
12 11447 I was very pleased when Sandy asked
13 me to sit as part of the Board of Directors on the CCA
14 and came at this fairly recently. So, I have to say
15 that I didn't have a hand in writing this new media
16 submission to the CRTC, but I was extremely happy to
17 see that the tone of the document matched what I felt
18 was important from which artists should be speaking.
19 That is, that I think it is really important that
20 Canadians know that artists are actually quite excited
21 about the opportunities presented by new media and this
22 new technology, and that we should, as artists and
23 content creators, take a proactive stance, rather than
24 a reactive and defensive stance against some of the
25 changes that are taking place in the new economy, and
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1 in fact can probably benefit from a lot of these
2 opportunities.
3 11448 I think you will notice from the
4 submission that this tone is indeed present in all of
5 the points that were made.
6 11449 I would like to speak about three of
7 them, which I think speaks more clearly about what my
8 personal beliefs are in terms of the relationship
9 between the technology and the arts. The first one is
10 this whole notion of protection of artists' rights. I
11 think that the CCA is quite sophisticated in its
12 understanding of intellectual property, and instead of
13 having sort of this defensive cry against what could
14 potentially be a terrible sot of outcry against the
15 fact that artists' rights -- or artists' copyright may
16 be violated on the net, they actually have put forth a
17 series of recommendations that will allow -- and this
18 is in section 4, I believe, -- a series of
19 recommendations, section 3 and 4, that will look at
20 sort of a hierarchical notion of copyright for artists,
21 and that they would like to play a role in determining
22 what some of these copyright hierarchies may be.
23 11450 The second point that they talked
24 quite clearly about is this whole creation of a new
25 media commission, which I think is terribly important
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1 as well. Sandy had told me earlier this week that when
2 Robin King from Sheridan had spoken, he had actually
3 mentioned this whole notion, that the new media
4 commission is also important, filled with people on the
5 committee that actually do know something about new
6 media, as opposed to a series of appointees that come
7 from other sectors. So, I think that is also
8 incredibly important.
9 11451 Then, the third point is this whole
10 notion of trying to create some kind of point system
11 that will determine what we mean by Canadian content.
12 I think we all know that the Internet is presenting an
13 opportunity to tape into a global marketplace, so we
14 are not really talking about creating content that's
15 purely Canadian, but instead creating content that has
16 as part of its team a series of Canadian members.
17 11452 The Cavco model, as it stands, is
18 probably not the best one, but I think the CCA placed
19 it in this particular document as a potential model
20 that we can look at for this kind of a point system and
21 new media.
22 11453 So, I would urge that the CRTC look
23 at these three particular points that come from the
24 CCA.
25 11454 Now, we can either sort of talk about
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1 the CCA's role and this particular document now, or I
2 can segue into some of the points I would like to make
3 on behalf of the CFC. Which would you prefer?
4 11455 THE CHAIRPERSON: The person who was
5 going to question you on the first part prefers the
6 former.
7 11456 MS SERRANO: All right.
8 11457 THE CHAIRPERSON: So perhaps we can
9 do that and we can have a discussion around those
10 issues and then move into the other one. Is that your
11 presentation on that issue then?
12 11458 MS SERRANO: Yes.
13 11459 THE CHAIRPERSON: Commissioner
14 Wilson.
15 11460 COMMISSIONER WILSON: Good morning,
16 Ms Serrano and Mr. Crawley. Thank you for being with
17 us today.
18 11461 I would like to begin our discussion
19 by asking you a number of questions of clarification
20 about statements that you have made in your submission.
21 I am going to do this by taking you through the
22 specific recommendations that you have very usefully
23 summarized at the beginning of your submission. Then I
24 would like to explore a couple of concepts with you
25 with respect to your particular approach to the idea of
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1 regulating new media, as well as the whole notion of
2 cultural identity in this new environment.
3 11462 Your first recommendation suggests
4 that the federal government amend the Broadcasting Act
5 so that it specifically applies to new media. You also
6 state that this amendment should include the
7 differentiation between traditional broadcasting, which
8 is controlled by a system of licensing and multipoint
9 digital delivery which is not. You then go on to state
10 that it would include a statement expressing the
11 government's policy objective to ensure access to
12 content produced by Canadian on the Internet.
13 11463 First of all, I am curious as to what
14 precedent you are looking to to apply the Broadcasting
15 Act to new media, especially in light of the fact that
16 you are suggesting that new media be differentiated
17 from traditional broadcasting in the Act. Are you
18 saying that new media is broadcasting or is analogous
19 to broadcasting, or is it just sort of -- you are
20 looking for some place to put this and that was your
21 best instinct?
22 11464 MS SERRANO: Do you want to go first?
23 11465 MR. CRAWLEY: Go ahead.
24 11466 COMMISSIONER WILSON: Ms Serrano, I
25 know you said you didn't participate in the writing of
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1 this.
2 11467 MS SERRANO: Yes.
3 11468 COMMISSIONER WILSON: Please do
4 whatever you want in terms of providing me with the
5 background.
6 11469 MS SERRANO: I think we should just
7 have a conversation with everyone involved here.
8 11470 The way I understand this particular
9 point is that one of the key problems in the new media
10 industry is no one knows who is going to pay for
11 content. So, looking at I think the Broadcasting Act
12 allows -- well, allowed the CCA to look at a model
13 where they can take some of the best practices in that
14 particular model and then apply it for the development
15 of new media content.
16 11471 So, if you notice, one of the points
17 that they actually made was this whole notion that ISPs
18 be mandated to provide at least 5 per cent of their
19 gross earnings, if they make over $500,000, towards
20 content development.
21 11472 So, I think it is just a way to try
22 to fund what is one of the most important things in the
23 industry, which is going to be this whole content
24 development portion of new media. So, I think that is
25 really why they took a look at the Broadcasting Act.
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1 11473 Sandy, do you have more to add?
2 11474 MR. CRAWLEY: Yes. I think as with
3 several of the intervenors you have heard over this
4 hearing, there needs to be an attempt to specifically
5 define those activities over the net, as the model that
6 we are using now, which are analogous to broadcasting.
7 So, even this morning I think Mr. Morrison with Friends
8 was saying if it's the same or a very similar linear
9 delivery of a continuous story or a product or a
10 program that happens to be delivered by this medium, we
11 have to find a way to capture that in terms of the
12 Broadcasting Act.
13 11475 The example I could give is --
14 perhaps a negative analogy is that we might not be
15 having this struggle if the powers that be in
16 government had listened to the CCA's position at the
17 time that they removed the word "culture" from the
18 Telecommunications Act. We wouldn't perhaps be having
19 this struggle right now, and that was a very
20 unfortunate decision that we still maintain was a wrong
21 one and perhaps there is a solution there. Perhaps
22 there is a solution that involves not only looking at
23 the Broadcasting Act and bringing it up to a modern
24 standard to cope with the technological developments,
25 but perhaps going back, even though I know it was only
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1 1991 or so, and looking at the Telecommunications Act
2 and rectifying that. Because if we had the cultural
3 mandate once again in the objectives of the
4 Tele-communications Act, I think the convergence of
5 your responsibilities here at the Commission would be
6 simpler in that sense.
7 11476 But other than that, I think Ana has
8 made the essential point. The practical realities now
9 are for you to decide whether through your legal
10 mandate or through moral suasion, which can be quite
11 effective at times, whether we can get some of the
12 revenues flowing back from the larger ISPs into
13 production.
14 11477 COMMISSIONER WILSON: So the funding
15 is really your central concern?
16 11478 MR. CRAWLEY: In a sense it's the
17 allocation of resources, yes. Also, access and,
18 obviously, the Copyright Act, as you have been
19 exploring --
20 11479 COMMISSIONER WILSON: Yes, and we
21 will go there later.
22 11480 MR. CRAWLEY: Yes.
23 11481 COMMISSIONER WILSON: Why in that
24 recommendation do you say that multipoint digital
25 delivery would not be licensable under the amendment
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1 that you are suggesting? You are saying that
2 traditional media is licensed and multipoint digital
3 delivery is not. Why would you make that distinction?
4 11482 MR. CRAWLEY: Again, I have to
5 confess that if we had greater resources I would have
6 the entire committee here with me, but I think that was
7 perhaps the feeling of that committee, that they were
8 accepting the idea that if it's multipoint --
9 multi-point delivery is not exactly analogous to
10 broadcasting.
11 11483 I feel a bit caught up there because
12 I am not convinced that it isn't, myself personally.
13 So, I am sorry, I have to sort of beg off that one.
14 11484 COMMISSIONER WILSON: That's fine.
15 Maybe as we go along it will become clear, but I guess
16 the reason I am asking about that is that the next part
17 of that recommendation says that the amendment would
18 also include a statement expressing the government's
19 policy objective to ensure access to content produced
20 by Canadians on the Internet. If the multipoint
21 digital delivery is not licensable how would you
22 envision that access to content be ensured?
23 11485 Are you suggesting in that statement
24 that we establish a Canadian content requirement for
25 new media?
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1 11486 MS SERRANO: I don't think so.
2 11487 COMMISSIONER WILSON: So how are you
3 ensuring access?
4 11488 MS SERRANO: I actually can't talk to
5 that particular point because this is one of the things
6 that I am actually quite -- feel strongly about this
7 whole notion of the fact that what we mean by Canadian
8 content is not necessarily about the content itself and
9 that it should be about the people who are creating the
10 content, or a certain portion of the people creating
11 the content be Canadian because there is no such thing
12 as the Canadian marketplace when it comes to digital
13 network delivery systems.
14 11489 So, it really doesn't make any sense
15 at all to talk about Canadian content as having a
16 Canadian spin requirement in the content itself.
17 11490 And in terms of access, I think that
18 universal access is actually probably going to be a
19 reality and if not in the home, then certainly in
20 public spaces like schools and libraries, et cetera.
21 11491 You can have content aggregators
22 which again the CCA document talks about, this whole
23 notion of perhaps creating a national portal site
24 through the CBC or through some other Canadian
25 recognizable entity, which could serve as the portal
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1 through which schools and libraries and these public
2 spaces can go through, but that's different from a
3 Canadian content requirement. I don't know if that
4 makes --
5 11492 COMMISSIONER WILSON: I guess what I
6 am --
7 11493 MR. CRAWLEY: Sorry, I have just
8 reread this and I am not sure -- as I look at the
9 wording there I am not sure that the intention of this,
10 No. 1, the first paragraph, is not to point out the
11 fact that perhaps multipoint digital delivery, which is
12 not currently licensed needs to be captured somehow.
13 So that it is not saying -- it is not accepting holus-
14 bolus that this could never be licensed in any way. At
15 least that's how I would interpret it from my point of
16 view.
17 11494 So, it's not accepting the fact that
18 multipoint delivery -- it isn't necessarily regulated
19 through a licensing regime of the Commission. Again,
20 it is again trying to capture the different mechanisms
21 that are available, including the Copyright Act, of
22 course. If the Copyright Act comes into line in terms
23 of the digital universe that is avowed public policy
24 now to do some more reform of the copyright regime in
25 order to make sure that creators and producers' rights
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1 are protected that might serve.
2 11495 Again, it is trying to capture the
3 situation between the pieces of legislation. We
4 understand that all the answers aren't going to come
5 from the CRTC.
6 11496 COMMISSIONER WILSON: I guess that's
7 what I am really struggling with when I go through this
8 because you have sort of taken certain elements of
9 what's in place now with respect to film and television
10 and sort of pulled them together.
11 11497 I just might abandon this plan and go
12 right to the sort of conceptual question. At the end,
13 which is at -- this is quite a controlled model that
14 you have presented, in terms of how to manage new
15 media. I mean, we have had a number of presentations
16 over the last couple of weeks. Some people have said,
17 "Keep your hands off it." Some have even gone as far
18 as to say that, you know, the way that new media is
19 going to develop will require you to dismantle the
20 broadcasting regulatory regime because that will be
21 meaningless in this new environment. Others have
22 suggested sort of a light-handed approach to the
23 regulation of new media, perhaps through the notion of
24 an exemption order with a threshold. We had a
25 discussion with Mr. Grant from the Directors Guild
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1 yesterday.
2 11498 But this model that you have
3 presented is very detailed and pulls out a whole lot of
4 the elements of the existing system, and I am trying to
5 figure out how they all fit together in terms of what
6 you are really saying about what you want us to do with
7 new media. Do we license it? Do we apply Canadian
8 content regulations and the notion of the Cavco
9 criteria? Are you suggesting that those be used to
10 assess whether or not to fund Canadian content, or
11 whether or not it is Canadian content?
12 11499 If you are suggesting that we use it
13 to determine whether or not it is Canadian content --
14 well, what's the point if there is no requirement? So,
15 these are the questions that I am sort of tossing
16 around in my head. I guess I am just wondering if in
17 all of this, and, Mr. Crawley, you have been here quite
18 a lot during the last couple of weeks, thinking about
19 the comments that have been made by a number of the
20 people who work in this industry, that if you start
21 trying to apply these regulations from the traditional
22 broadcast medium, the old paradigm, if you will, that
23 you are going to drive this industry out of the
24 country. If you start requiring Canadian content,
25 requiring -- I mean that's the nub of their argument
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1 really, that they can locate anywhere. They don't have
2 to be here and they can still offer their services.
3 They can still create their content and still make it
4 available to Canadians from across the border or from
5 across the ocean, it really doesn't matter.
6 11500 So that's what I am struggling with
7 because from what I have read and from what I have
8 heard over the last two weeks, this is by far the most
9 controlled model of regulation that has been presented.
10 11501 MS SERRANO: I would like to reply to
11 that. I think I come at this with sort of a slightly
12 objective eye because I didn't participate in writing
13 this document. I have to admit that when I first read
14 the document my instinct was similar to yours, and then
15 I thought, like wow, everyone has been talking about
16 how we shouldn't be regulating the Internet. In fact,
17 I was talking to a colleague of ours earlier today and
18 she had mentioned that she was in an elevator recently
19 with three what seemed to be computer geek guys, and
20 they were saying, "Did you hear that the CRTC is going
21 to regulate the Internet?" and all the hype that
22 surrounds these particular hearings.
23 11502 What I came to realize after having
24 pondered this document is that there is always going to
25 be -- there has been extremes in this debate for so
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1 long, for five years or more, especially in the United
2 States.
3 11503 There was this wonderful article, for
4 example, written in the Atlantic Monthly, I think two
5 months ago, three months ago, on the whole notion of
6 copyright, where they were looking at the two extreme
7 positions. On the one hand, the libertarian movement
8 in the States, led by the digurodi(?), like Ester Dyson
9 and John Perry Barlow, who say that, you know, digital
10 bits should be free and that we should not regulate
11 them at all. All the way to the other extreme, who
12 claim that everything should be sort of coded, so that
13 you know exactly where everything comes from.
14 11504 COMMISSIONER WILSON: These are the
15 digital watermarks.
16 11505 MS SERRANO: Yes, exactly, which
17 technologically speaking may or may not work.
18 11506 So, when I reread this document, I
19 think what became clear is that the CCA has actually
20 presented just a document that is not necessarily -- I
21 didn't read it as a prescriptive document the second
22 time around, but more like a document that presented
23 the best parts of certain models in the broadcast and
24 telecommunications industries that could be applied to
25 the -- I hesitate to use the word regulation, but to
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1 the sort of shaping and development of the new media
2 industry.
3 11507 That's why in my introduction -- I
4 was a bit nervous earlier, so I think I can speak more
5 clearly now. In my introduction I was really -- I
6 wanted to stress that these are models that we should
7 look at. It doesn't make sense for us to pull out new
8 models out of thin air, when there are models out there
9 already which we can see how they might apply to the
10 new media industry.
11 11508 I think you are right in saying it
12 looks like a mishmash of things, but to quote sort of
13 Arthur Kessler, sometimes creativity is about
14 mishmashing things and putting them together and making
15 something new. Really, that's how I see the CCA
16 document, as now we can actually take a look at it. It
17 is something tangible that we can then say, "Okay,
18 let's pull it apart, let's see what makes sense and
19 let's throw out the stuff that doesn't make sense."
20 It's more useful an exercise in fact than just saying
21 these grandiose things, like, "Do not regulate the
22 Internet," because how are you supposed to move from
23 that position?
24 11509 COMMISSIONER WILSON: Well, the quote
25 that came to my mind when I reading through it was a
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1 Marshall Macluhan quote from "The Medium is the
2 Massage," which is we look at the world through a
3 rear-view mirror. We march backwards into the future."
4 Which of course is whenever you are trying to deal with
5 something new you always look back at what is familiar
6 and sometimes hang onto that because you are not quite
7 sure. Certainly the resounding message that we have
8 received is that this is a big unknown.
9 11510 So, I think what we are looking at is
10 do we look back at that or do we make this paradigm
11 shift.
12 11511 MS SERRANO: I think we do both. I
13 don't think you can do anything else but both actually,
14 because you -- I talk a lot about when I was in art
15 school in high school and whenever my art teacher says,
16 "Draw anything you want," people went into a panic
17 because they could draw anything and they didn't know
18 how to do it. So, the results were actually worse than
19 if the teacher had said, "You have a two by two box and
20 you can only use grey ink, draw something." At that
21 point they could actually stretch out of the parameters
22 that were set for them and think of something more
23 creatively.
24 11512 Now, I am not suggesting that we
25 should apply everything from old models into the new
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1 media industry, but I think it's important to actually
2 have something tangible to hold onto, while still
3 looking into the future. I know it's a more difficult
4 task, but I think it's the more measured, carefully
5 thought out and sensible task that people can do, as
6 opposed to just jumping into this vacuum and then
7 trying to scramble to try to get something pulled
8 together.
9 11513 MR. CRAWLEY: To answer your specific
10 question, and I think it's a good one, in terms of the
11 Canadian content point system, something like that. It
12 is my perception that the committee was looking at some
13 kind of criteria for a public investment or an
14 investment period, a funding mechanism for development,
15 as opposed to saying, "You can't get on the net if this
16 doesn't get Canadian -- Cancon branding --"
17 11514 COMMISSIONER WILSON: Certification.
18 11515 MR. CRAWLEY: "-- for the net,"
19 because, as you say, with the current state of affairs
20 it doesn't make any different whether you do or not
21 because it could go on from anywhere.
22 11516 So, I really think it was in terms of
23 the investment, the critical investment that is
24 required. So, perhaps those funds, if we could bring
25 in a regime where ISPs were making a contribution to
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1 production, development creation, that those funds
2 would then be dispensed based on some kind of criteria.
3 11517 COMMISSIONER WILSON: Let me ask
4 you -- I want to ask you about the CBC and enshrining
5 that, the role of the CBC in the fostering and
6 distribution of Canadian content, and you are
7 suggesting that this be defined in the Act. Would this
8 be similar to the concept suggested by SPTV of creating
9 a super-Canadian Web site?
10 11518 Part two of the question is: Given
11 that the CBC has already stated that it is interested
12 in doing this, in the absence of being designated to do
13 so, why bother? Why would you define it in the Act if
14 they are going to do it anyway?
15 11519 MS SERRANO: Personally, I don't
16 think you need to.
17 11520 COMMISSIONER WILSON: Okay. That's a
18 good, straightforward answer.
19 11521 MR. CRAWLEY: I think there was a
20 recognition there that they were -- that the CBC was
21 trying to get out front of this thing and do something
22 useful, as an aggregator I guess is the word that we
23 have come to use, and that they should be supported.
24 We have been engaged in a number of struggles to make
25 sure that public broadcasting was supported
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1 appropriately in this country, so this is a bit of a
2 smorgasbord perhaps, a good chance of saying there's
3 something that is going on that relates to this. Let's
4 make sure that if a regime emerges of say Telefilm or
5 some other agency or a new agency is overseeing public
6 investment in new media development, that the CBC might
7 be a logical partner there.
8 11522 I tend to agree that you don't want
9 to put that kind of detail in the legislation.
10 11523 COMMISSIONER WILSON: Maybe it's a
11 good thing your committee members aren't here. You are
12 diverging from their view.
13 11524 MR. CRAWLEY: They are going to see
14 on TV.
15 11525 COMMISSIONER WILSON: The funding
16 approach that you have suggested, I guess we have had
17 some submissions that have suggested direct public
18 funding, but for the most part the creators of new
19 media content seem to be telling us that what they
20 really want is incentives, most of which are tax based,
21 and you do include a couple of tax-based incentives in
22 your recommendations.
23 11526 I guess the rationale put forward for
24 the notion of avoiding sort of the public funding,
25 direct public funding regime is that it can't respond
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1 quickly enough to the nature of the market. If you
2 have to fill out applications and maybe line up or
3 something, you are not doing what you really should be
4 doing, which is creating, and if you can use the tax
5 incentives then it allows you to move forward at the
6 pace at which you need to and deal with that stuff in a
7 different way.
8 11527 MS SERRANO: I think that in the
9 absence of any kind of private sector capital that
10 small content creators can access public funding for
11 grants and/or loans for original content development is
12 going to be important. Until the private sector,
13 through venture capital firms, through banks, through
14 angel investors, through a number of different
15 mechanisms that are already in place in the States gain
16 a higher tolerance for risk, we are not going to have a
17 lot of original content development happening in
18 Canada.
19 1120
20 11528 I have spoken with a lot of small
21 multimedia companies in Toronto and B.C. and in Ottawa.
22 Many of them who aren't actually here -- most of them
23 probably didn't have the opportunity to present a
24 paper -- would love to have some capital to actually
25 develop content rather than develop corporate Web sites
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1 that they have been doing for the past five years.
2 11529 It's just really difficult out there
3 now to get money for this kind of stuff from the
4 private sector. I don't know. I don't know how you
5 would legislate people to give money to small content
6 creators, but if they don't then someone is going to
7 have to.
8 11530 Otherwise our gaming industry is
9 going to suffer, our entertainment industry is gong to
10 suffer, our entertainment content industry is going to
11 suffer, new media that is.
12 11531 MR. CRAWLEY: Also, there is an
13 incentive based program that is possible. Obviously we
14 have seen it work in some other sectors. You could
15 come up with a tax incentive that would encourage
16 private investment.
17 11532 If we can in fact get similar
18 contributions coming from ISPs, IAPs or whatever, as
19 the cable has created a critical mass, the distribution
20 centre in the conventional media -- I know a lot of
21 people would want to call it a tax. It's not a tax as
22 far as we are concerned.
23 11533 Is that public funding or is it
24 funding that is overseen in the public interest, that
25 you create a critical mass of investment hopefully. If
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1 this industry grows the way we have been told for
2 decades now it is going to, we would create the
3 resources there which might be overseen in a public way
4 but it wouldn't actually be coming from tax dollars in
5 that sense.
6 11534 COMMISSIONER WILSON: You just raised
7 this. I want to ask you about the idea of acquiring a
8 5 per cent contribution by the ISPs. This issue has
9 been talked about quite a bit during the course of the
10 hearings.
11 11535 My first question is how did you
12 arrive at the threshold level of 750,000?
13 11536 MR. CRAWLEY: I can't answer you.
14 11537 MS SERRANO: I have no idea.
15 11538 COMMISSIONER WILSON: Can you write
16 me?
17 11539 MR. CRAWLEY: Yes. We will make a
18 note and try and answer that question for you.
19 11540 COMMISSIONER WILSON: Okay. The
20 second question that I want to ask with respect to
21 this, as you were sitting talking about finding sources
22 of funding and what not, you know, in my mind the
23 rationale for requiring funding from cable companies is
24 that they own infrastructure and they control that
25 there and they are called gatekeepers by many people.
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1 11541 The same is not true with the ISPs.
2 They are customers presently of the people who own
3 infrastructure, just like anybody else. So why would
4 you require of them and again if you did, are you not
5 concerned they would just say "See you! I'm heading
6 south".
7 11542 MS SERRANO: I think one of the main
8 problems -- it's a good idea, but I'm not sure how
9 feasible it is. I know quite a few people who have
10 ISPs in the States. They don't necessarily need to use
11 Canadian ISPs at all. There is going to be an issue
12 there.
13 11543 I'm not sure how that can be
14 resolved.
15 11544 MR. CRAWLEY: To be absolute about
16 it, it may be true that you won't have a local service
17 provider because of that extra cost of doing business.
18 However, I am personally not convinced that is true.
19 11545 I still like to make sure that my ISP
20 is someone that I can communicate with directly in my
21 own country and if I have to go down and knock on their
22 office door because I'm not getting the service I want,
23 I want to be able to do that. I want to see my
24 cultural values reflected there. Maybe I'm just an old
25 fashioned guy. Maybe it doesn't work that way.
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1 11546 I'm not --
2 11547 COMMISSIONER WILSON: It may not be a
3 case of what you want because the ISP will be the one
4 deciding whether or not to stay or go.
5 11548 MR. CRAWLEY: Exactly, but I think
6 that the ISP's customers have some say in that. I
7 would like to see some real research done on this.
8 Maybe the Commission has the resources to do that, to
9 see how many people choose an ISP based on the fact
10 that's it's a local company, someone who is
11 communicating directly with them, seeking their
12 business.
13 11549 There is a cultural identity, if you
14 will, even with the ISP. Maybe that's not accurate,
15 but that's what my instincts tell me, that people will
16 still want to go to -- as we found out with
17 conventional media like television.
18 11550 When the Commission has created a
19 critical mass of quality programming through its
20 regulation, people have chosen to go to those service
21 providers for their entertainment because they see
22 their values reflected there.
23 11551 I'm not sure that the same thing
24 can't work in the digital universe. As I said the
25 other day, you know, all culture is local. Maybe it
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1 was McLuhan who said that originally too.
2 11552 There is still an incentive and a
3 business opportunity based on the fact that you are
4 actually located in the same place, not necessarily the
5 same city or whatever, but that you share a kind of
6 cultural identification with each other, including the
7 people you choose to buy your services from.
8 11553 COMMISSIONER WILSON: That kind of
9 leads me into the final question that I wanted to pose
10 to you. This really had to do with the whole idea of
11 culture and how local it is.
12 11554 We heard from a number of ISPs. Your
13 concern is Canadian content. That's the focus of your
14 submission to us. They have told us that there is
15 really quite a compelling business case for it because
16 people do want to see Canadian things.
17 11555 The appeal of the Internet, of
18 course, is that it's international and you can travel
19 the world on the Internet, but maybe there's a comfort
20 level, you know, starting with Canada or just the
21 convenience or the practicality of knowing what's
22 available in your community or in your country and, you
23 know, not having to worry about whether or not there's
24 duty or anything if you are making purchases.
25 11556 MR. CRAWLEY: Canadian dollars.
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1 11557 COMMISSIONER WILSON: Yes. They have
2 said there is a really compelling business case for
3 doing this, this is what our consumers are demanding.
4 Why intervene in that?
5 11558 MR. CRAWLEY: I wish I had been here
6 for the particular intervention you are talking about.
7 Did they say they were then going to invest maybe 5 per
8 cent of their revenues into developing Canadian
9 content?
10 11559 COMMISSIONER WILSON: I don't think
11 they mentioned a figure.
12 11560 MR. CRAWLEY: No. But they said they
13 were developing Canadian content.
14 11561 COMMISSIONER WILSON: And giving a
15 prominence on their sites.
16 11562 MR. CRAWLEY: That's great. I think
17 the CCA is firmly in favour of voluntary regimes, if
18 they work. I believe that the power of government
19 policy and of regulatory policy should still be held
20 there as a possibility in case voluntary regimes don't
21 work. These are measurable.
22 11563 I suppose that that's an option, to
23 say pure market forces are going to work in this case,
24 we don't need to intervene at all. I have my doubts
25 personally, but --
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1 11564 MS SERRANO: I think one of the more
2 important points to make is what they are calling
3 Canadian content, which is just good business. The
4 Internet works well because it promotes -- community
5 based sites are what sells on the net. We have seen
6 that with e-bay, we have seen that with GO Cities, et
7 cetera.
8 11565 It's kind of, I don't know,
9 interesting that they would call that -- it is Canadian
10 content, of course, but it is also just good business.
11 I mean when they are talking about Canadian content and
12 they are saying "We want to create", I don't think they
13 are talking about creating the sweet hereafter
14 interactive movie when they are talking about creating
15 Canadian content.
16 11566 They are talking about shopping for
17 Canadian goods or putting Eddie Bauer online. I don't
18 even know if Eddie Bauer is still Canadian or not. I
19 think we have to be very careful that we make the
20 distinction between original content development that
21 has at its soul an art to it and content that is, you
22 know, what I call information based content which is
23 typically about electronic commerce, about -- yes,
24 actually about electronic commerce, shopping, and
25 that's different.
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1 11567 When Sandy talks about voluntary
2 regimes, I think yes, everyone will tell you we will
3 support the creation of Canadian content, but they are
4 talking about Canadian shopping. They are not talking
5 about interactive narratives, virtual environments,
6 whatever, Canada or the Rockies, entertainment titles.
7 11568 COMMISSIONER WILSON: Then, of
8 course, there is the third Canadian content that you
9 pointed to. Actually another intervenor pointed to it
10 as well. That is Canadians creating the content.
11 11569 MS SERRANO: Yes. I mean I think
12 that it's important for us to create the growth of
13 original content development that is entertainment
14 based, that is education based, that is not just about
15 shopping. I think that more and more people will
16 probably want that kind of content in the future.
17 11570 Where I sort of disagree with some of
18 the people that have spoken, to me what Canadian
19 content is is about those people who are Canadians
20 creating the content rather than having a Canadian
21 content requirement in it.
22 11571 COMMISSIONER WILSON: Thank you very
23 much. Those are my questions.
24 11572 MS SERRANO: Great.
25 11573 THE CHAIRPERSON: Thank you,
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1 Commissioner Wilson.
2 11574 Ms Serrano, did you want to make a
3 brief presentation on behalf of the Film Caucus before
4 we switch horses here?
5 11575 MS SERRANO: Yes.
6 11576 THE CHAIRPERSON: It was not meant to
7 be a pejorative comment on my colleagues. I have to be
8 careful what I say here.
9 PRESENTATION / PRÉSENTATION
10 11577 MS SERRANO: My presentation is
11 actually on behalf of the Canadian Film Centre. For
12 those of you who don't know, the Canadian Film Centre
13 recently received funding to develop a new media
14 department called Media Links Habitat which has been
15 funded in part by Bell Canada.
16 11578 Media Links Habitat's mandate is
17 actually to promote the development of original
18 content. My main point here today is that I think it's
19 really important that one of the key areas in the new
20 media industry is going to be training.
21 11579 It's really important for us to
22 remember that right now we are still at the infancy of
23 this medium. Most people don't even know what it is.
24 I'm sure when you looked at all your submissions, there
25 are many different definitions of what new media is and
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1 what it could be.
2 11580 Certainly in our submission, we spoke
3 a lot about how new media is actually quite different
4 from film and television and print. We are in the
5 early stages of trying to define what the salient
6 characteristics of this media might be.
7 11581 The Film Centre believes that the
8 type of training that people need is going to be more
9 than just about software training. All of you know
10 that content is going to be king in this industry and
11 for this industry to evolve, we need to have more and
12 better content in the future.
13 11582 The training of content developers is
14 crucial. Training content developers is not about
15 training them in software, but about providing them
16 with both soft and hard skills. The Canadian Film
17 Centre is committed to doing that.
18 11583 In fact, it is more than just
19 training in the new media industry. We also believe
20 that they have to be trained how to be successful
21 knowledge workers.
22 11584 To that end, we believe in team
23 building and leadership training because we think that
24 people who will be working in the future have to have
25 particular skillsets that aren't really being met in
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1 traditional educational institutes right now.
2 11585 Skills like entrepreneurialism, the
3 ability to create a vision for themselves and
4 articulate that vision with others; the ability to
5 oscillate between working individually and working as
6 part of the team.
7 11586 Secondly, the reason why we put the
8 new media design program together is that we felt there
9 was a vacuum in the marketplace in terms of training.
10 You either had higher education universities doing a
11 lot of research and development in new media and then
12 you had private training institutions doing these
13 typical software training courses.
14 11587 There was no middle ground where
15 people were actually thinking conceptually about what
16 this media might be and creating solid conceptual
17 frameworks, not only for the content but also in terms
18 of business models -- how do you make money on the
19 net -- as well as organizational models, what's the
20 most appropriate kind of company to form for this
21 industry, as well as doing production base training.
22 11588 The new media design program has done
23 that. Really that is the main point that I would like
24 to make on behalf of the Canadian Film Centre, that is
25 there are enough training institutions out there that
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1 are pumping out sort of robots who know particular
2 software applications.
3 11589 We need to start creating and helping
4 people become better critical thinkers and better
5 creators for this industry.
6 11590 THE CHAIRPERSON: Thank you very
7 much.
8 11591 MS SERRANO: Thank you.
9 11592 THE CHAIRPERSON: I will turn the
10 questioning to Commissioner Pennefather.
11 11593 COMMISSIONER GRAUER: The other
12 horse.
13 11594 THE CHAIRPERSON: Commissioner Grauer
14 has had trouble containing herself here, so she may
15 have a question or two at the end.
16 11595 COMMISSIONER PENNEFATHER: Thank you
17 very much. You have actually begun to answer some of
18 my questions which I was really anxious to hear you on.
19 11596 I would like to start, if you don't
20 mind, by going back to your "definitions". I think in
21 your paper you talked about the convergence of the
22 creation, the commerce and the communication or
23 transactions. You raised this point earlier, how
24 important it is to understand that those are all
25 different but they are all happening sometimes through
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1 the same media.
2 11597 Could you just help us again with
3 your take, your vision on what new media is. There are
4 a number of definitions, but where I am heading, and
5 you can just keep going with this if you want, is also
6 to tell us then what kind of courses, what kind of
7 specific training relates to that.
8 11598 You mentioned earlier too virtual
9 reality and three dimensional environments. You could
10 describe those and, therefore, what skills would be
11 developed. It's really just expanding on what you said
12 already.
13 11599 MS SERRANO: Sure. One of the
14 philosophies that we have at the new media design
15 program, and we have a faculty of seven -- one of them
16 is Daryl Williams who founded the media arts program at
17 Ryerson and actually was a colleague of Marshall
18 McLuhan's. Another faculty member is an associate
19 professor at York. We come from diverse backgrounds.
20 11600 The first philosophy we have is that
21 diversity is important in this industry. Simply
22 because you are going to have Bill Buxton from Alias
23 Way who actually calls it the new multiculturalism,
24 which is not about ethnicity but about a series of
25 people in a cluster, working as a team, from specific
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1 specializations. This could be an artist, a screen
2 writer, a programmer, a film maker, et cetera.
3 11601 Part of that philosophy involves this
4 notion that we still don't know what new media actually
5 is. There's no definitive definition of it because, as
6 I said, it's changing all the time. It's still in its
7 infancy. We don't actually know what the ultimate
8 delivery channel is going to be.
9 11602 However, having said that, what is
10 important is that it is a communications medium. It is
11 two ways and it is non-linear. It has as part of its
12 grammar a spacial and temporal thing about it.
13 11603 Cinema is simply temporal and so is
14 television. New media encompasses both. That's where
15 you find the terms information architects coming from
16 because it's really about architecting a space in this
17 virtual world as well as creating a story or something
18 like that.
19 11604 I don't know if that helps in terms
20 of the definition of new media, but we do think that
21 because it is a communications medium, that's why you
22 have growth of community based sites, the growth of
23 chats, the growth of forums. That's why people like
24 using that stuff because you can in this particular
25 medium.
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1 11605 It's known that your nature is also
2 very interesting to us because that's where you might
3 get new entertainment genres emerging. This whole
4 notion of interactive story telling or this notion of
5 virtual reality is part and parcel of that. the notion
6 that one could choose to go into spaces as opposed to
7 being led through those spaces.
8 11606 In terms of those two things, we are
9 definitely clear that those are salient characteristics
10 of the medium.
11 11607 In terms of what the language for
12 creation in this medium might be, and what I mean by
13 that is things like in film, for example, you have the
14 jump cut and the closeup and the pan. In new media we
15 still don't have that grammar, so that's part and
16 parcel of what we are trying to do and define and find
17 out about in our programs.
18 11608 COMMISSIONER PENNEFATHER: That's
19 very, very interesting because the tendency is always
20 when discussing this to imagine a finished product
21 which is something that has a beginning and an end or
22 it has a defined "script" which is delivered to me as a
23 user via television or via the Internet or I pick it up
24 at the store.
25 11609 You are entering into a world where
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1 there is artistic work going on in the medium of
2 communication, so it may have an ongoing life.
3 11610 MS SERRANO: Yes.
4 11611 COMMISSIONER PENNEFATHER: If you
5 take something like virtual reality or 3D environments,
6 and let's get to the delivery point now. We hear a lot
7 of talk about the Internet and we have almost merged
8 the two discussions together.
9 11612 Will you be able to participate in 3D
10 environments via the Internet?
11 11613 MS SERRANO: Absolutely. You can
12 now.
13 11614 COMMISSIONER PENNEFATHER: In that
14 sense, what is the impact of the Internet on the kind
15 of art that you are developing and on the kind of
16 skills that you feel we need to develop in the training
17 side of things?
18 11615 MS SERRANO: I would just like to
19 talk about this whole notion of art.
20 11616 One of the things that we believe in
21 is that we are not just -- even though we do research
22 and development, or you could say that we do research
23 and development, we don't just sort of do experimental
24 artwork.
25 11617 One of the most important things
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1 about our program is we actually want to see what kind
2 of interactive entertainment and entertainment genres
3 will be commercially successful in five years time.
4 11618 As part of the training, we also look
5 into business models. That's where I talked a lot
6 about transaction. I think I talked a little bit about
7 what are some of the revenue models in the submission
8 that I gave, how you have to be able to combine a
9 different series of revenue models.
10 11619 One of them might be advertising.
11 One of them might be sponsorship. One of them might be
12 transaction. One of them might be data mining. You
13 want to be able to see which combination of those
14 things would fit into the art or entertainment content
15 that you are developing. I just wanted to make that
16 clear.
17 11620 In terms of virtual reality, the
18 major skillsets that I think are going to be important
19 for that is in fact not about learning how to use the
20 SGI machine, but learning how to conceive of space.
21 11621 Architects actually make very, very
22 good new media developers because they have a good
23 understanding about the relationship between humans and
24 space. In terms of virtual reality training, I would
25 say that is probably one of the most important things,
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1 how does one create positive space as well as negative
2 space in an environment and then how does the user then
3 navigate through that space so that it's simple, it's
4 easy to use and they don't get lost. I think that's
5 important.
6 11622 Perhaps, you know, a series of case
7 studies on traditional buildings and talking about how
8 they function as good uses of space. A series of
9 lectures on that as well as some software training that
10 will allow people then to start using these tools to
11 implement some of their ideas.
12 11623 I don't know if that sort of answers
13 your question on the skills based.
14 11624 COMMISSIONER PENNEFATHER: What I
15 hear is not just new media as an art form in itself,
16 but how new media is used in other forms of art or of
17 such things as architecture or industry development or
18 anything else. It seems also to be a tool of a
19 different kind of learning.
20 11625 You do mention the term lifelong
21 learning.
22 11626 MS SERRANO: Yes.
23 11627 COMMISSIONER PENNEFATHER: And Media
24 Awareness brought that term to us.
25 11628 MS SERRANO: Yes.
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1 11629 COMMISSIONER PENNEFATHER: What does
2 it mean, lifelong learning, for you?
3 11630 MS SERRANO: Well, lifelong learning
4 to me is about this whole notion of the creation of the
5 knowledge worker.
6 11631 I think what we are finding is that
7 the whole definition of education is changing.
8 Lifelong learning is about the ability to have the
9 appropriate kinds of skills to know when to say "You
10 know what? I don't know this stuff" and then to be
11 able to have the skills to be able to research or ask
12 people on those things that you don't know and to be
13 able to be open to change and learning and to perhaps
14 potentially use technology as a tool to facilitate your
15 learning when you are on the job.
16 11632 Lifelong learning is actually about
17 developing an insatiable curiosity and a set of skills
18 that will allow you to satisfy that curiosity and build
19 on your knowledge assets.
20 11633 COMMISSIONER PENNEFATHER: You are
21 obviously developing courses in skills training in all
22 these areas. You mentioned that Media Links at Habitat
23 is funded by Bell Canada.
24 11634 MS SERRANO: Yes.
25 11635 COMMISSIONER PENNEFATHER: With that
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1 in mind, a couple of questions.
2 11636 Is there a link between the courses
3 that are developed and where the students will end up
4 working and the funder?
5 11637 MS SERRANO: At the moment no. It's
6 funny. If you work in a multimedia firm, you end up
7 working for Bell Canada at some point. Either you
8 create their corporate Web sites or you create some of
9 the floppy discs they need. Indirectly they end up
10 working for Bell anyway.
11 11638 They typically tend to be hired on by
12 development companies rather than the telcos or Bell.
13 11639 COMMISSIONER PENNEFATHER: We have
14 heard a lot in fact about the importance of skills
15 development in the country and also the importance of
16 keeping people in the country.
17 11640 What are you hearing from your
18 students in terms of the challenges, what they need in
19 terms of skills development and the job opportunities
20 that are or are not available in Canada?
21 11641 MS SERRANO: One of the biggest
22 challenges that my students face is that in our
23 program, which is four months long, they actually
24 create a prototype, so it's a prototype that they can
25 potentially develop further for commercial
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1 distribution.
2 11642 One of the challenges they have is
3 that they love doing that. They love the idea of
4 working on a team, working on a project from concept to
5 prototypical delivery. They find that most jobs out
6 there don't have these kinds of activities or they
7 don't do these kinds of activities. They do fee for
8 service work.
9 11643 They would love to have an
10 opportunity where -- in fact some of my students have
11 done this, where they have formed their own companies
12 because they refused to work for other people and just
13 do your sort of run of the mill corporate Web sites and
14 are now starting their own companies and trying to
15 develop models for funding projects that they want to
16 do.
17 1150
18 11644 Right now there aren't any mechanisms
19 out there for helping people who want to develop
20 original content to do that.
21 11645 COMMISSIONER PENNEFATHER: What would
22 you suggest would be those mechanism? You mentioned a
23 really important thing earlier and that's risk and the
24 difficulty now in this country. I think it was another
25 intervenor or two or three, also mentioned the same
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1 problem, particularly at the start-up point. It's just
2 the segue you were leading to there.
3 11646 MS SERRANO: One of the things that
4 is missing is that most of the capital that is being
5 given by the private sector and by the government
6 actually, Telefilm, et cetera, they typically fund
7 medium to larger-sized companies, or what they look at
8 is a degree of professional history in many of the
9 management teams that they would fund.
10 11647 Now, I am not saying that is a bad
11 idea. I think that's probably a good idea. However,
12 this industry, as you know, is actually populated by a
13 lot of young, really successful people. I mean, if you
14 look at the companies that have done well in the
15 States, their CEOs are under the age of 29, so how do
16 you balance this seemingly competing notions that on
17 the one hand you want a certain level of maturity
18 because you want to make sure that your investment is
19 protected, but on the other hand the people with the
20 creativity, the people with the chutzpa typically tend
21 to be younger.
22 11648 So, one of my recommendations, and
23 this is something that we would like to work on at the
24 Canadian Film Centre, is the creation of an
25 incubator-type idea, where the management expertise is
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1 provided by a mature, or you know -- I don't know,
2 someone who has had a long career, set of people, but
3 it actually funds a whole host of smaller companies
4 that may be populated by younger people. That's one
5 model.
6 11649 I know that Canada has had a long
7 history of incubators in its universities, et cetera,
8 and some of them haven't been very successful at all.
9 However, again in the U.S. there is a good model run by
10 Bill Gross, called The Idea Lab, which seems to be
11 doing really well. So, that's one model that we could
12 use.
13 11650 Another one is again, as much as I am
14 a proponent of kickstarting entrepreneurialism and
15 people, I think grants do help, especially for these
16 young people. They don't have to be large. They can
17 just be small development grants that they can get
18 access to, so that they can then market it or large it
19 to a larger sponsor who is in the private sector.
20 11651 COMMISSIONER PENNEFATHER: Thank you
21 for that. I think my colleague might take up that
22 point again a little later.
23 11652 So, let me ask you to get back to --
24 what you were describing could be part of what a number
25 of players in this country could take on as a strategy
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1 to support new media. We have had suggestions like
2 yours and I appreciate it and I really want you to
3 focus on the training and development side, although I
4 know you made some comments on the production and
5 delivery or marketing as well.
6 11653 But, if we put all of this together
7 what role do you see for the CRTC in all of this?
8 11654 MS SERRANO: I was hoping you weren't
9 going to ask that question.
10 11655 COMMISSIONER PENNEFATHER: Let me ask
11 it another way then. Let me go back to your point, all
12 of this discussion and a lot of what you have been
13 saying fits the larger discussion which is, of course,
14 part of the presentation earlier about regulation is
15 one piece of a series of things done in this country to
16 support the culture of this country through its
17 artists, through its artists in technology, as our
18 previous intervenor said, through to the
19 infrastructures themselves, that they be Canadian for a
20 number of reasons.
21 11656 So, those objectives are part and
22 parcel of the Broadcasting Act and because of the
23 nature of the infrastructure and the communication
24 medium that is represented by what is interpreted in
25 the Broadcasting Act, there are regulations which
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1 support that content.
2 11657 To some that word means -- limits
3 that content, but to some it means it supports that
4 content and it has certainly had success in terms of
5 film production. We could also include national
6 institutions which have supported film production,
7 either through producing or granting, and we have had
8 other mechanisms inclusive of regulation that, for
9 example, have brought Canadian music artists to at
10 least their own audience, let alone a world audience.
11 11658 How does this paradigm then fit the
12 new media? We will come back then if there is any
13 place for regulation. You have a place on one point I
14 think for regulation, but we can talk to that too.
15 11659 MS SERRANO: I think one of the key
16 challenges that the CRTC will have for the future if
17 they decide, let's say, to adopt some kind of Cavco
18 model is that the people who are going to be part of
19 the new media industry in about five years, seven
20 years' time, are young people who have no conception of
21 what this kind of regulation may mean.
22 11660 What I mean by that is that the
23 students that we teach, and we have a large gamut of
24 them from 23 to 45, but most of them from about 35 on,
25 including myself, have lived in an environment where we
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1 have been taught that government support is bad, where
2 we have been taught that government regulation is bad.
3 11661 Now, we may not agree with that
4 ideologically, but there is a learning curve I think
5 that this particular demographic needs to go through in
6 order to feel comfortable, (a) accessing some of the
7 funds that the CRTC may create or may mandate someone
8 else to create to see themselves as being part of this
9 government shaping of the industry, as opposed to being
10 outside of this government shaping industry, and that's
11 probably what the challenge is.
12 11662 I don't know whether you have noticed
13 that most of the people that you have talked in the new
14 media industry have this same sort of stance. I don't
15 think it's so much that they actually don't want help
16 from the government. It's just psychologically it's
17 alien to them.
18 11663 So, I think one of the things that
19 the CRTC could actually do is if they were to put in
20 place some form of regulation of content that's not
21 obviously onerous or let's say just requires one person
22 to be a Canadian producer, et cetera, I think it's
23 important that accompanying that particular piece of
24 regulation should be some kind of, I don't know, a
25 series of training that will tell people why actually
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1 you are doing it and why it might be of benefit to them
2 because they may not -- I know that some of my students
3 just don't even consider the government as a potential
4 source for funding for a lot of their projects. They
5 would much rather go to the States because it's quicker
6 and easier and all that sort of stuff, to try to get
7 some kind of angel investor to think that they would
8 have to jump through the hoops to get some kind of
9 government funding.
10 11664 I don't know if that makes sense to
11 you at all.
12 11665 COMMISSIONER PENNEFATHER: It's a
13 fascinating perspective. I appreciate you bringing it.
14 My son always reminds me, it's your point of view,
15 mother, and your history, not mine.
16 11666 I appreciate that and it brings me to
17 your other point. If that's the case and that's the
18 reality, it is important, however, that Canadians as an
19 artist find the training here and find access to the
20 tools they need to develop here, as opposed to going to
21 the States.
22 11667 MS SERRANO: Yes.
23 11668 COMMISSIONER PENNEFATHER: Is it not
24 your thesis then that the effort has to be placed in
25 the training and the skills development and job
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1 opportunities and, therefore, the content will follow?
2 I would assume this is your thesis, that Canadian
3 content is defined by the team, by the people actually
4 doing the work?
5 11669 MS SERRANO: Yes.
6 11670 COMMISSIONER PENNEFATHER: How does
7 their creation survive in the global marketplace then?
8 Are we going to have sufficient people working to have
9 a Canadian presence in the marketplace of the world?
10 It's an age-old problem here, the size of our market.
11 Now we have this huge market, so there shouldn't be a
12 problem, but it still remains a little mystery of how
13 you still maintain your particular voice and your
14 particular stories.
15 11671 MS SERRANO: Yes. It is a problem
16 and most people will probably say so what/
17 11672 COMMISSIONER PENNEFATHER: Ah ha!
18 11673 MS SERRANO: Which is that clusters
19 are formed. I forget this management consultant's
20 name, but he calls them clusters and they are like
21 communities. Hollywood is a cluster. The Silicon
22 Valley is a cluster, et cetera. But more and more you
23 are going to find transcontinental clusters forming, so
24 these are people who are macromediasts authoring
25 specialists and they chat to each other from Hong Kong
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1 to -- you know.
2 11674 So, some people may argue that that
3 doesn't matter, that there is no Canadian branded stamp
4 on content that gets distributed across the world. I
5 think then that perhaps one way of ensuring the Canada
6 brand on content, without having to instill some kind
7 of Canadian content requirement on Canadian content
8 that gets developed is to create some kind of, if you
9 will, brand committee that looks at all the different
10 Canadian brands out there in the global marketplace and
11 then promotes them as Canadian content to Canadians and
12 the international community.
13 11675 So the onus of branding Canadian
14 content does not necessarily belong to the creator
15 themselves, but belongs to some other form of -- some
16 government body that will market Canada through the
17 products that she creates, as opposed to putting that
18 responsibility on the creator.
19 11676 COMMISSIONER PENNEFATHER: I am going
20 to leave some time for Commissioner Grauer to ask you
21 some questions. I may come back.
22 11677 MS SERRANO: All right.
23 11678 THE CHAIRPERSON: I will turn to
24 Commissioner Grauer, but I am worried that you have so
25 piqued our curiosity --
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2693
1 11679 COMMISSIONER GRAUER: No, I won't be
2 long.
3 11680 THE CHAIRPERSON: I just remind you
4 both that it's twelve noon and most of us are going to
5 want to eat sometime in the next few hours.
6 11681 COMMISSIONER GRAUER: Yes. I won't
7 keep you long because I know you have been here a
8 while.
9 11682 One of the things that I was really
10 interested in is when you talked about the
11 multi-disciplinary approach and what we have heard a
12 lot actually throughout this hearing is this whole
13 notion of partnerships. One of the things I have been
14 wrestling with is are we talking about people working
15 together in different ways in this environment than in
16 traditional business, if I can even put it that way.
17 So I was intrigued by that and your discussion of the
18 skills required, like learning leadership skills and
19 team building and that kind of thing. I wonder if you
20 could just elaborate a little on that piece of it.
21 11683 MS SERRANO: Sure.
22 11684 I think what happened was that as the
23 new media industry was growing there was also this
24 parallel movement happening, which was that the
25 traditional way of doing business was being questioned.
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1 So, at that time, you know, the whole sort of command
2 and control hierarchy, the whole notion of wearing
3 suits to work, I mean as sort of banal as that, was
4 being questioned at the same time that the new media
5 industry was growing.
6 11685 So what in fact started to happen was
7 you noticed that the IT companies, and especially the
8 more creative IT companies, started to develop --
9 started to adopt the new theories that were being
10 placed on the traditional business community. So, in
11 fact it was the new media industry that first promoted
12 the whole notion of teams, project-based teams, this
13 whole notion of open spaced concept workplaces,
14 tele-working or the ability to work at home, and all
15 these new sort of -- part of this new re-engineering
16 movement that occurred in the business community.
17 11686 I think that one of the key parts of
18 that movement, I mean there are some that have been
19 proven not to work, but one of the key mainstays of
20 these particular movements was this whole notion of
21 interdisciplinary teams.
22 11687 It is quite different from just
23 traditional business partnering, in that the team
24 itself becomes in essence a small company within a
25 larger company and the skills required to create a new
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1 media product are so diverse that each member of the
2 team actually has equal say in the development of the
3 product.
4 11688 While typically -- and the film
5 industry is a good analogy to this. You can say films
6 are created by teams too, but their organizational
7 structure is hierarchical in nature, in that it's the
8 producer who typically gets the money and the director
9 calls the shots for everyone.
10 11689 In a new media team that can't happen
11 because there is no such thing as design being more
12 important than programming or the video or audio
13 elements, et cetera. So, it has to be flatter,
14 although the requirement for a project manager becomes
15 even more important when you have these kinds of teams.
16 11690 So, yes, it's sort of the same in
17 that it grew at the same time as this whole notion of
18 team building and the business community, but it's
19 different in that at the end of the day the product is
20 actually created equally by all the team members. Does
21 that sort of answer your question?
22 11691 COMMISSIONER GRAUER: Yes, and that's
23 very helpful. Thank you.
24 11692 Just again with respect to some of
25 the financing issues, and you talked about the lack of
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1 risk equity, which Commissioner Pennefather said other
2 people have as well. I am wondering if -- I mean this
3 has been a traditional problem in Canada, the lack of
4 venture capital and I mean there's nothing new about
5 this, but if we were going to be making recommendations
6 to other parts of government or doing a report, I
7 wonder if it is not worth -- well, I guess I should
8 come back and talk about it seems that what is required
9 here, and someone else has used the term, is a climate
10 of innovation in Canada in order to really nurture,
11 incubate and develop this talent and let's say on the
12 business side.
13 11693 We have had some recommendations. I
14 guess I would just like your response to that, and if
15 you have anything specific to add.
16 11694 MS SERRANO: Are you going to --
17 11695 COMMISSIONER GRAUER: Yes. IMAT, who
18 talked about four pillars of support, which was support
19 for research and development, for content development,
20 education and training support, support for marketing
21 and promotion and access to capital for investment in
22 interactive new media products and companies, and that
23 was what they called four pillars of support.
24 11696 Torstar had some specific
25 recommendations with respect to education and training
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1 and tax incentives. I would appreciate your views on
2 that, and also appreciating that you talked about the
3 need that there may be a place for government grants in
4 there as well.
5 11697 MS SERRANO: I tend to agree with all
6 the tax incentive recommendations that a lot of the
7 different associations have talked about. I think
8 definitely that's quite important.
9 11698 I think that obviously the whole
10 notion of supporting training is equally important, but
11 I think what we haven't figured out yet is how to
12 actually create sort of a partnership between the
13 government and the private sector to share risk for
14 investment and new media product, or new media content
15 development. I think that's something that we can
16 definitely do. That way you might skirt around the
17 whole issue of do I get a government grant or do I go
18 to an angel investor.
19 11699 If there was some kind of model where
20 the risk is shared by a company and the government, and
21 then that can be even -- a new fund could be created
22 based on that shared partnership or a shared risk, then
23 that might actually be really useful for a lot of
24 different people.
25 11700 The more important thing is to have
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1 sort of tiered investment or tiered funding activities,
2 so that it's not only products that are going to be
3 placed in the market that are mature, but also seed
4 capital funding for small firms.
5 11701 There is obviously investment in
6 products and investment in companies, so creating those
7 kinds of distinctions and having a whole series of
8 services, if you will, or funds that this body or this
9 particular fund can create.
10 11702 COMMISSIONER GRAUER: That's very
11 helpful. Thank you. I really won't keep going on and
12 on.
13 11703 THE CHAIRPERSON: As much as you
14 would like to.
15 11704 COMMISSIONER GRAUER: As much as I
16 would like to.
17 11705 THE CHAIRPERSON: Commissioner
18 Pennefather, did you want to go?
19 11706 COMMISSIONER PENNEFATHER: No. Thank
20 you very much.
21 11707 MS SERRANO: Thank you.
22 11708 THE CHAIRPERSON: Counsel? No.
23 11709 Thank you very much, Ms Serrano. It
24 has been an interesting discussion.
25 11710 We will take our lunch break now and
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2699
1 reconvene at 1:30.
2 --- Recess at 1210 / Suspension à 1210
3 --- Upon resuming at / Reprise à 1330
4 11711 THE CHAIRPERSON: Good afternoon,
5 ladies and gentlemen. We will return to our proceeding
6 now.
7 11712 Madam Secretary, would you call the
8 next party, please?
9 11713 MS BÉNARD: Thank you, Mr. Chairman.
10 11714 The next presentation will be the
11 Canadian Independent Film Caucus.
12 PRESENTATION / PRÉSENTATION
13 11715 MR. BOWIE: Good afternoon. Let me
14 begin by thanking you for giving us the opportunity to
15 present to you today.
16 11716 My name is Geoff Bowie. I am a
17 member of the national board of the Canadian
18 Independent Film Caucus, known as the CIFC.
19 11717 My colleague is Andrew Male of our
20 New Media Committee.
21 11718 Our organization represents over 300
22 private sector independent production companies from
23 across Canada that primarily produce broadcast
24 documentaries.
25 11719 Increasingly, our members are also
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1 producing on-line content, as well as CD-Roms for the
2 educational and home markets.
3 11720 Over the last few years, the CIFC has
4 made several submissions to the CRTC on issues of great
5 concern to our membership. These have included the
6 hearings on convergence, Bell Canada's broadcast
7 trials, and most recently, the Canadian Television
8 Policy Review.
9 11721 The difficult issues before the
10 Commission today are no less important. Given that new
11 media will revolutionize the way independent producers
12 create and do business, we are eager to present our
13 perspective to assist the Commission in its
14 deliberations on the role of new media in our
15 communications system.
16 11722 Communications has the fundamental
17 importance of providing a stage for the public debate
18 that is so crucial to democratic societies. This
19 public debate is not restricted to news and current
20 affairs. Rather, communications should be thought of
21 as providing a stage for the public debate in the
22 broadest cultural sense. It refers as well to the
23 expression of visual artists, performers, writers, film
24 makers, dancers, song writers, composers and designers.
25 11723 It is the play of expression of all
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1 these groups that forms the crucial public debate for
2 Canadian society; and it is the vitality of this
3 ongoing debate that creates Canada's culture and
4 defines our national identity.
5 11724 It is perfectly consistent for a
6 government that values this kind of citizenship and
7 community to use regulation to limit the influence of
8 free market forces to achieve these higher values; to
9 ensure social inclusion and equality of citizenship.
10 11725 The CIFC believes this certainly
11 applies to the Information Highway communications
12 system and new media content as much as it does to
13 broadcasting.
14 11726 Our excitement over the opportunity
15 of the Information Highway stems from its potential of
16 being more inclusive, less homogeneous, than the
17 traditional broadcasting system.
18 11727 More specifically, the free market
19 forces that government regulation is required to limit
20 is the undue influence of large vertically integrated
21 media companies. Their influence needs to be limited
22 to foster the production and availability of a diverse
23 range of Canadian new media on the Information Highway
24 and a plurality of political standpoints.
25 11728 The CIFC envisions a structure for
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1 the Information Highway that fosters the greatest
2 diversity and quantity of high quality Canadian new
3 media content. In our remarks today, we would like to
4 expand on this vision and to suggest regulation to
5 support it.
6 11729 MR. MALE: We echo the need for a
7 broad partnership among key stakeholders expressed by
8 many intervenors, particularly the Digital Media
9 Champions Group, Communications and Information
10 Technology Ontario, and the Interactive Media Arts and
11 Technology Association. The key stakeholders are the
12 distribution sector, the technology provider sector and
13 the production sector.
14 11730 The distribution sector divides into
15 two groups, the carriers, including cable, satellite,
16 wireless and telephone companies; and the ISPs,
17 broadcasters, electronic publishers and other
18 distributors of content.
19 11731 Technology providers are the foreign
20 and Canadian companies that provide the software and
21 hardware to run both the production and distribution
22 sides of the information highway.
23 11732 The content production sector
24 includes all the producers, performers, artists and
25 technicians who create new media content.
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1 11733 If these three key stakeholders can
2 be made to work together as equal partners, it will
3 harness Canada's full productive capacity. To achieve
4 this kind of partnership regulation is needed that
5 encourages structural separation between the
6 stakeholder sectors. This means there should be
7 vigorous competition within each sector; and, at the
8 same time, each sector's jurisdiction should be
9 acknowledged and respected.
10 11734 This is most important for the
11 independent production industry, historically a less
12 capitalized weaker sector than either the distribution
13 or technology sectors. The independent Canadian new
14 media production industry will remain marginal and
15 fragile if carriers, broadcasters, ISPs or technology
16 companies are encouraged to vertically integrate into
17 the production sector. This is already occurring.
18 Many companies from the distribution or technology
19 sector produce content or own production companies.
20 11735 Only regulations, such as those at
21 the Canada Television Fund, for instance, that reserve
22 access to independent production companies, somewhat
23 check this free market trend towards vertical
24 integration.
25 11736 The production industry will be able
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1 to partner on an equal footing with the distribution
2 and technology sectors if regulation encourages the
3 recognition and protection of the jurisdiction of the
4 independent production industry over the production of
5 new media content.
6 11737 This is the basis for Canada's
7 Information Highway to move ahead in a horizontally
8 integrated manner.
9 11738 What does this vision for a
10 horizontally integrated Information Highway suggest
11 about regulation in the new media environment?
12 11739 MR. BOWIE: Financing new media
13 content production; we have some ideas for generating
14 funds for the production of new media content. Similar
15 to regulation governing broadcast distribution
16 undertakings, all companies with Internet revenues over
17 $750,000, which we will talk about later I am sure,
18 earned from distributing new media audiovisual content
19 should contribute 5 per cent of gross revenues to the
20 production of new media. This would include the
21 carriers' revenues earned from ISPs and other
22 Internet-based companies. These contributions should
23 be divided equally between the industry development
24 fund -- an industry development fund and a Canadian
25 content fund, as proposed by the Wall study.
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1 11740 Secondly, new media related
2 technology companies operating in Canada with gross
3 revenues exceeding $5 million annually should be
4 encouraged to contribute 1 per cent of gross earnings
5 to a new media production research and development
6 fund.
7 11741 The federal government, we would
8 recommend, should match the contributions raised
9 through these measures for the first five years.
10 11742 For any policy-created production
11 funds established, it is important that the board of
12 directors be independent, with only minority
13 participation from the distribution technology and
14 government sectors. This maintains the principle of
15 the production sector becoming an equal partner with
16 distribution and technology sectors and handing the
17 production sector the tools to control its own future.
18 11743 The role of the board of each of
19 these funds should be to carry out a new media agenda
20 that is determined by the production sector itself.
21 This agenda will be set with a view to achieving the
22 public interest communications goals of Canada, as set
23 by government in the Broadcasting Act.
24 11744 Broadcasters and others from the
25 distribution sector should not have access to programs
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1 and incentives designed to encourage the production of
2 new media content. Broadcast programming undertakings
3 are rightfully in the distribution sector. It
4 contradicts the principle of equal partners respecting
5 each other's jurisdictions if broadcasters are
6 encouraged to vertically integrate into new media
7 production.
8 11745 Also, the CBC should not be the focal
9 point of public support for new media production. It,
10 too, is a broadcaster, and should not be encouraged to
11 use its access to public money to produce its own new
12 media content in competition with the private sector.
13 11746 Rather, we see the CBC as becoming a
14 very important partner of the independent new media
15 production sector. We should strive together to
16 develop leading edge interactive broadcasting for new
17 programming that is in the public interest -- new media
18 programming that is in the public interest.
19 11747 The CBC archive could be an important
20 resource to create a wide range of new media content,
21 if it is made affordably available to the independent
22 production sector.
23 11748 As mentioned by the Directors Guild,
24 the Canadian Film and Television Producers Association
25 and the Friends of Canadian Broadcasting, financing for
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1 new media program production and for research and
2 development should not come from diverting existing
3 sources of funding for traditional film and television
4 production. The financing sources ideas mentioned
5 above should provide enough capital to successfully
6 kick-start the production of new media.
7 11749 In the medium term, if regulation
8 encourages the independent new media production
9 communities jurisdiction over content, these companies
10 will become self-sustaining from revenues earned from
11 the licensing of their rights.
12 11750 MR. MALE: The licensing; today's
13 Internet does not have the capacity for broadband
14 communications that we equate with the Information
15 Highway. While the Internet is experiencing phenomenal
16 growth and changing quickly, it remains a narrow band
17 communications system. It is not capable of providing
18 broadcast audiovisual content in a linear
19 video-on-demand fashion, let alone interactively.
20 11751 It is too soon to contemplate
21 changing the regulations of the broadcasting system
22 because of the similarity in competitiveness of new
23 media content on the Internet with broadcast material.
24 We agree with the Friends of Canadian Broadcasting and
25 strenuously oppose any reduction of existing regulation
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2708
1 on traditional broadcast at this time or in the near
2 future.
3 11752 Similarly, it is too early to decide
4 on how to appropriately regulate the Internet. We
5 agree with the submission of Netstar that the
6 development of the Internet needs to be monitored
7 closely, and in two years the question of regulation
8 should be revisited.
9 11753 In the meantime, services that are
10 distributing audiovisual and new media content over the
11 Internet, that could be considered broadcasting under
12 the definition of the Broadcasting Act, should operate
13 under exemption orders.
14 11754 In the longer term, we suspect that
15 licensing all companies connected to the Internet and
16 attaching complex conditions of licence, as in the
17 current broadcasting system, may not be feasible or
18 desirable.
19 11755 It may be workable in the future to
20 have a simpler registration system for Canadian ISPs
21 and other new media distribution entities attached to
22 the Internet.
23 11756 The money generated by a registration
24 system would go to the production of new media content.
25 Companies will choose to register to become eligible
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1 for any government incentives available to the key
2 stakeholder sector to which they belong.
3 11757 Registered broadcasters, for
4 instance, will be eligible for government incentives to
5 develop their interactive broadcasting capacity.
6 Registered broadcasters and other new media
7 distributors would also be required to acknowledge the
8 jurisdiction of the independent production sector over
9 new media production.
10 11758 In the case of the independent
11 production industry, companies and individuals that
12 register could gain more affordable access to
13 production technology and computer services and become
14 eligible to access public and private new media
15 production funds.
16 11759 MR. BOWIE: Finally, we have noted
17 the energetic resistance to any form of regulation of
18 the Internet and new media expressed by, for example,
19 the Interactive Media Arts and Technology Association,
20 and other new media organizations. These groups clearly
21 regard regulation as an inhibiting rather than an
22 enabling tool.
23 11760 The regulation of broadcasting,
24 restricted access to the distribution system to all but
25 a relatively small number of broadcast programming
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1 undertakings who gatekeep the system; the unregulated
2 Internet has been just the opposite. It is a level
3 playing field where access is affordable and available
4 to anyone. Many are afraid that regulation will ruin
5 this democratic access.
6 11761 The CIFC believes that the role for
7 regulation is to enable the growth of independent small
8 companies, like the majority of the members in IMAT,
9 the CIFC and in the CFTPA, as well as the growth of
10 Canada's self-employed artists, performers and
11 technicians. Regulation following the principles we
12 have outlined is meant to limit the ability of large
13 vertically integrated media companies from taking over
14 or marginalizing the independent new media production
15 sector.
16 11762 Building a strong independent new
17 media production sector is the way for Canada's
18 Information Highway communications system to
19 demonstrate social inclusion, diversity of voices and
20 equality of citizenship.
21 11763 We would like to thank the Commission
22 for giving us the opportunity to speak. We would be
23 pleased to answer any questions that you may have about
24 either our written or our oral presentation.
25 11764 THE CHAIRPERSON: Thank you very
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1 much, gentlemen, for your presentation. For a
2 discussion of your views, I will turn to Commissioner
3 Pennefather.
4 11765 COMMISSIONER PENNEFATHER: Thank you.
5 Good afternoon and welcome back.
6 11766 MR. BOWIE: Thank you.
7 11767 COMMISSIONER PENNEFATHER: I was
8 wondering earlier if you had brought any e-mails this
9 time.
10 11768 MR. BOWIE: We got one. Our friend
11 in Quyon is obsessed with the CAB, and it was so full
12 of expletives that we didn't think we could bring it.
13 11769 COMMISSIONER PENNEFATHER: Too bad.
14 11770 By saying that I do not mean in any
15 way that I am not looking forward to my discussion with
16 you viva voce; and I would like to go through your
17 written presentation, but I have to say that, listening
18 to you today, unless I am mistaken, I hear a few
19 changes or different wording to some of your ideas. So
20 I would like to revisit the main points of your
21 position and hope that I have heard them correctly
22 today.
23 11771 Just as a start, in your written
24 presentation, and I think the fundamental underpinnings
25 of your recommendations are based on your historical
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1 review, in which you state that the development of new
2 media, in terms of its production and distribution, is
3 no different than that of old media and, therefore, you
4 proceed to suggest the various measures that you are
5 suggesting, for example, measures of regulation to
6 prevent vertical integration which we will come back
7 to.
8 11772 I did pull a couple of comments from
9 other intervenors. You have mentioned yourselves IMAT,
10 where they have said very clearly that:
11 "As creators of interactive new
12 media content in Canada, IMAT
13 and its members do not seek the
14 projection of regulation."
15 11773 Sheridan College:
16 "New media is without borders or
17 boundaries which renders
18 meaningless any discussions
19 about the pros and cons of
20 attempting to impose a
21 regulatory framework.
22 Regulation evolved from the
23 history of licensing, and
24 regulating finite and measurable
25 entities, such as bandwidth and
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1 content where control was
2 possible. The environment has
3 taken the next evolutionary step
4 where neither limits nor control
5 can be defined, much less
6 enforced."
7 11774 This is a very different view of the
8 nature of new media versus traditional media and the
9 value of a regulatory approach.
10 11775 I wonder if you could expand on your
11 comments in that regard.
12 11776 You quoted IMAT, if I am right, this
13 afternoon, in one sense, and my understanding was they
14 didn't want any kind of regulation whereas --
15 11777 MR. BOWIE: That is what I --
16 11778 COMMISSIONER PENNEFATHER: -- your
17 proposal, as I read it in your written submission,
18 certainly brought to new media some of the existing
19 approaches for regulation in this country, for a number
20 of reasons. I am not sure how you react to that.
21 11779 MR. BOWIE: I think in the written
22 submission, and in the oral submission, I think our
23 concept is similar with IMAT's on one side and not on
24 the other. I think, as we have said in the written
25 submission, in terms of the kind of licensing that
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1 exists now for the broadcasting system, won't work for
2 the new media -- for the distribution outlets.
3 11780 I think one of the main things that
4 we hope that regulation can do is provide a system for
5 getting funding into the production of content because
6 I think, as you mentioned this morning, there is a
7 perennial problem with finding the money to produce
8 distinctly Canadian content, whether it is about
9 international issues or about particularly Canadian
10 stories.
11 11781 COMMISSIONER PENNEFATHER: I think
12 you have put your finger on it. My point is that they,
13 and others, have recommended other means than
14 regulation to support new media content.
15 11782 MR. BOWIE: Tax incentive.
16 11783 COMMISSIONER PENNEFATHER: I think
17 Commissioner Grauer listed four different versions of
18 that.
19 11784 Certainly, our presenter this morning
20 had other ideas and other models have been presented,
21 all of which do not include regulation, and yet you
22 seem to be including regulation in principle.
23 11785 MR. BOWIE: Yes. The reason for
24 that, I think, is that it is the -- it is the creators
25 in the traditional area that have the most experience
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1 with creating the kind of Canadian content that we are
2 interested in as far as -- as new media is concerned.
3 11786 The new media companies basically
4 come from a computer background; and, as IMAT has
5 pointed out, most of their work is fee-for-service work
6 that's corporate and training and so on. I think it
7 comes from being in the -- more in the sort of
8 traditional cultural sector and understanding the
9 history of that that makes us, I think, value the
10 important role that regulation can play.
11 11787 We, frankly, don't see any difference
12 in trying to make distinctly Canadian new media content
13 available to Canadians than the traditional media.
14 11788 COMMISSIONER PENNEFATHER: Just to be
15 clear, when you say "new media content", what are you
16 referring to?
17 11789 MR. BOWIE: I am referring to
18 interactive, audiovisual material, and I think our
19 vision is for a broadband highway -- Information
20 Highway where there is full video, full motion video,
21 and full audio, and the capacity of having what we call
22 database programming, which means you could have --
23 take any subject and have a database of material and
24 have many different ways into that material. They
25 could be from 30-second segments done by a poet to a
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1 half an hour linear presentation. It is just a million
2 ways into -- into new media content that would be
3 server based.
4 11790 COMMISSIONER PENNEFATHER: So the
5 element of interactivity, which many have said is a
6 defining feature of new media, is still, for you, the
7 product would be a program, even if it were
8 interactive?
9 11791 MR. BOWIE: I didn't quite understand
10 that.
11 11792 COMMISSIONER PENNEFATHER: A new
12 media product, even if it was interactive, which I
13 gather from many here is one of the defining
14 characteristics of new media.
15 11793 MR. BOWIE: I agree.
16 11794 COMMISSIONER PENNEFATHER: If such a
17 product was interactive, would it be a program as we
18 understand it under the Broadcasting Act?
19 11795 MR. BOWIE: Yes. My understanding --
20 at first I was confused, you know is new media
21 broadcasting? If you look at it technically, I would
22 say not.
23 11796 For me, the interactive distribution
24 Information Highway will be point to point whereas
25 broadcasting is point to multi-point -- it is "broad"
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2717
1 casting. On that basis, it would not -- new media
2 would not be broadcasting.
3 11797 But my understanding is that in the
4 Broadcasting Act it is really not about technical
5 issues at all. It is about audiovisual material; and
6 it doesn't matter if it is distributed simultaneously
7 or on an individual basis or to many people at once.
8 11798 So I would say that, then, any
9 audiovisual material that is not alphanumeric text
10 would come under the Broadcasting Act.
11 11799 COMMISSIONER PENNEFATHER: Different
12 people are drawing different lines there. One of the
13 reasons I am asking you is to discuss with you this
14 licensing process which you have proposed in your
15 written submission. You called it a registration
16 system today. Is that one and the same?
17 11800 MR. BOWIE: Yes.
18 11801 COMMISSIONER PENNEFATHER: Why have
19 you called it a registration system as opposed to the
20 licensing process? I am curious. Why did you change
21 the description?
22 11802 MR. BOWIE: The wording?
23 11803 COMMISSIONER PENNEFATHER: Yes.
24 11804 MR. BOWIE: I think I was a little
25 embarrassed by saying it was like getting a licence for
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1 your car.
2 11805 COMMISSIONER PENNEFATHER: The motor
3 vehicle?
4 11806 MR. BOWIE: The principle of it, I
5 think, is different than what we have now with
6 broadcasting. Instead of trying to impose regulations
7 on the resistant broadcasters to get them to do their
8 bit, this would provide incentives. I think it goes to
9 the SPTV -- I thought the SPTV idea of a web ring kind
10 of connects with it and, that is, you need to get the
11 players to buy into the Canadian system and there
12 should be incentives, tax incentives or whatever kind
13 of incentives we can think of for each sector to become
14 registered, to make a contribution.
15 11807 So, for instance, I mentioned the
16 broadcast sector. There could be incentives for them to
17 develop their interactive broadcasting capacity.
18 11808 The basic principle we have is that
19 if those three key sectors all can focus on what their
20 main business is, and work together, you are going to
21 be able to develop a very powerful interactive media
22 system that will -- and you will be able to develop it
23 differently than the United States; and, if we got on
24 it, more quickly. And that would be a huge advantage
25 to all three sectors and to the information economy
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1 generally.
2 11809 COMMISSIONER PENNEFATHER: Let me --
3 I still am not sure I understand, you having explained
4 that the purpose of this licensing process is
5 incentives. Just to be clear, it is a registration or
6 a licence that you would issue to all Canadian program
7 undertakings attached to the digital network. You
8 state that every Web site owner may be licensed in a
9 similar way -- sorry to the licensing of motor
10 vehicles -- but the cost of a licence should be on a
11 sliding scale from a nominal fee for small Web sites
12 engaged in very limited economic activity to a
13 percentage of gross revenues for entities connected to
14 the digital network with economic activity exceeding
15 $750,000.
16 11810 Given the sheer number of Web sites
17 attached to the network, how would you monitor such a
18 system to ensure that no one was operating without a
19 licence, for example?
20 11811 MR. BOWIE: I think the thing is that
21 people who were operating without a licence, or may
22 very well be, but they wouldn't be eligible for any of
23 the benefits that are there for people who do become
24 registered and who buy into the system.
25 11812 COMMISSIONER PENNEFATHER: So the
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2720
1 purpose of this licensing regime is to register and
2 therefore you have the right to other incentive
3 programs?
4 11813 MR. BOWIE: Yes.
5 11814 COMMISSIONER PENNEFATHER: What would
6 be the objective for licensing a small Web site engaged
7 in very limited activity, because you note the economic
8 activity exceeding $750,000 would seem to put the
9 emphasis on the larger company; and, as Commissioner
10 Wilson asked earlier, where did this $750,000 come
11 from?
12 11815 MR. BOWIE: I was one of the --
13 ironically enough, I was one of the people on the
14 committee that the Canadian Conference of the Arts
15 brought together to draft the report that was presented
16 this morning.
17 11816 It was a committee that met about
18 five times in telephone conferences from across the
19 country. There was -- Adam Frohman from IMAT was on
20 the committee. There was a new media distribution
21 company from Edmonton. There was a production company
22 in Vancouver. There was a company from Halifax,
23 Montreal.
24 11817 It was, generally -- I think it was
25 mainly put forward as a figure by the distribution
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1 company in Edmonton. It is a little bit of a grab from
2 the air, but it is kind of, well, it is companies that
3 are making that amount of money that are -- that have
4 achieved a level where they really have a business and
5 anything beneath that shouldn't be -- shouldn't have to
6 contribute.
7 11818 COMMISSIONER PENNEFATHER: Shouldn't
8 have to contribute but could have a licence and
9 therefore access to incentive programs, is this your
10 idea?
11 11819 MR. BOWIE: I guess I think of the
12 smallest Web sites as being production, you know,
13 production Web sites or people that are making content
14 and using their Web site to present it. They would
15 want to become registered in order to be part of a
16 production network that would be eligible for the
17 various funds that are there to -- for new media
18 production.
19 11820 COMMISSIONER PENNEFATHER: I want to
20 be sure I understand that what you are talking about
21 is, bottom line, a levy on the ISPs, for example,
22 percentage of their revenues towards the creation of
23 new media content. How do you respond to the
24 intervenors who have said that that form of incentive,
25 as you say, would simply drive ISPs or Web sites out of
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1 the country because it would be to them -- and again
2 IMAT says very clearly that they not only do not need
3 this kind of protection but these kind of regulations
4 and licensing procedures would be a barrier to their
5 growth?
6 11821 MR. BOWIE: I think -- to me, there
7 is a bit of a contradiction because I think IMAT and
8 other organizations support the Wall study, support the
9 idea of an industrial fund, and they kind of value more
10 the industrial fund than they do value the Canadian
11 content fund.
12 11822 To me, those funds are going to come
13 about because of some kind of regulation, or some --
14 who is going to contribute to those funds? I think the
15 problem at this stage and the confusion is that it is
16 early in the development of the Information Highway or
17 the Internet and exemption orders kind of -- the idea
18 of having exemption orders and them operating under
19 exemption orders until they are making a significant
20 amount of revenue from their "broadcasting
21 distribution", I think that is sort of why it is
22 confusing because we don't know yet if they are going
23 to make any money at distributing this kind of content.
24 11823 COMMISSIONER PENNEFATHER: This kind
25 of content. Let's be clear that if you got a licence
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1 in your process, it would go to the Web site or the
2 Internet service provider, who in fact is providing a
3 variety of services, as I understand it, and very
4 little of that, and you yourself have said at this time
5 certainly not of the quality we call for the long-form
6 program, but most of what they are delivering is text,
7 or others have defined it as interactive analogous
8 communication as opposed to broadcast.
9 11824 If you asked for a licence to act as
10 an ISP, are you then licensing all of these services,
11 in effect? Under what authority would you do that if,
12 for example, alphanumeric text is not in any way
13 broadcasting and therefore not within our jurisdiction,
14 for example, here to licensing?
15 11825 MR. BOWIE: I think maybe we have
16 kind of crossed over where now we are talking about the
17 idea of licensing the ISPs rather than having the kind
18 of programs where the ISPs would want to be registered
19 and would want to pay for that; and then that kind of
20 system, if that could be set up, would work, and then I
21 think the 5 per cent of gross revenues, we won't be
22 able to do that until it has become clearer that how
23 that new media content, that is, broadcasting is
24 distributed and they are making money with it.
25 11826 COMMISSIONER PENNEFATHER: Are you
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1 saying that your concept would not take effect
2 immediately because I think this afternoon you said
3 that it is too early to regulate the Internet?
4 11827 MR. BOWIE: Yes. I think the -- we
5 could take steps towards the registration idea,
6 although it is fairly involved, as far as organizing
7 that.
8 11828 COMMISSIONER PENNEFATHER: Who would
9 do this registration and under what authority would it
10 be done?
11 11829 MR. BOWIE: I don't know. That would
12 need to be developed. I suppose it would be some -- I
13 guess a body that is attached to government.
14 11830 COMMISSIONER PENNEFATHER: Let's go
15 to another mechanism for support which has been
16 recommended, and you talked about SPTV. They suggested
17 a super Canadian site be established as a central
18 clearing house or focal point for Canadian content
19 because we have certainly -- you are addressing the
20 financing of the content provider.
21 11831 This point is also addressing the
22 marketing and the visibility of the Web site and/or the
23 products that are carried by that Web site. What do
24 you think of this concept of the super Canadian site?
25 Would it serve as an effective way of promoting
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1 Canadian new media?
2 11832 MR. BOWIE: Yes. What it has sort of
3 made me think of is a kind of, on a broader scale, on a
4 bigger scale than just an aggregation of Canadian
5 sites. Kind of a web ring, network, where those three
6 key stakeholder sectors could all be participating. It
7 would be almost -- it would be -- what would be
8 registered, everything that belonged to that. That web
9 ring, for want of a bigger term, would be the focus of
10 Canadian regulatory policy.
11 11833 COMMISSIONER PENNEFATHER: You
12 mentioned the role of the CBC. The CBC has also come
13 up in terms of being the leader, exercising a
14 leadership role in terms of not only a new media super
15 site, if you will, a Canadian site, but also in the
16 production of new media content. I think you had a
17 different point of view on that. Why is that -- this
18 is in your area?
19 11834 MR. BOWIE: We think the future
20 should be in the self-employed private sector
21 performers, producers, artists, technicians; and that
22 the CBC's role is as a distributor.
23 11835 We have this problem with the CBC in
24 the current broadcasting environment where they are in
25 competition basically. They are going into business to
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1 protect their copyrights, to produce their own content
2 that they own and can sell. It is almost like there is
3 a public sector -- they have a monopoly on public
4 sector money. I mean that is not the case any more;
5 they used to. We think that the process -- it would be
6 more fruitful for both of us if the independent
7 production sector was doing the production and working
8 with the CBC more as their -- as an important public
9 sector distribution partner.
10 11836 COMMISSIONER PENNEFATHER: When you
11 are talking about the independent sector, you are the
12 film caucus, are you including in that the producers of
13 new media content?
14 11837 MR. BOWIE: Yes.
15 11838 COMMISSIONER PENNEFATHER: And
16 calling them the independent sector?
17 11839 MR. BOWIE: Yes. IMAT, I would say
18 would be the representative organization for them. It
19 is the producers association, at least; and I think it
20 should also include the performers and writers and
21 artists and technicians and their associations. There
22 should be a kind of a converging of that whole
23 production milieu, I think.
24 11840 COMMISSIONER PENNEFATHER: Well,
25 certainly, one of the members of the committee for CCA
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1 was also here with the Association des Producteurs en
2 Multimédia de Québec, M. Allard, and, again, just to
3 be -- try to be clear on why you are proposing a system
4 of support which would include regulation, he certainly
5 did not feel the need for any form of regulation.
6 Quite contrary to what you said in the beginning, the
7 business models would really move this forward and that
8 the content production side of the -- this new business
9 really should not be fettered with any regulation
10 whatsoever or any component of it.
11 11841 MR. BOWIE: I just don't understand
12 how that could ever work. I just -- I mean, part of
13 the problem of being Canada next to the United States
14 is that if you want to make -- you know, if you want to
15 have even public interest programming, if you want to
16 have other kinds of content other than what is the most
17 commercial kind of U.S.-style programming, how are you
18 going to get that?
19 11842 It is not to say that you can't have
20 Canadian content that becomes internationally
21 successful. We all know examples where that has
22 happened.
23 11843 In other cultures, the best work that
24 is most successful is deeply rooted in their local
25 culture and in their national culture; it is not
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1 generic drama series. That is what you are always
2 striving for, and you will have successes but you have
3 got to have support.
4 11844 I think one of our points is that the
5 production sector, historically, hasn't had that
6 connection to distribution. It has always been kind of
7 cut off from it. There has always been money at the
8 front end but never money at the back end. You
9 couldn't control your rights and make, you know, use
10 them to make an income. We want to strengthen that so
11 we can become self-sustaining.
12 11845 I think that is the whole point to
13 what I am talking about the production funds and that
14 the board of directors be independent and be carrying
15 out an agenda that is set by the production industry,
16 not with, you know, broadcasters and carriers and all
17 those with their vested interests basically controlling
18 it.
19 11846 COMMISSIONER PENNEFATHER: Yes, I
20 took that point in this -- it is difficult when there
21 is such a convergence of new media content with a
22 delivery system called the Internet. It is difficult to
23 see how they can be kept that separate and not assure
24 growth of both components.
25 11847 But I wanted to focus on another
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1 point you just raised. You state, and you just said,
2 that it is important to deal with rights, the rights
3 issue and in your written submission you state that it
4 is important that copyright clearance for new media
5 products be streamlined.
6 11848 Can you elaborate on how you believe
7 this might best be accomplished?
8 11849 MR. BOWIE: Yes. We think that -- I
9 think there is a couple of parts to that. We think the
10 producers associations, like IMAT, the CIFC and the
11 CFTPA should be negotiating a new media production
12 contract with the creative community, with the writers
13 and the artists and the performers and the technicians.
14 That would govern a kind of a production network that
15 would be comprised of all those people, and then there
16 should be a model like the electronic rights licensing
17 agency model, where once you have a production contract
18 that includes this whole -- all these producers and
19 creative community, which sort of details a sharing of
20 royalties for their creative work, that will itself
21 facilitate the clearance.
22 11850 So, you will already have -- the
23 whole production community will have come up with a
24 fair arrangement and, then, through an electronic
25 rights licensing agency, that money -- that is a
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1 one-stop shop for the distributors and a disbursing of
2 the income to the production side.
3 11851 COMMISSIONER PENNEFATHER: From what
4 we have heard this week and last from associations
5 representing various artists and performers and record
6 producers and so on, this is an important point, and a
7 long discussion internationally, and it is a very
8 serious bottom line issue for one intervenor until this
9 issue is resolved. In fact, there won't be a lot of
10 certain kinds of content on the Internet, such as
11 long-form cinema.
12 11852 MR. BOWIE: It should be a big
13 bottleneck. I mean anybody even now trying to clear
14 rights for documentaries for archival footage or for
15 music, it is a complicated and expensive process.
16 11853 COMMISSIONER PENNEFATHER: Just in
17 summary, you have, I think, some suggestions here for
18 financial incentives, but that includes a licensing
19 process, but you would not regulate the Internet as
20 such, you would wait until you saw how things evolve?
21 11854 Just one last point. You said at the
22 beginning that this is a stage for public debate for
23 citizenship and community. That component of the
24 Internet and its global medium, you say will not be
25 achieved by free market forces and, therefore, as I
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1 understand it, the need for regulation. Yet, many have
2 put to us, and I am sure you would agree, in fact you
3 said yourself that it is going to be as easy to be a
4 content provider as a user of the Internet.
5 11855 When you come to regulation, many
6 would interpret that as saying that you are preventing
7 access by individuals to content; you are controlling a
8 medium which is the ultimate, as you yourself have
9 said, in creating a plurality of standpoints.
10 11856 How do you reconcile those two things
11 because this is a medium unlike some of the media that
12 you have been talking about that, historically, we have
13 dealt with, does have this global communication aspect?
14 It is a communication medium. It is a transaction
15 medium. It is a content providing medium.
16 11857 I am sure you recognize that. So one
17 of the interesting things to think about is this
18 combination of content, providing delivery to a product
19 to a user, traditional, to this also being a forum for
20 public debate in which many would say freedom of
21 expression is the ultimate goal and must be preserved
22 at all costs and no regulations whatsoever.
23 11858 MR. BOWIE: I think the real world
24 that we are living in is that there are huge media
25 conglomerates and the Internet is at its -- in its
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1 early -- it is even less now, but it is in its anarchy
2 phase, and it is not even certain that the broadband
3 highway is going to be the Internet. I mean if the
4 Internet -- I am not an expert on this, but from what I
5 have heard, the Internet runs on a protocol called
6 TCPIP and it comes down from the military and it has
7 this feature to it about if you send something this way
8 and it gets interrupted because a bomb drops, it can go
9 the other way and it will still get there. It is a
10 great system, but it might not be a great system for
11 broadband and they talk about ATM systems as being the
12 protocol.
13 11859 So you might end up with, in an
14 interoperable world of network of networks, that the
15 Internet is going to be one network that is alongside
16 the broadband network, and that broadband network is
17 not, perhaps, going to be quite as anarchic. It is
18 going to tend towards, you know, the kind of huge
19 investments that are being made in it are from those
20 largest corporations in the world. That is what is
21 going to tend to having that system, which is probably
22 going to be the most -- the one with the most
23 interesting content, perhaps, and most powerful one,
24 most widely accepted one, having less diversity of
25 voices, becoming more homogeneous.
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1 11860 COMMISSIONER PENNEFATHER: Thank you
2 for your comments. Thank you, Mr. Chairman.
3 11861 THE CHAIRPERSON: Thank you,
4 Commissioner Pennefather. Thank you very much,
5 gentlemen. We appreciate your being here today.
6 11862 MR. BOWIE: Thank you.
7 11863 THE CHAIRPERSON: Madam Secretary.
8 11864 MS BÉNARD: Thank you, Mr. Chairman.
9 11865 The next presentations will be the
10 Communications and Diversity Network and Professor
11 Karim H. Karim.
12 11866 THE CHAIRPERSON: Good afternoon,
13 ladies and gentlemen. I will let you proceed when you
14 are ready and in the order that you wish to go.
15 PRESENTATION / PRÉSENTATION
16 11867 MS KORAH: Mr. Chairman, and members
17 of the Commission, I would like to introduce this
18 group. We are called the Communications and Diversity
19 Network. It is a loosely knit organization of groups
20 and individuals. Our main goal is to ensure that a
21 variety of voices and perspectives are included in the
22 Canadian media.
23 11868 To my right here is Dr. Karim Karim.
24 He is a professor of mass communications at Carleton
25 University; and next to Mr. Karim is Heather de Santis.
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1 She is a research consultant. She specializes in
2 issues relating to cultural policy and media and she
3 has recently done a paper on combatting hate on the
4 Internet.
5 11869 To her right is Anne Clarke. She is
6 the Executive Director of the Pearson Sharama Institute
7 which researches issues of inclusive policy.
8 11870 Behind me is Kamal Jama. He is an
9 Internet consultant involved in developing Web sites
10 for non-profit organizations.
11 11871 And next to Kamal is Mr. Rubin
12 Friedman. He is a research associate of the Pearson
13 Sharama Institute, and a member of the Diversity
14 Network.
15 11872 My name is Susan Korah. I am a
16 freelance writer and communications consultant. I have
17 recently been involved in creating curriculum materials
18 to combat hate on the Internet.
19 11873 So, now it is over to Dr. Karim.
20 11874 MR. KARIM: Thanks, Susan.
21 11875 Good afternoon, Mr. Chairman,
22 Commissioners.
23 11876 The Communications Diversity network
24 is delighted to have this opportunity to present this
25 brief to the CRTC's public consultation on new media.
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1 You will recall that the network has appeared before
2 you over the last weeks to present its briefs on the
3 Canadian Television Policy Review and in support of the
4 national application for the Aboriginal Peoples
5 Television Network.
6 11877 We shall attempt today to address a
7 few of the issues raised in the CRTC's call for
8 comments regarding new media, as they reflect the
9 interests of our network.
10 11878 At the outset, we would like to state
11 certain key principles that we believe should guide
12 governmental involvement in the new media. These are:
13 a) assisting the development of Canadian content; b)
14 ensuring the inclusivity of and access by all
15 Canadians; and c) advancing social justice and
16 equality.
17 11879 Secondly, the network would like to
18 address certain issues which frame the consideration of
19 the new media. One: Are the new media either
20 broadcasting or telecommunications services?
21 11880 We would like to suggest that such
22 categorization limits the understanding of the services
23 and technologies that include on-line media, such as so
24 many technologies, such as the Internet, the worldwide
25 web, electronic bulletin boards, Usenet, List Serve,
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1 Internet Relay -- I will summarize here because you
2 have the document -- as well as web TV and off-line
3 technologies like compact disks, CD-Roms, digital video
4 disks, as well as other emergent hybrid forms.
5 11881 The new media present us with new
6 paradigms of communication that merge in varying
7 degrees the one-to-one model of telephony and the
8 one-to-many model of broadcasting. Therefore, policies
9 for the various new media need to be placed within
10 innovative frameworks that address their unique
11 characteristics. Perhaps, the way to avoid constantly
12 second-guessing what policy and regulatory challenges
13 the next generation of new media technology will put
14 forth is to focus our attention away from the
15 technology and on the contents that they carry and the
16 users of their contents.
17 11882 Two: Who are the users of the new
18 media?
19 11883 It is common to think of the users
20 only as consumers. However, this aspect of users'
21 identity only speaks to the business sphere of
22 activity, which is important but should not eclipse the
23 identity of users as citizens. Revalorizing
24 citizenship in our national discussions about the new
25 media helps to underline the issues of access, equality
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1 and social justice.
2 11884 The network would like to urge the
3 Commission to maintain the critical balance between the
4 needs of citizens and consumers with respect to the new
5 media.
6 11885 Three: Who should develop the new
7 media?
8 11886 Even the U.S. government, which has
9 favoured massive private sector control of the
10 development of the new media, has poured enormous sums
11 of money into, first, establishing and maintaining the
12 Internet network, as well as into the production of
13 digitized education and heritage materials.
14 11887 The American government has also
15 supported the involvement of minorities in the
16 production, management and operation aspects of the new
17 media industry. The network believes that the
18 successful development of the new media in Canada
19 cannot be carried out without the close collaboration
20 of government, industry and community groups of all
21 background.
22 11888 The governments at all levels,
23 particularly the cultural and educational departments,
24 and the private sector, especially telecommunications
25 firms, broadcasters and cable companies, have a key
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1 role to play in financing community participation.
2 11889 I will now move on to our key
3 recommendations.
4 11890 One: Access, use and participation.
5 11891 The network generally supports the
6 recommendations of Telecommunities Canada, which has
7 presented its brief to you earlier, regarding access to
8 the new media. Research has indicated that the poorer,
9 the less educated, and the older a Canadian is, she is
10 less likely to have access to the Internet. Certain
11 provinces are doing better than others, and urban over
12 rural areas.
13 11892 We have less information on access by
14 ethnicity, however, but if the U.S. is any indication,
15 certain disadvantaged minorities tend to have much less
16 access than the average population.
17 11893 In any case, with the bulk of the
18 content on the worldwide web being in English,
19 aboriginal peoples, unilingual francophones, and ethnic
20 minorities without a facility in only that official
21 language are not able to fully utilize the medium.
22 11894 While the gender gap is gradually
23 being closed, men still tend to be the heavier users of
24 new media.
25 11895 Another disadvantaged group is
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1 composed of persons with disabilities.
2 11896 However, we need to distinguish
3 between access, use and participation in the
4 information society. Access in itself does not
5 guarantee that the technology will be used. For
6 example, even though a community may have a number of
7 computers with on-line services available at the local
8 library, for example, an elderly immigrant with a
9 limited knowledge of either official language would
10 find it difficult to compete for the use of a computer
11 with other more savvy users of the technology.
12 11897 Secondly, even though people may be
13 using the new media, are they participating socially,
14 economically or politically in the development of the
15 country? One of the most heavily accessed material on
16 the Internet is pornography. Does this lead to
17 positive participation in Canadian society?
18 11898 Therefore, access does not
19 necessarily mean use, and use does not necessarily lead
20 to participation, as producers and consumers of new
21 media products.
22 11899 Our interpretation of the data on new
23 media access should be tempered by this realization.
24 We need to develop policy and regulatory mechanisms
25 that encourage positive social, political and economic
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1 participation with the use of the new media.
2 11900 Assistance should be priorized with
3 preference given to community groups, non-profit
4 groups, independent producers, artists, collectives and
5 other independent voices of all cultural backgrounds
6 over major corporations.
7 11901 The second recommendation:
8 Encouraging the development of Canadian content.
9 11902 We firmly hold that there needs to be
10 a clear strategy to support the development of Canadian
11 content. The Broadcasting Act lays down the principle
12 of the development of radio and television content that
13 reflects the diversity of the Canadian population. The
14 global nature of some of the new media and the current
15 environment of trade liberalization takes this issue
16 into the transnational context.
17 11903 One set of calculations suggests that
18 less than 5 per cent of material on the Internet is
19 Canadian made. Assuming that this figure is accurate,
20 let us put it in to perspective. Given that Canadians
21 make up 0.006 per cent of the world population, one
22 could argue that we are already doing quite well.
23 However, such a comparison would be fatuous, since much
24 of humanity has little access to telephones, let alone
25 the Internet.
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1 11904 If the question is how to address our
2 competitiveness in global new media markets, we need to
3 address the needs of the future users of what is
4 expected to become a much more widely used medium
5 around the planet.
6 11905 We have all heard about the enormous
7 potentials of the markets in places such as China,
8 India and Latin America. How are we preparing to serve
9 those markets? Are we looking at our own linguistic
10 and cultural resources to build the human
11 infrastructure that will put us in a position,
12 nationally, to meet the needs of overseas markets?
13 11906 Unfortunately, previous work, like
14 that of the Information Highway Advisory Council,
15 largely disregarded this vital aspect of our
16 preparation for what is touted as the "global
17 information society". However, a singular focus on
18 markets should not preclude the cultural production by
19 those Canadian minorities who do not have ready access
20 to markets abroad.
21 11907 Therefore, the network recommends
22 that the CRTC develop bench-marks for public and
23 private support for the development of Canadian content
24 for the new media that meets the diverse cultural needs
25 of all Canadian citizens and consumers, as well as the
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1 potentials for overseas markets.
2 11908 One of the means of enhancing
3 relevant material may be through co-production
4 agreements with other governments, models for which
5 already exist in television and film production.
6 11909 Three: Recognizing the globality of
7 the new media.
8 11910 Certain new media, particularly those
9 based on open electronic networks and digital
10 broadcasting satellites, have allowed for
11 inter-continental communication among individuals and
12 groups of a kind -- a communication of a kind that was
13 not possible before. We have seen how people in
14 different parts of the world can link together around
15 particular issues, such as the opposition to the
16 Multilateral Agreement on Investment, human rights and
17 environmental issues, opposition to land mines, and
18 even the recent crash of the Swissair airliner off Nova
19 Scotia.
20 11911 I have already submitted a written
21 submission on "New Media Use Among diasporic
22 communities" and will only sketch some of the main
23 points of the this topic here.
24 11912 Global migration trends have produced
25 transnational groups related by culture, ethnicity,
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1 language and religion. Whereas members of some of
2 these groups had generally operated weekly newspapers
3 and occasional broadcast programming to meet the
4 information and entertainment needs of their
5 communities, the emergence of digital technologies is
6 enabling them to expand such communication activities
7 to a global scale.
8 11913 The relatively small and widely
9 scattered nature of diasporic communities have
10 encouraged them to seek out the most efficient and cost
11 effective means of communication. Technologies that
12 allow for narrow casting to target specific audiences
13 rather than those that provide for mass communication
14 have generally been favoured. Ethnic broadcasters,
15 having limited access to space on the electromagnetic
16 spectrum, are finding much greater options opening up
17 for them through DBS in Canada, the U.S. and Europe.
18 11914 Indeed, in certain cases, ethnic
19 media have led the way in the adoption of this
20 technology and are in competition with mainstream
21 broadcasters. Not only are they disseminating their
22 material to audiences in their regions, but also
23 intercontinentally, for example, the Spanish-language
24 network Univision in the U.S. reaches Hispanic homes
25 coast to coast and Latin America; and the programming
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1 of the Orbit Network in Europe, which broadcasts
2 Arabic, English and French, is received in Europe as
3 well as in the Middle East.
4 11915 National regulatory bodies which have
5 prohibited the growth of ethnic media find that their
6 minorities are tuning in to programming disseminated
7 from their respective home countries or diasporas.
8 11916 For example, when France's Conseil
9 supérieur de l'audiovisuel excluded Arabic stations
10 from licensed cable networks, the Maghrébin-origin
11 population in southern France put up the pizza-sized
12 dishes to receive programming from Northern Africa.
13 11917 Diasporic communities are similarly
14 maintaining links through the Internet and worldwide
15 web services. Web sites are already creating global
16 directories of individuals, community institutions and
17 businesses owned by members of diasporas.
18 1430
19 11918 Instead of viewing this as a threat
20 to our sovereignty, we should be putting ourselves in a
21 position to take advantage of the growing transnational
22 connections that can foster trade, global cultural
23 co-operation.
24 11919 The Network recommends that the CRTC
25 take into account the global nature of some of the new
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1 media in developing its policies and regulations.
2 11920 The final area, four, offensive
3 material.
4 11921 The Network has already submitted the
5 written report by Heather De Santis titled "Combatting
6 Hate on the Internet: An International Comparative
7 Review of Policy Approaches". Heather is present. She
8 is sitting next to me today.
9 11922 We have several views on this issue
10 among our members of the Network. One may be
11 overstating the case in saying that hate propaganda is
12 pervasive in the new media and that a user comes across
13 a hate site as soon as he or she logs on to the World
14 Wide Web. On the whole, we feel that the presence of
15 hate materials is a serious issue that has to be
16 addressed by the Commission.
17 11923 Given that there are very different
18 kinds of new media, we feel that the operation of
19 certain services, such as DBS, should continue to come
20 under the Broadcasting Act whereas it may be more
21 difficult to apply this legislation to other services.
22 11924 The Network favours a multifaceted
23 approach to dealing with hate in the new media. The
24 Australian government, for example, plans to adopt a
25 multifaceted approach in consultation with the
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1 community, the online industry, the states and the
2 territories and international organizations. It is
3 also encouraging the development of awareness through
4 educational materials.
5 11925 We would like to support the Media
6 Literacy Awareness Network's recommendation for what it
7 calls web literacy to make users aware of the dangers
8 of hate-related material in the new media.
9 11926 Our final recommendation is that the
10 CRTC work with a variety of partners to deal with the
11 issue of hate materials in the new media. These
12 partners should include community groups, researchers,
13 Internet service providers, telecommunications and
14 cable companies as well as federal and provincial human
15 rights commissions, departments of the attorneys
16 general and police forces.
17 11927 Thank you.
18 11928 THE CHAIRPERSON: Thank you for your
19 presentation, Dr. Karim, Ms Korah.
20 11929 To discuss your views, I will turn
21 the microphone to Commissioner Grauer.
22 11930 COMMISSIONER GRAUER: Thank you.
23 11931 Thank you very much for your
24 presentation and also your very substantive written
25 submissions.
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1 11932 Your submissions and your
2 presentation today covers quite a wide range of areas.
3 What I would like to try to do initially is focus in on
4 those areas where perhaps we have jurisdiction and try
5 and get your sense of that and then go from there.
6 11933 I'm not sure from your presentation,
7 or if it is something you have reached any conclusive
8 position on, as to whether or not the Internet and new
9 media fall in your view within our jurisdiction on the
10 Broadcasting Act or the Telecommunications Act.
11 11934 It's not so much a technical
12 question. Really it leads to pursuing some of the
13 specific areas in your presentation and what we might
14 be doing and how we might approach it.
15 11935 MR. KARIM: I will start off and then
16 the other people will respond as well.
17 11936 We did discuss that. One of the
18 things, as I said in my presentation, that sort of
19 frames our understanding of this issue is that the new
20 media as such are comprised of a variety, a very broad
21 variety of technologies and services.
22 11937 There are certain aspects which may
23 be considered broadcasting, as I said DBS, whereas
24 others may not. It is difficult for us to have a
25 blanket approach on all new media as such.
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1 11938 Certainly so far as the Internet uses
2 telephone lines, I would imagine it does come under the
3 Telecommunications Act. Insofar as DBS is a
4 broadcasting system, it would fall in our understanding
5 under the Broadcasting Act.
6 11939 I guess our approach has been to
7 suggest to you that this be looked at on a case by case
8 basis. The paradigm is new because many of these media
9 are hybrid media. Perhaps we need to approach the
10 whole issue from a totally different paradigm.
11 11940 As I said in my presentation, the
12 hybrid is off the one to one model of the telephone and
13 the one to many of broadcasting. Even that is
14 simplifying issues.
15 11941 We really need to develop an innovate
16 paradigm which looks at this whole unique set of media
17 in a very, very fresh way. Unfortunately, I don't have
18 a complete answer.
19 11942 COMMISSIONER GRAUER: That's just
20 what I was going to ask you. Where is the paradigm?
21 11943 MR. KARIM: There is a paradigm, at
22 least a graphic model that I have developed with some
23 of my colleagues. Again, that is only for certain
24 media like the Internet. Unfortunately, I don't have
25 it here, but perhaps I could submit it for the next
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1 stage of submissions.
2 11944 Whereas in broadcasting we had a very
3 linear, centralized model in which you have the source
4 which is providing content, whether it has developed it
5 itself or through a production company, and along the
6 line then uses a medium, television or radio, and then
7 after this linear progression is continued up to there,
8 it sort of branches out to one to many, but there is a
9 very linear centralized approach as far as the source
10 material, content and medium in which it is possible to
11 have certain kinds of regulation because this can be
12 cut off.
13 11945 This linear hierarchical centralized
14 approach can be cut off at various points, either at
15 the point of the source or in terms of the kind of
16 content we just produced or the limitations of the
17 medium or the restraints and constraints which can be
18 put on the medium.
19 11946 On the other hand, what we have in
20 network technology is that there are so many different
21 sources who are all, or many of them, are producing
22 content. There are all kinds of receivers.
23 11947 Sources are also receivers. It's
24 interactive. It's two way, three way. One source can
25 send out to so many so it can be broadcasting, it can
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1 be one to one, a whole combination and permutations of
2 so many different.
3 11948 In a way, that's something that we
4 have been able to at least develop graphically at least
5 as far as the Internet goes, so in terms of developing
6 regulations and rules, we obviously need a very, very
7 different model that begins to think in terms of
8 networks, which are decentralized, lateral or
9 multilateral, definitely non-hierarchical.
10 11949 Obviously if you are thinking in
11 terms of control, control is very, very difficult, so
12 even the paradigm of what we would like to control or
13 regulate has to be rethought, in what manners, in
14 collaboration, self-regulation, education.
15 11950 We prefer sort of the multilateral
16 approach, the multipronged approach.
17 11951 COMMISSIONER GRAUER: Perhaps then
18 what I could do -- I don't know if you heard some of
19 the presentations we had from some of the intervenors.
20 Some of the interpretations by legal communications
21 lawyers who really understand this, some have suggested
22 that what we might do is while it might technically be
23 considered broadcasting, we talk about new media for
24 the moment and the Internet and those activities, that
25 the Commission should consider issuing a broad
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1 exemption order, perhaps for a certain period of time,
2 which would exempt all of these activities that weren't
3 broadcast quality.
4 11952 I am paraphrasing and perhaps quite
5 unfairly, but maybe for the sake of this discussion if
6 we were to say given we don't know exactly how it is
7 going to evolve and we don't know what the model should
8 be because it's so early that we should exempt many of
9 these activities and continue to monitor their
10 development, would it be fair to say that that kind of
11 an environment, given the attention you have given to
12 some of the concerns you have raised by various
13 government bodies, might fit for you?
14 11953 MR. KARIM: I would like to just
15 quickly answer and perhaps Anne might want to say
16 something.
17 11954 I think perhaps we need to move away
18 from a technology centred approach of regulation and
19 policy towards content and a human centre of users,
20 citizens and consumers. That might provide us with a
21 better understanding of what is the end result of our
22 regulation and our policies that we seek to create.
23 11955 What you said about sort of the
24 moratorium or sort of hiatus in terms of regulatory
25 restrictions assumes that somewhere along the line we
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1 are going to have a stable structure that has evolved
2 before we go into a future stage.
3 11956 From what we have seen, to give the
4 example of a paper -- I can only read newspapers on a
5 weekly basis -- the Globe and Mail has this column
6 every week on new media. Every week there is some
7 development or the other which is reported on.
8 11957 It's almost like the terrain is
9 constantly shifting. I don't think it would be wise to
10 assume that five years, seven years, ten years down the
11 road we will have achieved some sort of stability and
12 we can start regulating then.
13 11958 I think we should prepare for
14 continual change because that seems to have been the
15 trend.
16 11959 Coming back to my original point,
17 perhaps because of this environment of continual change
18 the safe route perhaps is to move to content and
19 audiences or basically citizens and consumers so as to
20 understand, you know, what's the end result of our
21 policies.
22 11960 COMMISSIONER GRAUER: I am interested
23 to hear you say that any sort of exemption order or
24 moratorium assumes that we would get to a stable place
25 at which time we would regulate. I don't think that's
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1 what was intended. It was absent a clear understanding
2 of what we might do at this point was one route.
3 11961 I am interested in your proposal, but
4 I'm wondering what specifically you have in mind. Do
5 you know what I'm saying? I understand what you are
6 saying, that our goal should be looking towards the end
7 user and consumer and meeting those needs and our
8 pluralistic values in this country, but I'm not quite
9 sure what mechanism you would suggest we use to achieve
10 those goals.
11 11962 MR. KARIM: I have to confess that I
12 myself have not been able to come up with a specific
13 mechanism in mind. I don't know if some of my other
14 colleagues would like to suggest certain mechanisms or
15 elaborate on this topic generally.
16 11963 MR. FRIEDMAN: We, as you know, we
17 have had an opportunity to look at this. It's exactly
18 correct that the problem is that there is no limit or
19 barrier in moving from one medium to the other.
20 11964 Basically you are dealing with the
21 flow of electrons and electrons don't care whether they
22 are flowing through a telephone wire or a cable or
23 whether they are being transformed into electromagnetic
24 waves.
25 11965 Given that fluidity, I would say
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1 that's why people are looking for a moratorium. No one
2 is yet sure how you set up the borders, how you pass
3 from where is the correct point to say at this point we
4 can consider it to be like sort of in a black box.
5 11966 Think of it as the black box model.
6 It's inside the black box. Now it has come out of the
7 black box. Now we are going to call it broadcasting.
8 I think that's where it becomes difficult.
9 11967 Someone has mentioned an individual
10 who is rebroadcasting broadcasts on the west coast.
11 It's very hard to control the person because they are
12 doing it over the Internet. They are using their Web
13 site as a broadcast source.
14 11968 It does become difficult. I think in
15 the current state individuals are not yet at the point
16 where they are producing a lot of programming that is
17 being broadcast all over the world. We are not there
18 yet.
19 11969 It does require us to sit down and
20 watch what kind of balance will be developed in the
21 next few years. I understand that the balance may be
22 temporary. It may last a year. But we are looking for
23 what will happen in terms of the economics and social
24 and cultural forces that Karim was talking about. How
25 will these balance out, especially factoring in the
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1 fact that most of it is in English right now.
2 11970 Is that going to continue? Are we
3 going to see some kind of massive change? Right now we
4 are dealing with a small semi-universe where English
5 predominates. Will we then have five universes
6 competing in different languages? Will that happen
7 down the line? We aren't really sure. The whole
8 dynamics will change if that does occur.
9 11971 That's why I think people are looking
10 for a moratorium, those two reasons. One is no one is
11 quite sure of the rapidity of the change and no one is
12 quite sure at this point where to draw a particular
13 line.
14 11972 As some of the lawyers said, you
15 could argue that it is broadcasting. Some uses of the
16 Internet could be deemed as broadcasting. A lot of
17 other uses you can't argue that they are broadcasting.
18 You know e-mail isn't broadcasting. Electronic
19 bulletin boards isn't exactly broadcasting.
20 11973 There are all sorts of things that
21 you can't really claim that they are broadcasting. On
22 a first step perhaps, following up on Karim's lead,
23 what we can do is at least identify the things that are
24 not broadcasting and then simply deal with everything
25 else.
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1 11974 COMMISSIONER GRAUER: Thank you.
2 11975 Just so I am clear with respect to a
3 moratorium or exemption order, it would just be to
4 ensure that it's not done in such a way that people
5 would assume at the end of the period that we were
6 going to put it into a box and use certain
7 prescriptions that may in fact not be appropriate.
8 11976 Is that a fair characterization?
9 11977 MR. KARIM: I would like to reiterate
10 that -- there's a colleague of mine at Carleton
11 University in the mass communication program who has
12 done some groundbreaking research looking at the
13 archives of policy development over the last several
14 decades. I believe it goes back to the beginning of
15 the century when the technologies of telegraph,
16 telephones, broadcasting, were emerging.
17 11978 There were, according to him, very
18 specific decisions which were taken both by government
19 and by the industry to keep broadcasting and
20 telecommunications separate.
21 11979 In a way, this is a policy
22 construction. We talk about this being the great era
23 of convergence. He is arguing that convergence has
24 been possible all along. It's just that decisions were
25 made to keep the technology separate.
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1 11980 Perhaps we need some historical
2 understanding of how we came about first of all
3 separating the technologies and then developing the
4 regulations and policies around them as we now enter
5 this new phase.
6 11981 If we are to put a moratorium, it
7 should take into account the history of our
8 policymaking, of our separation of spheres, as well as
9 coming back to my earlier point, moving away from a
10 technologically deterministic approach in which the
11 technology is determining how we should regulate and
12 moving on to understanding what sort of a world do we
13 want as citizens primarily and then consumers.
14 11982 This sort of a human centred approach
15 I think will really help us redevelop. I know I am not
16 giving you specifics.
17 11983 COMMISSIONER GRAUER: No.
18 11984 MR. KARIM: But I think we are at the
19 threshold of developing a paradigm. It hasn't been
20 sort of expressed yet, but these are the kinds of
21 thinking that I hear around me.
22 11985 COMMISSIONER GRAUER: I guess what
23 I'm trying to get at, and I don't want to put words
24 into your mouth. I am not trying to do that in talking
25 about a moratorium.
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1 11986 What I am trying to do is say the
2 points you are making are valid in terms of something
3 that is evolving, but what do we do right now until we
4 have a sense of what to do? Part of the issue for us
5 and part of the rationale for this hearing, one of the
6 reasons is that we are hearing from many people who
7 might be inclined to be making investments that they
8 are looking for an indication from the Commission are
9 we going to regulate or not and what will the rules be
10 and what will the regulations be to just create a
11 little more certainty, as someone put it, in a very
12 uncertain world.
13 11987 It's that I am just struggling with
14 in terms of what you are saying. To say there's a
15 period right now and yes, in fact, it is evolving.
16 11988 MR. KARIM: I would suggest before an
17 exemption order is granted that perhaps there needs to
18 be some sort of study as to what the possible effects
19 might be, if this is going to be for five years, ten
20 years, however long the window is, what sort of effects
21 there would be primarily on Canadians.
22 11989 That would be sort of the bottom
23 line. If it's a carte blanche in which you can do
24 basically anything you like, there may be a certain
25 rather regrettable kind of consequences which we may
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1 basically regret.
2 11990 I would imagine we would need to
3 understand, at least in terms of the trends, yes, it is
4 an uncertain universe, but in terms of the trends, I
5 think we can speculate over the next three, five years
6 what sort of technologies and beyond that what sort of
7 social consequences that they will produce.
8 11991 Obviously we can't know everything,
9 but there are certain things that we could do. I would
10 suggest this is a course that perhaps may be taken.
11 11992 COMMISSIONER GRAUER: Thank you.
12 11993 MS DE SANTIS: I would just like to
13 add a comment from the controversial content point of
14 view, which is one of our specific points of interest
15 and my area of specialty in particular.
16 11994 If we take a look at the examples in
17 the report that was submitted to looking abroad,
18 looking to other countries who have a similar social,
19 cultural, legislative background as Canada, aside from
20 some very distinct examples which get a lot of
21 publicity, such as the Communications Decency Act in
22 the United States and the German telecommunications
23 laws that do attempt to regulate content on the
24 Internet, specifically pornography or you could say
25 hate, it falls into that auspices, countries such as
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1 the Netherlands, the United Kingdom, New Zealand,
2 Australia, the appropriate body or their equivalent of
3 the CRTC or their government ministry or department has
4 taken instead of a regulatory role, the role of a
5 facilitator, in coming up with some kind of
6 non-regulatory framework that does establish certain
7 criteria that are relative to citizens that address
8 issues of controversial content.
9 11995 For example, encouraging responsible
10 user activities such as educational programming or
11 literacy or voluntary filtering in the home, for
12 example, by parents, encouraging ISP codes of conduct.
13 Certainly I'm sure that none of the ISPs that have been
14 here would say that they could possibly monitor the
15 content on their side.
16 11996 Codes of conduct, agreements with
17 users, for example, user recourse action. For example,
18 if -- part of what we are talking about here is citizen
19 use. We are not talking about consumer.
20 11997 If citizens have a sense that they
21 are empowered in some way, if they come across a site
22 that they find offensive, that may or may not be
23 illegal -- that's up to the Human Rights Commission or
24 whatever body to decide -- that they know who to
25 contact. They know to contact the police or the
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1 authorities.
2 11998 There have been cases where they have
3 called the police, the police have directed them to
4 somewhere else in Canada, for example.
5 11999 Perhaps the role of the CRTC or
6 another body, that's not for us to decide here, we are
7 not lawyers, is to facilitate a framework that citizens
8 feel is addressing the issues, but is not regulating
9 the Internet because it is in its infancy.
10 12000 Nowhere in the world have we seen
11 successful legislation or successful regulation of the
12 Internet because of its international jurisdiction.
13 12001 COMMISSIONER GRAUER: I have some
14 questions for you on just those areas. I was also
15 going to ask -- I think your study is about a year old
16 now. A year is a long time in the world of the
17 Internet.
18 12002 I was wondering if you had any
19 updates that would be of interest to us.
20 12003 MS DE SANTIS: I must admit I haven't
21 been watching my file as closely as I should have been.
22 I have been clipping, but I haven't been reading.
23 12004 There was a case in Germany which
24 when I was writing the report at the time, I don't
25 think it had yet been in front of the courts with
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1 CompuServe and Philipson, who was the person in control
2 of the server over there. Are you familiar with the
3 case at all?
4 12005 COMMISSIONER GRAUER: No.
5 12006 MS DE SANTIS: Correct me if I'm
6 wrong. Jump in because the details are sketchy.
7 12007 The service provider there was
8 hosting child pornography, I believe. The authorities
9 stepped in and deemed it to be illegal under the new
10 Telecommunications Act. If it's within reasonable
11 expectation that an ISP server is aware or could have
12 been aware of the content, then they are criminally
13 liable.
14 12008 They shut down the site. What
15 happened was the site was mirrored then by civil
16 libertarian groups all around the world. It
17 demonstrated that you can't shut down sites because
18 there is going to be a haven, particularly the United
19 States. It is always pointed out as the example for
20 the haven for controversial sites. Mirrored sites will
21 pop up.
22 12009 He did go to court and he was
23 convicted because in Germany the ISP is considered to
24 be responsible.
25 12010 ISP servers in Canada and certainly
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1 in most countries that I surveyed argue that there is
2 no way that they can possibly monitor all the content
3 on all their servers. However, if they do have
4 knowledge of a site, most of them agree that yes, if
5 they are aware a site is illegal and a site is on their
6 server then they will shut it down.
7 12011 I believe we saw that in British
8 Columbia earlier this year. There were ISPs that shut
9 down sites.
10 12012 Another interesting finding I just
11 found the other day was that Sweden has also passed a
12 new Telecommunications Act specifically on DBS
13 services, but the legislation -- a few academics say
14 that it will apply to Internet services, web services,
15 even though it is specifically targeted to DBS. They
16 say the same thing, that Internet service providers are
17 not responsible for monitoring their content unless
18 there is a reasonable way they could have known about
19 it.
20 12013 What they have done instead is they
21 have set up a tribunal or some kind of body in which
22 users can report the illegal content or what is
23 perceived to be illegal to this agency, this body, this
24 tribunal, which will then determine whether it is and
25 then pass it on to the authorities.
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1 12014 Sweden, which is generally seen as a
2 rather liberal country, we often find parallels between
3 Canada and Sweden. It has also attempted to regulate,
4 but this is yet to be tested before the courts.
5 12015 I am a researcher, but I will always
6 say that there is more research to be done in this
7 area, a tremendous amount of research.
8 12016 In terms of a moratorium, I would
9 certainly agree that this technology is in its infancy.
10 There are a number of multilateral organizations that
11 are working on this issue, the European Commission,
12 UNESCO, the United Nations.
13 12017 If anyone wants to jump in. From the
14 information that I have read, the Swedish law, the
15 German law they are so new, the German law has only
16 been tested before the courts, there is no way of
17 telling just yet whether or not they are going to be
18 successful.
19 12018 It is a matter I think of wait and
20 see instead of maybe a moratorium.
21 12019 COMMISSIONER GRAUER: I will never
22 now be able to find my way through my notes between
23 your various papers.
24 12020 If I can just on this matter then.
25 You have done a lot of research, even here in Canada I
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1 take it, with ISPs and what's happening here. We have
2 had the Canadian Association of Internet Providers
3 here. They have a code of conduct.
4 12021 Would you say that for the most part
5 the Internet service providers in Canada,
6 notwithstanding your suggestion that there is perhaps a
7 facilitating role for ourselves or some other part of
8 government, that for the most part these matters are
9 being dealt with in a timely way by the industry?
10 12022 MS DE SANTIS: I would say so. I
11 would say in Canada and abroad that generally there is
12 co-operation between industry and government. From a
13 consumer point of view, I don't think it's imminent in
14 ISPs' interest to host sites that the majority of users
15 will disagree with or take offence to.
16 12023 Even from just a business point of
17 view, it is not in the server's interest to carry sites
18 that users are going to take offence with.
19 12024 I will admit that I am not as
20 familiar with what is going on in Canada at the moment,
21 but the service providers that I am familiar with, and
22 I participated in a workshop in Montreal sponsored by
23 the Canadian Human Rights Commission. I was in a
24 workshop and there was somebody representing B.C.Tel
25 there.
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1 12025 By all means he was certainly
2 agreeable that ISPs do have a role to play, but it's
3 not a monitoring role of their content. I would say
4 generally that the Canadian industry is agreeable.
5 12026 COMMISSIONER GRAUER: I know a lot of
6 your work or your research was looking at what is
7 happening internationally. You talked about the need
8 for co-operation between Canada and these other
9 countries.
10 12027 Is that happening? Is there a fair
11 amount of work taking place intergovernmentally and
12 within the industry internationally?
13 12028 MS DE SANTIS: Definitely.
14 Particularly in Australia, which is one of the examples
15 I pulled out of my study to recommend in terms of
16 policy recommendations that the industry is working
17 hand in hand with government and with different levels
18 of government.
19 12029 It's still not certain in some
20 countries at which level this responsibly falls,
21 whether it's the state or the province or the federal
22 government.
23 12030 Also, for example, in the U.K. we
24 have seen that the industry is quite active in
25 developing rating systems, not filtering but rating
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1 systems in terms of something that would pop up and say
2 the site is applicable for children or good for
3 children, that kind of thing.
4 12031 Yes. It is also in industry's
5 interest to come up with a non-regulatory alternative.
6 If that means a code of conduct, if that means a rating
7 system, I am sure it is more in their interest to have
8 those types than have the CRTC, for example, come in
9 and say it is your responsibility to make sure these
10 types of materials are not on your site.
11 12032 Do you feel, for the most part,
12 that -- I know we have heard from various organizations
13 about, you know, the role of the Internet in allowing
14 for freedom of expression and more ability to combat
15 hate, and other people have said, "No, it perhaps
16 incubates and nurtures hate groups."
17 12033 On balance, I take it from what I
18 have read that you feel that it is more a force of good
19 than a force of evil. Is that a fair characterization?
20 12034 MS KORAH: I think it is a 50/50
21 two-way street thing because I have been involved, as I
22 said, in developing curriculum materials specifically
23 aimed at students in the secondary level and elementary
24 level where they are particularly vulnerable. Research
25 has shown that secondary school students, adolescents,
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1 are particularly vulnerable to hate materials,
2 offensive materials; but the answer seems to be to
3 develop other alternatives to teach them critical
4 thinking skills.
5 12035 So I would say it is a 50/50 thing.
6 It is a force for enormous good, as well as it can be a
7 destructive force.
8 12036 COMMISSIONER GRAUER: So the real
9 challenge, then, for us is to promote awareness, media
10 literacy, critical thinking skills, as opposed to
11 attempting to censor or restrict access?
12 12037 MS KORAH: I would agree.
13 12038 MS DE SANTIS: If I could just add
14 that we need to become more savvy, just as hate mongers
15 have become more savvy. Research has shown that,
16 initially, when -- well, the Web in its infancy hate
17 mongers tended to go to interactive sites in which you
18 could -- like discussion groups. So, for example, you
19 could go on site with a hate monger, refute their
20 views, have an intelligent conversation in which you
21 were combatting the hate directly through dialogue and
22 discussion and, certainly, that is constructive and
23 positive.
24 12039 What research now shows is that they
25 are not necessarily using interactive sites any more
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1 but they are retreating to non-interventionist Web
2 sites, so Web sites that look just like magazines, that
3 there is no fora for discussion within the site. So it
4 makes it less easy to refute such views. As I say,
5 they have become more savvy and now it is time for the
6 other side of it to just become more creative in ways
7 of educating users.
8 12040 COMMISSIONER GRAUER: Thank you. As
9 I say, with three separate papers, I am not really
10 going to have a chance to get into all of them, but I
11 did want to ask specifically Dr. Karim, and I know this
12 was also in your paper, you refer to national
13 regulatory bodies which have prohibited the growth of
14 ethnic media find that their minorities are tuning into
15 programming disseminated from their respective home
16 countries or diasporas. I wonder if you could -- I
17 know you have referred to France and I am wondering
18 how -- where the CRTC and the Canadian regulatory
19 agency fits in all of this, or if you are referring to
20 non-Canadian bodies?
21 12041 MR. KARIM: Generally, I think --
22 well, the problem has been that every country has a
23 limited amount of space on the electronic spectrum.
24 The priority in most countries is to serve mass
25 audiences, first of all. So, in Canada, if you are
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1 going to take the example of Canada, our priorities
2 first of all is to serve Canadians in English and
3 French.
4 12042 So, certain licences may not have
5 been -- more licences may have been refused for ethnic
6 broadcasters than, perhaps, for others. Generally,
7 what I have seen in Canada is, especially recently, a
8 more opening up to ethnic broadcasters, even on DBS
9 television, TeleLatino, in Spanish and Italian, the
10 Salvation Network, the Chinese network, Fairchild
11 Television, and other -- radio channels as well.
12 12043 The example I gave of France was,
13 perhaps -- I don't know -- I haven't studied -- done a
14 global study, but certainly it was a clear example in
15 which those people found alternative sources for
16 entertainment and information. It is this particular
17 kind of technology which is making it easier and
18 easier. This -- obviously, it was much more difficult
19 before. You might have newspapers from the old country
20 or you might produce a weekly yourself, and so on.
21 Broadcasting was much more difficult to obtain,
22 broadcasting content; and now, since people are using
23 satellites, this is what we are faced with. So, if we
24 don't provide these services to our minorities, they
25 are going to get them from somewhere else. That is the
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1 situation we face, whether it is through satellites or
2 Web TV or other digital media. That is the point I was
3 making.
4 12044 COMMISSIONER GRAUER: Thank you. I
5 could go on for quite awhile but I think we have some
6 other -- thank you very much.
7 12045 THE CHAIRPERSON: Thank you. Thank
8 you very much, ladies and gentlemen. We appreciate
9 your participation in our proceeding.
10 12046 I think we will take our afternoon
11 break at this point and reconvene at 3:25.
12 --- Short recess at / Courte suspension à 1508.
13 --- Upon resuming at / Reprise à 1525.
14 12047 THE CHAIRPERSON: We will return to
15 our proceeding now.
16 12048 Madam Secretary, would you
17 introduction the next panel, please?
18 12049 MS BÉNARD: Thank you, Mr. Chairman.
19 The next presentation will be by Bell Satellite
20 Services Inc.
21 12050 THE CHAIRPERSON: Good afternoon, Mr.
22 Gourd.
23 PRESENTATION / PRÉSENTATION
24 12051 MR. GOURD: Mr. Chairman, Madame la
25 Présidente, Commissioners.
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1 12052 I am Alain Gourd, President and Chief
2 Executive Officer of Bell Satellite. I have with me
3 today on my immediate right Mr. Chris Frank, Vice
4 President, Government Relations & Corporate Development
5 at Bell ExpressVu; Mr. Terry Snazel, Vice President,
6 Technology; and Mr. David Elder, our regulatory counsel
7 for this proceeding.
8 12053 I am pleased to be with you today to
9 discuss the new media services which is important for
10 our company, Bell Satellite.
11 12054 Today, I would wish to address you
12 from a broadcasting perspective, as a broadcaster who
13 views the future of the broadcasting sector with
14 considerable enthusiasm. I will limit my part of the
15 presentation, if you agree, to three key areas: First,
16 the Broadcasting Act; second, the regulatory context;
17 and, third, new opportunities coming for multimedia for
18 broadcasters and independent producers.
19 12055 Monsieur le Président, permettez-moi
20 donc de commenter par un certain regard sur la Loi sur
21 la radiodiffusion et son application au monde des
22 nouveaux médias.
23 12056 Premièrement, ce que je voudrais
24 souligner d'entrée de jeu, en tant qu'ancien
25 sous-ministre des Communications à Ottawa, est que,
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1 comme on l'a dit et redit, la Loi sur la radiodiffusion
2 de 1991, dont je fus l'un des artisans, se veut
3 évidemment technologiquement neutre. Elle a donc
4 vocation à s'appliquer à toute forme de transmission
5 d'images et d'informations couvertes par la définition
6 de la radiodiffusion à l'article 2. Cette définition
7 s'applique donc à la radiodiffusion conventionnelle, à
8 la radiodiffusion sur le câble, sur le SBM, au système
9 de diffusion multipoints, sur le satellite, et nous en
10 sommes, ou sur l'Internet.
11 12057 Évidemment, la définition de
12 radiodiffusion vise la distribution de programmes et
13 non le texte alphanumérique qui constitue, et
14 constituera pour de longues années, l'immense majorité
15 des contenus Internet.
16 12058 À mon sens, l'objectif du législateur
17 en révisant la loi de 1968 était certainement de
18 s'assurer que les autorités réglementaires canadiennes
19 aient tous les outils nécessaires pour continuer de
20 régir le système canadien de radiodiffusion en tenant
21 compte de l'intérêt public, mais aussi des changements
22 technologiques.
23 12059 En effet, comme vous le savez, le
24 législateur a également prévu, par son article 3(d),
25 que le système canadien de radiodiffusion devait
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1 s'adapter aux changements scientifiques et
2 technologiques. L'article 5, particulièrement aux
3 sous-sections (c) et (f), cherche aussi à favoriser le
4 progrès scientifique et technologique.
5 12060 Par conséquent, à mon sens, la Loi
6 sur la radiodiffusion fournit au Conseil la latitude
7 voulue pour établir des règles appropriées pour
8 favoriser l'évolution de la radiodiffusion canadienne,
9 y compris sous sa forme nouveaux médias.
10 12061 Le contexte réglementaire maintenant.
11 Nous croyons à ce sujet, comme tant d'autres, que la
12 réglementation de la radiodiffusion, sur l'Internet,
13 par exemple, devait être la plus légère possible, entre
14 autres pour favoriser l'évolution technologique prévue
15 par la loi. De plus, le Conseil pourrait envisager un
16 certain nombre d'initiatives qui favoriseraient une
17 synergie entre les différents partenaires de la
18 radiodiffusion et des nouveaux médias. La neutralité
19 technologique ne veut pas dire évidemment un traitement
20 réglementaire similaire.
21 12062 C'est ainsi que le Conseil pourrait
22 choisir de fonctionner par exemption de licence dans le
23 secteur des nouveaux médias, comme il l'a fait dans
24 d'autres secteurs, c'est-à-dire si une entreprise
25 rencontre certains critères de base, elle pourrait être
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1 exemptée d'avoir une licence de radiodiffusion.
2 12063 Le Conseil pourrait aussi envisager
3 de reconnaître certaines dépenses de titulaires de
4 licences de radiodiffusion dans des programmes
5 canadiens destinés à la fois aux médias traditionnels
6 et aux nouveaux médias.
7 12064 Dans la même veine, le Conseil
8 pourrait évaluer la possibilité de nouveaux fonds
9 destinés à la production de programmes canadiens
10 destinés à la fois aux médias actuels et aux nouveaux
11 médias. On pourrait aussi procéder à l'ajustement de
12 fonds existants.
13 12065 D'autre part le Conseil pourrait,
14 d'un commun accord avec le ministère du Patrimoine
15 canadien, envisager d'élargir la définition d'une
16 coproduction dans le domaine du cinéma et de la
17 télévision, pour inclure le traitement multimédia d'une
18 production télévisuelle ou cinématographique.
19 12066 On pourrait également envisager
20 l'établissement de nouvelles mesures fiscales -- par
21 exemple, un crédit d'impôt pour la création d'un
22 traitement multimédia pour une production télévisuelle
23 et cinématographique.
24 12067 Au niveau des opportunités que
25 représente le multimédia, je voudrais vous mentionner,
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1 comme vous le savez, que Bell a lancé un fonds Bell de
2 la radiodiffusion et des nouveaux médias en septembre
3 1997, avec comme objectif de favoriser et d'accroître
4 la production de contenu canadien à la fois sur les
5 nouveaux médias et la radiodiffusion au Canada, et
6 stimuler les partenariats entre ces secteurs.
7 12068 Doté d'un capital de 12 millions de
8 dollars, ce fonds a déjà accordé à ce jour un peu plus
9 de 5 millions de dollars pour la production de 28
10 projets. Pour qu'un projet soit reçu, il est
11 nécessaire qu'un producteur indépendant y soit associé.
12 12069 Les projets sélectionnés touchent
13 divers secteurs d'intérêt: séries éducatives et
14 documentaires, productions destinées aux enfants,
15 émissions de variétés, et séries dramatiques.
16 12070 Les productions multimédias associées
17 à ces projets ont misé sur un vaste éventail
18 d'expressions, allant à des sites de références aux
19 jeux interactifs, en passant par les forums de
20 discussion et le laboratoire virtuel, utilisant pour ce
21 faire des sites Web, des CD-ROM branchés, ou encore des
22 services en ligne. D'ailleurs, les responsables du
23 fonds de la radiodiffusion et des nouveaux médias de
24 Bell ont déposé hier un premier rapport très positif
25 sur la performance du fonds.
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1 12071 La synergie entre les industries de
2 la télévision du multimédia et du secteur de la
3 production indépendante se confirme. À titre
4 d'exemple, signalons que Robert Lepage, qui bénéficiera
5 de l'assistance financière du fonds Bell, prépare
6 actuellement en parallèle une version télévisée et une
7 version Internet de sa prochaine production.
8 12072 D'autres exemples d'alliance entre
9 les producteurs et les télédiffuseurs qui ont bénéficié
10 du fonds Bell sont les émissions bien connues:
11 "Riverdale", au réseau CBC, et "Diva", au réseau TVA.
12 12073 La raison pour laquelle je me suis
13 attardé, monsieur le Président, un peu plus longuement
14 sur le fonds, c'est que nous souhaitons aujourd'hui
15 indiquer au Conseil notre désir de rendre ce fonds
16 permanent, en consultation avec son conseil
17 d'administration et l'industrie.
18 12074 Comme il se doit, après avoir
19 finalisé, en consultation, les détails de ce projet,
20 nous serons heureux de le présenter au Conseil pour
21 approbation.
22 12075 Bell Satellite a donc l'intention de
23 participer activement au développement de programmes et
24 de services pour les nouveaux médias, entre autres en
25 effectuant prochainement un investissement majeur dans
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1 une importante compagnie canadienne de multimédia.
2 Notre but est d'optimiser les contenus de
3 radiodiffusion à la fois sur les mécanismes de
4 distribution traditionnels, tels le satellite, et
5 l'Internet.
6 12076 Enfin, Bell Satellite a conclu [une
7 entente] avec le laboratoire de recherche sur les
8 nouvelles technologies du département de communications
9 de l'Université de Montréal, dirigé par M. Caron, le
10 professeur Caron. Cette entente nous permettra de
11 réaliser en commun des travaux de recherche sur
12 l'exploitation des multimédias et sur leur application
13 dans le secteur de la radiodiffusion.
14 12077 Mr. Chairman, Madame la Présidente,
15 Commissioners, I am confident that, as we have done in
16 the past, both the Commission and the industry will
17 strive to maximize the potential benefits being offered
18 to us through the new media.
19 12078 The Canadian Broadcasting System must
20 fully participate in the new media universe which is
21 developing not only in Canada but also internationally.
22 12079 I believe that the Commission and the
23 government can continue to play a role in ensuring a
24 stronger Canadian content presence in the multimedia
25 universe.
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1 12080 I would now ask Mr. Frank to continue
2 with our presentation, particularly regarding the
3 satellite new media capability of Bell ExpressVu.
4 Merci.
5 12081 MR. FRANK: Thank you, Alain.
6 12082 Bell ExpressVu, BSSI's direct-to-home
7 distribution system, has not as yet launched any new
8 media transport services. Our inability to do so has
9 been caused largely by our lack of satellite capacity.
10 12083 With the advent of Nimiq, Canada's
11 new high-powered, direct broadcast satellite, the
12 capacity challenge will be alleviated. Telesat Canada
13 has advised us that Nimiq will launch in April of next
14 year. This means we could have commercial service in
15 May.
16 12084 Current plans envisage the subsequent
17 and near-term roll-out of at least two new
18 applications. First, a fully interactive Internet
19 access service with the out route or main feed direct
20 from Nimiq and the in route or return loop via
21 terrestrial facilities. Second, with the introduction
22 of new set top boxes next year which have interactive,
23 multimedia capability, we hope to provide existing
24 broadcasting services which we distribute with the
25 ability to enhance their respective services and create
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1 incremental sources of revenue for the broadcast
2 industry through additional data and image capability.
3 12085 For instance, information services
4 such as the Weather Channel could provide additional
5 layers of text, graphic and video information for local
6 and regional consumption. For a national service
7 provider such as Bell ExpressVu, this is an exciting
8 development because it allows for additional, specific
9 information for our subscribers, which is not available
10 from a national feed or takes time to access because of
11 the broad scope of the primary service.
12 12086 Perhaps I can now comment briefly on
13 the three themes that the chairman has raised in his
14 introductory remarks. The first of these themes asks:
15 In what way and to what extent does or will new media
16 affect regulation of the traditional broadcast
17 undertakings of radio, television and BDUs?
18 12087 Mr. Gourd has already stated that one
19 of the key underpinnings of the Broadcasting Act is
20 technological neutrality. As a result, broadcasting
21 services are unaffected, in the public policy sense, by
22 the means of distribution. It is clear that one of the
23 important objectives of the Broadcasting Act is to
24 further the growth and development of the domestic
25 broadcasting system so as to provide all Canadians with
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1 choice, variety and excellence in programming that is
2 relevant to them. That is, giving Canadians the
3 opportunity to see themselves and their society fairly
4 represented in the broadcast programming which they
5 watch and listen to.
6 12088 We have said in other appearances and
7 submissions to the Commission that Canadian programming
8 is an important point of product differentiation for us
9 from at least one of our competitors, the unauthorized
10 U.S. grey market service providers. Having established
11 our belief in and our need for quality and diversity in
12 Canadian programming and in the present context, we
13 suggest that it is early days for new media and
14 therefore difficult to fully assess this question at
15 the present time.
16 12089 However, what is clear is that new
17 media offers Canadian broadcasters and consumers new
18 opportunities, opportunities that can be developed
19 through prudent fiscal support and light-handed
20 regulation as suggested by Mr. Gourd.
21 12090 I would also note parenthetically
22 that we believe that we are some number of years away
23 from the point where the worldwide Web will actually
24 provide reasonable quality in video delivery thereby
25 providing any degree of competition in the conventional
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1 television, specialty or premium TV mass markets.
2 12091 The second theme identified by the
3 Commission is: To what extent do some or any of the
4 new media services constitute broadcasting? Or
5 telecommunications? How do we treat them consistent
6 with the objectives of their respective acts?
7 12092 On this matter, BSSI observes that
8 the record of this proceeding demonstrates that it
9 appears difficult to characterize and predict how new
10 media will evolve. What we are seeing on the Internet
11 now, and will continue to see in the short term, is
12 overwhelmingly text-based service, and hence clearly
13 telecommunications.
14 12093 It appears to us that virtually all,
15 if not all, intervenors believe this new media should
16 be encouraged to develop, and that Canadians should be
17 encouraged to be at the forefront of this development.
18 So while the objectives of the Broadcasting Act may be
19 a reasonable starting point in some instances, the
20 tools used by the Commission to achieve those goals
21 should be chosen in a pragmatic fashion, where
22 applicable.
23 12094 The Commission's third theme is:
24 What recommendations should the Commission make to the
25 government on broader policy issues, particularly the
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1 government's connectedness agenda?
2 12095 BSSI feels that it can make an
3 important contribution to the government's agenda of
4 connectivity. We note that Telesat Canada, originally
5 a mixed enterprise involving both government and
6 Canadian telephone companies, has been instrumental in
7 bringing DBS service to Canadians, which will give us
8 the opportunity to compete with the U.S. grey market
9 services head on and with a comparable platform.
10 12096 Satellite-delivered Internet services
11 will provide all Canadians, and especially those in
12 rural and underserved areas, with the opportunity to
13 access new media services and not be by-passed because
14 of cost constraints associated with terrestrial
15 facilities in thin route/low population areas. Among
16 other things, this will keep rural schools, businesses
17 and homes the opportunity to get on and stay on line.
18 12097 We would now be pleased to answer
19 your questions.
20 12098 THE CHAIRPERSON: Thank you very
21 much, Mr. Frank, Mr. Gourd.
22 12099 Let me first just ask a question,
23 since you have raised it in your presentation, about
24 the grey market. I guess I have been under the
25 understanding that between yourselves and your
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1 competitor a number of the issues or concerns with
2 respect to the grey market were being addressed and
3 that that had probably been stabilized, if not
4 shrinking, with your presence in the marketplace with
5 some stories we have seen recently in the newspapers.
6 You seem to be suggesting that in fact the grey market
7 may still be growing. I appreciate it is not directly
8 related to our proceeding here today, but you did raise
9 it in your presentation, so maybe we can get a little
10 update on that from you. What is your sense of that?
11 12100 MR. GOURD: Please allow me to give
12 the general introduction and then turn to Mr. Chris
13 Frank for the details.
14 12101 We are pleased to report, indeed,
15 that both Star Choice and Bell ExpressVu, indeed,
16 through particularly specialty programs to facilitate
17 the transfer from the grey market to Canadian DTH
18 undertaking services, that the two combined in our
19 opinion has indeed reduced the grey market. So it has
20 not only plateaued but there were some transfers with
21 broader reduction, which means that the theory that an
22 offering of both the best of foreign services and the
23 best of Canadian services does work. We have no
24 evidence, quite frankly, that there has been a new
25 momentum given to the grey market in recent times.
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1 12102 Chris?
2 12103 MR. FRANK: I would simply add that
3 although our service has been enthusiastically received
4 across the country, and the service of our competitor
5 Star Choice as well, that DirectTV remains the biggest
6 DTH company in Canada. So we have to be very vigilant.
7 We have to continue to add new services and improve our
8 service to make sure that we are ultra competitive.
9 12104 There is no question this is a very
10 competitive market and it is a challenge, a challenge
11 that we relish.
12 12105 THE CHAIRPERSON: So, are they
13 getting new customers? This story that we saw in the
14 press recently that suggested I think it was --
15 12106 MR. GOURD: They are probably getting
16 new customers but they are losing customers. So we
17 believe that the net is a slow reduction of the grey
18 market.
19 12107 However, if, for example, Echo Star,
20 with their new deal with Rupert Murdoch and MCI were to
21 increase very dramatically the number of services --
22 the number of 500 was mentioned in the newspapers --
23 and the Canadian direct-to-home undertakings would
24 plateau, let's say at 100 TV services, then indeed the
25 grey market would pick up.
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1 12108 But, if Star Choice occupies some 30
2 transponders on F1, and if we -- if and when we migrate
3 to Nimiq and add significant number of transponders,
4 and add a mix of additional Canadian and foreign
5 services, then we are quite confident that the trend of
6 slow reduction of the grey market would be reduced.
7 But it would be maintained.
8 12109 However, as Chris has said, the
9 expansion of the programming menu, the orderly
10 expansion of the programming menu, using a Canadian
11 expression, in par with the increase of the menu of the
12 U.S. providers will be very important, which will
13 represent additional expenditures on the part of both
14 Canadian licensees.
15 12110 THE CHAIRPERSON: Let's switch -- I
16 guess you are here sort of wearing two hats, one
17 perhaps a little old and dusty, and no grey or white
18 hair.
19 12111 You talked in your presentation today
20 about aspects of the Broadcasting Act. We have had a
21 lot of discussion, as you can probably appreciate,
22 around the broadcasting -- the definitions in the
23 Broadcasting Act and what they mean and what they were
24 intended to mean and so appreciate your comments here
25 today.
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1 12112 A number of parties have noted and
2 stressed the fact that the concept of regulation of
3 broadcasting was fundamentally based on the notion of
4 scarce resources. I wonder if you would just comment
5 on that aspect of this issue.
6 12113 MR. GOURD: The Broadcasting Act,
7 1968 might have been rooted in that concept of scarcity
8 and, perhaps, it might have been rooted as well in a
9 certain type of delivery mechanism, most importantly
10 conventional television; and, at the last moment, we
11 all know that there was a cable section added to the
12 1968 Broadcasting Act. So cable was covered a bit at
13 the last moment in the parliamentary committee that met
14 during 1967 and 1968.
15 12114 With the 1990 and 1991 parliamentary
16 committee, and I should even say that the attempt to
17 review the Broadcasting Act started even in 1985, and
18 you all know that there were three attempts and a lot
19 of committees. But from day one the various
20 parliamentary committees with the officials that
21 supported them, including yours truly, wanted to
22 achieve a certain number of objectives.
23 12115 I remember endless discussions around
24 these objectives, and positive discussion, because the
25 objective was to further the Canadian identity and the
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1 modernity of the Canadian broadcasting system. So
2 therefore there was a strong conviction by everybody.
3 Only the means really were discussed, but the
4 objective, the section 3 and section 5 and other
5 sections were the object of a very large consensus and
6 they were, "Let's try to capture the essence of
7 broadcasting programming." So therefore the
8 Broadcasting Act should apply to a certain type of
9 programming.
10 12116 Then, the other complementary
11 consideration was it should not be rooted on any given
12 technology or in any given distribution technique. Of
13 course, at the time, we didn't talk a lot about
14 Internet in 1985. We knew somehow there was a thing
15 called Internet but, basically, we were of the opinion
16 at the time that the telephone system -- we didn't say
17 it is Internet on the telephone system -- but we were
18 saying to ourselves, probably one day the telephone
19 system will become a major delivery mechanism. We were
20 not sure, but there was a strong desire on the part of
21 the members of the parliamentary committee to make
22 certain that if suddenly the telephone system, or any
23 other system, because there was also a consensus that
24 nobody really knew, because nobody had really foreseen
25 cable in the fifties, and then nobody had really
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1 foreseen satellite when CanCom started, and the members
2 of the committee were saying, "Can we foresee
3 everything? There is probably a delivery mechanism
4 dormant in some laboratory that will emerge one day and
5 we don't know about it."
6 12117 So there was a strong desire, that is
7 my second comment, to make sure that the Broadcasting
8 Act was not rooted in any type of delivery mechanism,
9 in any type of delivery technology. Therefore, there
10 was a conviction that the Commission of the day, within
11 the umbrella of section 3 and the umbrella of its
12 power, would find ways to achieve the objectives of the
13 Broadcasting Act, whether the program is delivered
14 through this delivery mechanism or that other one.
15 12118 THE CHAIRPERSON: But I take it even
16 notwithstanding all that you have said there were
17 certain limitations on the technology that we would be
18 considering. For example, are we are not considering
19 the distribution of content in cinemas. We are not
20 concerned about the distribution of content in video
21 stores. And, even in the act, even where it is using
22 telecommunications for the delivery, for example, it
23 was -- it specifically excluded -- does not include,
24 even if it is delivered using telecommunications
25 technology, programs that are made solely for
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1 performance or display in a public place.
2 12119 So, the government of the day did try
3 to put some kind of a fence around. We are going to be
4 technologically neutral, but we are going to put a
5 fence around the kind of ways this would be delivered.
6 I wonder if you might comment on how you tried to sort
7 of narrow, if you will, where that fence or -- position
8 is perhaps a better way to put it -- where that fence
9 would be?
10 12120 MR. GOURD: I may have misunderstood
11 your question, Mr. Chairman.
12 12121 THE CHAIRPERSON: I don't think you
13 did.
14 12122 MR. GOURD: There was certainly a
15 desire not to step in provincial jurisdiction. I
16 remember that the members of the committee felt that
17 they should focus on what was clearly a federal
18 jurisdiction, so cinemas, video stores, even display in
19 public places were either square and fair provincial or
20 grey zones. So that was a first fence.
21 12123 Another one was, indeed, the desire
22 to focus on what was the core of the broadcast
23 programming and therefore alphanumeric services were
24 not included. The desire of the part-time member, the
25 chairman, I think it was Mr. Edwards, the chairman of
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1 the committee, was saying, "Let's focus really on what
2 is the basic core broadcast services, have a definition
3 which is general enough, even though it excludes
4 certain types of activities for the reasons I have
5 mentioned, and then it will be up to the Commission of
6 the day to do the implementation."
7 12124 But you are totally correct, the
8 desire was not to throw so wide a net that it would be
9 very difficult to manage implementation, or so wide a
10 net that it would include non-essential information
11 distributed through these delivery mechanisms, like
12 pure data or things like that.
13 12125 THE CHAIRPERSON: Now, there has been
14 lot of discussion that has been raised over the past
15 two weeks about different sort of characteristics or
16 ways of approaching the technology in the sense of
17 delivery, if you will. There has been talk about push
18 versus pull; that broadcasting is largely understood to
19 be a push technology, that the signal is sent out
20 whether over the radio waves or using wire, from one to
21 many sort of thing, rather than an individual going and
22 pulling out the information.
23 12126 There has been some talk about the
24 question of what has been referred to as simultaneity,
25 whether the same program is delivered to one or more
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1 individuals at the same time. The notion of
2 interactivity has also been raised in terms of whether
3 or not the subject we are talking about constitutes a
4 program.
5 12127 Maybe I am throwing too many terms
6 here for you to catch up with. I wonder if you might
7 comment on some of those notions that have been raised
8 with us.
9 12128 MR. GOURD: Of course, my perspective
10 is not that of a legal expert because even though I was
11 a long, long time ago a practising lawyer -- it was at
12 least 25 years ago -- I am simply, perhaps, bringing to
13 the attention of the Commission that when the
14 Broadcasting Act was discussed in that parliamentary
15 committee in the House of Commons there was no real
16 focus on push versus pull, on direct focus on
17 simultaneity, or a direct focus on interactivity.
18 12129 However, there was a clear vision,
19 and it is a tribute to the quality of the membership on
20 that committee, there was a clear conviction that
21 things like that would happen, would emerge, and
22 therefore there was a desire to have a Broadcasting Act
23 which would have a set of general objectives that would
24 be kind of the mission of the system, plus enough power
25 and enough flexibility to be able to -- to enable the
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1 Commission of the day to deal with these issues.
2 12130 Whether or not the legal advisors to
3 the committee would have considered a pull approach
4 broadcasting, or a lack of simultaneity is still
5 broadcasting, or full interactivity as opposed to mass
6 one-way delivery, remains to be seen. But in fact
7 there was simply that basic desire to allow the system
8 and the regulatory component of the system to evolve.
9 12131 THE CHAIRPERSON: Now, there has been
10 some discussion around the notion of the concept of
11 program itself, and you can approach this from the
12 point of view of the definition of broadcasting, which
13 is largely around the technology, and that gets into
14 the delivery, if you will, of programs.
15 12132 If you look at the issue of the
16 program, or of the content, if that is the fundamental
17 concern, is the content regardless of how it is
18 delivered, subject to being in federal jurisdiction. A
19 number of parties have suggested that what was meant by
20 program is largely what we understand to be a typical
21 broadcast program today, something that has a
22 beginning, a middle and an end and even, in some cases,
23 may have some multiple ends, but is for the most part
24 not something that I as an individual can interact with
25 and if I go to, I think the term that Astral used in
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1 their second round presentation, was the ability of me
2 as a user of this -- or accessor of this information to
3 alter it, to customize it, to tailor it to my
4 particular needs; and some have suggested that that
5 would no longer be a program; or, if it was, it
6 shouldn't be. I wonder what your views would be on
7 that.
8 12133 MR. GOURD: At the time the
9 Broadcasting Act was reviewed, Mrs. Sauvé had stated
10 her famous comment, "Pay TV is inevitable." However,
11 there were no real discussions of pay-per-view, for
12 example.
13 12134 However, at the end of the debates of
14 the committee, there was an a suggestion from certain
15 experts that service à la carte, that pay-per-view-like
16 services would happen one day, and therefore I remember
17 quite clearly that some members said, "Let's make sure
18 that the division of a program or a programming service
19 can allow the regulator to apply it to something like
20 pay-per-view." As I said, full interactivity, I don't
21 remember that being discussed directly.
22 12135 So, therefore, like every definition,
23 like every general statement, there is a bit of
24 discretion at the end of the day.
25 12136 THE CHAIRPERSON: And we have had
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1 considerable discussion, and kind of gone through
2 almost the hierarchy, if you will, of interactivity,
3 associated with this. You start with plain TV; then
4 you add specialities; go to pay television; then
5 pay-per-view; then video-on-demand, where
6 video-on-demand would be that the timing for me might
7 be, even if it is just milliseconds might be different
8 from the timing that you interact with it, and any
9 individual, depending on what the node size would be.
10 12137 I think it is probably fair to say
11 that there has been at least some acknowledgement that
12 video-on-demand may still be a program because the
13 program itself has not changed. My experience with
14 that program is no different than your experience with
15 it, even though the time may be different.
16 12138 My question was: If you take that
17 next step then, and if I heard you correctly you were
18 saying there was no consideration of that next stage
19 where now I have the ability to actually interact with
20 the substance of the program itself, and possibly alter
21 that, and whether that now takes us out of the realm of
22 what was considered to be a program.
23 12139 MR. GOURD: The definition is
24 quite -- as we know, is quite general because sounds
25 and visual image or a combination of sounds and visual
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1 images that are intended to inform and entertain.
2 12140 Therefore, I really would agree that
3 the members of the parliamentary committee had in mind,
4 probably, broadcasting content as they knew it. It is
5 true that things have evolved very, very rapidly, and
6 that the technology does enable us to move towards
7 video-on-demand, and towards interactive systems that
8 can impact the content itself. Would it be
9 broadcasting? I don't -- I am not sure we can have the
10 answer now. That is why we are saying that probably
11 the best way to go is to let the system evolve; is to,
12 perhaps, after recognizing that the Commission has in
13 my opinion the tools that could allow it to try to
14 regulate certain components of the system, which are
15 clearly broadcasting, that perhaps since these content
16 are extremely limited as we speak, and they will be
17 extremely limited for quite a number of years, to let
18 the system evolve and review it after a given point in
19 time.
20 12141 There is a point, indeed, where, as
21 you move towards more and more individual reception,
22 more and more individual interactive reception of
23 content, towards an individual interactive reception
24 and content which impacts the content, that at a
25 certain point in time you are probably out of the
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1 definition. But the definition itself is not really
2 essentially of great use because of its generality.
3 12142 THE CHAIRPERSON: Given that, I am
4 wondering -- we had a discussion yesterday,
5 Commissioner McKendry had a discussion with Peter
6 Grant, who is, I guess one would characterize as, an
7 expert in this field.
8 12143 MR. GOURD: An expert legal mind,
9 which I am not.
10 12144 THE CHAIRPERSON: Of the act and its
11 application. A number of parties have suggested in the
12 proceeding as well that we should consider the use of
13 an exemption order for certain types of programming
14 here.
15 12145 I guess one of the things that I am
16 interested to get your opinion on, given your
17 background here and given what you have just said
18 about, perhaps, the looseness of the definition of
19 program here, when we come to the Internet and think
20 about the possibilities and the capabilities of using
21 that technology, whether one could look, at least,
22 perhaps, three levels, or three approaches here; one
23 being as today virtually all of the material on the
24 Internet is alphanumeric text. Clearly, that is
25 excluded from the definition of program. So that is
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1 out.
2 12146 The next level could be, or an
3 approach the Commission could take, if you will, would
4 be to interpret the definition of program as to not
5 include programming which could be customized by the
6 individual user of that information or altered to serve
7 their need.
8 12147 My sense is that combination of the
9 first two would probably take virtually everything that
10 is currently on the Internet out of broadcasting today.
11 12148 The third level could be what is
12 understood to be broadcast type programming, which
13 sometimes has been referred to here as long-form
14 programming, and given the current state of the
15 development of that programming on the Internet, and
16 you have acknowledged that in your presentation here
17 today, that that is probably going to be quite some
18 time before the development of the Internet can handle
19 that sort of programming in any sort of reasonable
20 quality, that one would simply issue an exemption order
21 for that sort of programming.
22 12149 I am wondering what your view would
23 be on that approach by the Commission, and I guess in
24 particular the latter two elements of it, because I
25 think all would agree that the alphanumeric material is
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1 out in any event.
2 12150 MR. GOURD: Radio -- a Canadian radio
3 station based, let's say in Montreal and Toronto,
4 delivered on the Internet is certainly broadcasting
5 because it is a broadcasting content delivered by one
6 additional delivery mechanism. A pure data stream is
7 certainly not broadcasting. So the issue is the grey
8 zone, which everybody tries to focus on.
9 12151 The three level approach that you
10 have mentioned in my mind does make sense provided, in
11 my mind, that it does not create a precedent that would
12 make it difficult later to try to regulate some form of
13 customized content. I think the basic thing we don't
14 really know what it will be in five years. If I put
15 myself back in 1990, we didn't see the Internet coming.
16 I think that is the big truth. Even NMDS and even
17 LMDS, there was no -- we never thought that what we
18 call LMDS would be there, small radius of five
19 kilometres, we never really focused on that.
20 12152 Therefore, yes, I think basically it
21 is a very good structurization of the three layers of
22 content, and understanding that there is some overlap,
23 and certainly to say that every alphanumeric content is
24 not covered, that what is truly customized is probably
25 not covered and therefore refocus on the more
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1 traditional broadcasting content and it is exempted, it
2 is a good approach. But who knows in five years what
3 the technology will be; and there might be a wish then
4 to try to cover some form of customized content because
5 there might be, in five years from now, many layers to
6 a broadcasting service.
7 12153 There might be the -- partly in terms
8 of specialty services, there might be, let's say, the
9 traditional layer, let's say satellite to cable to the
10 TV set. But with Web TV there might be some continuing
11 delivery of video content that cannot find its place on
12 the main layer, but are still interesting for segments
13 of the audience. They will probably be able to have it
14 in the corner of their screen -- not probably, we know
15 it is being done. They will be able to call it on the
16 corner of their screen. So main video, complementary
17 video.
18 12154 They might be able to then call the
19 data stream and therefore do we -- maybe we should make
20 sure that if it is the right thing to do at that time
21 that we can have some form of regulatory coherency
22 between, let's say, the various components that will be
23 delivered by that service because I am convinced
24 personally that in five years from now specialty
25 services will have a number of information streams
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1 towards the TV set. Probably, they will have
2 additional information streams to the computer at the
3 same time, on weather, on whatever it is.
4 12155 So, coming back to the conclusion,
5 not to be too long, I think it is a very good
6 structuring, provided that it maintains a degree of
7 flexibility to adjust, if and when a review is
8 conducted some years from now.
9 12156 THE CHAIRPERSON: I suppose it
10 remains to be seen whether or not the very nature of
11 this technology allows us to overcome some of the
12 inherent problems that we have had with access, if you
13 will, since I have been -- it has been referred to me
14 as noting that is a fundamental concern here of content
15 to distribution and then audiences to that content.
16 The very nature of this technology may overcome some of
17 those problems, we may discover at some point in time.
18 It may not, but it may overcome those.
19 12157 MR. GOURD: Certainly.
20 12158 THE CHAIRPERSON: Okay. Some of my
21 colleagues may want to pursue some these issues, I
22 don't know.
23 12159 Let me turn to a couple of other
24 points you raised in your submission. You talked about
25 the Bell fund and how you expect this to become a
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1 permanent fund and it may change somewhat. Then, you
2 suggested that you might come to the Commission for
3 approval for this fund.
4 12160 I am wondering why -- I was curious
5 to note that you said that. I am wondering why you
6 would come to the Commission for any sort of approval
7 or authorization.
8 12161 MR. GOURD: I will cover the first
9 part and I will ask Chris Frank to cover the rest. The
10 approval, let me start with a general comment.
11 12162 We would really wish to make the fund
12 permanent. We believe that it has performed well from
13 what we see. Therefore, we feel that from our
14 perspective, even though it might represent a
15 continuing financial contribution, that is probably the
16 thing to do.
17 12163 In order to achieve that, there is a
18 need for comprehensive consultation with the board;
19 and, of course, we would not mention that possibility
20 today without some consultation with the board of the
21 fund. But they have to take a formal position through
22 a resolution. We feel also that, most importantly, the
23 industry has to be consulted.
24 12164 In terms of the Commission, what we
25 wanted to make sure is that the fund be recognized; so,
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1 perhaps, the term "approve" was the incorrect one, but
2 we would wish the fund to be recognized as a valid fund
3 for the purpose of a financial contribution by certain
4 licensees who may wish to put some money in the fund.
5 So the fund has to be recognized in order to achieve
6 that.
7 12165 But since I have the -- our best
8 satellite expert right beside me, and he was whispering
9 in my ear to make sure that I would recognize the
10 complexity of that, I will turn to him right now.
11 12166 MR. FRANK: So much for discretion.
12 12167 The only point I would like to add is
13 that this would be a consultative process. It is early
14 days. We are trying to put the pieces together and we
15 want to keep the Commission involved in the process.
16 12168 THE CHAIRPERSON: Well, when we talk
17 about being recognized in terms of contribution from
18 licensees, I wonder if you would be a little clearer
19 about what you have in mind there.
20 12169 MR. GOURD: For example, in some
21 cases, licensees, like some of our licensees have a
22 certain amount of discretion where they put part of
23 their fund and, therefore, let's say if we were to get
24 a new licence, let's say -- I don't want to focus on
25 some applications we have in front of the Commission,
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1 but we have some; and, of course, a part of the
2 cross-revenues of these services that we might or might
3 not get can be invested, part has to go to, let's say,
4 the TV fund, and another part might be a bit more
5 discretionary and go somewhere else; or we might wish
6 to come back to the Commission, if and when we have
7 these new licences, and suggest that, perhaps, 20 per
8 cent of the 5 per cent of these -- of the gross volume
9 be invested in the Bell broadcasting and media fund.
10 12170 So that is the kind of thing I had in
11 mind. So therefore the fund has to be recognized for
12 that purpose.
13 12171 THE CHAIRPERSON: I guess I would
14 have to check the details here, but I think today that
15 fund is designed for -- and this may be a bit of a
16 circular argument I guess -- designed for programs.
17 12172 MR. GOURD: But it would be programs.
18 In our mind it would be programs that would be
19 delivered both through the traditional, if I may use
20 the term, traditional delivery mechanism of the
21 broadcast system, plus a complementary form for
22 distribution.
23 12173 THE CHAIRPERSON: So that would not
24 necessarily require an alteration of the rules around
25 the 5 per cent and where that money can be spent.
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1 12174 MR. FRANK: Perhaps I could just add
2 that with respect to one of those applications that we
3 have in front of the Commission, we are very definitely
4 on the public record as how that money would be --
5 12175 THE CHAIRPERSON: I don't want to
6 turn this into a hearing about your application. That
7 is next week.
8 12176 MR. GOURD: That is why we want to be
9 very --
10 12177 THE CHAIRPERSON: Let's just talk
11 about the current one.
12 12178 Looking at this whole 5 per cent
13 issue, and maybe this takes us back into a bit of a
14 definitional question, some of the ISPs appeared before
15 us last week and raised a number of issues and, in
16 particular, some telecommunications issues.
17 12179 A number of them had suggested that
18 they, in fact, probably would or should be treated as
19 telecommunications carriers or, perhaps, at least
20 resellers. During this whole discussion many people
21 have suggested that we should be, in an effort to try
22 to put more money into this business and in terms of
23 content creation, content development, we should be
24 looking at levying a fee similar to the one we have
25 just talked about, this 5 per cent, on certain players
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1 in this business. Some of those players could be the
2 ISPs.
3 12180 I guess we posed the question to a
4 few of them: By what authority would we levy this 5
5 per cent fee on an ISP? I am wondering whether you
6 have a view on that because some of it -- some people
7 have suggested we should treat an ISP as if it was a
8 BDU, a broadcast distribution undertaking; or, in other
9 words, a cable-like undertaking. Maybe that takes us
10 back to this definitional issue, but I wonder if you
11 have a view on that.
12 12181 MR. GOURD: I will ask Chris and our
13 legal advisor to focus on whether or not there is the
14 authority to impose a levy or a tax or whatever. But I
15 would like to table, first, a general position that it
16 is our belief that to let a thousand flowers bloom, you
17 know, on the new media, it would probably be better to
18 let it alone for awhile. Let it grow. Let's see how
19 it will unfold and then we might see if it's
20 appropriate to gather some of the revenues, whether 5
21 per cent or not, for reinvestment in the content.
22 12182 Just as an aside, I said to my
23 colleagues privately that having worked with a lot of
24 deputy ministers of finance, if and when the government
25 of the day, in five to ten years, decides that it is
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1 important to get some of the money back, they will find
2 a way. So that is what I said about the creativity of
3 the successive departments of finance.
4 12183 But whether or not it is possible
5 now, maybe I would like to turn to Chris and David.
6 12184 MR. ELDER: I guess we would be of
7 the view that, from the telecom act perspective, there
8 isn't the jurisdiction in the telecom act to impose
9 that sort of a broadcast objective oriented condition
10 on the provision of a telecom service.
11 12185 I don't know that I can say any more
12 than that.
13 12186 THE CHAIRPERSON: Would it be your
14 view that an ISP would be more likely to be
15 characterized as a carrier or reseller than a BDU?
16 12187 MR. ELDER: Definitely. I think
17 there are a number of characteristics that would
18 differentiate an ISP from a BDU. I think mainly of an
19 ISP as providing connectivity. It is a completely open
20 user group. It is not this sort of closed market where
21 the BDU is effectively picking the services and the
22 programming to which subscribers will have access.
23 12188 THE CHAIRPERSON: Going back to your
24 point about letting a thousand flowers grow, a lot of
25 people have raised the issue both before and during
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1 this proceeding that there is a considerable amount of
2 uncertainty about the regulatory regime around these
3 flowers, and that there could be a number of huge rocks
4 that are preventing the growth of these flowers, and
5 one of these rocks is the question of the potential
6 threat of regulation, taxation and so on, and that in
7 order to remove those rocks from the -- and create a
8 more fertile ground for these flowers to grow, that the
9 Commission should be very certain about the regulatory
10 world that these flowers likely would grow up in and
11 blossom or bloom in; and that the threat hanging over
12 their head of potential taxation or regulation within
13 the foreseeable future will stifle the growth of those
14 flowers and, perhaps, let a lot of weeds grow, I don't
15 know how far to carry this.
16 12189 Going back to my scenario that the
17 Commission might adopt here, what is your view on this
18 issue of the regulatory certainty? I am particularly
19 concerned about this business about, well, if you
20 wanted to do it, you could tax it at some point down
21 the road. Does that not still keep the threat of some
22 sort of regulation or taxation? What would your view
23 be in terms of what the Commission should do to address
24 this question of uncertainty?
25 12190 MR. GOURD: I don't believe that,
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1 personally, we can have certainty in this world except
2 for a few things like --
3 12191 THE CHAIRPERSON: Death and taxes.
4 12192 MR. GOURD: That proves my point. So
5 we cannot have certainty that there will be no
6 taxation. If e-commerce on the Internet explodes and
7 becomes a very, very significant -- already there is
8 some form of taxation, and David can speak on that, but
9 at the end of the day certainty is not really possible.
10 12193 Therefore, I would say that, one, the
11 Broadcasting Act can apply to broadcasting on the
12 Internet. Second, I feel personally, like many others,
13 that it is preferable to let it emerge before there is
14 a real regulatory framework put on it.
15 12194 Yes, there are rocks and
16 uncertainties, but that is a bit like life. Therefore,
17 I don't believe that it is really realistic to expect
18 that there can be a certainty that it will be never
19 taxed more or never regulated more. It all depends
20 what it will become. If it becomes culturally and
21 socially critical, there will be some form of taxation
22 and additional regulation. So I think that there can
23 be a consensus on giving it a period of time to emerge.
24 12195 Also, I remember prior to the
25 unfortunate paedophilia events, I remember some inside
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1 conference where people were saying there will never be
2 any regulation. My reaction then was, if there is a
3 critical targeted -- a public opinion position on
4 something, the government will feel bound to do
5 something about it, and then later that unfortunate
6 event emerged and various governments tried to do
7 something about it.
8 12196 Singapore tried a way; it was a bit
9 drastic. Others are using -- and their way was to put
10 responsibility square and fair on the ISP -- discipline
11 the system. Other jurisdictions used the Criminal Code
12 in order to focus on the person who has -- who creates
13 the offence, and so on and so forth.
14 12197 My conclusion is that, as the system
15 evolves, as pressure points develop, or revenue
16 opportunities develop, nobody can ensure that a few
17 things will never happen.
18 12198 THE CHAIRPERSON: Going back to the
19 taxation question, even if one was to not do it today
20 but consider it a possibility of doing it some point in
21 time in the future, given the comment we just had about
22 ISPs being carriers and no provision under the
23 Telecommunications Act, at what point would you levy
24 this tax? At what point in the value chain would you
25 levy this tax?
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1 12199 MR. GOURD: Two comments.
2 Personally, I feel, and we feel, that the new media
3 should be given a lot of years to emerge. If the
4 question is: Can there be a technique through which a
5 tax in 25 years can be put on certain activities, I
6 remember that some years ago there was a tax on telecom
7 revenues. There was one and then it was abolished, but
8 there was a specific need. They found a technique.
9 They slapped it on it and then later they removed it.
10 12200 But our position, irrespective of
11 whether or not creative tax lawyers can find a
12 technique, our position is that let's see what form it
13 will take, what forms I should say, plural, how it will
14 emerge. I don't know if colleagues have a special
15 comment on these matters.
16 12201 MR. FRANK: Just a couple of general
17 thoughts, that this is the worldwide Web we are talking
18 about and Canada is a small part of that. We have to
19 stay competitive. We don't want to burden our
20 businesses unless there is a specific public need,
21 public policy reason to do so. To be creative, to be
22 competitive, I think it makes a lot of sense, as Alain
23 said, to give this industry as much freedom as possible
24 to actually grow and mature.
25 12202 THE CHAIRPERSON: Mr. Elder, did you
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1 have a comment?
2 12203 MR. ELDER: I guess I was just going
3 to say that no matter what unfolds I think down the
4 road you, the Commission, are still going to have that
5 jurisdictional problem if you are talking about the tax
6 in that sense.
7 12204 But, as Mr. Gourd said, I mean there
8 are other means, and those would likely be legislative,
9 I would think.
10 12205 THE CHAIRPERSON: Now, in your
11 comments, in your oral presentation, you said you
12 believe the Commission and the government can continue
13 to play a role in ensuring a stronger Canadian content
14 presence in the multimedia universe.
15 12206 Beyond the issue of the fund that we
16 have discussed, and allowing some contributions to go
17 into support this sort of fund, did you have other
18 specific initiatives in mind for the Commission?
19 12207 MR. GOURD: Perhaps not exclusively
20 for the Commission, but in terms of, for example,
21 co-production agreements, which is an approach where
22 you recognize the content produced by producers of two
23 countries as fully Canadian in Canada and fully
24 Canadian elsewhere, and both the government does that
25 for funding purposes and the Commission for Canadian
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1 content purposes. There, I remember negotiating myself
2 a certain number of these agreements with France, Italy
3 and Belgium and elsewhere, and of course at the time,
4 1984-1985, we didn't have in mind the Internet and the
5 multimedia. It was pretty straightforward; it was
6 either on the TV screen or on the movie screen and that
7 was it.
8 12208 I feel that we should revisit the
9 parameters of these agreements and make sure that a
10 part of the funding be put on distribution on new
11 media, and also on different packaging of the content
12 for the new media.
13 12209 Another one is the certification
14 program. When a production is recognized, it is
15 entitled in certain -- to certain tax advantages, and
16 we should make sure that the -- a content which is both
17 on the television screen and also repackaged for
18 another form of distribution be able to receive a
19 certain funding there. The percentage of it, is it 10
20 per cent of the total or whatever, could be left for
21 others, like the officials of the department to figure.
22 But I think it would be a good approach to open a bit
23 this funding mechanism.
24 12210 We can talk about Telefilm as well.
25 I think it would be worth it to consider opening some
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1 segment to content which would be both on the
2 broadcasting system and on the other delivery
3 mechanism.
4 1630
5 12211 I'm not sure at this point in time we
6 should fund a content which is exclusively delivered to
7 the new media. We might wish to walk before we run.
8 It might be a good step if the content is definitely
9 delivered to the broadcasting system.
10 12212 There is also another version or
11 another delivery, that other version receive some
12 degree of funding.
13 12213 THE CHAIRPERSON: Let me switch to
14 the technology here just a little bit, but not too
15 technical because we had Francois Menard here last
16 week --
17 12214 MR. GOURD: There's no risk with me,
18 Mr. Chairman.
19 12215 THE CHAIRPERSON: We have had some
20 concerns raised by a number of the ISP in terms of the
21 problem that we have got in this country with the last
22 mile.
23 12216 I think a lot of people would
24 acknowledge that a fairly good job has been done by
25 providing dial-up access throughout the country and in
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1 many jurisdictions telephone companies serving areas I
2 suppose I should say.
3 12217 Toll free access is provided to the
4 Internet even if there is not an ISP in your own
5 community and so on, but there has been a concern
6 raised about higher speed access.
7 12218 You talked in your presentation here
8 today and in your written brief about some of the
9 opportunities that you might be able to provide through
10 the use of satellite technology. I'm wondering if you
11 could describe for us how that is going to work in
12 general terms, again not too technical.
13 12219 We tend to think about your
14 capability, getting back to push versus pull, as a push
15 technology. You deliver to the ground those signals.
16 You have mentioned here the loop back would be a
17 terrestrial facility.
18 12220 I'm wondering what role Telesat can
19 play in terms of providing higher speed access to and
20 from the Internet, particularly in some of the more
21 rural areas where maybe some of the terrestrial
22 facilities aren't available or aren't as affordable.
23 12221 MR. GOURD: Chris and perhaps Terry.
24 12222 MR. FRANK: Perhaps I can start and
25 very briefly because I will get out of my depth that
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1 quickly.
2 12223 The two opportunities that we spoke
3 about in our presentation today are the ones we are
4 focused on most directly. That is real Internet
5 service and enhancements to existing broadcasting
6 services.
7 12224 We have the technology or the
8 technology in the services are available today to offer
9 the first. It just requires capacity and that will be
10 available very shortly. As to the second, it requires
11 new set-top boxes which I think Terry can describe and
12 which I understand are going to be available very, very
13 shortly.
14 12225 Having said that, Terry, maybe you
15 could flush out the details.
16 12226 MR. SNAZEL: You said top boxes will
17 be available very shortly.
18 12227 THE CHAIRPERSON: My colleague says
19 we have heard that before and I decided long ago that I
20 am not going to hold my breath waiting.
21 12228 MR. SNAZEL: Before I get into
22 that --
23 12229 MR. GOURD: They are actually being
24 introduced in Spain by our supplier, so it is coming
25 pretty soon.
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1 12230 MR. SNAZEL: The new set-top boxes
2 that Chris is talking about are not fictitious. There
3 are some boxes that allow a much greater degree of
4 interactivity than we have now.
5 12231 In a sense, the box that we have now,
6 the box that we use, has a crude form of interactivity
7 within it. I mean impulse pay-per-view and the
8 interactive program guide is a very basic form, but it
9 is actually interacting with data in a data way rather
10 than a broadcasting fashion.
11 12232 Going back to the earlier question or
12 the question I guess you asked was the last mile and
13 how satellites are perhaps different from other
14 broadcast undertakings.
15 12233 THE CHAIRPERSON: In your case I
16 guess it's the last 23,000 miles.
17 12234 MR. SNAZEL: You're right. Actually
18 it's the last three feet, that little connection
19 between the box and the display device.
20 12235 Satellites are quite different
21 obviously from other technologies, particularly a
22 telephone system, because they are asymmetric. They
23 are very good at delivering things one way. They are
24 very bad or very expensive at delivering things in the
25 reverse direction which is interesting.
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2818
1 12236 Essentially, a lot of the data
2 interactivity is in fact asymmetrical as well. The
3 high speed that everyone wants is in one direction and
4 the interaction and the calling for that speed is
5 obviously slow speed, much less of a pipeline you need
6 to make it work.
7 12237 Satellites can deliver data at much
8 higher speeds than, say, a telephone connection can
9 deliver, but the one satellite connection if you like
10 serves many thousands of people as opposed to the
11 single person on the telephone.
12 12238 Anyway, the issue is that satellites
13 are quite different, I think, than telephones. The
14 opportunity is to deliver slightly services or the same
15 services perhaps in different ways. I think that's
16 where we will see satellites take their part within the
17 system. It will be quite a different way that
18 satellites get utilized.
19 12239 THE CHAIRPERSON: If I went out to
20 the local electronics store and bought my computer,
21 what type of service could ExpressVu provide me in
22 terms of it being able to access the Internet?
23 12240 You said in your written submission:
24 "With the advent of new
25 incremental satellite capacity,
StenoTran
2819
1 Bell ExpressVu intends to offer
2 high speed data service through
3 connectivity to the Internet."
4 12241 MR. SNAZEL: The most obvious one is
5 similar to services that already exist whereby you
6 deliver the main high speed data to the subscriber over
7 the satellite. The telephone is used to connect back
8 to the service provider to call down that particular
9 data. That's one way of doing that.
10 12242 The other type of service you can
11 offer is whereby you are putting out a great quantity
12 of data that can be of more general interest and the
13 filtering is taking place in the computer in the home.
14 The person at home is actually deciding what part of
15 that data they want to have access to and to use.
16 12243 It may not be coming down totally in
17 real time. It could be coming down in non-real time.
18 It's transmitted in real time but it's actually
19 accessed in non-real time. The person using it could
20 be looking at it at a totally different time from when
21 it was actually transmitted.
22 12244 Those two sorts of services are what
23 I would call the computer and the data side of
24 multimedia, new media if you like.
25 12245 The other piece of the puzzle, and
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2820
1 this is where you are going back to the definition of
2 what is broadcasting and what is not broadcasting. It
3 gets to be quite difficult. Perhaps a definition or a
4 partial definition could be the fact that some services
5 are suited only to be enjoyed by a solitary person
6 working with a keyboard and a screen right in front of
7 them.
8 12246 Perhaps entertainment and
9 broadcasting is enjoyed or can be enjoyed by more than
10 one. Members of the family can sit together and look
11 at that. Some of the applications we are talking about
12 are much more suited to the livingroom display upon the
13 television as opposed to the basement person working on
14 their PC.
15 12247 That's the other piece of the puzzle
16 that we would perhaps evolve our service towards. As I
17 mentioned, there are set-top devices. France, for
18 instance, has a fairly interesting interactive service
19 that is using DVB technology, the same technology as we
20 use, to deliver those services whereby you can
21 customize weather reports, travel information. You can
22 listen to various customized versions of commercials
23 and so on.
24 12248 That sort of interactivity would be
25 delivered from the set-top device rather than from a PC
StenoTran
2821
1 card or computer connected device. I think ExpressVu
2 will be looking at delivering both kinds of services.
3 12249 MR. GOURD: If I may, Mr. Chairman.
4 12250 THE CHAIRPERSON: Sure.
5 12251 MR. GOURD: In terms of the set-top
6 box, we will conduct very shortly a pilot project in
7 Quebec using the CanalPlus media highway box which is
8 interactive as we speak in France. We will test it in
9 Quebec for business television application, but
10 business TV in a way is broadcasting but it's
11 unregulated. Therefore, it is scattered. It is for
12 commercial purposes. Therefore, it's not regulated as
13 we speak.
14 12252 From a technology perspective, I have
15 to be very careful with that --
16 12253 THE CHAIRPERSON: We should go back
17 to what you said before.
18 12254 MR. GOURD: Yes. I know. I was
19 listening to myself. Let's stick to the fact, Mr.
20 Chairman. We have an agreement with CanalPlus that we
21 will test their box in the coming months with partners
22 in Quebec.
23 12255 The second comment I wanted to make
24 is you mentioned Telesat. As we know, Telesat as we
25 speak, the high speed Internet capability which has
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2822
1 been used, for example, to link thousands of school
2 under the SchoolNet program. Therefore, there is as we
3 speak with Telesat that Internet capability that has
4 been implemented partly inside the SchoolNet program.
5 12256 THE CHAIRPERSON: Do you expect to
6 have a service offering that would be functionally and
7 price competitive with that of a terrestrial based ISP?
8 12257 MR. GOURD: Again, I will be rapidly
9 out my depth and I will turn to Terry, but probably
10 not. Again, if I go back to the SchoolNet approach, it
11 is for institutions because of the price point. It's
12 for companies. It's for organizations.
13 12258 Terry.
14 12259 MR. SNAZEL: I think you're right.
15 That form of true Internet interactivity delivered by
16 satellite where there is no terrestrial at all, the
17 option of using something like a V-set technology is
18 still quite expensive.
19 12260 It can work and does work very
20 nicely. You can gather a group of people together like
21 a school or a school board or various other places
22 where it becomes cost effective to use the return path
23 by the satellite.
24 12261 The telephone return path is
25 practical. It works. Obviously there is a service
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2823
1 that was alluded to that is functioning now. The
2 service that it provides though is quite expensive and
3 it's not quite the same as you would provide on a true
4 full-blown Internet service where you have an
5 individual connection directly by your phone line back
6 and forth and it's symmetrical and so on and so forth.
7 12262 For remote and rural areas, it's a
8 wonderful opportunity to get connected to the Internet,
9 but it's perhaps more likely that a terrestrial service
10 will be more competitive in an urban area.
11 12263 COMMISSIONER GRAUER: If I may again,
12 Mr. Chairman. When I was President of Cancom, the
13 Cancom engineers had developed what we used to call a
14 trunk Internet which was a fully interactive two way
15 Internet by satellite using a V-set platform.
16 12264 It was trunk in the sense that it
17 needed the local ISP, whether the cable operator or an
18 ISP, using the telephone line to have the last mile.
19 12265 Various satellite Internet activities
20 have been introduced in this country, but they face, as
21 compared to the terrestrial ones, some price challenges
22 and, in the case of a full Internet one, some bandwidth
23 challenges as well.
24 12266 That's why the Cancom Internet was
25 really targeted at more remote areas where the number
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2824
1 of users is naturally a bit more limited, even though
2 usage per user was high. There were some bandwidth
3 limitations, so you could accommodate a certain number
4 of users only per transponder.
5 12267 THE CHAIRPERSON: Thank you. Those
6 are all my questions.
7 12268 I think Commissioner McKendry has one
8 or two.
9 12269 COMMISSIONER McKENDRY: Thank you,
10 Mr. Chair. What is business TV and in light of the
11 points you made about broadcasting, why isn't it
12 broadcasting?
13 12270 MR. GOURD: Because it is delivered
14 in the form of a private network to a single
15 organization normally with delivery of content two or
16 three times per week, for example, typically.
17 12271 Let me give you a specific example.
18 Again when I was at Cancom, we obtained the contracts
19 to deliver business television to first Ford Motors and
20 then to General Motors. These were networks that we
21 were very proud of and very proud to have gotten the
22 contracts.
23 12272 They were designed, quite frankly,
24 for one application which was interactive distance
25 training. Once a week, depending on the program, there
StenoTran
2825
1 was really not continuous training activities, so once
2 a week there would be a training activity pertaining to
3 the introduction of a new car for, let's say, the
4 technicians.
5 12273 The trainer would be at the studio,
6 fully automated with one technician, automated robotic
7 cameras, laser beam on the mike, and for half an hour
8 the trainer would push a button so there would be music
9 in the intro.
10 12274 This is the Ford Training Network,
11 FTN, then push another button. A VCR would start and
12 show the car rolling on a platform or whatever.
13 12275 He would then push another button,
14 introducing the engineer, the main engineer from
15 Detroit who would explain how the car was technically
16 built. Then the trainer would move to questions and
17 answers and they would use an electronic path for text
18 and audio interactivity.
19 12276 Each path would be individualized so
20 the trainer would see the name of the caller. There
21 would be one per week, let's say, for technicians. The
22 next one would be two days later for the salespeople,
23 but it would all go to specific boardrooms, fixed
24 points, and, therefore, it was considered as a private
25 network.
StenoTran
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1 12277 COMMISSIONER McKENDRY: If the same
2 service was delivered over the Internet and required
3 password access for the users in order to keep it
4 private, would it be broadcasting then?
5 12278 MR. GOURD: Again, I would rather
6 rely on my legal advisers. As I said, I was a
7 practising lawyer more than 25 years ago. If it is in
8 the form of a private network towards dedicated points,
9 normally it wouldn't be, but I think I should rely on
10 David for that.
11 12279 MR. ELDER: I would say the short
12 answer is no. I would say a private network is a
13 private network regardless of the means to deliver it.
14 12280 Really what you are talking about is
15 when you are looking at the Broadcasting Act and the
16 definition you are talking about for reception by the
17 public, I know certainly in other instances the
18 Commission has interpreted that as not meaning for
19 reception by a closed user group.
20 12281 COMMISSIONER McKENDRY: On the
21 Internet, if password access is required to a site,
22 then it is not intended for the public and it's
23 private.
24 12282 MR. ELDER: Well, again, you are
25 talking here about a private network, something along
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2827
1 the lines of distance TV.
2 12283 COMMISSIONER McKENDRY: I am asking
3 if it was delivered on the Internet and password access
4 was required.
5 12284 MR. ELDER: Just to clarify your
6 question. The passwords would only be provided then to
7 the members of this corporation. Then I would say yes,
8 that is also a private network and would not be
9 broadcasting.
10 12285 COMMISSIONER McKENDRY: Would it also
11 apply to a service -- would the same rule apply to a
12 service that was being offered, for example, a movie
13 being transmitted over the Internet but password access
14 was required and one had to be a member of a group to
15 have that password?
16 12286 MR. ELDER: I don't think that that
17 password access, if you are talking about something
18 that's available to the general public, I don't think
19 takes you out of the definition of broadcasting.
20 12287 In your question we are again talking
21 about the Internet. For a number of reasons, a number
22 of arguments, you have heard ad infinitum I think this
23 week, I don't think you are talking about broadcasting.
24 You are looking at predominantly alphanumeric services.
25 You don't have program coherence. You have
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1 customization of programming.
2 12288 I don't really think that the
3 password is determinative in that scenario.
4 12289 COMMISSIONER McKENDRY: I thought in
5 the training program scenario where the members of the
6 corporation had the password that was in fact
7 determinate.
8 12290 MR. ELDER: I guess it helps assure
9 you that it is indeed a private network. I guess you
10 can come at this two ways.
11 12291 You can look at it and say are there
12 programs being distributed here? If you can conclude
13 that there are programs being distributed but they are
14 only being distributed over the Internet to a closed
15 user group and it involves a corporation, I would say
16 they are still not being distributed to the public.
17 12292 COMMISSIONER McKENDRY: But you don't
18 extend that to individuals who require a password and
19 don't work for a corporation.
20 12293 MR. ELDER: Right. If you make the
21 determination that what is being provided over the
22 Internet are programs and those are being distributed
23 to members of the public who only have to get a
24 password in order to access the service, this would be
25 equivalent to a pay TV sort of service. Not everyone
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1 gets pay TV, but if you pay your money you get it.
2 12294 If you are talking about that sort of
3 scenario, once you have made the determination that it
4 is programs being provided over the Internet, then that
5 would be, I suppose, a broadcast service, but there's
6 an awful lot of ifs in there I guess is the point I am
7 trying to make.
8 12295 COMMISSIONER McKENDRY: And the use
9 of the password is not determinate in any way.
10 12296 MR. ELDER: I don't think in that
11 situation. If it is to the public and all you have to
12 do is get a password to get on, I think it is the same
13 as accessing the specialty services.
14 12297 COMMISSIONER McKENDRY: It's the same
15 in your situation where you said the password is
16 determinate. Members of the corporation, all they have
17 to do is get a password.
18 12298 MR. ELDER: Yes, but they are members
19 of a restricted user group. They are not members of
20 the public.
21 12299 COMMISSIONER McKENDRY: Surely you
22 don't have to be in a corporation to establish a
23 restricted user group.
24 12300 MR. ELDER: There certainly is a grey
25 area here. I know that the Commission has looked at
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1 this in other situations. To be honest with you, I
2 haven't looked at some of the case law on this point
3 about exactly what constitutes the public for these
4 purposes.
5 12301 Certainly segments of the public can
6 constitute the public, but the conventional wisdom I
7 guess is if it is not publicly available, it is only a
8 closed user group. There is some unifying
9 characteristic that defines that group. That is not to
10 the public. That is a private communication. That is
11 not broadcasting.
12 12302 I think that is consistent with the
13 intentions certainly behind the drafting of the
14 legislation.
15 12303 MR. SNAZEL: The comment I was going
16 to make was in fact with pay TV or pay-per-view or
17 other broadcasting programs that are available to the
18 public, there is in fact a password. It's an
19 electronic password. People are given access to that
20 program only upon having access to the password. You
21 can call it technically a password which allows them to
22 do that which I think is the analogy you are trying to
23 make. Is it?
24 12304 MR. ELDER: Yes.
25 12305 COMMISSIONER McKENDRY: Thank you.
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1 12306 THE CHAIRPERSON: Thank you.
2 12307 I think those are all our questions.
3 We appreciate your participation here today and your
4 history lesson.
5 12308 Madam Secretary, our last presenter
6 for today and for this week.
7 12309 MS BÉNARD: Thank you, Mr. Chairman.
8 12310 The next presentation will be by
9 Leslie Regan Shade.
10 PRESENTATION / PRÉSENTATION
11 12311 MS SHADE: This probably will be
12 short and sweet. I reiterate a lot of what Dr. Karim
13 said.
14 12312 My name is Leslie Regan Shade. I am
15 currently an Assistant Professor at the Department of
16 Communication at the University of Ottawa where I teach
17 classes in the history, theory, effects and social uses
18 of mass media, including new media.
19 12313 Before joining the University of
20 Ottawa, I was a consultant on information technology
21 issues in Montreal, Toronto and Ottawa. Some of my
22 clients included the Government of Ontario in a study
23 looking how non-profit groups could use and benefit
24 from e-mail.
25 12314 I did a report for Status of Women
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1 Canada on how Canadian women's groups are using the
2 Internet and some of the barriers to access and
3 Industry Canada through the Information Policy Research
4 Project at the University of Toronto and a
5 collaborative series of workshops and discussion papers
6 and research on issues of universal access, of which
7 you have heard from Andrew Clement the very first day
8 of the hearings. I have been working with him on a lot
9 of these issues.
10 12315 One of the areas that I am most
11 concerned about are the issues surrounding what I like
12 to call the social infrastructure of the new media and
13 in particular the very vital issues of universal
14 access.
15 12316 Partly what I would like to do today
16 is reinforce the oral presentations of Andrew Clement
17 of the University of Toronto who presented the National
18 Access Strategy, as well the Media Awareness Network
19 who emphasized the need for ongoing web literacy,
20 particularly for Canadian school children, and Mr.
21 Garth Gram who will appear on Monday next on behalf of
22 Telecommunities Canada and the Community Networking
23 Movement in Canada and as well Dr. Karim and his
24 associates.
25 12317 Many of my comments here uncannily
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1 echo what Dr. Karim was saying this afternoon, which
2 probably isn't surprising since we both graduated from
3 the same university at the same time.
4 12318 Canada has a unique history of
5 providing national communication links through federal
6 government intervention, through subsidies and content
7 quotas and principles of universality, but what we see
8 with the development of new media, or as its also
9 referred to as ICTs or information and communication
10 technologies, the government has decided to let market
11 led forces and industry initiatives prevail, admits an
12 environment characterized by competition,
13 telecommunications, deregulation and increasing cuts to
14 social services, issues of national and cultural
15 sovereignty and citizenship remain crucial.
16 12319 We need to ask ourselves what should
17 be considered essential services to new media and
18 information and communication technologies and what
19 information governments should be required to provide
20 to citizens free of charge.
21 12320 Moreover, how well can such access
22 provision fulfil individual needs and societal goals
23 and how can access to new media and ICTs encourage and
24 enable social, political and economic participation.
25 12321 One of the visions of the information
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1 infrastructure is that of the electronic marketplace or
2 e-commerce. What is noticeable about the Canadian
3 government strategy towards a Canadian electronic
4 commerce strategy is its neglect in considering issues
5 relating to the social infrastructure.
6 12322 Access is referred to in terms of
7 physical infrastructure only and the policy
8 infrastructure that will support this market driven and
9 competitive environment.
10 12323 If electronic commerce is to be
11 successful for Canadians, it would seem to make sense
12 to consider more carefully the nature of access which
13 is very multifaceted and whether or not there should be
14 some sort of regulations concerning universal access
15 for Canadian citizens.
16 12324 It's important to note that
17 throughout the background documents on electronic
18 commerce that Industry Canada put out, Canadians are
19 referred to as consumers. It is consumers who are
20 concerned with the security of their network
21 transactions over the Internet and consumers who are
22 concerned with disclosure of their personal information
23 over the Internet.
24 12325 In these market driven scenarios,
25 what is the role of the digital citizen? Are we solely
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1 purchasers and sellers of services and products in the
2 digital realm? Are these transactions interactive or
3 are they governed by a one way flow of information? Is
4 the role os communication here restricted to a
5 merchandising function?
6 12326 If you look at recent surveys on who
7 is connected to ICT services in Canada, it highlights
8 the overwhelming inequities in access across the
9 country. According to various socioeconomic frameworks
10 overall, the figures reveal that even though more
11 people are becoming connected to ICT services, it's a
12 fairly homogeneous group of higher income families and
13 our students who have access through universities.
14 12327 My concern is that we need to be
15 concerned with those citizens that are not connected,
16 those citizens in lower socioeconomic groups, disabled
17 peoples, natives and visible minority peoples, seniors,
18 single mothers.
19 12328 As well, these surveys don't get into
20 the uses and participation, as Dr. Karim mentioned.
21 They mentioned who has access but they don't talk about
22 who is using and who is participating and how with
23 these services.
24 12329 Fortunately, there are some issues
25 that should be solved in terms of institutionalizing
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1 research into use and participation of ICTs. The
2 Social Science and Humanities Research Council has just
3 set up a new research agenda to look at issues
4 concerning the knowledge based economy society, issues
5 of social cohesion, issues of uses and participation.
6 12330 Hopefully some good research should
7 flow from this research agenda that can help us find
8 out what it is that citizens need and want.
9 12331 Although Canada can brag that it is
10 one of the more technologically advanced countries in
11 the world, boasting major infrastructure advantages
12 including the world's highest penetration of
13 telephones, cable TV and home electronics like the VCR,
14 a schizophrenia exists between the race to implement
15 diverse communication technologies and the fact that
16 often these technologies carry more non-Canadian
17 cultural material than Canadian culture material.
18 12332 Two recurring viewpoints are, one,
19 that culture can colonize minds and, two, that cultural
20 sovereignty is a necessary condition for political
21 sovereignty. This has surfaced again with respect to
22 new media.
23 12333 The twist now is that culture has
24 less to do with proximity and more to do with
25 technology, information and the diffusion of text.
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1 Some Canadians fear that the global sweep of network
2 technologies that admits an increasing climate of open
3 competition could result in the Americanization of
4 Canada.
5 12334 Will Canadians have equal access to
6 the channels of production and distribution as our
7 southern neighbours? It is here that the role of
8 community networking and universal access for Canadian
9 citizens comes into play.
10 12335 Communicating networking activists
11 have championed the idea of community networks as being
12 a distinctly Canadian communications facility
13 reflective of the goals of the Federal Information
14 Highway Advisory Council, issues of jobs, cultural
15 identity and universal access.
16 12336 In 1994 public interest intervenors
17 at the CRTC information highway hearings reminded the
18 Commission of the continued surge and enthusiasm for
19 community based networks and urged the CRTC to
20 recommend the creation of both social and economic
21 policies to sustain community networks.
22 12337 Given that national and global
23 information infrastructures are now being promoted and
24 legislated in a deregulative, competitive and
25 self-regulated environment where private industry at
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1 this point can have unbridled, albeit inoperable power,
2 community networks which are indeed a social utility
3 could find themselves in a vexatious position.
4 12338 Community networks occupy the ground
5 between government and the private sector or what is
6 commonly referred to as civil society or civic space.
7 This civic space is voluntary, embraces co-operatism,
8 consensus and the common ground. It is vital that this
9 public space be reinforced and sustainable.
10 12339 It is my hope that the CRTC will act
11 in some capacity to acknowledge the role of community
12 networks and other forms of electronic public space in
13 defence of citizen participation and the need to
14 institute some form of regulatory intervention for the
15 purposes of achieving universal access to new media and
16 ICTs for all Canadians.
17 12340 By access I include notions of the
18 social as well as the technical infrastructure. A key
19 component of that sense of access is this notion of
20 digital or web literacy. How we can achieve that?
21 However, as Dr. Karim said today and as I am sure that
22 you realize, it is really up to discussion. It is just
23 to reinforce this notion that we need to have a sense
24 of a social public space that I want to reinforce this
25 afternoon.
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1 12341 Thank you.
2 12342 THE CHAIRPERSON: Thank you, Ms
3 Shade, for your presentation.
4 12343 I will turn the questions to
5 Commissioner McKendry.
6 12344 COMMISSIONER McKENDRY: Thank you,
7 Mr. Chair.
8 12345 Good afternoon and thank you for
9 patiently waiting until late in the afternoon.
10 12346 MS SHADE: It's okay. I wrote a few
11 research proposals.
12 12347 COMMISSIONER McKENDRY: Perhaps I
13 could ask you a question that relates to paragraph 8 in
14 your written submission. I will just give you a moment
15 to find that.
16 12348 MS SHADE: Yes. What did I write?
17 Okay.
18 12349 COMMISSIONER McKENDRY: I will just
19 read a bit of that. You indicate that programs such as
20 CAP, SchoolNet and VolNet, and I quote:
21 "-- can boast what their actual
22 and potential access figures
23 are, i.e. how many communities
24 and schools are connected, but
25 what is more important than
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1 mirror access figures is
2 ascertaining how ICTs are being
3 used by the various communities.
4 What is the use and
5 participation of new media and
6 ICTs?"
7 12350 Then you add in the quote:
8 "In the near future, a research
9 agenda will need to be designed
10 and implemented to look at use
11 and participation rates."
12 12351 I'm just wondering if you could
13 elaborate a bit on what that research agenda should
14 include and who in your view should undertake that
15 research.
16 12352 MS SHADE: Well, fortunately, SHIRK
17 did announce their research proposals and being in an
18 academic context, I am pleased to note that I can try
19 to secure funds along with other like-minded suspects
20 in the academic realm across the country, and community
21 groups as well, to look at this.
22 12353 Research agendas need to look at how
23 people, how communities, how citizen groups are using
24 information and Internet services, what sorts of
25 resources they need access to, what source of content
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1 they need access to, what source of content they need
2 to develop, how sustainable it is for them in terms of
3 economics.
4 12354 We are there accessing this content
5 whether it be domestically at community access points
6 such as public libraries or community centres or other
7 sorts of institutions and how they can contribute to
8 this content.
9 12355 In terms of use and participation, as
10 well I'm interested in how sustainable is it. When I
11 did research into looking into how woman's groups were
12 using the Internet, one of the big issues was why
13 should we go on the Internet? What is in it for us?
14 12356 What sort of content do community
15 groups need and want? That's one of the questions.
16 One of my concerns is that the information
17 infrastructure is becoming increasingly commodified and
18 there's a lot of corporate information and community
19 based information isn't getting out that needs to be
20 put out there.
21 12357 Does that sort of answer your
22 question?
23 12358 COMMISSIONER McKENDRY: That's very
24 helpful. Just following on that, what are some of the
25 elements that we should consider in evaluating whether
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1 or not we have achieved a successful access strategy.
2 How would we know when we are there?
3 12359 MS SHADE: It's going to take time.
4 I think it's a long research strategy. It's going to
5 take a long time. As I was waiting to give my talk, I
6 was sketching the outline for a research proposal I
7 need to submit to the university next week.
8 12360 I want to look at how the public
9 library is being used as a public access site for the
10 Internet. What sorts of information or resources are
11 citizens using at the public libraries.
12 12361 Who is not using these resources?
13 What sorts of resources do they need, and why? It is
14 an ongoing process in that sense.
15 12362 It is not a matter just of serving
16 the participants but of asking them questions about how
17 they might design systems that might better accommodate
18 their needs and usages; and considering it as well, and
19 not just information that is digital, but how it fits
20 into other information in their everyday lives.
21 12363 So digital information is a component
22 of information and needs that we have in our everyday
23 lives. There is a balance between that sort of
24 information and other information we use on a
25 day-to-day basis.
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1 12364 COMMISSIONER McKENDRY: Thinking of
2 the CRTC, what role do you see for us in encouraging
3 communities to use and participate in new media and
4 ICTs?
5 12365 MS SHADE: Reinforcing the need for
6 communities to participate. Reinforcing the need for
7 citizen participation. Reinforcing the need for
8 citizens to participate as Canadian citizens and to
9 reinforce and promote their own content that can be
10 Canadian content, whether it be Canadian cultural
11 content or just content produced by Canadians
12 themselves I think is very, very important.
13 12366 COMMISSIONER McKENDRY: Let me take
14 you back to paragraph 3 in your written submission.
15 You have a quote there from a communications theorist
16 Denis McQuale, and I am going to read one sentence in
17 that quote, and the sentence is quote:
18 "The new communication networks
19 which are developing often
20 cross-cut the older boundaries
21 of place, culture, class and
22 political organization and tend
23 to undermine rather than sustain
24 traditional political ties."
25 12367 I take it you -- correct me if I am
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1 wrong -- but I take it either he or you or both of you
2 look at that as a negative development.
3 12368 MS SHADE: Yes, I would say it is a
4 negative. I guess I can speak for him because that is
5 the interpretation of what I got from Denis McQuale and
6 why I quoted him.
7 12369 Political ties, I think this whole
8 notion of communication amongst and between government
9 entities should be sustained and encouraged rather than
10 curtailed using electronic media; likewise its
11 communication between citizens, whether or not they
12 live across the country or down the street.
13 12370 So, yes, there should be some
14 enhancement of democratic possibilities, this sort of
15 whole notion of electronic democracy that has been
16 globally referred to in many senses.
17 12371 COMMISSIONER McKENDRY: For the sake
18 of discussion, I would have thought that the ability of
19 new communication networks to cross-cut the older
20 boundaries of place, culture, class, in particular,
21 would be a positive attribute of the new networks.
22 12372 MS SHADE: Yes, it is positive, but
23 my sense as well is that it has to include everybody,
24 okay? It is not just an elite at this point of which
25 mostly who has access to it.
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1 12373 COMMISSIONER McKENDRY: Just keeping
2 in mind the quote we talked about, I want to just move
3 ahead to a comment you made in your oral comments, and
4 it is made in paragraph 13 of your written comments,
5 the statement that culture can colonize minds.
6 12374 Wouldn't the fact that the new
7 communication networks cross-cut the things that we
8 have talked about work against the colonization of
9 minds that you are concerned about in paragraph 13?
10 12375 MS SHADE: Perhaps. Part of where I
11 am coming from is as an American.
12 12376 COMMISSIONER McKENDRY: I didn't hear
13 you.
14 12377 MS SHADE: Coming as an American. I
15 have lived here for 12 years, and I am absolutely
16 fascinated by this notion of cultural sovereignty,
17 particularly in the Canadian sense. I am constantly
18 asking my students what they think -- name Canadian
19 musical products, name Canadian films, and I am always
20 discouraged because very often they don't pick up on
21 it. They say, "Well, what is it? What is so special
22 about being Canadian? I don't get it. It is all the
23 same. We are all one culture," but we are not. There
24 is uniquenesses, definite uniquenesses.
25 12378 I think it is very important that
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1 those in the race to implement new media technology
2 that a lot of Canadian content get reinforced and
3 sustained very much so.
4 12379 COMMISSIONER McKENDRY: Let me ask
5 you a question about paragraph 16 in your written
6 submission. In there you warn that, and I will quote
7 again:
8 "Given that national and global
9 information infrastructures are
10 now being promoted and
11 legislated in a deregulated
12 competitive and self-regulated
13 environment where private
14 industry can have unbridled
15 power, community networks which
16 are indeed a social utility
17 could find themselves in a
18 vexatious position."
19 12380 Many parties in the proceeding that
20 we are currently conducting have emphasized the
21 positive impact that ICTs could have upon individuals
22 and communities giving them powers and opportunities
23 that they lacked under traditional communication
24 models, such as broadcasting.
25 12381 Some of them have even gone further
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1 to argue that such power has to some extent created a
2 levelling effect between corporate interests and
3 individual or community interests.
4 12382 Can you comment on that observation
5 by those parties?
6 12383 MS SHADE: The vexatious position
7 that community networks and electronic public space
8 could find themselves in deals more in issues of
9 sustainability, peer economics, non-profit. How can --
10 given the sort of climate right now of electronic
11 commerce, and commercialization of the Internet in
12 great big media giants and, you know, AOL and Sun
13 Microsystems and so on, merging and what not, the fear
14 is that a lot of the community groups and community
15 networks in particular and non-profit spaces and
16 educational resources and spaces that can be there for
17 a variety of different citizens in Canada will be
18 side-swiped. They won't be able to afford entry. That
19 is what I mean there in that sense.
20 12384 Indeed, can electronic networks be a
21 great leveller? To a certain extent, but let's look at
22 who has access, and that is my concern. It is -- there
23 are more people that are not -- that don't have access.
24 12385 It is my concern that if this is of
25 paramount importance in terms of lifelong learning, and
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1 in terms of electronic commerce, and in terms of
2 education and so on, that there be some sort of
3 provisions to make sure that all citizens can have
4 access in some way.
5 12386 COMMISSIONER McKENDRY: Do you have
6 any specific recommendations for us, thinking of the
7 CRTC and its mandate, that we could put in place to
8 develop or sustain community networks?
9 12387 MS SHADE: I think one is the
10 recognition, as you did in 1994 in the hearings here,
11 of the recognition of the viability and the
12 vitalness -- the vital sense that community networks
13 have achieved, and networks -- new media is also not
14 just being delivery of content but as being interactive
15 and a communication mechanism. Public social utility,
16 I think is very important.
17 12388 So I think there is that recognition
18 from the Commission that you could make.
19 12389 In terms of regulating access, I mean
20 this is a huge hornet's nest. How do you do this? How
21 do you set up universal access funds? Do you set up
22 little taxation methods and take away some of those
23 taxes and put it in a universal access fund?
24 12390 Those are issues I think that need to
25 be discussed in wide spread consultations involving,
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1 industry, public interest groups, citizens, unions,
2 educators, various federal entities, and so on and so
3 forth.
4 12391 COMMISSIONER McKENDRY: Thank you
5 very much for answering my questions. I appreciated
6 reading your very interesting comments.
7 12392 Those are my questions, Mr. Chairman.
8 12393 THE CHAIRPERSON: Thank you,
9 Commissioner McKendry.
10 12394 Thank you, Ms Shade. We appreciate
11 your presentation here today. It looks like there is a
12 lot of potential for research with all this new media,
13 and I wish you well in terms of your application.
14 12395 MS SHADE: As people were saying, it
15 is -- we are in an infancy. In a sense, we are in an
16 infancy; and, in a sense, not. I can remember being on
17 line in 1990, and things have changed dramatically.
18 But, at the same time, things haven't changed that
19 much.
20 12396 But I think in terms of -- I would
21 say probably in the next five years we will know more
22 and we can answer some more questions and you might
23 have to do this all over again, who knows?
24 12397 THE CHAIRPERSON: What we have
25 learned this week represents 35 years in real time, I
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1 guess, in terms of development of the Internet. Thanks
2 again.
3 12398 MS SHADE: Thank you.
4 12399 THE CHAIRPERSON: That concludes our
5 work for today and for the week. We will reconvene
6 here on Monday morning at 9:00 o'clock.
7 --- Whereupon the hearing adjourned at 1715, to resume
8 on Monday, December 7, 1998, at 0900 / L'audience
9 est ajournée à 1715, pour reprendre le mardi
10 7 décembre 1998 à 0900
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