ARCHIVED -  Transcript - Hull, QC - 2001/06/22

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Conference Centre Centre des conférences

Outaouais Room Salle Outaouais

Portage IV Portage IV

140 Promenade du Portage 140, Promenade du


Hull, Quebec Hull (Québec)

June 22, 2001 Le 22 juin 2001


Volume 4








In order to meet the requirements of the Official Languages Act, transcripts of proceedings before the Commission will be bilingual as to their covers, the listing of the CRTC members and staff attending the public hearings, and the Table of Contents.

However, the aforementioned publication is the recorded verbatim transcript and, as such, is taped and transcribed in either of the official languages, depending on the language spoken by the participant at the public hearing.





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 sousmentionnée 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.


Canadian Radio-television and

Telecommunications Commission


Conseil de la radiodiffusion et

des télécommunications canadiennes


Transcript / Transcription


Multiple broadcasting and ownership applications /

Demandes de radiodiffusion et de propriétés multiples




Martha Wilson Chairperson / Présidente

Andrée Wylie Commissioner / Conseillère

Andrew Cardozo Commissioner / Conseiller

Barbara Cram Commissioner / Conseillère

Ron Williams Commissioner / Conseiller


Peter McCallum Legal Counsels /

Leanne Bennett Conseillers juridiques

Michael Burnside Hearing Manager and Secretary

/Gérant de l'audience et


Lynne Poirier Hearing Secretary /

Secrétaire de l'audience



Conference Centre Centre des conférences

Outaouais Room Salle Outaouais

Portage IV Portage IV

140 Promenade du Portage 140, Promenade du Portage

Hull, Quebec Hull (Québec)

June 22, 2001 Le 22 juin 2001

Volume 4











APPLICATION BY (Continued) / DEMANDE PAR (suite)

World Television Network (WTM) /

Le Réseau Télémonde Inc. 1 / 1




Canadian Cable Television Association / 136 / 660

Association canadienne de télévision par

Câble (CCTA)

Canadian Ethnocultural Council / 166 / 784

Conseil Ethnoculturel du Canada

Credit River Institute 181 / 850

General Assembly Production Centre (GAPC) 190 / 905

Ms Colleen Beaumier, M.P. 198 / 943

(Video presentation / présentation vidéo)



REPLY / RÉPLIQUE 207 / 981

--- Upon commencing at 9:05 a.m. /L'audience débute à 9h05

  1. THE CHAIRPERSON: Good morning, Ladies and Gentlemen. Welcome back to the hearing. I hope you had a good evening.
  2. MR. D. IANNUZZI: Good morning. Thank you.
  3. THE CHAIRPERSON: Well, I did say "Ladies and Gentlemen" even though there is one lady on your panel.
  4. We are going to start this morning with Commissioner Cardozo on the questions regarding distribution and carriage, and from there we will move to the marketing and finance areas, and then we will move into intervenors, and then into reply.
  5. MR. D. IANNUZZI: Madame Chair, before we start with Commissioner Cardozo, I would like you to believe that we did spend the entire evening and the night going over a few things that are requirements. One was the condition of licence, which we will bring up later for counsel, on Commissioner Cardozo's writing of the nature of service. We accept it wholeheartedly, and it meets all of our requirements.
  6. But also, in working with the Act, and I would like to submit this, since he talked about the valued added to the service ---
  7. So Commissioner Cardozo, as I tried to mention yesterday, it's not so much as 3(2) as 3(1) that speaks to the real value added, and because meeting the objectives of the Broadcasting Act or, in essence, the underpinning of our application as it comes to the question of carriage, then I think it's very important that we see how our particular services, in the plural here, actually meet these particular sections of the Broadcasting Act, especially in 3(b) and also in 3(b)(ii). I don't know if you want me to go through it and read it through, but no one is more familiar with the Act than yourself, but we highlighted those things that I was mentioning yesterday that are key to the whole question of meeting the objectives of the Act. There is no doubt that we meet 3(2) dealing with multiculturalism and all of that, but the point is here, as a Canadian service, what our specialty is and what the requirements are, and how we earn the right to the service we have asked for, as far as carriage is concerned. And when that comes up later, I would appreciate it if we can go back to this. Thank you.
  8. THE CHAIRPERSON: Thank you, Mr. Iannuzzi.
  9. Commissioner Cardozo.
  10. COMMISSIONER CARDOZO: Thank you, Madame Chair, and good morning everyone.
  11. I won't refer to this right now because I haven't had a chance to look through it in detail, though I get a sense of what you're doing.
  12. The point we talked about yesterday, and which I would like you to keep in mind for today in terms of the distribution and carriage issue is there is no question of what you are outlining here meets the objectives of the Act. And I gave you my thought of it, that there's at least two services you are trying to do here. One is a very good news service, internationally based, with news coming from other countries, and the other is cultural diversity within Canada. And you have talked about how the two are inextricably linked, and I accept that.
  13. But for the purposes of looking at distribution, I think a major part of your case in your application was relating to the second part, the multicultural part, which is in Section 3(1)(d)(iii) on the second page of what you have handed us. And in terms of the kind of distribution that you're looking at, what I want to explore with you -- or what I want you to keep in mind in our discussion this morning is how does this add value to what is there, and why does what you are presenting warrant the kind of distribution you're asking, which is quit extensive and quite special? And everybody's got -- and I'm not saying you shouldn't ask for it, but I want to understand, and we need to understand quite clearly how your application deals with taking us one step further, giving the viewers something more that isn't there in the Canadian multicultural context. Because the other parts, the world news is undoubtedly a good idea, undoubtedly as to what is there, but I would suggest a lot of that is already covered and is being done, unless that's part of your case. It seems to me the case that you have made centres on 3(1)(d)(iii) and, therefore, the distribution and carriage arrangements. Or are you saying that the world news part is also what warrants the kind of distribution that you're looking for?
  14. MR. D. IANNUZZI: There's no doubt, because we're not talking about -- and I hate using the word -- "ghetto Canada", and that is that it is the downtown cores of 14 or 15 cities in Canada and, therefore, one could reach those off-air, I suppose.
  15. The point is that we are talking here about bringing to Canadians, as a whole, from Victoria to -- well, how far can we go? Maybe St-Michalov, if we can get that far. The whole point being that there are Canadians everywhere that have a need for and a demand for -- because our demand comes from across Canada. It doesn't come from downtown Toronto, the west end of Montreal, downtown Vancouver. These are Canadians who have responded and, I suppose, the same Canadians who have responded in other surveys that they wanted more sports or more cooking shows, and so on. Those were Canadians. We didn't distinguish those from other people and decided to break out those people who love cooking and the ones that don't. This is made for Canadians because it isn't in the broadcasting system today.
  16. COMMISSIONER CARDOZO: Yes. Well, I have never been ---
  17. MR. D. IANNUZZI: It may be there tomorrow. I hope we are the ones that are going to bring it.
  18. COMMISSIONER CARDOZO: I have never been of the view that Section 3(1)(d)(iii), which talks about multiculturalism, I have never thought of that as a ghetto section at all.
  19. MR. D. IANNUZZI: No.
  20. COMMISSIONER CARDOZO: I have always thought of that as being everybody and that everybody should be part of the system and all of that.
  21. MR. D. IANNUZZI: No, but I am saying -- I used the term to narrow it down, because thank God Canada doesn't have ghettos. It's only those who have ghetto mentalities that we have to worry about.
  22. COMMISSIONER CARDOZO: So then are you telling me that Section 3(1)(d)(iii) isn't really the -- the multiculturalism aspect is not really the main part of your application, that the main part is the world news?
  23. MR. D. IANNUZZI: No, I'm saying they are all integral part. I am saying to reflect only on the second part would make the service incomplete. We try to describe the thing not as two services in one, but really two services dealing with both English and French under one licence, but within each of these services, the whole question of world and call it the multicultural or the Canadian side of this equation do actually go together. There is a link in these, that when we go into and deal with our news programming -- and Howard can speak to that in a moment -- but when we deal with that, this is not another newscast. This is dealing with news and information and analysis that brings it into the Canadian context. That's our bridge. That's how we get in from -- where is it -- 3(1)(d) and 3(1)(a) and (b). So that's the link. The link is already written into the Act.
  24. It's hard to believe that when this was written, that they were talking about the future of Canada, not the Canada of the day, but the day that Canada will become, and we are on the verge. As we turn to the 21st Century, we came into what Canada is going to be and a lot of people dreamed about over the past 100 years.
  26. MR. D. IANNUZZI: So we are on the forefront, and it has taken a while to get here and to get to this point where we are discussing "Where are the links? How does this fit with the Act? Give me a picture of what I would be seeing and what would I feel, and so on." But it's already written, and that's why, when you were mentioning the whole question of value added, which is a good term when we say, how does our service differ from others and how does it fit in, and what are the benefits. And it is always difficult with a pro-social type of service, and this has a pro-social benefit built into it when we come and we read into 3(1)(a) and (b) as well as the other. That's the value added in the whole pictures.
  27. So our Canadian programming fits like a glove, and that's where we will excel. That's where we will differ, and that's why it should be as broad a distribution as possible, because all Canadians have the right.
  28. It's like long distance. I mean, everybody gets long distance no matter where they are in Canada. Maybe they don't use the phone. Maybe they have no one to talk to overseas, but the fact is that they have the right to have long distance in the event they need.
  29. This is the same thing. Canadians have the right to have this kind of service available to them in their home.
  31. MR. M. McHALE: Commissioner, if I could just draw your attention to 3(1)(b), because we seem to keep referring down to (d). The only way to maintain cultural sovereignty or sovereignty of any kind is that you have to exercise cultural sovereignty. It's a passive -- or sorry, an active choice rather than a passive choice. That's the only way to exercise sovereignty.
  32. And enhancement of national identity is how we exercise cultural sovereignty, and that area is understanding ourselves. We believe we are providing a new way to understand ourselves as Canadians.
  33. COMMISSIONER CARDOZO: I would say that a lot of that is happening now with the CBC, with the kind of Canadian content requirements we have of other broadcasters, that the issues of Canadian sovereignty are dealt with there. And you are saying what you are doing is you are adding a different way of looking at it, bringing in the cultural diversity issue, and to the mainstream of our thinking. Is that ---
  34. MR. M. McHALE: Correct.
  35. COMMISSIONER CARDOZO: Okay. Let me ask you a few questions about distribution.
  36. MR. K. JOHNSON: Excuse me, Commissioner, could I just add, because you made mention of world news and then the multicultural. I think that when we talk about the world programming concept, I would hate to think that we are just limiting ourselves to the concept of world news. We are talking about a world programming component of World Télémonde that is cultural. News analysis is merely a part of that total package. It's a cultural package that represents the multiculturalism, if you were to have it, of the world, the cultural diversity of the globe.
  37. COMMISSIONER CARDOZO: And the other part is the entertainment?
  38. MR. K. JOHNSON: Yes. Well, it's the cultural component.
  39. COMMISSIONER CARDOZO: The films and ---
  40. MR. K. JOHNSON: The films, the comedies, the parts of programming that gives expression to people's cultures around the world.
  41. COMMISSIONER CARDOZO: Distribution. We have talked about carriage on analogue, high- penetration tier, and as you will know from one of our -- a 1997 policy, Public Notice 97-33, that the test for high penetration tier goes as follows: either you demonstrate that you have agreements with the distributors, or you demonstrate the "exceptional importance of the proposed service to the achievement of the objectives of the Act.
  42. Which of the two is it? Have you got agreements with distributors at this point, or are you focusing your argument to us on the basis of the exceptional importance of the service?
  43. MR. D. IANNUZZI: Well, we have to eliminate the first one, because historically, cable companies, at least in my experience -- I have travelled the country three times to cable operators -- we have written them prior to each application. I have asked to meet with News Services Committee last year, and because we were the only applicant, there was no News Services Committee available, even though we attended as members of the CCTA Annual Meeting and Convention. We didn't attend this year, nor renew our subscription, simply because we wrote each and every cable operator in the system, and not the usual "Big Seven", as most people would advise you to do. And I think we got one letter back. So that's 370 odd letters going out. One would even answer. And our question was fairly general. It wasn't only a question to say, "If this were licensed, would you carry it?" That was part of it. The whole thing was, "At least give us some comments as to the feel that you might have for this service, as far as your subscribers, since you know your subscribers better than anyone else, as the theme goes. And we go no answers.
  44. So it either means they really don't know how this service would fit within their whole men, or didn't bother to look into this.
  45. Now, whether the CCTA does everything for them, I don't know. But the point is, as far as the first one, that's practically impossible. I don't know how other colleagues and applicants have done in the past and how they make out, but certainly, that was out of the question.
  46. So therefore, we can only fall back on two -- on the two questions which are at hand: the exceptional importance -- and we tried. The last time, we did that, and I thought we had accomplished that, to show the exceptional importance, and we are trying to do that again this time, and certainly, meeting the objectives of the Act. And if you look at most broadcasters, they will tell you, as they come up, that they meet all of the basic ones and so on because they interpret some of these things to fit the model that they are entering the broadcasting system.
  47. But we are laying it out as best as we know how, because we have interpreted -- we believe that in order to make this service possible, in order to give it all of the attributes that are necessary for it to succeed -- so we've got all the requirements, but then again, it comes down to the whole question of the funnel. Here we are discussing this particular service, and it's about this wide. And then as soon as we are going to come to the carriage question, the question starts off from, "If the hole were only this big, how much of that could you stuff down on that, and it is important for you to be in Victoria?" or "Is it important to be in Newfoundland?"
  48. So my question comes back, we believe that we are an exceptional service as compared to a lot of others. And if it weren't true, then the question of the government policy of going into more cultural diversity in the broadcasting system, it's because, in great part, the broadcasting system has failed, in my estimation -- otherwise, we wouldn't be here -- has failed to meet some of the finer parts of the objectives of the act. I mean, it's always that 10 per cent that's missing, and usually there is, on their part, good reason for them to be specialized in another area.
  49. So we have taken -- call it a niche, call it what you wish, but we looked at what was missing in the broadcasting system. What is it that doesn't reflect all of those things that we are saying here today, and where would it fit?
  50. Well, when it comes to that, this is private enterprise. Trying to meet a pro-social objective within the Act, and then when we look at the Act, and we look to the broadcasting system and we've got this one little wedge when we lay everything else out, and there's a wedge missing. This is the missing wedge. Some people call it the last spike in the broadcasting system that would balance it before it enters that new universe, yet unknown. Even the cable industry recently is not too sure that we are breaking doors that are already open, but we don't know what's on the other side before we did that.
  51. So if we are to fulfil this particular mandate as it's called for, and it fits within the broadcasting system, and it's that wedge, and it's obvious that it's missing, and it's obvious that there's balance missing here, as we look at the whole question of unity in Canada, there is a voice missing that gives expression to a great number of people in Canada who firmly believe that there is a lot more to unity than we've had up until now. There's an expression missing. There's an element that is missing within the broadcasting system that lays this whole thing up. There's more to be said that has been unsaid.
  52. So therefore, we are saying that we are an exceptional service for bringing that, for this kind of mandate. We are meeting the objectives of the Act. It's spelled out there as the value added and the benefits of this pro-social service. And therefore, we cannot see how this service cannot be deemed in the national public interest and, therefore, have as wide a carriage as Canadians deserve. This is their system, and they have a right to this particular kind of programming that is missing within the broadcasting system today. Thank you.
  53. COMMISSIONER CARDOZO: I notice from the record you mentioned 300 and some letters, but I noticed 11 letters dated November the 3rd to various cable carriers like Rogers, Shaw and CCTA, CCSA, Bell ExpressVu and others.
  54. Are you telling me you have had no response to that letter, not at all, not even from the CCTA?
  55. MR. M. McHALE: We even provided an e-mail address to save the cost of the postage stamp.
  56. COMMISSIONER CARDOZO: So you have had no responses, for the record?
  57. MR. M. McHALE: Yes.
  58. COMMISSIONER CARDOZO: And the CCTA hasn't responded either?
  59. MR. M. McHALE: No response.
  60. MR. D. IANNUZZI: Other than the interventions.
  61. COMMISSIONER CARDOZO: Yes. But there wasn't a response to your November 3rd letter?
  62. MR. D. IANNUZZI: I even met with the President of the CCTA, Janet Yale, whom I have known over the last 10 years, in dealing with this particular application, and she has personal knowledge, when she was with the Commission, in dealing with this whole question of this application. And she has come full circle, that today she is objecting to the same objections that she did when she was with the Commission. I met with her and tried to fill her in on it, and certainly didn't negotiate anything because she is not in a negotiation position. But I was hoping that she would -- and I gave her all of the information that we were able to compile for our own interests, and I thought, "Well, I'm going to try this.", contrary to what my people had advised me on, that you just can't do those kinds of things. You can't believe that you are going to change someone's mind where it is practically etched in stone that this particular service shall not happen for the simple reason that there are a number of areas where cable believes that on their community channel 10 is where anything that's multicultural, ethnic belongs. It's down in the pipe. Not even a pipe, it's a straw on which we should be pushing this programming through.
  63. And a lot of them have dropped. All of their ethnic programming. Videotron in Montreal, because there was a licence granted there with a lot of problems. Second, in Toronto. Rogers is carrying very little programming on its community channel that is of multicultural, or ethnic, for that matter, and it has all been moved over to, in part, responding through Channel 47.
  64. So in discussing this with Janet Yale, I thought that by giving all of the information we had, our latest surveys and where we were going, and why this was a, call it, new mainstream kind of service that would really probably help increase penetration, but the whole answer was, "Well, why don't you come over to digital and help us with the roll-out?" Well, I mean, when everyone else will want to go and roll out. When Moses Zneimer wants to go out and help with the roll-out, then I will be right behind him, as I was in 1972.
  65. But today, the fact is that we have been asking for this kind of coverage, and it's one of the things that has been holding us back, which means that it's our fault. We were never able to convince you that this was an exceptional service because there was a whole question of ethnicity versus multiculturalism. It has taken a while for this country. We buried multiculturalism for a while. And of course, that went there, and that suffered. We suffered from that because while everyone else was still on an ethnic kick, we were trying to sell multicultural broadcasting.
  66. I remember a month of July once going through our whole application, "Oh Geez, my God, multiculturalism is a bad word. Let's take it out and put ethnic back in." And then I stopped myself, and I said, "What are we doing? What are we doing?" The country hasn't changed. The people are evolving. Multiculturalism in on the growth in Canada, because those people who live it understand it. Those that don't are just passers by.
  67. So in this thing here, we have gone from trying to illustrate this service, but in each case it was the carriage, and in each case they brought the cable industry, supported by the CAB, who will go against any news service because it detracts from radio, which is suffering, and so on and so forth. I don't know where radio is suffering. With all the radio stations now practically in the hands of six or seven groups in Canada, it must be doing well, because generally they would shed these. No, they're buying them up. So it must be a good thing. We cannot harm radio.
  69. MR. D. IANNUZZI: So cable has never responded, is what I am saying.
  71. MR. D. IANNUZZI: We never got a reaction. It's not -- you cannot reason with them when you're talking of the kind of service that their subscribers -- their subscribers are our viewers, and it's hard to get onto the other side of the conversation. And I would have to have to go and negotiate with every cable operator in the country when the first obstacles on the first two major ones, who are now in the ethnic broadcasting services, namely, Rogers and Shaw, both owned and controlled, ethnic-specific broadcasting undertakings, on the way to looking at a few other of the specialties that were licensed a couple of years ago. I know they are making overtures to some of these independents. I know because these are all people who were with me in the early days of ethnic broadcasting, and today are in the field. And they have had overtures, which means there's an area there where there is another rationalisation about to take place.
  72. And how do we fit into all this if we're on this one side of the fence, then we're treated as if we were ethnic -- not that there's anything wrong with that, but an ethnic undertaking. On the other hand, we are saying that you have come over too far to this particular side.
  73. It's the service. It's not a question of who owns it. It's a question of the service itself that warrants the kind of distribution on analogue -- even if we're the last of the Mohecans under that -- but while we have been filing from last year to this year, there has been migration the other way around. People, who you have licensed for digital and should be helping with the roll-out, are helping themselves, as between themselves, coming over into analogue. All the while, the Cable Association will tell you today, as it has said for the past decade, that there is no capacity available yet, just like how much capacity you have been able to license. That's my argument.
  74. COMMISSIONER CARDOZO: Okay. I have got a few specific questions here that I just want to rhyme off and get your response to.
  75. You have asked for modified dual status, which I might call modified dual status with a twist, in that, as you are aware, our current policy of modified dual status says the policy is distributed on a -- the service is distributed on a discretionary basis, unless both the service and the BDU agree to basic carriage. Now, you have added that this carriage, on a discretionary basis, should be on the highest penetration tier.
  76. Can you tell me what your rationale is for that, as opposed to our current modified dual status ---
  77. MR. D. IANNUZZI: Well, I will give you my thought, and then I would certainly like to turn it over to some people on our group that are more familiar with the actual regulation and the spelling out of that.
  78. But the fact is that it's hard for me to get over the fact that this is not a basic service. There is a compromise here. We are here today under a compromise of some sort of understanding how we can satisfy the system. How can we look at the system today? And it says, "Well, if you've got to be over here." Where can we be over here? I can't talk out of both sides of my mouth when I say that all Canadians -- and I underline all Canadians -- deserve the service. And when we put this service together, we are designing it, not for urban Canada, but we are producing this for Canada, coast to coast, from sea to sea to sea and, therefore, we say to ourselves, even when we come with a compromise and we understand that is still in the negotiations. We still have an ace in our hand that says, "It's either that way, or we're going to basic." But if it is, when we are starting off with the cable operator, we are starting by saying it's going to be in the highest tier, as it was the case, I think, with Télé-Art when it was spelled out that it was to be carried, and that even in English-speaking Canada, it would be on at least the highest possible, within reason.
  79. And that's why we're saying modified dual status, and when it comes to that, on the highest tier available within that. If you are going to package this, you are going to package this where there will be traffic. It's not basic.
  80. COMMISSIONER CARDOZO: Just so I understand clearly, you are asking this for the English service in English markets and the French service in French markets?
  81. MR. D. IANNUZZI: That's correct.
  82. COMMISSIONER CARDOZO: How do you define English and French markets? And if I could just ask you to define Moncton, Montreal, Ottawa and Winnipeg? What carriage would you want in cities where you have got a substantial number of people from both language groups?
  83. MR. D. IANNUZZI: Well, we broke it down, that we decided it was Quebec -- outside of Quebec for the terms of dealing with that, where there was ample analogue in the Province of Quebec and, therefore, our French service should be carried and given to reach the maximum number of people, French-speaking people and English-speaking people on our English service, in the Province of Quebec. We are not discounting Quebec. Quebec, to us, is not a token service.
  84. I believe Canadians -- and I can't divide that in my mind, even though I'm fourth generation Italian, born and raised in this country, born in Quebec, I can't take that away from my heritage when I say "Canadians". I can't think of another word.
  85. COMMISSIONER CARDOZO: No, no, I am just asking you to tell me, in terms of the carriage, where you have said a certain carriage in English markets ---
  86. MR. D. IANNUZZI: Right.
  87. COMMISSIONER CARDOZO: --- and a certain French market ---
  88. MR. D. IANNUZZI: We consider the others outside of Quebec -- we deal with them in a different way.
  89. COMMISSIONER CARDOZO: Are Moncton, Montreal, Ottawa and Winnipeg, in your view, under the carriage you would like, are they considered English markets or French markets?
  90. MR. D. IANNUZZI: They are English markets with a minority French.
  91. COMMISSIONER CARDOZO: Montreal would be ---
  92. MR. D. IANNUZZI: Well, no, Montreal is French.
  93. COMMISSIONER CARDOZO: Montreal is the other way around.
  94. MR. D. IANNUZZI: I said outside of Quebec.
  95. COMMISSIONER CARDOZO: Okay. Let me ask you about Class 2. I take it that for Class 2 systems with the -- what I called modified dual status with a twist -- this would apply -- our policy of modified dual status applies to Class 1 systems, the largest systems. The Class 2 systems, the way it works is if you carry it, then you carry it on this basis. But I just want to make sure you understand that that's what the modified means. We are not forcing Class 2's to carry it. We are just saying, "If you decide to carry it, then you have to carry it on this basis."
  96. MR. D. IANNUZZI: That's correct. We understand that.
  97. COMMISSIONER CARDOZO: Okay. Now, you have outlined very passionately your view, and very clearly your view about why you want this particular status, which is the modified dual status. I hope you don't mind, I keep calling it "with a twist".
  98. But if the Commission couldn't see its way to granting that, would you be prepared to accept modified dual status as it currently stands? And I understand fully what your Plan A is.
  99. MR. D. IANNUZZI: Yes. The answer is yes, because then we're into negotiations, heavy negotiations cable operators, and I think the question there is being carried, is the first objective to be met. Therefore, that -- the modified dual status gives us that status on all systems.
  100. COMMISSIONER CARDOZO: I have a couple questions about -- well, first class is the reason I questioned about Class 2 and 3. I just wanted to clarify a point here.
  101. On the chart which you had filed, with regard to Class 3, on the first part, Class 3 - Cable distribution undertaking, you say discretionary basis. I just want to understand what that means, the words discretionary basis. Does it mean discretionary on whether or not they carry the service, or does it mean mandatory carriage that must carry, but discretionary as to which tier the service would be on?
  102. MR. D. IANNUZZI: With your indulgence, I would like to ask Pip Bola, our Cable Relations person, to spell that one out for you.
  103. MR. P. BOLA: Thank you, Dan.
  104. It's discretionary carriage. So basically what we are looking for is being able to negotiate carriage on Class 3 systems for both services.
  105. COMMISSIONER CARDOZO: So it would be discretionary, up to them, which is currently the case for modified dual, as to whether or not they carry ---
  106. MR. P. BOLA: That is correct.
  107. COMMISSIONER CARDOZO: --- and then you would ---
  108. MR. P. BOLA: Basically, there is no change in that model.
  109. MR. D. IANNUZZI: In fact, you will notice that it is our hope. And in dealing with people who are the managers and owners of Class 3 cable undertakings are generally people that you can discuss with because they are dealing on local situations, smaller cables, who really understand their subscribers, and I have been able to practically convince some of them that their subscribers are our kind of viewers and are demanding on this product. So much so that we want to entice them to do that, that you will notice that the rate is only $0.05 per subscriber. I mean, it's practically a give-away. The $0.05 just keeps the accounting department on its toes so that we can really know how many systems of the smaller ones are on board.
  110. So we're trying to make it easy in our compromise.
  111. COMMISSIONER CARDOZO: I have another question, but I think I have the answer to it. I'm going to ask you because, as I say, what we are doing here is just to make sure the record is clear.
  112. We currently have no way to make carriage of a service mandatory on Class 2 or Class 3 systems, and I understand now that you are not proposing that it would be mandatory for Class 2 and Class 3 systems. What you want with the modified dual status on Class 2 is if they carry it, they carry it on that basis and the Class 3 discretionary, and you want to be able to negotiate with them.
  113. MR. D. IANNUZZI: Yes.
  115. You have talked about, in your application and I guess some of the responses to discrepancy questions, the issue of minority language policy where you talked about in minority markets you would want it on a discretionary tier -- the highest penetration discretionary tier.
  116. Our policy, which is fairly new policy, Public Notice 2001-25, doesn't lay that out, where services of minority language would get covered or any particular services would get carried on any particular tier. We haven't gone into defining that. You are asking for that here. I just want to get a sense of why you're asking that here and whether that is crucial for you?
  117. MR. D. IANNUZZI: Well, first of all, as I said earlier, we are trying to get as many Canadians to be in a position to have access to this new service.
  118. Therefore, when we get into compromising on the one part, we went one step further and said that if we are in the minority markets, how are we going to deal with English in, say, Quebec and French outside of Quebec. And our hope was that we would get as many people access possible.
  119. At the same time, we wanted to be accommodating to the whole new question of technological diversity and try to meet the cable operator halfway by saying, "We're also coming there with you and we're starting off.", and penalising ourselves, and putting Canadians who, unfortunately -- or fortunately are in the opposite ends of Canada when it comes to the broadcasting system, that we, in accommodating them, have, in essence deprived some Canadians of getting this on basic service, not having to "switch to digital" if they didn't have that in mind.
  120. So when we say that we are going to move that then and compromise what we believe should be on all available analogue for these services in minority markets, that if we're going to have to go to digital, then it would be on the highest tier again in the digital package by the cable operations or DTH in the minority markets.
  122. With regards to DTH then, you have asked for the same thing. And I would take it that your answer is the same as what you have articulated just now?
  123. MR. D. IANNUZZI: Yes. I mean, the logic applies in both. It's not the method of distribution; it's the question of distribution.
  124. COMMISSIONER CARDOZO: I want to ask you about the -- again, we are sort of back to the larger question. I have just a couple more questions on distribution. I want to close it off here. But let me just move it up a little bit. I don't want to have the whole discussion again in terms of the purpose of this service, because I think you have articulated that well.
  125. You have made a certain amount of comparison to APTN and TVA in the course of the application, and I just want you to briefly tell me again, when we do have a certain number of multicultural, multilingual, multi-faith services, news services that deal with the world, and then we have our efforts to get the English and French mainstream services to reflect cultural diversity, why would this service require the distribution? I guess we have to cover this again, but I just wonder if you can just tell me again, focusing just on the distribution issue?
  126. MR. D. IANNUZZI: All right. When you list the "ethnic multicultural", as you would want to label them, all the services that you have licensed there now are predominantly ethnic-specific services, i.e. exclusive to those particular communities -- example, Tele-Latino. Tele-Latino, which started out being a pay service for Mediterranean languages -- I know I was at the hearing -- or romance languages, the programming was put together, and those services started off as pay, and slowly it migrated into extended basic into basic, and is available in most parts of the country today as an ethnic-specific in Spanish and Italian with very little English or French, and they are on basic service and available to most Canadians, most because there a few cable operations that are still not carrying it out west.
  127. When we go into the conventional broadcasting system, including the specialties, the majority of them are on basic, and you are looking forward to, and so is government policy, looking forward to the inclusion of cultural diversity. One would have thought that this was starting to happen maybe 10-15 years ago. When I remember that the Commission, in its applications and applications for renewal, there used to be and was added a particular category of what percentage of the programming did that undertaking, during its previous term of licence, actually dedicate to this section of the Act under multiculturalism. No longer there. I presume that that will be added in the future, and we will be able to measure the undertakings, as we know them today, and those that are about to be licensed as Canadian services in the English or the French languages and will carry forward. And we will be able to measure how the policies are being interpreted.
  128. We are saying here today that because the future is future and the present, as those ethnic-specific services are licensed and speaking exclusively to those languages that have been licensed and to the eligible lists which are about to come onto digital, that are all these foreign national signals that, again, will be speaking exclusively to those ethnic groups in Canada, to the people who speak languages, whether it's coming from Germany, from Italy and so on. They are meeting their requirements. So again, we have exclusive services going to pockets and to groups within Canada.
  129. We see ourselves and this service currently in the present putting a balance to all of the ethnic-specific exclusive services and the ones that are about to come into the new digital universe. Of the 262 that were licensed, some 15, I think, actually speak to some form of ethno-cultural concept, no one touching the full multicultural concept and dealing with cultural diversity in Canada.
  130. So again, when I say that we will fill the balance, this one little wedge that's left in the broadcasting system, as we know it today, and how it should be in the future, that you are looking at that service today. It's not a promise or something that the Commission will have to run after us to do. We are saying and committing here today that we are going to be that wedge in the broadcasting system. We are going to be the balance. We are going to be the Canadian television station, network, that will fulfil these objectives in the Act that policy, both of the Commission and the government, are calling for as we go forward into the next decade. You have it here in front of you today.
  131. COMMISSIONER CARDOZO: You know what? I take back my apology for asking the question, because your answer was very good. It really, I think, placed -- it was very helpful in understanding the distribution issue in terms of all the other ethnic and multicultural stuff that is out there and what you are trying to do.
  132. MR. D. IANNUZZI: I just want to add one thing.
  133. COMMISSIONER CARDOZO: No, you might not want to. You might want to stop right there.
  134. MR. D. IANNUZZI: I just want to say this, that a compromise -- no, no, it's got to be said because it's got to be on the record.
  135. The fact that we are here today and the fact that there is -- as I said, we came in here with a form of compromise, hoping that for all parties concerned, that this compromise would see that we're trying to use a shoehorn here in order to fit this into the Act and get maybe the best out of there, even though we may be denying some Canadians the possibility of getting long distance.
  136. If this was a telecom situation, I would like to know who would be speaking for the people that could not get long distance in Belle-Chasse, or who could not get long distance in Flin Flon, Manitoba?
  137. This is what we're saying. Who is not going to get this service in Belle-Chasse, Quebec and who is not going to get this service in Flin Flon, Manitoba? I'm not too worried about the city of Toronto, because if this service was available in Canada and not in Toronto, I would have to be worried. I mean, there would be enough people to fill the Skydome to make the complaint.
  138. So when we are looking at this, we are saying that the compromise we are making should not be considered as a weakness within this particular application. This application stands on its own as a Canadian service that is to be deemed in the national public interest and deserves -- I don't want to use the word basic, but I'm saying the widest coverage this Commission can license.
  139. COMMISSIONER CARDOZO: Okay. Let me just take you a little further on that last issue of compromise, and just ask you, at least for the record, a few other possibilities.
  140. You have articulated very well what your preferred distribution is, and I think we understand that quite well. On the matter of Category 2 digital, is that a possibility for you?
  141. MR. D. IANNUZZI: Mr. Cardozo, the question of Category 2, just the sheer number of the ones that were licensed and the method with which they were licensed doesn't leave much confidence for anyone that really wants to get into the system, to put the time and the effort and the investment and really say, without talking out of both sides of his mouth, actually say that he's out to do this for the people of Canada. Most of the services that are in there, when you look at the business plan, it either makes money. Otherwise, it will never see the light of day. And if we listen to the spokesman of the cable industry, they are interpreting exactly that. No one is talking about any of those services actually being that digital really has a place in the pro-social side of what this broadcasting system should be doing for Canadians. The reason they are saying that is because they say all the priority services are already on basic, and they are already over there on analogue, and anything more going in there that might be considered a priority service, by God, is detracting from our development of the digital universe.
  142. I remember them starting off by saying that an analogue channel deprives the industry of six digital channels, and then it grew that it deprived the -- last May it was up to eight. Did you know that a service such as ours would be depriving 10 possible digital channels, 10 money-making channels? And they are not too sure they can even get them going or launched within the prescribed time. And I am saying, "What is at stake here?"
  143. The development of the digital service is to give Canadians more choice, and I am all for that. That's diversity in another sense. By using the technological diversity, we are able to eventually give Canadians more choice. But are we going to give them more choice of more of the same, when we know for a fact that there is something missing in the daily diet of Canadian broadcasting in Canada. We know the Act has a piece -- has a wedge missing. How can we then say we are going to force-feed another system because Canadians deserve choice.
  144. Well, let me tell you, Canadians deserve a balanced broadcasting system, and this particular application is the missing link that we should have discussed a long time ago, before we went into digital. And if we are five years late in digital, you certainly can't hold that against me. Talk to the cable companies.
  145. COMMISSIONER CARDOZO: Okay. Could I ask you two more scenarios? And again, I want to underline I understand what you would like and what you think you need, and I appreciate that very well. What I just want to explore for the record and for us to have the options available is to explore the different scenarios. So I appreciate your views on a Category 2.
  146. Let me ask you about an analogue licence with discretionary carriage, where we wouldn't be describing it as it is described in modified dual status, but simply an analogue licence with discretionary carriage?
  147. MR. D. IANNUZZI: Mr. Cardozo, digital, at this stage of its development, is not the kind of service that this particular application needs, that this service needs.
  149. MR. D. IANNUZZI: Canadians need the service ---
  150. COMMISSIONER CARDOZO: But I asked -- sorry. Let me just repeat. What I was asking was an analogue licence with discretionary carriage.
  151. MR. P. BOLA: The answer is no. You just can't find -- there's no way to get on the system. It's no different than having Category 2, because you have got to negotiate carriage.
  152. COMMISSIONER CARDOZO: With the Class 1.
  153. MR. P. BOLA: Exactly.
  154. COMMISSIONER CARDOZO: So do you ---
  155. MR. M. McHALE: The same Class 1 who have not responded to any of our correspondence.
  156. MR. P. BOLA: Exactly.
  157. COMMISSIONER CARDOZO: So the main stumbling block for this then is the Class 1's because your feeling is that you have a better chance, as you said earlier, to negotiate with the Class 2's and the Class 3's?
  158. Could you see a service, if you had it running in -- I mean, if we did go this route, or if this is the type of licence you received -- you were able to get Class 2's and 3's to carry it and DTH to carry it, for example, would that begin to get a good enough number together, such that you could then force the Class 1's to carry it because you had a system that was then running and was beginning to get popular, people were hearing about it?
  159. MR. P. BOLA: We have gone through a number of models, and those models just don't work for us because of the level of Canadian commitment and the level of production and the content for our business model.
  160. COMMISSIONER CARDOZO: Okay. Let me ask you a third scenario then. If we were to give you an analogue licence without the distribution ordered by the Commission, so we wouldn't even say a discretionary carriage, would that work for you?
  161. COMMISSIONER CRAM: I'm sorry, Commissioner, I missed the question. I'm sorry.
  162. COMMISSIONER CARDOZO: If we were to provide an analogue licence without the distribution described, if it was just an analogue licence, would that be of any use to you?
  163. MR. D. IANNUZZI: You are saying then we would have to fend for ourselves?
  165. MR. D. IANNUZZI: That's not possible in this market with the way the cable systems are organized today, the rationalization that is taking place in this country. I read the newspapers like everyone else, not as a stockholder, but as an interested party, and when I see what is happening and how they are fending for themselves, I can't believe this Commission would send us out there and fend for ourselves, knowing full well the bear is at the door.
  167. Let me just ask you a last question on distribution. Are there any other distribution arrangements -- you said, Mr. Bola, you had looked at various models. Are there any other models which are -- again, I would underline, I understand not as positive or useful for you as the one you have put forward, but are there any other models you would find acceptable that would at least get you rolling in some kind of decent manner?
  168. MR. M. McHALE: We would be quite prepared to accept basic carriage.
  169. COMMISSIONER CARDOZO: Okay. Any other?
  170. MR. M. McHALE: We think the two choices are adequate.
  171. COMMISSIONER CARDOZO: Okay. A couple of questions on human resources.
  172. With regards to employment equity, you have outlined a plan in your application. I just want to clarify this would include, of course, visible minorities because they are central to your service in terms of the employment equity designated groups, but you are also looking at Aboriginal Peoples and persons with disabilities?
  173. MR. K. JOHNSON: Yes, we would accommodate them.
  174. COMMISSIONER CARDOZO: How about official languages? Maybe I should, before I start, where is your operation going to be headquartered?
  175. MR. K. JOHNSON: It will be headquartered in Ottawa. We will be operating out of Toronto and Montreal.
  176. COMMISSIONER CARDOZO: Okay. And you would be looking at having a bilingual workforce in which parts?
  177. MR. K. JOHNSON: I would say pretty well throughout the whole system, at least bilingual.
  178. MR. D. IANNUZZI: The majority of the management are totally bilingual, and in some cases, with Kerry speaking Mowri, that makes us trilingual. So we are fully acquainted ---
  179. COMMISSIONER CARDOZO: Are you telling me your Italian is not up to scratch?
  180. MR. D. IANNUZZI: No, mine is up to scratch. It's a foregone conclusion, being trilingual in the City of Toronto.
  181. COMMISSIONER CARDOZO: I have two questions with regards to services to persons with disabilities. The first is services to the sight impaired and the blind with regards to what is either referred to as described video, audio description, described video service. As you may be aware, we have had some fairly encouraging and detailed discussions with TVA, CTV and Global in recent months during their licence renewals.
  182. Do you think it is appropriate to expect a specialty service or a service such as yours to make commitments with regards to described video, so for people who are blind?
  183. MR. D. IANNUZZI: We would certainly love to be able to do that, but we've got so much on our plate at the beginning as going in that we would certainly look at that. We can't make a commitment here today. One, I personally don't know that much about it and what is involved as far as costs per hour, and this type of thing. But certainly, we will look at that and we would make that one of our tasks as we develop the service. We believe that to the hearing impaired, the mere fact that we are totally subtitled, as a great numbers of hours to begin with to that particular segment of the population that has a particular disability. Now, how we deal with the blind in this particular case would be, again, something for our programming people to look at and see how that can be accomplished, both technically and within our programming schedule.
  185. MR. P. BOLA: If I can just add to that. Yes, we have a board for described video, and I think we would use every means that is available to use, use the SAP channel, for example, in the environment that we are proposing to fulfil that.
  186. COMMISSIONER CARDOZO: On closed captioning, and you mentioned this earlier, it, to some extent, ties into the issue of subtitling, the different being that closed captioning gives a bit more because you are not able to get the emotion, the non-spoken sounds and that sort of stuff. So the closed captioning is the subtitling which you plan for everybody, plus a little more.
  187. Is that something that is workable? Do you have plans for that?
  188. MR. D. IANNUZZI: Well, where programming has subtitling available, of course, would have a preference, but as Pip will tell you, we are looking into doing some of the subtitling since we will have in-house equipment that will give us subtitling on short notice for news and, therefore, we are hoping -- and that technique is partly taken from the closed captioning concept and, therefore -- Pip, could you please ---
  189. MR. P. BOLA: The information is already available to us, so that basically is using the data that is already available, using that data to transmit on line 21. So that can be easily accommodated with our day-to-day operation.
  190. COMMISSIONER CARDOZO: You understand we are talking about subtitling plus?
  191. MR. P. BOLA: Right. That's correct.
  192. MR. M. McHALE: Commissioner, in the area of closed captioning, at my company Telebotics we work in the area of providing accessibility to people with disabilities in various areas, and with research partner Ryerson, we are working on enhanced closed captioning because current closed captioning is not incredibly effective because it misses the emotions. And I think there will be really exciting developments in that area. We are having pretty positive results and trials, using different colours, using some techniques from cartooning print for speedback devices. They give people a sense of how do you translate the movie score, because movie scores are an integral part of the programming, which are totally missed in closed captioning. So we are working on these kinds of experiments, and probably within the next two to three years, you will see that filtering into more mainstream. The project is being funded partially by two or three American studios, plus money from the Canadian Government.
  193. COMMISSIONER CARDOZO: Okay. Well, those cover my questions. I just want to thank you very much, and thank you for your patience. I am sure my colleagues have other questions, but I just want to say I appreciate the answers you have given us, and while you might feel we have asked some of the same questions again and again, they have, at times, become clearer. And really what we are after, with any applicant, is to see how a wonderful dream that somebody puts before us can best fit into this system that we have to work in, which is more complicated than any of us want to, but that's the way it is.
  194. So thanks very much.
  195. THE CHAIRPERSON: Thanks, Commissioner Cardozo.
  196. Before we move on to the next section, what I would like to do is offer the other Panel Members an opportunity to ask questions with respect to distribution and carriage, if there are any, and then we will take a short break and go to the next segment.
  197. Do either of you have any questions? Commissioner Williams?
  198. COMMISSIONER WILLIAMS: Mr. Iannuzzi, if we were to approve your application, when do you anticipate the launch?
  199. MR. D. IANNUZZI: We are hoping to be in the position to do that Canada Day 2002.
  200. COMMISSIONER WILLIAMS: And could you please describe your roll-out plan leading up to the launch?
  201. MR. D. IANNUZZI: Do you want to cover that?
  202. MR. BROOKS: Our roll-out plan would involve obviously dealing with the broadcast industry, the operators of the system in making sure that they are on-side, that they are part of the way in which we go forward into the marketplace. We obviously would be approaching the advertising and marketing, promotional and sponsorship community through their agencies and through their buying services to make sure that they are on-side.
  203. We would then launch an extensive in-market integrated program that would spell out the unique service that is now available to all Canadians, and we would do a building program that would lead to our launch on July 1st that the network would then bring our cultural diversity, the Canada brand, if you will, to all Canadians.
  204. MR. M. McHALE: Commissioner Williams, we estimate we will spend about $1.7 million in total during the start-up period before we turn the magic switch and we are available to Canadians on air.
  205. COMMISSIONER WILLIAMS: Okay. Thank you. I have no further questions, Madame Chair.
  206. THE CHAIRPERSON: Commissioner Cram?
  207. COMMISSIONER CRAM: Thank you.
  208. I wanted to talk about DTH. Do I understand your position that the kind of carriage you would like is in the highest -- as part of the highest penetration tier in that language? Is that your point?
  209. MR. P. BOLA: Yes, that is correct.
  210. COMMISSIONER CRAM: I guess I want to talk about the DTH environment and how you would justify that, your proposal, when you consider that we do not, at least we choose to date not to even require carriage of local signals. So the people in Lloydminster, Saskatchewan, if they subscribe to DTH, would not see any of their local signals because we do not require them to carry that, and yet they would be required to carry WTM?
  211. How do you -- why do you say that should happen?
  212. MR. D. IANNUZZI: Well, first of all, if I may, and then I will let Pip take it.
  213. In that situation, I try and put myself in the shoes of a cable operator -- not very easy, I can tell you, because my personality is totally different. The fact being that could you tell me how a cable operator in any of the cities in Canada, small ones particularly, would not carry an off-air signal of local television?
  214. COMMISSIONER CRAM: I am talking DTH.
  215. MR. D. IANNUZZI: And DTH.
  216. COMMISSIONER CRAM: I am talking DTH.
  217. MR. D. IANNUZZI: Oh, I'm sorry, in DTH, right.
  218. But I am saying again, DTH would certainly want local channels since that, in being in competition with cable, then the DTH operator, it's in his interest.
  219. COMMISSIONER CRAM: They do not carry -- neither DTH carries any local signals. We do not require them.
  220. My point is how can you justify that we would require them to carry you and not a local signal? How can you justify that?
  221. MR. M. McHALE: We are not a local signal. You are talking about a local VHF/UHF signal.
  222. COMMISSIONER CRAM: I am talking about local news.
  223. MR. M. McHALE: We are a specialty service, a national specialty service. They are not carrying local UHF and VHFs at the moment.
  224. COMMISSIONER CRAM: Well, I'm trying to talk about consistency and some sort of level of equitability within the regulatory scheme to DTH.
  225. MR. P. BOLA: I think the simplest way to answer that is we are not asking for anything different than previously licensed modified dual status. You know, this is a ---
  227. MR. P. BOLA: DTH.
  228. COMMISSIONER CRAM: I thought you were asking to be included in the largest tier in English and/or French.
  229. MR. P. BOLA: That's correct. The purpose of that is to, again, try and provide accessibility Canada-wide.
  230. COMMISSIONER CRAM: I recognize the reason. I'm just saying how can you justify that when you consider we don't require that local signals be carried? I mean, Canada is one thing.
  231. MR. P. BOLA: It's a national service.
  232. COMMISSIONER CRAM: But Canada includes every community also, and I guess the juxtaposition is something that is concerning me.
  233. MR. D. IANNUZZI: Well, maybe the question, if I may -- I don't know if I'm going out of turn here -- but why does not the Commission require them to carry a local signal. If one's people have migrated to digital end up losing their local station, shouldn't it be a requirement?
  234. COMMISSIONER CRAM: Well, you see, that's part of the regulatory scheme ---
  235. MR. D. IANNUZZI: Is that protection for the cable ---
  236. COMMISSIONER CRAM: --- we have got.
  237. MR. D. IANNUZZI: Is it protection for cable?
  238. MR. M. McHALE: Commissioner ---
  239. COMMISSIONER CRAM: Can I just -- the regulatory scheme was allowing DTH to be able to better compete without putting as many regulatory impediments on them, and that's where I am trying to get you to, is the regulatory scheme and the light-handed regulation issue, and how do we justify a heavy hand in one case and a light hand in another with that type of carriage?
  240. MR. M. McHALE: Commissioner, using the example of Lloyminster, all of the local stations are available over the air using an antenna. It's not a case of that if you go to DTH you lose access to these services. They are available over the air in your local community using an antenna at no charge.
  241. Our service would not be available in Lloyminster by sticking an antenna on your roof.
  242. COMMISSIONER CRAM: My next question is, and we talked about employment equity, and I found it very interesting. We talked about people with disabilities and we talked about people with various ethnic origins. And I look at your panel, and I ask what about women?
  243. MR. D. IANNUZZI: I can probably answer that. Our Director of French Services, Marie-Josée Beaudoin, who you saw yesterday, is unavailable and in Thailand. Our Chair, Gail Valaskakas (phonetic), although works here in Ottawa as Executive Director of the Native Foundation, was not able to make it today because of the way the Commission -- the way the whole hearing has fallen into place, and unfortunately had other meetings. Our Director of English Service, Hany Drescher, who was involved in the Mega-city Transition Team in Montreal is at the same meetings that Gerry Weiner was mentioning about yesterday. So we have three key people and three key positions in these particular services that are handled by and managed by women.
  244. COMMISSIONER CRAM: Out of a total?
  245. MR. D. IANNUZZI: Out of a total of our management team? Well, the senior management team is only seven and, therefore, we've got three right there. And I exclude my daughter, who is Director of Communications and our Internet Services, the webmaster.
  246. COMMISSIONER CRAM: Thank you.
  247. MR. M. McHALE: I would draw your attention to P-400, a chart. And we can provide a copy.
  248. MR. D. IANNUZZI: Oh, I forgot to mention that our Chief Operating -- our Chief Financial Officer is also a woman, who is here. Oh, there she is in the audience there now.
  249. MR. M. McHALE: Commissioner, we also go a step further, using the Channel 4 model, which is then our -- we say our script development and talent development. As that independent production that we commission, we will make sure that there is an intern policy and that trainees are taken at all levels within that production. It's self-serving in that we will create a whole new generation of storytellers we can use on-air.
  250. THE CHAIRPERSON: Commissioner Wylie.
  251. COMMISSIONER WYLIE: Thank you, Madame Chair.
  252. I followed Commissioner Cardozo's very thorough questioning, but I want to make clear on the record where you stand on various possibilities for distribution, not go into the merits of the application, which you very ably put forward to us, but the distribution system which -- this is where we are at in 2001, that we have, as you know analogue access, digital access. Once you are entitled to analogue access, then you can get dual status, which means you go on basic unless you can agree with the cable operator -- I'm talking about cable systems here -- to go on discretionary. If you are on basic, you have a regulated fee. If you are not, you are not, you have a discretionary fee. Another way of licensing, which has been the more common one in the last 10 years is modified dual status for Class 1, which means that you are entitled to analogue access and you are on a discretionary tier, unless you can negotiate with the cable operator to be on basic at a regulated fee. On the discretionary tier, you have to negotiate the terms.
  253. Interrupt me when you think I'm making a mistake.
  254. Now, I want to be clear your application is based on the premise that you will have analogue access, and that access would be for Class 1 only, forced upon the cable operator to carry you on an analogue channel. And you would want modified dual status, that is, you would be on a discretionary tier on negotiated terms as to the tier and the price and so, unless you made -- unless you had an agreement for the cable operator as a regulated fee on basic, on Class 1. This is the regime we have.
  255. You add to that that if you are on a discretionary tier, it has to be the highest penetration one, Tier 1, correct?
  256. Now, for Class 2's, you would follow the analogue rule, which is you are not assured access, but if you get it, you would get it on modified dual status with the caveat that it would be on the highest penetration tier with a negotiated fee.
  257. What we want to make clear is as we discuss this and weigh, as you eloquently put, the value of the service against the type of distribution we would require, we have to be clear what it is you would not accept and implement the service, if you didn't get what it is that you applied for.
  258. Would you accept, for example, required access on an analogue tier, modified dual status, but without the special status of being on Tier 1, which would give you the status that other analogue services have who have modified dual status?
  259. MR. D. IANNUZZI: Therefore ---
  260. COMMISSIONER WYLIE: I am only exploring the possibilities for the purpose of the record. So do take my questions in that spirit.
  261. MR. D. IANNUZZI: Aside from saying reluctantly, my point is to understand maybe just a little finer point there.
  262. I always have a problem when it says to negotiate with the cable operator on the system, and if he decides and if you decide and so on. The point is that once the Commission, through its final licensing, takes away the knife from the handle and reverses it to the other way, then that puts this service in a very detrimental position.
  263. As I said before, the fact that this starts off from being a pro-social service just in its identity in the eyes of the cable operator and it doesn't have all of the, what you might call the sexy side -- and I don't mean sex in the pure sense. Some of those have already been licensed, and you can't license two, I understand. So the point is that they don't see the sexy side of cultural diversity and, therefore, we stand in line. And I know for a fact -- because you will have to appreciate that I was part of the Rogers Organization for a number of years, and the thinking has always been that this was something to be relegated to a particular section of carriage in this country. And they firmly believe that. You can't change that. And I can't see myself, as good as a negotiator I think I am, having to deal with this. I would have to come back and say that our promise to do this by July the 2nd or July the 1st, I should say, Canada Day 2002, is an improbability. When I look around and I see other broadcasters, Moses Zneimer as an example, the entire CHUM organization taking a year and a half, trying to fit and fit their various channels and so on. And if that can take place way up there, who are we, coming from behind with this type of service, having to go cap in hand, because in reality, it is cap in hand for those who get licensed -- pity those who got the 262 licences -- is what will happen over the next decade? Well, I would hate to write that particular chapter.
  264. So the Commission really can't change. If it needs a little caveat there that says, "Yes, it will do that, but you will still be in the position that when you're negotiating, he either comes up with something reasonable or you go to basic." That's the best weapon the Commission has, that if it really wants this service to happen, that Canadians are going to get it, then the Commission has the power. It has the power to say, "In this particular case, either you do it this way -- you don't like the word mandatory, but if you don't, then that's the way it's got to be, because we believe, we deem this service to be." And therefore, you are the ones that put the caveat on it, not me.
  265. So if you're asking me the question, I will answer reluctantly we would go to that particular situation, but you are making this service -- we will end up coming back here. It will be for a different point -- it will be for strictly carriage at that point.
  266. COMMISSIONER WYLIE: Yes, I'm sure my further questions will get an even more adamant answer from you, but it has to be asked.
  267. Would you accept discretionary only for Class 1 and 2, but analogue access? In other words, every cable operator will have to carry you, but not on basic. It will have to be on a tier at negotiated rates and negotiated terms, which would be a novel -- something that we don't have right now. In other words, it would say you can't be on basic, but you must be somewhere on the discretionary tiers on analogue. In other words, Class 1 and 2, analogue access, but you may not be on basic, but they must put you on a tier.
  268. MR. D. IANNUZZI: Would that also include the services in the minority markets where analogue is available?
  269. COMMISSIONER WYLIE: I'm talking here more about this would be the treatment in the markets that are of the language of the majority feed. In other words, you would be -- if we can use this word -- forced upon a tier everywhere, in all Class 1 and 2, in anglophone markets and your French feed on the other.
  270. MR. P. BOLA: If I can just jump in here for a second. I think what we need to do is maybe talk this over on the break and ---
  272. MR. P. BOLA: --- and come back to you.
  273. COMMISSIONER WYLIE: So I hope somebody is taking this down.
  274. But I am sure you all understand the scheme we have in place. Yes, the Commission can exercise its discretion. So I am asking you what would be acceptable. In fact, you are asking for special status because you are saying analogue access on discretionary and on a high tier. So I'm going, in your view obviously, downwards in saying, would you accept that modified status, but the same as everybody else, that is, not on the highest tier if you were on discretionary, and next, discretionary only, which would be a novel thing, where the Commission would say, for whatever reason, at this stage of the game, we are not prepared to give you basic status, but we will force the cable operators to give you an analogue channel on one of their tiers.
  275. Now, another option, which is a reference to what we did with minority markets -- markets with minority language in a recent decision that you are quite familiar with, which is to use technology as a point of reference for access and to say, if your system is larger because you have 750 megahertz, which is usually what is the complete digital capacity, we will require that you carry all the French services, and if you have 550 megahertz to 750 megahertz, which is pretty well the tier downwards, where your system is bigger than if you didn't do digital at all, but it's not at the highest, we will ask you to carry the services in a minority language in a certain ratio, which, if I recall, is 1 to 10.
  276. So now, forget minority and just think of what if we used as a point of reference technical capacity, that I the size of the system, and said for those systems, which will be mostly Class 1's who have 750 megahertz, modified dual status, but those who have only 550 up, purely discretionary, that is, you will not have the opportunity to go on basic on those. And with 750 megahertz, we would have to think of would we then just -- would you accept just modified dual status, or would you insist a 750 megahertz on special status in the sense that you would get on a high-penetration discretionary tier?
  277. Now, we are obviously -- as a Commission, we have a regime in place, and we are always able, obviously, to make decisions that are not the exact regime we have, but we have to know what it is that would prevent you from implementing the service and you wouldn't accept.
  278. So I hope that this is clear. And we want to be clear on the record what it -- not just a question of delaying because you would have to negotiate, but what you would not accept simply, you would not go forward.
  279. Now, to be honest, I think I would ask you to consider whether, in light of the fact that you understand the system, the tiers are already in place, they are trapped, it is complicated to untrap them and change them. What do you think is the possibility of negotiating any type of discretionary service with Class 1 services? And if you can't, then it will be on basic, correct? And I think we can't hide from you the fact that then it would be like very close to asking for basic status, and we then have to be convinced that we are prepared to raise the basic fee to that extent.
  280. Do you have any comment, considering your passionate comments about the difficulty in negotiating with cable operators, if you have discretionary status and you can't negotiate what you want, then you go on basic. What is the possibility that that is where you are going to be, everywhere at $0.35? And somehow we have to be convinced that basic status is acceptable to us in the circumstances, which you have argued eloquently, and you are quite entitled to. But I want your comments as to whether I make any sense when I say with modified dual status, you won't get anywhere with the cable companies and, therefore, you will end up on basic, and they will get their mark-up, and you will get your $0.35 and the subscriber will pay. Is that a fair comment?
  281. MR. D. IANNUZZI: That's very fair. In fact, we would like to discuss this during the break. Hopefully we get at least 10 minutes.
  282. But I just want to close with the one statement that certainly our discussions will come, and any proposal that we will bring forth and deal with the ones that you have suggested, and I appreciate that very, very much, that is that in two cases, it's got to be that type of carriage that will guarantee the largest access for Canadians, and hopefully that it will keep the rate low. We are talking about a $0.35 wholesale rate at this particular point and, therefore, if it was on basic, it would probably work up to $0.38, but if it goes into any other particular tier being negotiated with the cable operator, in order to get in there, that rate could go as high as $0.70. So it depends on how the cable operator wants to deal with this as far as the carriage.
  283. So we will take all this into consideration and come back to you.
  284. COMMISSIONER WYLIE: Yes. And I understand you, Mr. Iannuzzi, but we have a different role, and the tier is discretionary. If the subscriber feels that it has gone too high or the cable company didn't do it particularly well and they are not getting value for their money, they can disconnect, and that's not true for basic. And for a number of people, we are talking about Lethbridge and getting over the air, there are a great number of Canadians in this country who can't really get television without cable. They are in high-rises or they are in very large cities where it's very congested. So there is a balancing act. We understand your approach, but we are supposed to use a balancing hat and try to see what makes most sense. So that is the spirit of my question.
  285. MR. D. IANNUZZI: We will keep that I mind and come back to you.
  286. THE CHAIRPERSON: I am going to call a break, but I just want to say I was a little surprised when you said that if you go on a basic, your rate goes up. If you go onto basic, would your rate not go down?
  287. MR. D. IANNUZZI: I'm saying that the cable operator adds his slight overhead to it so that ---
  288. THE CHAIRPERSON: The two-cent mark-up.
  289. MR. D. IANNUZZI: Right.
  290. THE CHAIRPERSON: I thought you said your rate would go to $0.38.
  291. MR. D. IANNUZZI: No, no. The subscriber basic rate would increase by $0.30 to $0.37, correct.
  292. THE CHAIRPERSON: Okay. So we are going to take ---
  293. MR. P. McCALLUM: Madame Chair, could I ask -- with your indulgence, could I ask a very similar question with respect to DTH and MDS carriage?
  294. THE CHAIRPERSON: By all means.
  295. MR. P. McCALLUM: Because I have essentially the same question as Madame Wylie, and perhaps you can think about it and get back. And again, the spirit of the question is exactly in what situations for DTH and MDS would you carry -- would you go forward and implement your service, and exactly in what situations would you not? Because on your page P-350 for DTH carriage, you seem to say "in the package of discretionary services containing the greatest number of English services", and from that I infer that what you are asking for is mandatory carriage on a DTH system with a packaging requirement that it be in a package of discretionary services containing the greatest number of English services.
  296. So my questions are what if neither of those hypotheses were true? What if it was not in a package of discretionary services containing the highest number of English services, in other words, mandatory carriage was there in DTH, but not the packaging? And the second hypothesis is what if neither was true, it was not mandatory for DTH to carry it, it was available to be carried but not mandatory, and there was no packaging restriction?
  297. And I have the same question vis-à-vis MDS. It says "Subscribers who choose to subscribe in addition to the basic service to three English specialty services must also receive WTM." What if that was not true? What if they have a full choice and it's not required that they receive WTM?
  298. So if you could look at those series of questions in the same context, we would appreciate it.
  299. MR. D. IANNUZZI: We will do so. Thank you.
  300. THE CHAIRPERSON: Okay. I am going to give you until five minutes to 11:00 to come back. I will give you a few minutes to have a discussion, and we will reconvene at that point.
  301. MR. D. IANNUZZI: That's very generous. Thank you.

    --- Upon recessing at 10:38 a.m./L'audience est suspendue à 10h38

    --- Upon resuming at 11:00 a.m./L'audience est reprise à 11h00

  302. THE CHAIRPERSON: Welcome back.
  303. Before we begin with the marketing and finance, I wonder if you would like to address some of the questions that were posed to you just before the break?
  304. MR. D. IANNUZZI: Thank you very much, Madame Chair.
  305. Before I turn this over to Pip Bola and Kerry to sort of fill in on this, I think that I left you with a statement that said, when you mentioned a few of these, and I said reluctantly, and then to qualify it we would go back and think about it. So we come to the situation that, in essence, what we are asking for is exactly what is in our application, and that, when we did put that together, in revising our application and coming up to a compromise of sorts, was about the same time as other licences were granted, and one in particular which was Télé-Arts, that we looked at and how a pro-social channel such as that one, originating in Quebec, and how it was dealing in the both major and minority markets. And we come to the conclusion that that type of carriage applied to this particular licence would fit hand in glove and be, for the most part, exactly what we are asking for.
  306. The reluctance comes in stating that the proposal that Commissioner Wylie put forth, and that being the sort of basic -- well, the analogue service with a must-carry -- I hate using that word; it gets you into trouble all the time -- but a must-carry aspect to it, and to deviate from the twist that Commissioner Cardozo had mentioned of where we had said, "Well, we have got to put a qualifier there because we know who we are dealing with in the negotiating, that we would need the highest tier." So it starts off in discussions.
  307. But if we had to -- I use the term back-off -- on that, we have to weigh two things. One, in doing so, as we lower the rod under which we must crawl, is the fact that we do two things. We start etching away at viability on the one hand, and then we talk about the other, which is on the pro-social side that we have to look at, and we say, what percentage of Canadians, in order to get this, are we willing to deprive on the way in?
  308. So if by lowering that we say to ourselves, "Where is the line?". And once we finally came to that conclusion of how far in order to answer the question and give the Commission some guideline that it's a must that this be dealt with in as tight a belt that this service, in order for it to even get off the ground, I would say the level is 60 per cent, so therefore, saying exactly with what Commissioner Wylie had proposed.
  309. And getting off the dime as far as the penetration -- the high penetration, we are saying that on any service then, that with any package that would have not less than 60 per cent penetration.
  310. THE CHAIRPERSON: I think you said Mr. Bola and Mr. Johnston wanted to jump in as well?
  311. MR. D. IANNUZZI: Right. Pip, do you want to ---
  312. THE CHAIRPERSON: I mean, that is your position with respect to all of the various options that were suggested by Commission Wylie?
  313. MR. D. IANNUZZI: Correct. It's the one that would still fit the model and that by, again, compromising a further 20, because if one looks at our model, we were using an 80 per cent penetration ---
  314. THE CHAIRPERSON: Right.
  315. MR. D. IANNUZZI: --- in order to do that. So we are lowering the barrier to a threshold of 60 per cent plus.
  316. THE CHAIRPERSON: So in fact, your answers to all of those options is no?
  317. MR. D. IANNUZZI: Correct.
  318. THE CHAIRPERSON: You want to stay with the same position that you have presented in your application, and the one compromise you would be willing to offer is that you would have to be on a tier offering you no less than 60 per cent of the subscriber base?
  319. MR. D. IANNUZZI: Otherwise, then it would revert to basic.
  320. THE CHAIRPERSON: And what about with respect to DTH and MDS? I believe counsel presented some questions.
  321. MR. D. IANNUZZI: Yes. Again, in the question of DTH, it would be the same, that they would carry it and it would be on any tier that they have as 60 per cent. What's good for the goose is good for the gander.
  322. THE CHAIRPERSON: Counsel, is that sufficient for your purposes?
  323. MR. P. McCALLUM: I just wondered if from the applicant's perspective if everything was said that they wanted to say on that point.
  324. MR. D. IANNUZZI: I can't think of anything other, because there was a proposal of analogue ---
  325. THE CHAIRPERSON: There were various iterations that were presented.
  326. MR. D. IANNUZZI: True, but the one that came closest to ours was that if that proposal were made that it was analogue and it was to be carried, without using the word forced or mandatory, it had to be carried, then how far would we drop the highest tier? And we are saying, well, we can only drop that, but go down to a particular level.
  327. THE CHAIRPERSON: I think Commissioner Wylie would like to step in.
  328. COMMISSIONER WYLIE: Yes. To be clear, Mr. Iannuzzi, then your compromise would be modified dual status that is discretionary on a tier of at least 60 per cent. If you can't make that deal with the cable operator, you go on basic at $0.35?
  329. MR. D. IANNUZZI: Correct.
  330. Now, there was one point left over on there, and that was how do we deal with the minority languages in the respective markets. And again, we come up to that where we say -- and that's where the Télé-Art is an example that would fit our model and fit beautifully, and I think that we would be reaching as many of the people that are available in those markets for those languages. We wouldn't be penalizing someone for being Anglo or English-speaking in the Province of Quebec.
  331. COMMISSIONER WYLIE: Mr. Iannuzzi, you realize that, the way I understand it, Télé des Arts cannot be on basic?
  332. MR. D. IANNUZZI: Unless I am reading the decision wrong ---
  333. MR. P. McCALLUM: I think Télé des Arts can be on basic.
  334. MR. D. IANNUZZI: Are we saying it is or is it not? I don't follow you. It can't be on basic service? Oh, it can. Okay. Because there is no restriction in the decision, so that in the minority markets ---
  335. THE CHAIRPERSON: I am just going to give our legal counsel a couple of minutes to look through it.
  336. MR. D. IANNUZZI: Sure.
  337. MR. P. McCALLUM: There is a modified dual status possibility for Télé des Arts. The Commission states at paragraph 47 of Decision 2000-386 that:

    "The Commission authorizes the distribution of Télé des Arts service in anglophone markets via modified dual status, i.e. on a discretionary basis, unless the distribution undertaking and the programming service operator agree to distribute it as part of the basic service."

  338. COMMISSIONER WYLIE: We should also clarify what the status is in its own market.
  339. MR. P. McCALLUM: In francophone markets, at paragraph 41 of the same decision, the Commission specifies that:

    "Télé des Arts must be distributed in analogue mode in francophone markets on a mandatory basis on the existing discretionary tier with the highest penetration by Class 1 cable distribution undertakings. This rule applies also to Class 2 distribution undertakings that choose to distribute the service."

  340. THE CHAIRPERSON: So that there is no basic distribution in its primary market. The modified dual status applies only to the anglophone markets.
  341. Is there anything else that you wanted to add before we move on to marketing and finance?
  342. MR. D. IANNUZZI: Was my statement then on Télé des Arts contradictory to what I had mentioned? I mean, it's still carried in the francophone markets. It's still on the highest tier and it's still a must-carry in that sense.
  343. COMMISSIONER WYLIE: Yes. The point was in its own market, it's a French service in what we define as the French market. It must be on discretionary, which is why I brought up would you accept analogue access on discretionary service only on a high-penetration tier, which is the case of Télé des Arts, but in its own market, it is not allowed to negotiate basic service at a regulated fee. It can only be discretionary. And I think if you read the decision, you will see that it was an attempt, again, to balance how much cost the Commission was prepared to pass on to the subscriber without the ability to choose to receive it or not. Presumably, as the tier goes up in price or is not priced in a way that the subscriber likes, they have the choice to disconnect the discretionary tier without disconnecting basic, is some of the philosophy underlying it, but modified dual status was possible in the market that is not its main market, which is outside of the French market, as we define it in the ranks.
  344. MR. M. McHALE: May I point out it was also Class 1 and Class 2 systems in the French market.
  345. THE CHAIRPERSON: Okay. Let's move on to marketing and finance. And for those questions, I am going to turn you over to Commissioner Cram.
  346. COMMISSIONER CRAM: Thank you, Madame Chairman.
  347. I want to preface my remarks by saying that this is primarily a number issue. I understand your argument about the national importance, and so the issues are more logical than the issues that we have previously been talking about.
  348. I have read the entirety of the file, as I am always one to do, and it has been your continuing position that the polls consistently show a broad interest in your service, broad support for your service, and indeed you have been, in fact, increasing support from the '80s. And in fact, yesterday you talked about 90 per cent believing that this is of national importance, 80 per cent believing they should have access to an international service, 70 per cent about the subtitling and 81 per cent believe we should make it available without delay.
  349. And I guess I have been struck yesterday and today by the dichotomy between your assertions of this demand, and yet on the other hand, insisting that you need some type of mandatory carriage.
  350. If indeed this demand is as it is, why couldn't the service sell itself?
  351. MR. D. IANNUZZI: The question of public surveys such as that one is to define two things: the size of the market and the size of the demand.
  352. Now, if that becomes an integral part of an application and we say this service is aimed towards that demand, the whole point is we need the carriage to get to that demand, to satisfy the demand and, therefore, this particular business plan has a chance to deliver both the service and these kinds of numbers and the potential advertising that goes with it. I mean, it's all tied together.
  353. So it's not a question of saying if there was a demand there, why not put up a balloon and see how many of them can get it that way? We would never reach that total. Again, it's the size of the funnel. The market is this size, and we need the carriage to reach that size.
  354. COMMISSIONER CRAM: But is it simply an issue of time? If the demand is as high as you assert in your studies, would it then simply -- and if we gave you some different kind of carriage -- would it then not simply be an issue of time before you could build the service up to the financial status that you wanted to start at?
  355. MR. D. IANNUZZI: Well, again, I mean, I find difficulty in explaining this, that time is the time in which a business plan is set out. We have set out what used to be five-year plans. Now there's seven-year plans, and we show that. We take everything into consideration, the growth of cable, the growth of DTH and digital, and at what point might we have to migrate or want to migrate to digital. All of that is part of a business plan, but it's predicated on getting not less than. Are we going by bus, by plane or by boat? And this one here calls for going by plane in order to get there within seven years without failing.
  356. MR. M. McHALE: Commissioner, your question, "Why can't you sell yourself?" brings me back to my Economics 101 days where we would draw the demand curve and supply curve, and it always met at a point, at an efficient market, which meant that the perfect price was paid and the perfect amount of production.
  357. We don't live in that world. There is something called a gatekeeper in between the licence holders and the consumers, not a case of the consumer is calling up a cable company and saying, "Move this to another tier." The tiers are mandated in the conditions of licence. So it's not a simple question of why can't we get it on because the consumers want it.
  358. We have also mentioned earlier -- and they are on record, all of the letters we wrote to all of the Class 1, 2, 3 cable companies. They have not responded. We mentioned the favourable market response to our proposed service. That still didn't encourage a response. If we lived in a world of perfect competition and that meets supply and demand curves, yes, that would happen. We would be on the air.
  359. COMMISSIONER CRAM: So do I take it then that the purpose of the demand studies were primarily to show us that others in Canada think that this is -- it goes to the importance of the service rather than going to the finances of the service? It goes into the carriage issue as opposed to ---
  360. MR. BROOKS: Yes, that's correct. I mean, we're looking at this -- from a marketing point of view, we want to know how big our potential audience is, how big our constituency is and what our constituency thinks. Our understanding, based on the documentation and research that comes back, says we have a fairly large constituency. We just have to have the way to get to that constituency and get our message out to them.
  361. COMMISSIONER CRAM: So then the studies are both for the purposes of carriage and marketing?
  362. MR. M. McHALE: Commissioner, like any good business plan, the more external validation you get for your plan, the better and the stronger the plan is. And that's what we have accomplished with the market demand studies. It's external validation that our ideas are good and that there is a need for this service. Canadian consumers want this service. They have been waiting for years for this service. It's external validation of our business plan.
  363. COMMISSIONER CRAM: And the reason it was filed here was to show to us the national importance issue on carriage or the viability of the service and marketing?
  364. MR. M. McHALE: Both.
  365. COMMISSIONER CRAM: Both? Okay.
  366. I want to go into the studies in some, not too much, depth. The first is how can we assume that the questions -- and I guess I will use the 95 Gallup one first -- how can we assume that the questions lead us to the service you have described yesterday? And when I say that and I look at the questions that were given to the people -- called into the people -- I see the descriptions about "reflects the diversity of Canada and the world", "reflective of the diversity of views and interests of all Canadians", "public affairs, business, sports, movies and entertainment, television programming produced in other parts of the world outside North America". How can I take these descriptions and put them into what you described yesterday? How can I say they are identical or how can I say that the numbers in the Gallup poll lead me to the service that you described yesterday?
  367. MR. K. JOHNSON: Well, it is the basis of that service. This is the '95 study you are talking about?
  368. COMMISSIONER CRAM: M'hm, the Gallup, yes.
  369. MR. K. JOHNSON: Right. Those are the questions upon which we have shaped the service that we have put forward.
  370. When we spoke to staff of the CRTC about this study, they said it was exactly what was required.
  371. COMMISSIONER CRAM: I'm sure they didn't say it -- they committed us to saying it proves what you asserted there.
  372. MR. K. JOHNSON: They said it was exactly what was required.
  373. COMMISSIONER CRAM: I hear you.
  374. So then again I look at the May 2000 survey, and it talks about, "Would you say that an economic, business, political, military and cultural activities and events in the rest of the world." The next question talks about "Canadian viewers have more choice and opportunity to see programs produced outside North America." The next on is "Opportunity to see public affairs, business, sports, movies and entertainment television programming produced in other parts of the world outside North America", not one word about multiculturalism in Canada and diversity. That's the May 2000 poll that you are talking about. Not one word about multicultural diversity in Canada.
  375. How does that describe demand for the service you have shown us, talked to us about?
  376. MR. D. IANNUZZI: What page are you reading from, please?
  377. COMMISSIONER CRAM: I am reading the questions on the Compas poll May 2, 2000, page 265, 264 of the record.
  378. MR. M. McHALE: Just while we are waiting to find this information, I hope we then talk about the 4,000 letters of support which clearly indicate an incredible demand for our service, seeing as we are talking about public demand.
  379. MR. K. JOHNSON: We have been seeking to define and to get the feedback that we can from the marketplace.
  380. COMMISSIONER CRAM: Please, the question is how can I say this survey, that you say purportedly shows a demand for your service ---
  381. MR. K. JOHNSON: M'hm.
  382. COMMISSIONER CRAM: --- how can I say that the describers of the service accurately reflect the service when they don't have one word about multicultural diversity in Canada?
  383. MR. K. JOHNSON: We were attempting to find -- to determine the interest in world product.
  384. COMMISSIONER CRAM: Okay. So then this isn't about your service?
  385. MR. K. JOHNSON: Well, it ---
  386. COMMISSIONER CRAM: This is only world programming. It's not about ---
  387. MR. K. JOHNSON: It's part of our service.
  388. COMMISSIONER CRAM: Well, if we are talking about two services, it's about the one service, but it has nothing to do with the multicultural diversity issue in Canada?
  389. MR. D. IANNUZZI: Commissioner, we attempted to do more than one survey. We have surveyed this to death over the past decade.
  390. COMMISSIONER CRAM: Yes. And I ---
  391. MR. D. IANNUZZI: And each time we try to find another way to find if this demand really was a pent-up demand and to what degree.
  392. The last one, which was part of an omnibus survey done by Compas, for which certain questions were asked in order to deal with, in today's environment, the whole question of world programming. The multicultural aspect of our application and demand for it was done in the earlier ones where the specific questions were asked. We didn't keep asking the same question over and over again when we know that scientifically where there is a demand that is unfilled, it becomes a pent-up demand and only grows.
  393. COMMISSIONER CRAM: I am trying to, and if I understand, to ascertain if indeed your surveys show a demand for WTM, and that is indeed what you said at page 5 in your initial remarks, "Over the years, support for the WTM service has grown steadily."
  394. And so the questions I am asking is how I can use these polls to show that a demand for WTM service is rising?
  395. Now, I would like to go to the November 2000 one and the questions there. And I'm sorry, I don't have a file page number. They weren't ---
  396. MR. K. JOHNSON: Page 520.
  397. COMMISSIONER CRAM: And again, the questions referred to "A Canadian TV service that will allow all of us equal access to what is going on around the world" or "Opportunities for access to programming, public affairs to drama from around the world, most of which is never seen in North America", again, "The best international programming to be broadcast in the original language with subtitles, etc."
  398. How can that show me a demand for WTM service?
  399. MR. D. IANNUZZI: Well, I think you have to start off -- aside from the fact that we will dig up the earlier survey -- start off from the premise for the type of person or persons that have answered those questions dealing with "more world programming, public affairs" and so on, could certainly not be a person of worldly interests, not think in his own world that these types of programming that would be bridging, both to the world and from the world, would be blind to the rest of the programming schedule. I mean, these are tied in together.
  400. COMMISSIONER CRAM: Mr. Iannuzzi, forgive me. I mean, these are filed to show that "support for the WTM service has grown". And I am a lawyer. I need evidence. I am asking for a logical analysis showing me that that has grown. And I have the public file. I have read all of the surveys on the file.
  401. Aside from the 1995 Gallup survey, where is there a reference that fully describes the WTM service in a survey?
  402. MR. K. JOHNSON: The earlier surveys did define the service.
  403. COMMISSIONER CRAM: That's not on the file. That is not evidence in this ---
  404. MR. K. JOHNSON: In Soucy Gagné -- we defined the service in terms of the studies that were done for Montreal by Soucy Gagné and for Toronto by Gallup.
  405. COMMISSIONER CRAM: So based on this discussion and your assertion, do you then believe that these polls support your beliefs about the marketing? Because as you say, these were used both for carriage issues and marketing.
  406. MR. K. JOHNSON: Absolutely.
  407. COMMISSIONER CRAM: The May survey of 2000 only surveyed people in Toronto and Montreal. You are not saying that this is really representative and conclusive of national demand, are you?
  408. MR. D. IANNUZZI: No, but the point is that this information was supplemental information in order to answer the fact that we had gone from one application to another application, and a six-month period had gone by, and to satisfy intervenors, CCTA, CAB and so on, we invested a further $35,000 in order to show that at least in the two principal, major markets that things had not changed, but things had grown.
  409. The whole point here is that in the eyes of the cable operator and so on, the true specialty, as they see it, is that the specialty is the world service, and that is why, as a general service, that that portion would be the most attractive to them, and that's why these surveys are the ones that we do that.
  410. The multicultural "Canadian element" of this whole thing, as designed in our application, to bridge with the world programming is a foregone conclusion that this is missing within the spectrum and, therefore, we believe that Canadians on a whole, whether they love world programming or not, the fact is that they at least get another fully Canadian service.
  411. COMMISSIONER CRAM: So when they talk -- when we talk -- and I guess we will have to go back to the digital hearings when we talked about the propensity to actually subscribe, and that goes to the marketing issue, it would appear that present practice is that people have to be at the highest area of interested, very interested, or agree completely. And so you really have 21 per cent in your May of this year survey that would be very interested in watching the service. And in November, you have an "agree completely" of 23 per cent.
  412. Do you think that that, in fact, justifies the kind of carriage that you would be asking for?
  413. MR. M. McHALE: I mean, we could spend hours here talking about the inherent bias in the construction of any question for a survey. You are talking about asking people to express demand for programming that most people in North America have never seen, as 94 per cent of the world's programming is unavailable. Then you are asking them further qualifications, would they accept subtitling, and then another further qualification, would they pay for it. And I think our numbers stay remarkably high given the inherent bias that's in any survey that you construct.
  414. MR. H. BERNSTEIN: I would like to add one thing to that, and that is that in '95 there was no question about the multiculturalism. Why continue to ask about that? Where there were questions were about whether or not world programming would be accepted and would subtitles be accepted. That's -- because we had to answer those questions, that's where those surveys went.
  415. COMMISSIONER CRAM: Yes. And I merely bring to your attention that they don't, though, reflect that support for the WTM service has grown because it doesn't reflect the service. The polls don't reflect the service.
  416. MR. H. BERNSTEIN: Like I said, the polls reflect what the questions were about the service from others.
  417. COMMISSIONER CRAM: I hear you.
  418. But my real question, and the question that I asked was, is 21 per cent, as in the May poll, or 23 per cent a sufficient or adequate level to justify us ordering 60 plus penetration in the analogue world?
  419. MR. D. IANNUZZI: It may seem a small number as compared to what, but the point I want to make is that if we start off that there is that demand for a service that cannot be compared to any other service in Canada, and then we step down to the next level and we take the midway point, which is good business, if you're in business, would give us that kind of a number that says, when we take the one most likely to to the one that probably would, disregarding those that wouldn't, then we still say that we have a potential market that starts off at 21 or 23, whatever the case may be, and works itself towards the centre, which gives a sufficient potential audience to make this a viable service.
  420. COMMISSIONER CRAM: I understand from the marketing position. The question is from the carriage issue.
  421. MR. D. IANNUZZI: We come back again that ---
  422. COMMISSIONER CRAM: And for us, on the Commission, if we are looking at something that has a 23 or a 21 per cent level of approbation, does that justify us ordering an extraordinary type of carriage for these years?
  423. MR. D. IANNUZZI: I would tend to selfishly say that definitely this is the case for this -- you make an exceptional choice ---
  424. COMMISSIONER CRAM: Based on the national ---
  425. MR. D. IANNUZZI: --- for an exceptional service that starts off with 23 per cent, that will grow maybe to 100 per cent, but it can't grow to 100 per cent unless it starts off with the right carriage.
  427. I wanted to go to the last survey that you filed here, the Compas November 28th one, and ask a few questions about that.
  428. The first one is, it's called a referendum. Why is it called that? What is the difference between that and a survey?
  429. MR. K. JOHNSON: That was the decision of the pollster. That's how we received it.
  430. COMMISSIONER CRAM: And the sample was 1,000 people. How was it weighted, or was it weighted?
  431. MR. K. JOHNSON: It was. I don't have the note here, but we certainly could get that information very quickly. No, I don't have the note here.
  432. MR. D. IANNUZZI: We will get that information for you, Madame Chair.
  433. COMMISSIONER CRAM: Okay. And the only survey that's on the file about price is the Gallup 1995 one, where it appears there is, at page 214 of the file, there is one-third of the people who have said they are not likely to want to pay the $0.38 I think you had in your survey.
  434. In none of the surveys did I see anything about "What would be your reaction if you were obligated to pay it?" Because that's what you are asking us to do. It is not, "Would you be willing to pay it?", but "If you were obligated to pay it, what would you do?"
  435. Have you considered that in terms of the repercussions both to your service and cable and DTH?
  436. MR. D. IANNUZZI: The question was that when we designed the service and the market in which we were reaching and for the type of carriage that we were talking about, it wasn't a question of being forced; it was a question that the basic service or dual status went to the fact that that was part of the cost of basic service and would, of course, increase it by that amount and become regulated as such. So with that there, why ask a subscriber? If we were going to be for basic, it wasn't a question of antagonizing them by saying "Would you want to be forced to pay for this if it was part of the basic service?" I think you are starting off with a negative there. I mean, the positive aspect here is, first of all, would he or she want this type of service, and if was, would you be willing to pay, whichever way it was, by regulation through one port or an increase on his bill, depending where you would end up on the system.
  437. So I think we qualified that, that yes, there was a great portion of the population that were surveyed that were willing to pay for the service.
  438. MR. K. JOHNSON: Can I -- excuse me.
  440. MR. K. JOHNSON: You were referring to the Gallup poll in 1995 ---
  442. MR. K. JOHNSON: --- in terms of the $0.38 a month.
  443. COMMISSIONER CRAM: I think it was, wasn't it?
  444. MR. K. JOHNSON: Yes. On a five-point scale, 27.3 per cent were five; 12.4 were four.
  445. Just one other addition. Let me read on the Compas -- we do have a note here:

    "Compas feel the national representative sample study of 1,000 voting-age Canadians, surveys of this size are deemed accurate to within 3.5 percentage points 19 times out of 20."

  446. COMMISSIONER CRAM: Thank you.
  447. I'm sure you understand, as I have said yesterday, the issue of affordability and that the Commission must, I think, concerns itself with that issue.
  448. And I ask you if, especially in the world right now with inflation and essential items like heating being increased incrementally, would that not create even a greater concern, or should that not create even a greater concern for us in terms of increasing any -- even looking at increasing any cable rates?
  449. MR. D. IANNUZZI: I suppose that's always a question that government and regulatory bodies look at, how and where these costs that are passed through to the eventual citizen should be taken into consideration. And I am sure you have taken that in consideration. Of all the services that brought the price up from -- and I remember it being $3.80 -- to today's rate of somewhere in the vicinity -- I think it's $13.00 or something. All consideration was given to these channels, some of which were priority channels and some of them are not. It was a question, in those cases, of giving Canadians choice and, therefore, choice has a cost. And it was passed onto the subscriber. And we are able to look today and justify the rate that was reached.
  450. I say to myself, again, why is it, therefore, that at this particular point we will analyse this and say, well, maybe we shouldn't pass this on to the subscriber, that whole portion of the population that haven't been receiving this particular service over the past decade when all of the other services were added to basic, priority or not. And today, on the other hand, we would like to say, well, maybe we went too far. Maybe we have reached the limit and we shouldn't add that other $0.35 to make it $13.35 when we're looking at this particular service and saying, well, maybe Canadians have the right to see this. And if that's the case, then they have a right, at $0.35, and everyone is paying a share of this.
  451. We believe in universality in Canada when it applies to a number of things. And this is one of those that fits into the mould. This is a pro-social service that Canadians have a right to get and then decide. First they have to get it, and then they decide if, what portions of this would they want to see, and turn the dial on or off, or change stations and so on, in order to see all of the other choices that you gave them. But this is one choice that should not be disregarded when it comes to the question of whether a further $0.35 or $0.37 should be added onto the basic service. It belongs there because it is a priority. It belongs there because Canadians are supposed to get it and Canadians have a right to get it, but in Canada your rights do have a string attached, and generally, we pay for the service on a universal basis.
  452. COMMISSIONER CRAM: We can't put the spilt milk back in the bottle. And are we not in a different environment where affordability of basic service does become an issue, especially given inflation?
  453. MR. F. KHARAS: Can I make a point on that?
  455. MR. F. KHARAS: I am a little bit confused about this question of inflation, because from what I understand, we are in one of the lowest periods of inflation we have been in in decades.
  457. MR. F. KHARAS: We have come off the levels of last year, and we are now hovering slightly higher than last year. But historically, our inflation rate has been much higher than it is currently.
  458. COMMISSIONER CRAM: Clearly you are not paying heating bills.
  459. MR. F. KHARAS: Well, Ma'am, I am talking about the overall rate of inflation of the economy, as I understand it, is fairly low for historical periods. I am not talking specifically about heating bills, but if you look at the rate of inflation in Canada today, it is historically and statistically accurate to say it is historically below average what it has been for the last few decades. That's a fact.
  460. COMMISSIONER CRAM: I take your point that in the '80's it was higher.
  461. MR. F. KHARAS: Well, not just in the '80's. Yes, in the '80's we had very high inflation, but if you take the '70's and everything -- look, it is slightly higher than last year. Last year was extraordinarily low, but inflation is not an issue.
  462. All the decisions that you have taken to increase basic rate, except for last year, were taken in a high inflationary period. That's a fact.
  463. COMMISSIONER CRAM: I hear you. And my point actually was talking about necessities such as heating, issues like that, for people who -- I mean, I don't think affordability is an issue.
  464. MR. F. KHARAS: Let's take, for a second, the low-income people, if that's what you mean, the people who have to make a basic choice between -- and here I am just speaking personally again -- but if you take a choice between a person who can't afford heating bill and an increase in their cable rate, if it's coming down to that kind of basic level, the people who are going to look at this are, I think, one of two kinds of people. Either the people who are fairly sophisticated and have some kind of international awareness and so on, what we mentioned earlier as the higher end, or are going to be sort of immigrants and refugees and others coming into the country and so on who are going to be looking at it, not just reading the subtitles, but actually listening to the program in their original language. That's what is going to appeal.
  465. So ironically, if you are going to ask somebody, "Do you want to increase your cable bill with another Shopping Channel or something, or do you want to increase your cable bill with this kind of service?", to those kinds of people at the lower end of society, you might find that they actually -- I mean, I don't think we've done this kind of survey, but I think my own inclination is that you might find a little bit more willing to pay for this.
  466. MR. M. McHALE: To put it in perspective, I mean, the overall cost on an annual basis is still less than a round trip on the Toronto subway system. Putting into perspective, as was pointed out yesterday, about the cost of a popsicle.
  467. COMMISSIONER CRAM: I wanted to go into your financial basic assumptions, and I was looking clearly at the fact that you are assuming a good chunk of your revenue is sub-revenue, subscriber revenue.
  468. Can you tell me -- and I will go to your financial pages -- 482 is what I was going to work on. What is the assumption of the penetration rate on the discretionary service in Class 1, 2 and 3?
  469. MR. M. McHALE: Could we refer you to page 348 that gives a detailed breakdown? That's P-348.
  470. COMMISSIONER CRAM: I don't have it with me. Can you just tell me?
  471. MR. M. McHALE: If I may pass this over to Pip Bola.
  472. MR. P. BOLA: Penetration rate on analogue of the discretionary tier, basically we looked at in the 80 per cent range, and that was basically taking the numbers from the CCTA '99 Annual Report, taking the discretionary tier and then taking 80 per cent of that, and break that down into Class 1 and Class 2.
  473. For the Class 3's, we basically took 25 per cent of that penetration, and DTH was also at 25 per cent.
  474. COMMISSIONER CRAM: Okay. So for Class 1 and 2, even though Class 2, based on your proposal, it will just be discretionary, you believe you will have 80 per cent penetration. Have I got that right, from the basis of your financial assumptions?
  475. MR. P. BOLA: That is correct, yes.
  476. COMMISSIONER CRAM: Okay. And yet, you have said today that you would be looking, bottom-line scenario, you would need at least 60 per cent penetration.
  477. Can you still meet all the commitments you have made with that?
  478. MR. D. IANNUZZI: Yes, that was our discussion. That's as far as we can go. We've got to use some -- you know, be a little more vigorous in our selling, in our marketing, in our sponsorships and so on, but we will just have to be a little more aggressive in that area.
  479. COMMISSIONER CRAM: And that would be based then again on the $0.35? Is that per sub?
  480. MR. D. IANNUZZI: That's unchanged.
  481. COMMISSIONER CRAM: And as I look over the years, at the end of the seven years, you are looking at an increase in sub revenue, but also a very substantial increase in advertising.
  482. On behalf of my colleague Commissioner Williams and I, why wouldn't it make sense, or could it make sense that year one would be, say, $0.35; year two would be $0.30; $0.25; $0.20, because your advertising revenue would be going up? I mean, I understand your purpose, that you want to be kick-started, you want to be able to have the money for the programming, but on the other hand, we have to concern ourselves with affordability. We also have to look at the fact that we ordered people to pay $0.15 for APTN. So is there a manner that we can get you what you need in the first place, but then set you free?
  483. MR. D. IANNUZZI: If I may just answer -- do you want to take this?
  484. MR. M. McHALE: Well, such a radical decrease in subscriber revenue would have an impact on quality of Canadian programming we produce because there is a direct expenditure tied into gross revenues each year, and that was one of the things we were looking forward to, as during the licence period we were talking about spending 41 per cent of gross revenues. So we would still spend 41 per cent of gross revenues, but what you are doing then is decreasing the amount of dollars available for production, and I think the quality suffers. So it's not as if 100 per cent of any additional increase in revenue is going directly to the bottom line.
  485. If you look at the return on investment over the seven years and factor in that the pre-launch costs have dated back a number of years, the return on investment over the seven-year period plus start-up is probably around the 14-15 per cent range, which is quite small.
  486. COMMISSIONER CRAM: So others have told us in this hearing.
  487. MR. M. McHALE: And we also raised the level of Canadian content. The model we started out with, over the seven years we will achieve a 50 per cent Canadian content level. In the start-up, because the diversity of programming that we are interested in is limited, we were saying yes, we would start off overall 41 per cent year one, rising up to 60 by year seven so that we would have a 50 per cent overall. We may be able to do it earlier, but by cutting back the amount of revenues we have available to us, that would make that virtually impossible to achieve, and we feel it's important that at the end of the -- over the seven-year period, that there is a balance between the two, that it's 50/50 in prime time and throughout the day.
  488. COMMISSIONER CRAM: How, at the end of the day, did you come up with the $0.35? Did you do it -- how do I call it -- deductively? You figured out how much you needed in terms of programming, and then figured out how much your advertising would make you, and then said, "And we need this much more." Is that how you did it?
  489. MR. M. McHALE: Deduction. We ended up building a comprehensive model on a spreadsheet in Excel, and then sat back and said, okay, based on the market penetration, based on various tiers, what do we need to survive? How can we reach an acceptable level? We had an idea on programming how much it was going to cost, so we would have to cover that base amount, the overhead. So it was more of a deductive.
  490. MR. P. BOLA: If I can just add to that, we went through a fairly thorough task in looking at various different models in trying to meet the criteria of the business plan, and we are still, from the previous model that we had filed, in this new model that we propose, we are still about $8.5 million short by year seven. So we have made a lot of compromises, and this is the one that seems to fit our needs.
  491. MR. D. IANNUZZI: If I can add that, again, in earlier applications, and I would say maybe three applications ago, when this was -- this basic plan was put together, we started off and came up with an analysis, and at that time the application was predicated on basic service. It was a base of $0.30, and would, over the seven-year period, work its way down to $0.28, and that was because of basic service. Now, with that capacity you are able to manoeuvre your marketing, because you have a basis on which to work with. You're working towards 100 per cent. And we had felt at that time that had this worked out over the seven-year period, at any period after the third year, if we were meeting our objectives and we had maintained a profit level for our shareholders -- and we have 3,500 shareholders -- the point was to reach a level of at least 20 per cent. This one here is based on 14 to 15 per cent, and that's without the reduction. But the costs have been brought up to $0.35 to make up for the difference of being on discretionary and using 80 per cent penetration. Now we're going down to a level of 60 per cent. Therefore, the possibility of even thinking about a reduction in the first seven years, probably on a renewal, when the Commission then looks at what -- not only the penetration we have achieved, how well we did in our vigorously selling of sponsorships and national advertising would we be able to have reached on an average, a 20 per cent return, then I would say -- and you could catch us on the renewal on that, and that is the point where we would look at a reduction of the basic service charge.
  492. MR. BROOKS: But to support the $0.35, if you look at our viewer demand surveys that we had talked earlier about, we can demonstrate or illustrate the results of those. If you look on page -- or I should say P-475, where it identifies quite clearly the type of target group we're talking to, their income and what they're willing to pay when you ask them if they're interested in the format and would they pay that extra 0.38 of a dollar.
  493. COMMISSIONER CRAM: I guess I find it interesting, because at page 112, and I think it's one of your letters, Mr. Iannuzzi -- you talk about the viability of the service being based on your capacity to attract an audience. But if 80 or 80 per cent of your gross revenues are from carriage, that really has very little do to with audience.
  494. MR. D. IANNUZZI: You will have to help me. You're reading from what page?
  495. COMMISSIONER CRAM: Page 112.
  496. MR. D. IANNUZZI: Is that P-112?
  497. COMMISSIONER CRAM: On the file, P-112. It's a letter.
  498. MR. D. IANNUZZI: Did that come from an earlier application, because we don't have it?
  499. COMMISSIONER CRAM: It could well, because I -- well, no, I just read this file. It doesn't matter.
  500. MR. D. IANNUZZI: I'm sorry, but our file brief, page 112 deals totally with a different thing.
  501. COMMISSIONER CRAM: Well, we will move along. I just have one last question.
  502. MR. M. McHALE: Maybe if you repeat the question again?
  503. COMMISSIONER CRAM: There was a reference to on -- I had 112 -- that the viability of the service was based on a capacity to attract audience. And when your revenues are 80 per cent consisting of sub revenues, then that truly can't be the issue, because viability is based primarily then on sub revenues.
  504. MR. M. McHALE: Your numbers -- your analysis is correct, however, is based on a seven-year period. The percentage starts to change as you go through the various years. The revenues in year one, two and three are predominantly subscriber revenue.
  506. MR. M. McHALE: You are correct.
  507. COMMISSIONER CRAM: Even after that.
  508. MR. M. McHALE: Year seven we were talking about $24.9 million coming from subscriber revenue and $11.7 coming from national advertising.
  510. MR. M. McHALE: So that the -- if you look at year one, we're saying the relationship is $20 million subscriber, $2.8 million advertising. So it's a 7:1 ratio.
  511. COMMISSIONER CRAM: Down to a 2:1 ratio.
  512. MR. M. McHALE: And it's almost 2:1 by the end. So there is quite a change, and we see advertising playing a major role in the success of the station as we go through the licence period.
  513. MR. D. IANNUZZI: With the increase of money going into programming at the same level though. We haven't diminished, so it hasn't gone to the bottom line so that the profit level to shareholders has increased. It has, in essence, diminished.
  514. COMMISSIONER CRAM: I hear you.
  515. You, at page 462 of the file, talk about the source of your advertising, and you say 21 per cent from off-air and 18 per cent from specialties. I find that -- is that outdated? Is that out of date?
  516. MR. M. McHALE: Yes, I think so. I think the percentage vis-à-vis existing off-air services and new advertisers is too high for on-air and revenues from new advertisers should be a lot higher.
  517. MR. D. IANNUZZI: Those numbers actually should be inverted.
  518. COMMISSIONER CRAM: So just tell me what they should be?
  519. MR. D. IANNUZZI: Approximately 14 per cent for existing off-airs and 21 per cent from new advertising sources. It's where I'm saying that we are going to be dealing with this a little more vigorously than we had to deal with it before.
  520. COMMISSIONER CRAM: Okay. So before we got to the 60 per cent penetration issue, it was 21 per cent, and then 18 per cent in specialties?
  521. MR. D. IANNUZZI: Correct.
  522. COMMISSIONER CRAM: And so now, when we're at the 60 per cent, it goes to 14 per cent off-air?
  523. MR. D. IANNUZZI: That's right. And 21 per cent would be the increase of revenues from new advertisers.
  524. COMMISSIONER CRAM: New sources?
  525. MR. D. IANNUZZI: Correct.
  526. COMMISSIONER CRAM: Okay. And when you're talking about 18 per cent from the specialties, in the first year you're talking 200,000 -- no, 400,000 from the specialties, because there's about a million advertising -- 20 per cent, so it would $200,000, going to $11 million, 20 per cent of that in seven years?
  527. MR. D. IANNUZZI: I think that's reasonable to say with the developments and the fact of specialty service, as we too will be a specialty in that area. The increased interest by national advertisers towards specialty, some of it would come from that particular area. The pools of money are moving.
  528. COMMISSIONER CRAM: In a world when we are going to be launching potentially hundreds of other channels?
  529. MR. D. IANNUZZI: I know, but this was in the world of analogue prior to the new digitals and all the problems inherent with that. I think it's the pool of money that we're talking about and not the number of cable -- of the specialty services, because that won't change. I mean, the amount of advertising that is available in today's market will not be too much different than the market tomorrow, as far as this year is concerned, but come September, when you launch 21 or 39, whatever the number might be, they're drawing from that same pool that we will. So when we call it the monies that advertising agencies have set in order to target their markets through specialty channels, i.e. Home and Garden and those types, are specific and, therefore, there is a fair amount of money in that area. Well, we believe that from those pools of money where agencies have targeted or set up budgets for specialty channels, that we will take it, because that pool is the one that's growing faster than it is for off-air stations.
  530. COMMISSIONER CRAM: And you think of that pool that you will take just under 20 per cent of it?
  531. MR. D. IANNUZZI: M'hm.
  532. COMMISSIONER CRAM: Thank you very much.
  533. MR. D. IANNUZZI: Not 20 per cent of the pool, 20 per cent of the money we require will come from the pool.
  534. COMMISSIONER CRAM: Yes, I hear you.
  535. MR. M. McHALE: Commissioner ---
  536. COMMISSIONER CRAM: Which is 20 per cent of a million, which would be $200,000 building up to whatever.
  537. MR. D. IANNUZZI: Correct.
  538. MR. M. McHALE: Commissioner, I think the other thing that is confusing on the chart and probably should have a descriptor, this is looking at the start-up period. The revenues from increased overall -- in the header at 10.3.2, for the first year of operation, provide a table showing the potential. So we're only talking about year one. So it's not like in year seven that we are taking and which our advertising revenues is $11 million that we're taking 20 per cent of specialty channels. This is only year one. We personally feel that revenue from new advertisers over the course of the licence period would be ---
  539. COMMISSIONER CRAM: Will be your primary source.
  540. MR. M. McHALE: Yes.
  541. COMMISSIONER CRAM: Okay. Thank you very much.
  542. Thank you, Madame Chair.
  543. THE CHAIRPERSON: Let me just see if there are any questions from other Panel Members. Commissioner Williams? Commissioner Wylie?
  544. COMMISSIONER WYLIE: Just one question. Mr. Iannuzzi, I want to make sure I understood you. When you told us what compromise you would accept, which would be a penetration tier of 60 per cent rather than the highest, did you intend that to apply to both Class 1 and Class 2's?
  545. MR. D. IANNUZZI: Yes.
  546. COMMISSIONER WYLIE: And you understand that at the moment Class 2's are not -- I hope legal counsel is listening in case I make a mistake. My understanding of the current analogue access rules is Class 2's must give modified dual status if they choose to carry the service, but they don't have to carry all the services. So that would mean then that you would want a variation there, you would want a required analogue access on both Class 1 and Class 2's in the modified dual status with the addition of a penetration tier of 60 per cent?
  547. MR. D. IANNUZZI: That's correct, Commissioner Wylie.
  548. We are, in essence, as we stand before you, although we are sitting, stand before you, is that we are, in essence, asking for regulatory relief, if that's the word, that will enable us to stand behind our commitments, as we have illustrated them here today. Our commitments are unchanged. Our compromise has been slightly lowered or increased, whichever way we want to look at the compromise, but in exchange for that, we are saying, can't you, within your own discretion, as you have shown in other situations -- and I don't want to say they are precedent-setting, but the fact is it has shown that there is latitude that when certain services offering some particular idea, concept, that would fit so well within the broadcasting system, give the balance, that there would be a consideration to offset anything else that we may have given up that would have hampered the programming quality or percentages that we're offering. But in each case, even with the question of the percentage of Canadian content, we stayed and held to that particular commitment, even though specialties have a tendency to back off and start at levels of 15 and work your way up.
  549. We have stayed on that because the Canadian programming is the integral part of -- it is the soul of this particular -- if I didn't believe that, then I wouldn't say, "Why not make up the difference in revenues by savings in our Canadian content portion." No. Canadians deserve the best service they can get. They are going to have to get and deserve the best that we, who have a certain amount of experience, in order to give them that.
  550. So we are asking -- if that's the thing that we're asking, that little extra relief of regulatory support, that would be the illustration that we were able to convince you then that this is a viable service that warrants your consideration.
  551. THE CHAIRPERSON: I have one question. It's kind of a of a picky little question, but it sort of goes back to some of the discussion that we had about the language of your programming. And I'm just looking at page 6 of your financial statements, and it's P-346. I'm just looking at your programming expenses, and it may just be a labelling issue, but under non-Canadian you've got non-Canadian acquisitions English, non-Canadian acquisitions French, and then you have two lines for subtitling expenses, one for English and one for French.
  552. When you say non-Canadian acquisitions English, do you mean foreign language programming with English subtitles already on it? And if so, why do you need a separate line for English subtitling?
  553. MR. M. McHALE: Both lines should be rolled together on the acquisitions.
  554. THE CHAIRPERSON: The what should be rolled together?
  555. MR. M. McHALE: Non-Canadian acquisitions English and non-Canadian acquisitions French, it should be one line. At one stage, in an earlier application, we were talking about introducing the French service at year three, and I think this is a hold-over from that older model. So when you're looking at the amount of money we will spend on acquisitions and the amount of money we will spend on subtitles, we just said we would allocate a similar amount to both English and French. But those first two lines should be combined into one. We are not buying for separate services.
  556. THE CHAIRPERSON: Right. And the non-Canadian acquisitions -- so the English and French shouldn't even be there.
  557. MR. M. McHALE: Shouldn't even be there at all.
  558. THE CHAIRPERSON: This is your international programming and ---
  559. MR. M. McHALE: This is international programming period.
  560. THE CHAIRPERSON: Whatever limits we might impose on you goes under your condition of licence ---
  561. MR. M. McHALE: Yes.
  562. MR. K. JOHNSON: All starting in year one. It's all as of year one, because the earlier models, we had it starting the French service in year three.
  563. THE CHAIRPERSON: Right. But it actually should just be one line?
  564. MR. M. McHALE: Yes, it should delete the English and French qualifiers in both lines.
  566. MR. D. IANNUZZI: Also, I would like to add that the conditions of licence that we will be turning over or discussing shortly will speak to that whole thing, that it does become all one, and not a distinction as to who we buy English programming for the English -- foreign programming for English channels and world programming for the French channel.
  568. MR. D. IANNUZZI: So we will speak to that shortly.
  569. THE CHAIRPERSON: All right.
  570. Commissioner Cardozo, I believe, has a question, and then we will go back to the discussion on the conditions of licence.
  571. COMMISSIONER CARDOZO: Sorry, it may be part of the same. Yesterday, we talked about the English and the French being pretty much identical programming, and I just wanted to clarify also whether the two English feeds would be identical to each other, but merely time delayed?
  572. MR. M. McHALE: That's correct.
  573. COMMISSIONER CARDOZO: So you don't even anticipate changing the order of programming?
  574. MR. M. McHALE: No, we don't. It will be an identical channel except for time differences.
  576. MR. D. IANNUZZI: I may add that there may be situations where for allowing for special events and scheduling considerations, that's the only time, but otherwise it would be identical.
  577. COMMISSIONER CARDOZO: Okay. Thank you.
  578. THE CHAIRPERSON: Mr. Iannuzzi, why don't you take us back to the conditions of licensing information that you said you would talk about at the beginning of the morning?
  579. MR. D. IANNUZZI: Thank you, Madame Chair.
  580. First of all, in dealing with the foreign programming, which we had quite a discussion yesterday, and we have given a fair amount of thought to this and we would like to read this into the record. One, that a maximum of 20 per cent of programming purchased in any one language in any one quarter. Tied to that though would be a maximum of five per cent English from the U.S. and written in any quarter. That's each of the U.S. and Britain, for a total of 10 per cent, and a maximum of 10 per cent from any one country of origin in any one quarter.
  581. Shall I carry on? Do we want to discuss that or carry on?
  582. THE CHAIRPERSON: I think we can have you carry on, and then if people have questions, they can ask them.
  583. MR. D. IANNUZZI: The second part of the -- or second condition of licence would deal with French language and regional programming. A minimum of 30 per cent of the expenditures on Canadian programming in a year on French language programming; a minimum of 30 per cent of the expenditures on Canadian programming in a year on Quebec-based production; a reasonable balance of expenditures on Canadian programming in a year across the other regions in Canada.
  584. COMMISSIONER CRAM: Can you just repeat that?
  585. MR. D. IANNUZZI: To start off, a minimum of 30 per cent of the expenditures on Canadian programming in French language programming in a year; a minimum of 30 per cent of the expenditures on Canadian programming in a year on Quebec-based production; a reasonable balance of expenditures on Canadian programming in a year across the other regions of Canada.
  586. COMMISSIONER CARDOZO: By other, you mean not Toronto?
  587. MR. D. IANNUZZI: That's all other regions in Canada; Ontario, Manitoba, Alberta, and so on.
  589. MR. D. IANNUZZI: Dealing with the categories FC and D, Sports, Category 7(d), a maximum of 35 per cent of the programming hours in prime time, being 6:00 to midnight, and a maximum of 25 per cent overall. Category 7(c), a maximum of 20 per cent of the programming hours in prime time, 6:00 to midnight and overall.
  590. THE CHAIRPERSON: Excuse me, Mr. Iannuzzi, do you have this typed up? Instead of just reading it into the record, it might be easier to get photocopies of this for both staff and the Commissioners so that we can ---
  591. MR. M. McHALE: We will provide one after the break, a clean copy. We were all doodling on ours.
  592. THE CHAIRPERSON: Okay. That would be good, just so that we're not going, "Oh my God, I missed that!"
  593. MR. M. McHALE: No, no, you can have it.
  594. THE CHAIRPERSON: If we could have a copy of that after ---
  595. MR. M. McHALE: Absolutely.
  596. THE CHAIRPERSON: --- the break.
  597. MR. D. IANNUZZI: So Category 7(c), a maximum of 20 per cent of the programming hours in prime time, 6:00 to midnight and overall, and sports, a maximum of 10 per cent of programming hours in prime time 6:00 to midnight and overall.
  598. That concludes the conditions of licence as dealing with the programming.
  599. THE CHAIRPERSON: Legal counsel.
  600. MR. P. McCALLUM: Just on the 30 per cent minimum in French in a year and minimum of 30 per cent on Quebec-based programming in a year, I didn't understand the relation between the two of those. Could you just -- is it all of that 30 per cent to go on Quebec-based programming, or is it 30 per cent of 30 per cent, which is nine per cent, to go on Quebec-based programming?
  601. MR. M. McHALE: No. The first one talks about French-language programming, 30 per cent, which will predominantly come from Quebec, but may come from other parts of the country, and the 30 per cent overall from Quebec as well, which may include some English language ---
  602. MR. P. McCALLUM: I see. Okay. Thank you.
  603. MR. D. IANNUZZI: That's right. We intend to produce English-language programming in the Province of Quebec as well.
  604. MR. P. McCALLUM: Thank you.
  605. At page 12 of your presentation yesterday, and I think also at page 346 of your application, you talked about expenditures of 41 per cent of gross revenues on Canadian programming. Would I be correct that you would agree to undertaking that as a condition of licence on an annual basis?
  606. MR. M. McHALE: I would average it down to 40 per cent overall.
  607. MR. P. McCALLUM: So you would take it down one percentage point to make it 40.
  608. MR. M. McHALE: To make it 40 per cent even, yes.
  609. MR. P. McCALLUM: But it would be acceptable as a condition?
  610. MR. M. McHALE: That's acceptable.
  611. MR. P. McCALLUM: On captioning, how much of your schedule in the English and French feeds would be closed captioned?
  612. MR. M. McHALE: We have a table in our application, and we will give it to you after the break. It's just a problem locating it, on closed captioning.
  613. MR. P. McCALLUM: Okay. I've got a related question to that, and I don't know if your table includes it or not. Does this include subtitled programming?
  614. MR. D. IANNUZZI: We keep them distinctive. As far as the expenditure, as we just said, with the programming, 40 per cent was our average expenditure. We have allotted here for closed captioning a total of 900 -- and that's 1.820 or .42 per cent in French closed captioning and .42 per cent of our budget for English closed captioning.
  615. MR. M. McHALE: To answer your question, every program that's subtitled, yes, would be closed captioned because it's an easy transfer with some enhancements to insert in the BBI VBI line.
  616. MR. P. McCALLUM: Would you be prepared to commit to the closed captioning of both your English and French language on each of your feeds by the end of the licence term?
  617. MR. M. McHALE: Yes, we would, by the end of the licence period.
  618. MR. P. McCALLUM: And similarly, would you be prepared to commit to the closed captioning of at least 90 per cent of the programming that is not subtitled on each of your English and French feeds by the end of the licence term?
  619. MR. M. McHALE: Yes, we would, assuming a seven-year licence period again.
  620. MR. P. McCALLUM: Yes, I understand that.
  621. You are proposing, as I understand, three different feeds, in English an eastern feed; in English a western feed; and in French one feed. That's correct?
  622. MR. D. IANNUZZI: That's correct.
  623. MR. P. McCALLUM: What is the relationship amongst those feeds? If the Commission saw it fit to deny one or other of the feeds, would you still implement? And if so, which ones would you not implement, or which ones -- what are the possibilities there?
  624. MR. M. McHALE: The only -- if we had to drop a feed, the only one -- we would drop one of the English. The nature of the service is that we want one channel, two services, three feeds, one, two, three. So dropping one feed, the only one you could drop is one of the English, and have one English national feed.
  625. MR. P. McCALLUM: So for example, you might drop, for example, the English western feed?
  626. MR. D. IANNUZZI: Again, reluctantly. All we would be doing is adding to western alienation. That means I lose ---
  627. THE CHAIRPERSON: Not necessarily.
  628. MR. D. IANNUZZI: We lose our Marketing Director ---
  629. THE CHAIRPERSON: It depends on how you program your channel.
  630. MR. D. IANNUZZI: --- who is a Vancouverite.
  631. MR. P. McCALLUM: But just for the record, it is integral to your service that you be granted at least one English and the French feed in order for you to implement this service. Is that correct?
  632. MR. D. IANNUZZI: Correct, but I would have to really understand, if we are willing to pay for the feed and the feed is there, why we should not be able to service western Canada in the timeframes that western Canadians should be able to see this service without getting up at 6:00 in the morning in order to find some responsible programming.
  633. MR. P. McCALLUM: Thank you.
  634. MR. D. IANNUZZI: We're trying to keep unity involved in this application as well. Why work against it?
  635. MR. P. McCALLUM: So just for that, if the Commission determined that it was possible to license this, just to take an example, in French only, and the English service were denied, you would not implement. Is that correct?
  636. MR. D. IANNUZZI: The French service alone would not be a viable situation.
  637. MR. P. McCALLUM: The same question for the English service alone?
  638. MR. D. IANNUZZI: Well, again, we are denying Canadians, a whole segment of Canadians of this service. It's not a question of language at this point. The language used of the two official languages makes it possible to reach all Canadians. I cannot see a Canadian service of this type having -- not having another service, a French equivalent. If we look at all the specialities we have had and whether it is music, film or what have you, we have always found that it was necessary to have a French equivalent. We are saying here that in order -- neither one of them could live without each other, which is really Canada.
  639. MR. P. McCALLUM: Therefore you are saying you would not implement ---
  640. MR. D. IANNUZZI: We would not.
  641. MR. P. McCALLUM: You would not implement the ---
  642. MR. D. IANNUZZI: Pardon?
  643. MR. P. McCALLUM: You would not implement the ---
  644. MR. D. IANNUZZI: Again, we are setting it off on the wrong -- we are setting it off on the wrong foot. We would have to maybe come back to the Commission with something totally different that would say something -- we have another idea where only one part of Canada now should get this and we are hoping you are going to give us the relief that allows us only to serve those portion of Canadians and let's make damn sure that in the next decade Quebec does not get this service. Because then we would be in a competitive situation creating our own competitor.
  645. In this case here we are dealing with a cultural diversity of a certain kind, the first time in Canada in any one particular channel and it needs all of the support that it can get.
  646. MR. P. McCALLUM: So you are saying effectively you would not implement the service even if the English language feed, only one feed were granted?
  647. MR. D. IANNUZZI: Correct.
  648. MR. P. McCALLUM: Even in that case no?
  649. MR. D. IANNUZZI: As a Canadian, my answer is no.
  650. MR. D. McCALLUM: Thank you.
  651. Thank you, Madam Chair.
  652. THE CHAIRMAN: Thank you, Mr. McCallum.
  653. We are going to take a half an hour break, a very short lunch, just enough time to grab a sandwich and come back. We will begin hearing the intervenors. Thank you very much for your patience and your time. We will start hearing the intervenors at one o'clock and we will go through all of those who are here and then we will go to reply.

--- Upon recessing at 12:30. / L'audience est suspendue à 12h30.

--- Upon resuming at 1:08 p.m. / L'audience est reprise à 13h08.

  1. THE CHAIRPERSON: Good afternoon and welcome back. We are going to commence with the interventions now on WTM's application.
  2. Mr. Secretary.
  3. MR. M. BURNSIDE: Thank you, Madam Chair.
  4. Before I call the first intervenor, I would like to point out that Intervention No. 2 and Intervention No. 9 appeared yesterday. As well, what is listed as Intervention No. 3, Colleen Beaumier, the Panel has consented to hear this intervention by a videotape, but it will be moved to last on the agenda for the intervenors.
  5. Again, before starting, I would like to remind all intervenors there is a maximum of 10 minutes for their presentation and the Panel would appreciate that rule being respected.
  6. I would like to now call the representatives of the CCTA to present their intervention.


  7. MS J. YALE: Thank you.
  8. Good afternoon. My name is Janet Yale and I'm President and CEO of the Canadian Cable Television Association. With me today is Mary Lemon, Director of Policy and Regulatory Research.
  9. As the Commission is aware from the CCTA's written comments, we oppose the World Television Network application for a national specialty service.
  10. WTM has refiled its earlier application, which was denied by the Commission in September of 2000, changing only the carriage and rate elements of the application.
  11. WTM is asking the Commission to grant it a licence for a dual feed speciality service -- comprising the English and French language versions of WTM -- with unique access rights. WTM is once again seeking preferential treatment -- to be permitted mandatory analogue carriage.
  12. In its previous application, WTM sought dual status on analogue carriage at a wholesale rate of 30 cents. WTM is now asking for mandatory analogue carriage on the highest penetration tier and mandatory digital carriage at a wholesale rate of 35 cents. They argue that they deserve special carriage entitlement because its -- the service is of national importance and fills a gap in the Canadian broadcasting system by providing a unique multicultural service. We do not agree that WTM's service is of national importance or that there is a pressing need for this sort of service.
  13. The Commission has taken numerous steps to ensure that the multicultural nature of Canadian society is reflected in and supported by the Canadian broadcasting system. For example, the Commission has licensed off-air broadcasters such as CFMT and CJNT, specialty services such as Fairchild, Telelatino and Odyssey, as well as numerous new Category 2 services. In addition, the Commission has authorized the carriage of several foreign services and, hopefully, may soon authorize even more. Multiculturalism has been recognized and fully supported by the CRTC.
  14. It is important to emphasize that WTM's proposed service is the same as the one which was denied a licence last September in Decision 2000-393. The Commission, in denying WTM's application, stated that WTM had not demonstrated that its service, and I quote:
  15. "... would have been of exceptional importance to the achievement of the objectives of the Act, warranting what would in effect be mandatory distribution on the basic service at a monthly subscriber fee."
  16. In the CCTA's view, nothing has changed since the Commission's Decision to warrant a different conclusion. WTM's request for mandatory carriage status remains unreasonable. WTM has not justified receiving any form of mandatory carriage especially not analogue carriage.
  17. The Commission has recognized the future of broadcasting is digital. As recently as a month ago in Decision 2001-270, the Commission emphasized that it strongly favours digital distribution of specialty services and that, since 1997, it has only considered applications for digital specialty services, with very limited exceptions.
  18. In our view, WTM's proposed service does not warrant analogue carriage. On the contrary, we believe it would be counterproductive to licence a new analogue service at this time. The industry faces considerable challenges to make ready digital capacity for an increasing number of services.
  19. This fall our member companies will be adding a significant number of new digital services to their line-ups; all of the new Category 1 services, a variety of Category 2s and a number of French-language services in Anglophone markets. They must also ensure there is adequate capacity for DTV services which will be available in the future. Requiring cable companies to carry an additional analogue service cannot be justified in this context. In fact, such a requirement could have the effect of reducing diversity by using up capacity that might otherwise be available for up to 10 or more new digital services.
  20. Finally, we believe it is either naive or disingenuous of WTM to suggest that modifying its carriage status from mandatory basic to mandatory carriage on the highest penetration tier somehow addresses the issue of customer choice. The plain fact of the matter is that giving customers the choice of accepting and paying for WTM or dropping the most popular discretionary tier is not giving them a choice at all.
  21. The lack of choice in WTM's packaging proposal would be highlighted by the roll-out of digital services this fall, a situation where customers will be given true choice. Given the total lack of justification of imposing WTM on customers, we would anticipate a very negative reaction to WTM's proposed form of carriage.
  22. The CCTA would like to emphasize we do not oppose the granting of a Category 2 licence to WTM, however, we strongly oppose WTM receiving any form of mandatory carriage.
  23. Thank you for the opportunity to provide these comments and we would be pleased to answer any questions that you have.
  24. THE CHAIRPERSON: Thank you, Ms Yale.
  25. You have characterized the request for carriage in your written intervention as unreasonable and extraordinary and I think you have called it unreasonable again in your remarks today. You said that WTM should not be granted special access of any kind on either analogue or digital. And you said at paragraph 7 of your written intervention that WTM has not justified receiving any form of mandatory carriage, either analogue or digital.
  26. In your remarks I was going to say you didn't say why, in your written intervention, why you didn't feel that they had justified that. You spent a lot of time talking about the change in the environment, the carriage environment and all the technical reasons with respect to the migration to digital and the roll-out of digital. But you didn't really spend a lot of time talking about the issue of whether or not the service does justify some kind of special treatment based on its nature of service.
  27. Now, today you have talked a bit more about that aspect, and you have said that the Commission has taken numerous steps to ensure that the multicultural nature of Canadian society is reflected in and supported by the Canadian broadcasting system. You talk about CFMT and CJNT and the specialty services such as Fairchild and Telelatino and Odyssey as well as the new Category 2s, and conclude that multiculturalism has been recognized and fully supported.
  28. I mean I'm on the Commission. I would argue that it has been fully supported. So I want to challenge you on that because if you look at those specialty services and even the over-the-air broadcasters, CFMT and CJNT, they are mostly third language and they are not accessible to the Anglophone and Francophone Canadians who are neighbours with an increasingly changing Canadian society. So how do those fully support?
  29. I mean if we just take those. I mean the other thing you can look at is, for example, the carriage status of the specialty, the ethnic specialties. So how do you make that argument? And if that is not really the argument, then what is the argument that this service is not of national importance?
  30. MS J. YALE: Well, let me start and if Mary has something to add, she will.
  31. I guess our starting point as you noted is not whether or not the service is -- might not be -- add something to the system. And that is why we say that the service can get a licence on the terms and conditions under which licences are currently being granted, which is on a digital basis.
  32. So I am not trying to suggest that this service is not a worthwhile service and that it shouldn't be given a licence. I really want to be clear about that. The real question is: in this current environment where the Commission for a number of years now has been saying that the future is digital, and all applicants who didn't get licences in analogue for a number of years were required to reformulate their business plans and expectations from a revenue perspective in relation to digital carriage, everybody else was able to come forward through the digital licensing process and respect the basis on which the Commission indicated it was going to be licensing new services on a going forward basis. And there is a variety of genres and niches that have now been occupied that weren't.
  33. So the issue isn't whether or not the service is deserving of a licence. The issue is whether this service -- whether there is such a gap in the landscape of services in Canada that this service deserves special exceptional treatment that warrants not only giving it an analogue licence, but guaranteeing its carriage, in effect, on Class 1 and Class 2 systems. Notwithstanding, as discussed earlier, Class 2 systems aren't even subject to the access rules in the same way as Class 1.
  34. So I really come at it from a different perspective. So when I look at it from that perspective, I do look at all of the services that are available for various ethnic and cultural groups in this country and there is a lot of them.
  35. THE CHAIRPERSON: But this service is not targeted to them.
  36. MS J. YALE: Well, that is what they claim, but you know there are two essential pieces to their service. One piece is bringing foreign product into Canada and targeting it, they say, for the non-ethnic community by subtitling it. The Commission itself in its last decision made it clear that the Commission didn't think that that would be very popular with consumers and I certainly share that view.
  37. So it is not clear to me that at the end of the day, while they have characterized it as a general interest service or tried to suggest that, that at the end of the day that it is going to appeal to anybody but the group in whose language the particular programming is targeted. And then when I look at the actual substantive programming in those languages, I look at the list of services that are either already launched or about to be launched and I would argue that there is a very, very full and complete range of services, or will be through the digital launch, targeted at a variety of ethnic communities and that need will be met through the digital carriage, which, as the Commission suggested, is exactly the future that the Commission is trying to encourage.
  38. THE CHAIRPERSON: Yes, and I mean that is certainly the argument that you made in your written intervention and that you have reiterated in your opening remarks. But the fact that the Commission has recognized that the future is digital and that the roll-out of digital is a really important thing that needs to happen in terms of consumer choice and putting that control must closer to the consumer, taking it out of the hands of the distribution undertaking in some ways, hasn't precluded the Commission from looking at certain services and applications in the context of meeting the objectives of the Act and saying, "You know, what? There is a gap here and there is a particular need and this should be carried on analogue."
  39. So I take your point but it doesn't mean necessarily that we couldn't say, just as it doesn't mean for distributors that they can't take one of the services that was licensed for digital and put it on basic if that is what they end up doing in order to get that into the system. Analogue is still being used. It's not like analogue has been cut off and is no longer available for anybody to do anything with for any reason.
  40. MS J. YALE: No, there is -- it's correct that analogue exists and will exist for some period of time. I guess, as I say, the question is whether or not this service is in the category of services where the Commission has felt that it was important to authorize on an exceptional basis to meet a need that would otherwise completely not be addressed within the broadcasting system.
  41. I think there is a distinction between something like this service and something like APTN where arguably but for APTN there would not be Aboriginal language programming. So it would be hard to argue that without the APTN the needs of that community would be served.
  42. THE CHAIRPERSON: But you could argue, and I mean, of course, my role here is to play the devil's advocate with you ---
  43. MS J. YALE: Fair enough.
  44. THE CHAIRPERSON: --- and explore all of these views. You could argue that but for the existence of a service like this there would not be world programming in the system with subtitles so that you and I could sit down on a Friday night and watch a movie from some other country in the world because it's not there now. By and large, it is not there now with the subtitles.
  45. MS J. YALE: Well, I disagree with you that -- on two counts. First of all, I do believe that many of the new services that are coming on board this fall will provide that kind of opportunity. We are having new foreign services come in through the list of eligible satellite services. There are over 40 Category 2s licensed for distribution and it seems to me those are the very kinds of opportunities to bring foreign-language programming to Canadian viewers. At the end of the day, the viewers that are going to be most interested in that programming, are the viewers for whom that language is the language of choice.
  46. If there is a broader demand for that, then that demand will be met through the possibility of subtitling.
  47. THE CHAIRPERSON: Is it that the Category 2s that we have licensed are going to do much subtitling?
  48. MS J. YALE: They may. I mean it's -- I'm not a licensee. But it strikes me that if they are trying to make sure that their service is taken by more rather than less people, they will do things to make sure that that programming appeals to a wider audience. And the only way to do that is to make that programming accessible as is the WTM proposal.
  49. But as the Commission itself recognized, I mean, you know, the idea that consumers are going to be watching on analogue programming in large numbers, subtitled programming I don't think is a reasonable assumption. I think, at the end of the day, the programming is going to have its appeal to the people in whose language that programming is provided.
  50. I think that -- so I think the basis on which the service is proposed to be general interest is the premise that I guess at the end of the day we disagree with. It's that, yes, it does bring a variety of programming -- of foreign programming to market, but I don't believe that it is really going to be of interest to a broad group of consumers.
  51. So I do see the service much more as a series of ethnic services, depending on which night and which ethnic community it is targeted at, rather than a general interest service by virtue of subtitling foreign-language programming.
  52. THE CHAIRPERSON: Do you think that there is -- I mean looking realistically at the television landscape and what is available to people right now and without -- because you look at the third language services that have been licensed, and they are third language, and they don't have subtitles. So Odyssey and South Asian Television and Telelatino, some of their programming may from time to time have subtitling, but generally speaking it doesn't. They are mostly available, with the exception of Telelatino, in some markets across the country on digital.
  53. In fact, they are being -- I think they are being used by some of the distribution undertakings to drive the roll-out of the box, which is it's not a bad strategy. But what it means is that it's not readily available. You have to spend the eleven bucks a month on the box first in order to get them.
  54. So that programming is essentially not available to the mass number of subscribers. CFMT is available in Toronto, London, Ottawa. CJNT is in Montreal. That essentially is all the ethnic television programming that there is, with the exception of a bit that CHUM does on their channels.
  55. So in your view is there a gap in the Canadian television landscape? If you look at basic and the first tier, which has, you know, 90 per cent penetration, even the second tier which has -- I don't know what the figure is for tier two overall. But is there some kind of a gap in the system in terms of the provision of multicultural programming? Whether it's in a third language or in English or French, which is what we call bridge programming, that may target an ethnic community, a specific ethnocultural community. Do you see a gap in the system in that way and -- yes, do you see a gap in the system?
  56. MS J. YALE: Well, I would distinguish between whether or not there is a niche that on a market basis a new service might fill. As I said, we support this service getting a Category 2 licence and it may well find ---
  57. THE CHAIRPERSON: I want to discount ---
  58. MS J. YALE: No, but ---
  59. THE CHAIRPERSON: I want to discount digital though. Because digital is in so few homes right now and there is an eleven dollar barrier to entry.
  60. MS J. YALE: Well, you know, I have to say that I don't consider 1.6 or whatever million homes a trivial number of homes and it's growing. So if you add up the number of DTH customers and cable customers with digital boxes, today even before the launch, I don't think it's a trivial number and I don't think it should ---
  61. THE CHAIRPERSON: I'm talking cable really.
  62. MS J. YALE: Well, but ---
  63. THE CHAIRPERSON: What are the numbers for cable -- 500,000?
  64. MS J. YALE: About 600,000 boxes.
  65. THE CHAIRPERSON: Six hundred thousand.
  66. MS J. YALE: And we are aggressively driving the roll-out of that and waiting, as you know, for the new content to drive it. But -- so having said that is there ---
  67. THE CHAIRPERSON: Is there a gap?
  68. MS J. YALE: --- is there a gap that would warrant the exceptional treatment as proposed by WTM, I don't think so. I think not and I'm very ---
  69. THE CHAIRPERSON: Why not? Why don't you think so? How is that -- how is the multicultural nature of society being served?
  70. MS J. YALE: I guess it depends on what the definition of multiculturalism really means. If it's -- if we are trying to make sure that people can, from different ethnic backgrounds, have an opportunity to see programming in the language of their choice and to see programming from perhaps their country of origin, I think that the Canadian Broadcasting System does a very, very good job of that. I think the over-the-air services, the current specialty services, the foreign satellite services that are already eligible for distribution, adding to that 40 new Category 2s that may be distributed there is a lot. I don't think you can just ---
  71. THE CHAIRPERSON: Right. But what about the focus of this application which is more like you and me? More bringing a different level of understanding of multiculturalism by bringing the world programming into Canada and exposing us to that through the business of subtitling. And helping us to understand thereby that the demographic nature of our society is dramatically changing and, you know, we are not all -- we are no longer all from British ancestry and French ancestry. So does it help to sensitize us?
  72. I mean if there is not a gap, that is -- if you think there is not a gap, that is fine. But if there is a gap, what would fill it?
  73. MS J. YALE: Well, my personal view is that subtitled foreign films is not a way to -- and other kinds of foreign dramatic programming is not a way to enhance knowledge and understanding of various ethnic groups in this country.
  74. So I certainly reject the notion that subtitled foreign programming is going to get the kind of display even on -- in analogue that would help that objective. I think the Commission itself, and I can only refer back to the Commission's own decision in denying the WTM application the first time around, to suggest that that is not something that would have appeal, and if it doesn't have appeal, it won't get watched. And if it's not watched, then it's not ---
  75. THE CHAIRPERSON: Well, we weren't convinced by what was put on the record.
  76. MS J. YALE: I don't this application in substance is any different than the previous one. What is different is the terms of carriage and the rate. The substance of the application is unchanged. So if the Commission based its conclusion last time on rejection of subtitled foreign-language programming as a basis for enhancing multiculturalism, I don't see that anything has changed from the last application to this one.
  77. I would also note that some of the services like Bravo! and Showcase do show subtitled films. It's not that there is a complete gap on this front. And as I say, I think that if there is quality programming out there from other countries, we are going to see that programming brought in through many of these new applications and done in a way that tries to make sure that the audience is as broad as possible.
  78. I think it is very important to keep in mind that we are also thinking very hard about what it is going to take to have a successful digital launch. We are worried for many systems that don't have significant capacity, about our ability to meet all of the other objectives of the Commission that we are trying to help fulfil. That has to do with the successful launch of Category 1 and Category 2 services, our requirement to meet the new minority language obligations that come into effect this fall and to make sure that we have capacity for digital television services, high definition services as they come to market.
  79. So in a world where capacity is not unlimited and it is not unlimited, it really is -- it's about trade-offs. That is why we base our position on the fact that at this point in time, unless there is a pressing exceptional need for a new analogue service, the Commission should stick to its commitment to licence services on a going forward basis on digital only.
  80. THE CHAIRPERSON: If the Commission did decide to give this service a licence, what would be less disruptive to your customers in terms of where it went? Putting it on discretionary or putting it on basic?
  81. MS J. YALE: Well, if I have to discuss the lesser of two evils, I would say disrupting the tiers would be a disaster because as you know the tiers are full, and putting a new service on a tier means taking another service off.
  82. THE CHAIRPERSON: Right. The suggestion has been made that you could move something like SpeedVision or golf, although our Chair, of course, would not be happy about SpeedVision and I understand the PM is a big fan of the golf channel.
  83. MS J. YALE: Whatever service you take off ---
  84. THE CHAIRPERSON: You are damned if you do, and you are damned if you don't.
  85. MS J. YALE: Whatever service you take off will cause unbelievable disruption and reaction, particularly if the service that gets taken off costs less than the service which is added and requires a price increase.
  86. So you take off a service that people like and accept, add a service that people arguably aren't interested in and increase their bill, not by 35 cents but by closer to 70 cents because that is the wholesale price, not the retail price. And all of a sudden you have imposed a fairly noticeable rate increase on people and taken away something they already had. It's -- in a world where people ---
  87. THE CHAIRPERSON: How do you characterize unbelievably disruptive and on what do you base that?
  88. MS J. YALE: Well, any change in ---
  89. THE CHAIRPERSON: Because I mean cable operators are increasing their rates these days, basic rates, tier rates, are they not? And what kind of a reaction are they getting?
  90. MS J. YALE: I don't have that. I mean I don't have the information in front of me on particular situations. I can just tell you that what causes the worst reaction is changing things. And changing channel line-ups, changing packages causes very great consumer reaction and it's worse -- I mean that would be the case even without a rate increase. It's worse with a rate increase.
  91. So I would say that while we are totally opposed to any form of analogue carriage, at the end of the day basic carriage is less disruptive than carriage on a tier.
  92. THE CHAIRPERSON: Okay. I think that about covers all my questions.
  93. Hold on half a second, I think we have got a couple of other questions.
  94. Commissioner Cram.
  95. COMMISSIONER CRAM: I just wanted to inquire, Ms Yale, if we have one per genre rule for everybody except Category 2, in terms of WTM as a complete service in and of itself if we licensed Télémonde -- World Télémonde, would we be breaking the one per genre rule? In your view I mean really.
  96. MS J. YALE: Well, there is certainly an intervention which suggests that you would be from an existing licensee and certainly for certain portions of the programming I do believe that it would be competitive. I mean as a -- I mean I'm here on behalf of the Cable Association but I mean if you ask me my personal opinion, the answer is yes, I agree with the intervention that suggests that you would be breaking the rule.
  97. COMMISSIONER CRAM: Thank you.
  98. THE CHAIRPERSON: Commissioner Cardozo.
  99. COMMISSIONER CARDOZO: Thanks, Madam Chair.
  100. A couple of questions. The applicant mentioned, I can't remember whether it was this morning or yesterday, we talked about whether they had been in touch with carriers in advance of this. And they indicated they had sent -- and there was a letter on the file that they had written to CCTA and a number of cable companies. There is a November 3rd 2000 letter on file and they haven't heard back from anybody. Do you know about that letter?
  101. MS J. YALE: Well, my role as President of the Association is to do these things on behalf of my members because this wasn't about a service which was licensed and which was trying to negotiate carriage arrangements with particular operators. It was about an applicant trying to understand whether or not there would be support for their application on behalf of the cable industry for their proposal. Those issues, as you see from our intervention, I and the Association address on behalf of all of our members.
  102. So it was agreed that I would meet with Mr. Iannuzzi on behalf of the cable industry, which I did.
  103. COMMISSIONER CARDOZO: Okay. So no one replied in writing?
  104. MS J. YALE: No, we agreed to a face-to-face meeting, which is what we did.
  105. COMMISSIONER CARDOZO: On the matter of APTN, you are suggesting that this service is different from APTN and it doesn't warrant the same status as APTN received?
  106. MS J. YALE: Correct.
  107. COMMISSIONER CARDOZO: Okay. In that case, I must compliment you on that position because that is a move. It was about two or three years ago that CCTA was here vigorously opposing that application and ---
  108. MS J. YALE: Well, the only thing I can say is it was before my time.
  109. COMMISSIONER CARDOZO: Well, this is good. So sometimes we should go ahead and do things in what we feel is the national interest even if we don't have the blessing of the CCTA because we can count on them to come on side eventually maybe? You don't have to answer that.
  110. MS J. YALE: Well, I would just note that it is all distributors are opposed to the WTM application, not just the cable industry.
  111. COMMISSIONER CARDOZO: Okay. With regards to the reflection of the multicultural nature of Canadian society, I'm not sure -- a large part of what the applicant is talking about -- well, just in terms of the reflection of the multicultural reality, you feel that there is plenty now on analogue and on digital and on what is to come on digital?
  112. MS J. YALE: I believe that in terms of the objective of the Broadcasting Act with respect to a reflection of multiculturalism, that if you look at the range of services, over-the-air, specialties and the new digital licences as well as the licensed foreign services, that yes, that objective of the Act is met and that there is not a gap that would warrant the licensing of this service on a mandatory analogue basis.
  113. COMMISSIONER CARDOZO: Okay. What you talked to Commissioners Wilson and Cram about was primarily, I guess, the issue of foreign films and material in other languages. But a large -- well, not a large part, but a part of what they are proposing -- and if I can just be nitty gritty here for a second -- in the six to seven, seven to eight time frame they have got "Canada in the World, World Regional Journal," and the eleven to twelve, they have got a variety of programs such as "Books in Print, Canada Live," and then on Saturday mornings, community magazines from across the country. And then a lot of this programming gets repeated in the mornings and through the weekends.
  114. A lot of it is in -- the English service is in English, produced in Canada about the diversity. So it's about creating an understanding among Canadians in Canada. So if you set aside the foreign films part of it, what are your thoughts about the other programming, which as I understand it is quite key to their application, programming that helps some understanding among Canadians in Canada. Is that type of programming out there elsewhere?
  115. And maybe I could just add, they have characterized it as programming that isn't ethnic specific in a third language, but really dealing with cultural diversity with the sense of the diversity and bringing people together.
  116. MS J. YALE: Right. I mean there are the two distinct parts of the application. In the questions that I was asked by Commissioner Wilson we were focused primarily on whether or not English and French-language people would be -- would benefit from the importation of foreign-language programming that was subtitled and I gave my views on that. Then there is this, as you point out, the other portion of the service.
  117. I haven't -- I'm not -- I can't say for sure how much of it exists today on other services and it comes back again to what we were talking about in terms of the definition of multiculturalism. And whether or not multiculturalism is allowing people of different ethnic backgrounds to feel that they see themselves reflected on the broadcasting system. In other words, it is not just English and French services and there is nothing in their language from their country that they can relate to. Or is it there is also this other piece which is to bring in English or French a perspective of other cultures to English and French Canadians.
  118. I'm not saying it is not a worthwhile goal, but it is not clear to me that that is the piece of multiculturalism that I would focus on in looking at the objective of the Broadcasting Act. I would look at more at the first piece, which I described, which is making sure that there are a variety of services in a variety of languages. So that people who don't speak English or French or aren't of that background, can see themselves, which is the logic of the APTN service -- that is why I was drawing a distinction -- can see themselves reflected on the broadcasting system.
  119. My view is when you look at the full range of services that are available, that objective is met. There is not a gap.
  120. COMMISSIONER CARDOZO: Well, I just leave it at this, you know, that what the Broadcasting Act talks about is the requirements of the broadcasting system reflect a multicultural and multiracial nature of Canadian society, and increasingly broadcasters have become aware of the importance of this. At recent renewal hearings with TVA, CTV and Global there was a lot of interest in moving in these areas in terms of reflecting diversity in English and French. Certain other channels do it in terms of more just reflection, so you have got people of various backgrounds on.
  121. Hopefully they will do some of this type of programming. We have certainly been pressing them on these issues. I am a little bit disappointed that the cable industry only sees it in terms of diversity only in terms of doing the stuff in the other languages and not seeing ---
  122. MS J. YALE: I didn't say -- well, I don't say that I don't see it only but, I mean, as you just pointed out I guess, the English and French broadcasters are more than capable of including that in their services. As you just pointed out, we heard there was a discussion with Pelmorex on this issue earlier this week. So, you know, then there isn't a gap in the sense that the English and French broadcasters through the way in which their licenses are framed are more than able to make sure they reflect that in their own services.
  123. So again it comes back to the question of is there a gap, and so when I look at where there is a gap, I was focused more on the language issue. But you are absolutely right, there is no reason that the existing English and French language services shouldn't be expected to reflect that broader multicultural nature in their own offerings.
  124. COMMISSIONER CARDOZO: Thanks for that. I think the degree to which there is a gap is indeed between the applicant and the other. That is sort of the discussion between the applicant and the others but I'm glad that I have gotten in the discussion from you a sense of this other part which I think is also an aspect which is part of the multicultural reflection.
  125. Thank you, Madam Chair.
  126. THE CHAIRPERSON: Thanks, Ms Yale, Ms Lemon.
  127. MS J. YALE: Thank you.
  128. THE CHAIRPERSON: Mr. Secretary.
  129. MR. M. BURNSIDE: I would like to now call Mr. Paul Winn.

    --- Pause / Pause

  130. MR. M. BURNSIDE: Mr. Winn doesn't appear to be here so I will now call the Canadian Ethnocultural Council represented by Mr. Art Hagopian.


  131. MR. O. ROMANIW: Good afternoon. Mr. Art Hagopian, the President of CEC was unable to come so I am taking his place.
  132. Madam Chair, Commissioners, on behalf of the Canadian Ethnocultural Council (CEC) we wish to thank the CRTC for the opportunity to speak in support of the World Television Network (WTM) application. My name is Oleh Romaniw. I live in Winnipeg, Manitoba. I am the immediate past president of the Ukrainian Canadian Congress, National Executive and a Director of the Ukrainian World Congress. I'm here today as the Vice President of the CEC and with me is Anna Chiappa, the Executive Director of the CEC.
  133. The CEC is a national umbrella organization which represents over 30 national ethnocultural organizations. Our mandate is to promote understanding and acceptance of the multicultural reality of Canada.
  134. It was a little over one year ago that the CEC appeared before you to support the application by WTM. We have supported the application of World Television Network for an operating licence ever since the application was first made. We have seen no reason to change our opinions at this time. We are, in fact, surprised and disappointed that a proposal of such clear merit has taken so long to wind its way through the bureaucratic process without results.
  135. We have gone on record on many occasions to support broader access and availability to broadcasting and programming which is reflective of the multicultural/multiracial diversity of Canada. We believe that this is in keeping with Canada's Multicultural and Broadcasting Act and we support the idea of national programming which reflects this vision.
  136. The CEC considers the service provided by WTM a "missing component" in the Broadcasting Act's mission statement, similar to the Aboriginal People's Television Network. The application should be regarded as equally important, and as a matter of public interest, should be available across the country.
  137. MS A. CHIAPPA: We see WTM as having two goals. One is to bring to Canadians belonging to particular ethnocultural groups the living culture of their ancestral homelands, as well as bringing them news and documentaries valuable to them in today's world and in Canada.
  138. The second is to give Canadians of all backgrounds exposure to the life, the thoughts and the actions of the rest of the world as expressed in the artistic and realistic creations of the countries of the world themselves.
  139. We believe the second to be as important as the first. Canada's constitution recognizes the realities of this, that this is a multicultural, multi-ethnic and multiracial nation. Such recognition is meaningless if it is only verbal and thus it must be reflected in reality.
  140. We feel it is a matter of right that multilingual and multicultural broadcast outlets should be created in Canada at the local, regional and national levels. The CRTC has the legislated mandate in Section 3(d)(iii) of the Broadcasting Act to ensure that the broadcasting system:
  141. "serve the needs and interests, and reflect the circumstances and aspirations of Canadian men, women and children, including ... the ... multicultural nature of Canadian society."
  142. WTM is the first application to offer multicultural service at the national level. We applaud the CRTC's decision in the past which have enabled such stations as CFMT and as well as many cable broadcasts to flourish. As we have stated in the past, local/regional programming of that nature must continue to exist.
  143. We believe that a national multicultural channel will be of great use to all Canadians as individuals; and that it can contribute to the building of a Canadian identity and a Canadian place in this rapidly shrinking world.
  144. As one of our colleagues stated last year, Canada suffers the disadvantage of geography. Here, we have one close and powerful neighbour whose cultural products dominate our film, publishing and broadcasting industries. Almost from the beginning of broadcasting in Canada, it has been the policy of our governments of all political stripes to struggle against domination by our close neighbour and to build a vital and attractive Canadian culture.
  145. Our struggle for identity has always been in relation to the United States and our efforts to distinguish ourselves from American dominated culture. Yet we continue to implement programming which continues to perpetuate this awkward relationship.
  146. In his article titled "Canada isn't working" in the May edition of the Report on Business, Nilo Cernetig states that Canada is stuck with a 50-year-old image, an image which makes Canada an indistinguishable appendage of the United States. He says that in order for Canada to work we:
  147. "...have to stop emulating their ideas, seeking their approval, watching their TV shows. We have to find the confidence to be ourselves and to invest in our ideas."
  148. Our airwaves and our cable and satellite channels are full of programs and concepts, which can hardly be distinguishable from one another. The reality is not reflected in our broadcasting system, and Canada, if it is to develop as a distinctive Canadian identity separate from that of North America, must encourage all cultures to contribute to its new identity.
  149. MR. O. ROMANIW: One way to nourish that process would be to expose Canadians to much more of the cultural products of other nations which, happily, are not merely isolated curiosities to most of us, but are a part of our own development and thought. Except for First Nations, we Canadians are all immigrants. Many still have ties to our ancestral lands and we still value what they taught us and can still teach us.
  150. We believe that it is important to Canada that WTM not be considered simply as serving a niche market, nor should the operators of the channel consider it as such. It should be a service to all Canadians in the hope of making an important contribution to our emerging Canadianness.
  151. The WTM service will bring the entire world to Canada and therefore allow all of Canada the opportunity to see and experience the richness of the world. Canadian TV and the media must be insightful and visionary of the global realities. In this age of rapid technological changes and so-called "communication revolution," it only makes sense that the CRTC open the window of opportunity of World Television to enter the homes of all Canadians. Just as computers and the World Wide Web have allowed individuals to surf the world and see it on the screen, television must do the same. The world looks at Canada as being open and diverse and as such Canadian media should promote an open and diverse format.
  152. In life there are those who originate and those who imitate. There are those who embrace risks and those who flee to safety. We believe the CRTC should recognize concepts such as WTM as original and should encourage such ventures. The Canadian public already has enough of the endless parade of safe and imitating programming.
  153. We believe that the CRTC should give alternative and original programming concepts priority on broadcast channels. It should not relegate them to the back of the bus and put derivative content into prominence. We believe the WTM is just the kind of alternative, original programming that all Canadians need and will support.
  154. The applicants have, in our opinion, amply demonstrated they are serious in launching this new service, which bears no resemblance to anything currently available or planned. We do not believe that they have persisted so long against much opposition if they were not serious.
  155. The principals of the WTM application have already shown that they have a knowledge of successful broadcasting. CFMT in Toronto was founded by Mr. Iannuzzi and it has proved its merit. So has the Australian Broadcasting Corporation's Special Broadcast Service, which was inspired by the ideas of CFMT.
  156. The CRTC is faced with a novel application and one that promises Canadians a great deal more than warmed-over fiction and non-fiction from one programming source south of the border, the 49th parallel. The CRTC must weigh the application in light of the aims of the Canadian Broadcasting Act, aims which have hardly changed since the dawn of broadcasting in the 1920s. As well, it must weigh the application in the light of the Canadian constitution, which stipulates that the multicultural reality of Canada must be recognized. As Michael McCabe, President and CEO of the Canadian Association of Broadcasters at the Banff Television Festival put it:
  157. "Until we all move beyond words towards action, we risk loosing our ability to provide our viewers and listeners at home with a reflection of themselves and their culture and our international audience with a sense of who we are and what is important to us. Face cultural homogenization or fight for cultural diversity? There should be no question."
  158. Commissioners, this service is what is available now to meet Parliament's legislated goal of a more inclusive, more diverse, more truly Canadian broadcasting system. We urge you to grant this application so that cultural diversity becomes a reality in our television airwaves.
  159. Thank you.
  160. THE CHAIRPERSON: Thank you very much, Mr. Hagopian. Oh, I'm sorry. You are not Mr. Hagopian. Excuse me. I'm very sorry. You just sort of get into a bit of a routine. Hold on.
  161. Commissioner Wylie. Thank you.
  162. COMMISSIONER WYLIE: Good afternoon, Mr. Romaniw and your colleague.
  163. You have been here throughout the whole process I noticed, patiently waiting for your turn at the mike. So you have heard the lengthy conversations we have had with the applicant and I take it that both of you have experience in the Canadian ethnocultural area. So I have a couple of questions to add to our understanding of the position of the applicant.
  164. Is it important to you that the choices made in the source of programming is made with regard to the size or number of the community in Canada of the origin that that programming represents?
  165. MR. O. ROMANIW: It depends on what level the programming is. We have all sorts of ethnic stations right now. As far as size goes, the CEC published a report about five years ago. It was called "The 42 Per Cent Solution," which showed that at that time 42 per cent of the Canadian population was some place else other than English or French. And the projection was that in about eight years to ten years after that that would change to 52 per cent.
  166. So certainly there is the constituency out there for multicultural and multi-ethnic broadcasting.
  167. COMMISSIONER WYLIE: I'm not sure that that you understood what I meant.
  168. Normally when applicants who have wanted to reach the ethnic population, be it by radio or by television or by speciality service, presents statistics and say, "The majority of our programming is going to be directed towards this..." if you will allow me to say this group of third culture, to get more easily new Canadians or people with an origin other than British and French, which is, I don't think, is what this applicant is saying.
  169. And my question was, is it important to you whether the emphasis is on how many Canadians of those cultural backgrounds are in Canada and they should drive the choice of your programming or do you choose it according to what interesting happenings may be occurring?
  170. To make it more clear, suppose something is happening of great interest in Afghanistan and you could show that in the scale of statistics there is only 2 per cent of people of that background here. Does it matter to you that the choice is made in that fashion?
  171. MR. O. ROMANIW: I think I understand your question. And yes, I think it's important as to the numbers and how that choice is made. I think whether that third group -- that third ethnic group has a small or large presence in Canada is not important, as important. My understanding is what the applicant wants to do is bring the world to all Canadians of all languages, French, English and ethnic. And I think that there are many situations like that that are not properly covered by other media in Canada.
  172. In my various travels and positions there were several occasions which I saw that would fit into this perfectly. The first independent elections in the Ukraine were totally differently covered by Ukrainian and European media than it was covered by Canadian media. And Canadians of all ethnic stripes didn't have an opportunity to see that. So that is just one example.
  173. COMMISSIONER WYLIE: My question was in the case of Ukrainian -- something happening in the Ukraine, of course, you can make the argument there are a lot of people of Ukrainian origin in Canada. It was more if you reversed it. Should you choose the Ukrainian election rather than something else that may be important but of less -- having a smaller reference point in Canada because we don't happen to have a lot of immigration from that area.
  174. MR. O. ROMANIW: In my opinion, what has been going on in Chechznia (phonetics) is just as important as any other things happening all over the world and Canada has a larger population of that group.
  175. COMMISSIONER WYLIE: Okay. Now, that leads me to my next question.
  176. I think I understood one of the Panel members to say that it is helpful to Canadians of third origin, if you will allow me that, of third cultural origin to have raw news or the news as it is presented in the country where it is happening and that is necessarily going to lead to a better understanding of Canadians of that background, especially when there are ethnocultural conflicts in those countries. Is it helpful to the integration of new Canadians or Canadians of that cultural origin to see world news from that area as presented in that area?
  177. MS A. CHIAPPA: Certainly. Those most recent immigrants will want to know what is happening in their former country. It's important for them to keep abreast of what is going on internationally. It's a very important part of this.
  178. Equally as important though are second and third generation who also want to know what is going on and who are part of a generation of people who are international, who are global in thinking, who want to be connected world-wide. So I'm not sure if I'm answering your question but that is ---
  179. COMMISSIONER WYLIE: Well, it was more focusing on your mainstream audience which I think is of interest to you at all. Is it necessarily helpful for the Canadian of British or French culture to call them that or who have been here a longer time to -- is it going to be helpful to the integration of new immigrants to see ethnocultural ---
  180. MS A. CHIAPPA: To see what has happened over there.
  181. COMMISSIONER WYLIE: --- conflicts that is happening around the world.
  182. MS A. CHIAPPA: I think it would certainly help them -- it has helped them understand "where they are coming from," if they are refugees. For example, if I am -- well, you don't have to English or French. I'm Italian and if I happen to watch what is going on in Afghanistan and we know that there are -- if we know there are refugees coming in, we will understand the situation.
  183. We are able to understand the complexities of the world as it is now so that it's not limiting our understanding of new immigrants and refugees in their position here in Canada but why they have had to flee, for example, or why they have chosen to come over here. It gives us that perspective and it helps perhaps understand cross-culturally a lot more and that is one segment of it.
  184. COMMISSIONER WYLIE: Thank you. I don't think we have your name for the record.
  185. MR. O. ROMANIW: Yes. I introduced her as Anna Chiappa.
  186. COMMISSIONER WYLIE: Oh, I missed it.
  187. MR. O. ROMANIW: I'm sorry.
  188. COMMISSIONER WYLIE: And we have seen you before, I believe, Ms Chiappa.
  189. MS A. CHIAPPA: Yes. Certainly.
  190. COMMISSIONER WYLIE: Yes. I wasn't sure that I had picked up the name properly, but I certainly recognize you.
  191. Thank you very much. Thank you.
  192. THE CHAIRPERSON: Thanks so much.
  193. MR. O. ROMANIW: Thank you.
  194. MR. M. BURNSIDE: Excuse me a moment. I would just like to see you for one second after I announce the next intervenor.
  195. I have just been informed that Intervenor No. 6 listed on the agenda, COMPAS, will not be appearing today. So I now call the Credit River Institute, Mr. Kenning Marchant.
  196. THE CHAIRPERSON: Good afternoon, Mr. Marchant. You may proceed whenever you are ready.


  197. MR. K. MARCHANT: Thank you. Good afternoon, Madam Chair, Commissioners.
  198. I appear on behalf of the Credit River Institute, a multidisciplinary research institute in Mississauga, Ontario, Canada's seventh largest city. I am also a lawyer qualified to practice in Canada, Britain and the European Union.
  199. I spend a lot of time on the public transit system of the global village -- overnight flights. Wherever I go, the similarities are as striking as the differences.
  200. There is warm hospitality everywhere. There also seem to be jokes about lawyers everywhere.
  201. My research work is in psychology, law and economics, interacting with scholars from around the world. Most of them struggle to make themselves understood to a sophisticated audience in someone else's language, one of my languages -- English or French. At international conferences, I often wish there were subtitles instead.
  202. WTM will bring us drama and daily life from around the world, bridged with subtitles.
  203. Traffic congestion is a problem everywhere. Paul Wohlmuth at San Diego Law School has tracked on film how variable speed limits can improve traffic flow. The key is slightly lowering speed limits to maintain flow as traffic builds.
  204. However, research shows you have to take account of differences in cultural psychology. In Germany, when the signs flash a lower speed, everyone slows down. In Italy, they speed up. In England, they slow down if they think the radar cameras are working.
  205. Some products have a global reach: Coca-Cola, McDonald's. But advertisers must be careful. The Chevrolet Nova didn't sell in Hispanic markets. "No Va" in Spanish means, "It doesn't go."
  206. A billboard shows, from your left to right, a basket of dirty laundry, a well-known laundry detergent and a neat pile of clean clothes. But this doesn't work in Arab countries where their script is read from right to left.
  207. Maybe WTM will have a regular show on cross-cultural advertising and marketing bloopers.
  208. Sometimes cultures are in direct conflict. A paper by Stuart Banner of Washington University Law School is called "Two Properties, One Land." It is about the clash of the Maori and English systems of property law.
  209. In the Maori system, every valuable resource is assigned. It just isn't assigned with boundaries and fences. For example, when the English arrived, the Maori were farmers. But someone's rights to cultivate were restricted to the growing seasons, not the whole year. Rights to other resources, such as minerals or forest products were, kind of like our property system now, separate from surface rights.
  210. Yet the English forced the Maori to learn and apply English law. This is not just a matter of legal arrangements and economic efficiency, narrowly defined. It involves the reassignment of major psychological and cultural costs.
  211. All cultures have social rules and norms and research shows all cultures have cheater detectors. For examples, queues, or line-ups are a vigorously self-policing phenomenon almost everywhere. People line up for food at mosques in Baghdad, for buses in Liverpool, for public phones in Mexico, for hockey tickets in Ottawa, and for miles -- and hours -- to vote for Nelson Mandela in South Africa.
  212. Rules about fairness and cooperation are particularly interesting. The economics profession has for decades taught that self-interest rules the world, and with competition this leads to the best outcomes.
  213. However, research in economic psychology shows that when people are given a choice between selfishness and cooperation or selfishness and fairness, the larger number choose cooperation, not selfishness, or choose fairness to others, not selfishness.
  214. And these cooperation experiments are interesting because they are based on the model for user-supported public television. It only happens when enough people contribute. Yet pure self-interest would make us all free-riders -- let others pay while we enjoy the programming.
  215. In hundreds of experiments, in countries from the US to Indonesia, enough people are ready to give their share so all can enjoy the public benefit.
  216. However, some experiments go the next step. Because if there is no way of sanctioning the free-riders, the model tends to degenerate. If there are sanctions, the public good -- say public television -- expands. The research shows people will incur additional personal cost to promote social rules that they believe in.
  217. I add parenthetically that Robert Frank at Cornell University has run other experiments that show that people become more selfish and less cooperative by majoring in economics.
  218. Madam Chairperson, global scholars are generally nice people. But they are not, with rare exceptions, professional entertainers or media personalities. I hope I have illustrated with these few examples that even global academic research can be interesting. But it is nothing compared to the richness of world television which has been placed before you by this application.
  219. I congratulate the Commission on its willingness to re-hear this applicant. I know the Commission rarely does this, though there are precedents -- an over-the-air multilingual licence in Vancouver is a current one, for example which also calls for analogue carriage on cable.
  220. Analogue carriage matters for services that reflect the character of our country. I first appeared before the Commission in the licensing of Channel 47 in 1977. I still consider it very unfortunate that the cable industry, for four years, denied that station the carriage on basic to which it was entitled under the regulations. Why? Because it involved shifting an American channel.
  221. This really hurt Channel 47 financially. Dan Iannuzzi is one of the unsung heroes of the broadcasting industry for taking the financial hit in his personal holding company to protect the company holding the broadcast licence.
  222. Madam Chair, the cable system way back then was basically channels 2 to 13. Since then, the Commission has had the enormous challenge of managing fast-paced change in both content and delivery. It has risen to that challenge.
  223. However, I invite you to stand back and look at the distribution system as you would look at a garden. Strong foundation plantings. Many features, which with age have improved, perhaps expanded. But there are also some transplants that might be considered. There are even, dare I say, one or two weeds. And there is a new variety the garden must have this year or next, access for both English and French audiences to the marvellous combination of world television and Canadian diversity programming.
  224. WTM is a service which very much deserves to be on all of the major cable and DTH systems. That may require some adjustments. But I believe it is in the public interest that this service be licensed. I urge you, Commissioners Wilson, Wylie, Cardozo, Cram and Williams, to give this application your favourable consideration.
  225. Thank you for your attention. I would be glad to answer questions, and when this hearing is over, I can get back to the paper for my next conference which is in Vienna.
  226. THE CHAIRPERSON: Thank you, Mr. Marchant.
  227. Commissioner Wylie.
  228. COMMISSIONER WYLIE: Good afternoon, Mr. Marchant, and welcome.
  229. Mr. Marchant, it is the first time I come across the Credit River Institute. Could you tell us a little more about that institute on behalf of which you appear today? For example, the numbers, the mandate and what your position is today?
  230. MR. K. MARCHANT: It's a small private research foundation. I'm the principal person. It has a small board of directors of three and one research assistant. It's a small organization.
  231. If you would prefer to treat my intervention as appearing personally, that is fine too.
  232. COMMISSIONER WYLIE: And what is its mandate?
  233. MR. K. MARCHANT: Its mandate is to do essentially academic research integrating psychology, law and economics. I might say this is a field in which it is very active currently internationally.
  234. COMMISSIONER WYLIE: And your intervention is on behalf of that institute.
  235. MR. K. MARCHANT: It is.
  236. COMMISSIONER WYLIE: I see that you have been quite loyal to staying every minute of the hearing and I hope you have appreciated the extent to which we try hard to understand propositions before us.
  237. MR. K. MARCHANT: Well, certainly. I guess you are referring to the fact that although when I filed the intervention, I didn't know this, I have also been participating here in another capacity, as counsel to the applicant. And I must say, I have -- because I have appeared off and on -- I am always impressed at the preparation you Commissioners bring to all the applications that I have heard.
  238. COMMISSIONER WYLIE: Thank you for your appearance, Mr. Marchant, and we now know of one more institute that we didn't know about before.
  239. Thank you, Madam Chair.
  240. THE CHAIRPERSON: Thank you so much, Mr. Marchant.
  241. MR. M. BURNSIDE: I would like to now call GAPC represented by Ken Stewart.
  242. MR. K. STEWART: Thank you very much.
  243. THE CHAIRPERSON: Well, Mr. Stewart. Now I recognize you.
  244. MR. K. STEWART: Good afternoon, Madam Chair.
  245. THE CHAIRPERSON: I don't recall your company being referred to as GAPC though.
  246. MR. K. STEWART: Change is good.
  247. THE CHAIRPERSON: The last time I saw you it was ---
  248. MR. K. STEWART: General Assembly Production Centre.
  249. THE CHAIRPERSON: --- known by its full name. That is right.
  250. You may proceed whenever you are ready.
  252. MR. KEN STEWART: Thank you very much. I think these hearings are about change and I think change is very good.
  253. Madam Chair, Commissioners, thank you for the opportunity to speak at this hearing and present to you both my position as well as my firm's position in strong support of this application.
  254. GAPC is an Ottawa-based independent production company that has been in business since 1983. Currently we have some 24 employees and contract a good number of freelancers in the region and elsewhere.
  255. We are this region's largest and most integrated production facility and for much of our history we have been providing post and production services to independent producers, broadcasters and agencies. Three years ago, however, we made the decision to develop our own broadcast division and have successfully produced and co-produced a good number of documentaries and one-off's for History Television, Bravo!, Discovery, CBC and Vision, amongst others.
  256. We are currently in production on a one-hour documentary on Mike Nemesvary, a quadriplegic who is driving around the world to set a Guinness world record and raise awareness and money for spinal cord research. We are also in production for six one hours -- on six one hours on the history of Canada through the eyes of children called "Growing Up Canadian."
  257. GAPC was also one of the first traditional production service companies to embrace and develop a multimedia/new media division back in 1990.
  258. As founder of GAPC and its related companies, my background has included working as a cameraperson, editor, director, producer and consultant. I have also taught video and television production in Canada and abroad, and have had the opportunity in the past to sit as President and Chair of the Ottawa/Hull Film and Television Association, was one of the founders and past Chair of New Media North, and currently I chair the advisory board of Algonquin College's Television Broadcasting course.
  259. Most importantly, however, I am a father of two children created through a partnership between my wife, a Canadian of Egyptian descent and myself. My children share both my culture and my heritage and that of their mother's. They also share at school the heritage and culture of their peers. Peers whose parents are from around the world. My children's friends, the food they eat, the family interaction and simply walking down the streets on a daily basis show them that in this great country, as in the world, it's made up of many peoples.
  260. One of my questions is then why when they watch -- when we watch television as a family, can we not witness that same diversity? Why can we not witness news and current affairs from around the world and gain insight into the perspective of that culture and country first hand?
  261. I believe strongly that WTM's mandate and mission is really targeted at me and my family. As a multicultural family in a sense and multiracial, I believe that there is a huge gap that is not being served with respect to the traditional broadcasters and the specialty services and I believe WTM answers that gap.
  262. Our society and the Canadian fabric are woven with strong multicultural and a multiracial threat and why is this not presented in our media? Why is it with all the talk and the movement towards a global economy that television is the last to embrace and reflect this reality.
  263. This Commission once again has the opportunity to take a tremendous step forward to rectifying this imbalance. We must allow all Canadians to witness the global diversity of peoples, learn about their own culture and that of their neighbours and also allow them to understand and appreciate issues from a truly global perspective.
  264. WTM's mission promises an approach and a programming schedule that will give Canadians an alternative and a perspective that must be available to all Canadians. It promotes in a significant way what our government has promised, preached and in some areas implemented, and I might add, spent probably up to billions of dollars.
  265. Our television must reflect this and must be accessible, not hidden away in the triple digits of the new dial. All Canadians must be able to witness the fresh and global perspective that WTM will bring to their homes.
  266. GAPC supports and commends WTM's plan with respect to establishing its head office in this region, and its investment in both infrastructure here as well as production facilities. We see this as an important commitment that will benefit significantly this region's independent producers and also ensure that international public affairs stories and news that are traditionally ignored by mainstream Canada will be presented.
  267. We also feel that World Télémonde understands the importance of a new media as a tool to interact with its viewers and also present more depth with respect to content, so to enhance Canadians' understanding of the world.
  268. GAPC is honoured to be in discussions with World Télémonde regarding the provision of production services, facilities and content.
  269. WTM's approach with respect to broadcasting programming in its original language along with subtitles is undeniably the best way to present foreign content and allow the audience a deeper understanding of that programming. Most importantly many Canadians want the opportunity to be able to have access to programming in their own language.
  270. But if we take, for example, my family and many families and friends that I have, we watch television together and one of us may speak Arabic as an example. But my two children do not speak Arabic, nor do I. And I think the idea of being able to listen to a program and having the inflections and sort of emotion carried forward in both hearing the language and also to be able to understand better the subtitles is a key significant point of this application.
  271. Other points that I just wanted to make, we were listening briefly to the CCTA intervention and I thought that it was interesting. I think that in fact when we talk about the digital roll-out that providing space for WTM will actually improve the speed or increase the speed of the digital roll-out. Quite frankly, I think it will force the cable companies to move faster and it will have other opportunities for more business. I think it will finally give Canadians an opportunity to really see and reflect the diversity that is already here in Canada, not a diversity that is coming or is in the future.
  272. Please take the time to consider this and other positive interventions as well as the thousands of support letters. I believe by supporting this application the Commission has the opportunity to take further steps towards reflecting our culture and will ensure that with respect to equality, compassion and understanding, television can be part of the solution and not the problem.
  273. Thank you very much, Madam Chair.
  274. THE CHAIRPERSON: Thank you, Mr. Stewart.
  275. Commissioner Williams.
  276. COMMISSIONER WILLIAMS: Good afternoon, Mr. Stewart. Thank you for a very thorough presentation. I think I have a pretty good understanding of how you feel about the issue and the importance of World Télémonde's plan to yourself personally and to your family.
  277. I am a little curious as to the scope of the -- you say you are in discussions with World Télémonde regarding the provision of production services, facilities and content. What is the scope of that projected work and what percentage of your livelihood would that make up should you be successful?
  278. MR. K. STEWART: Well, we have -- officially there is no agreement absolutely in place. There has only been discussions basically right from the beginning of WTM's applications back a number of years ago.
  279. We hope, since we are the largest facility in this region, that the opportunity for us would be there to one, to sell programming, two, provide services, camera equipment, crews and so forth. The discussions are very basic and preliminary and no commitment has been on WTM's part or on our part, but we see it as a natural fit.
  280. I think it is not just myself or our company that would benefit from this licence, of course. It would be other companies, independent producers here as well.
  281. COMMISSIONER WILLIAMS: Okay. Thank you very much, Mr. Stewart, I have no further questions.
  282. Madam Chair.
  283. THE CHAIRPERSON: Thank you, Mr. Stewart. Nice to see you.
  284. MR. K. STEWART: Thank you very much.
  285. THE CHAIRPERSON: Mr. Secretary.
  286. MR. M. BURNSIDE: I'm lost. Hold on one second, please.
  287. THE CHAIRPERSON: We will forgive you. It is the end of the week.
  288. MR. M. BURNSIDE: I am going to call the next intervenor. I don't believe they are here but I now call World Media Institute, Mr. Wayne Kines.
  289. It doesn't appear Mr. Kines is here so I will go to the final intervention, which is the videotape by Colleen Beaumier.


  290. MS C. BEAUMIER: I would like to extend my thanks to the Chair and the Commissioners for allowing me to make my presentation in this way.
  291. I'm Colleen Beaumier, Member of Parliament for Bramptom West-Mississauga and Vice-Chair of the Standing Committee on Foreign Affairs and International Trade. My riding is in that region of Canada which is the most culturally diverse.
  292. As international affairs of our country are an important part of my responsibility, I full understand the need for and support the application of World Télémonde. I gave it my full endorsement last year and was shocked to learn of your decision. Most shocking of all was the rationale provided for that decision.
  293. I quote:
  294. "WTM did not demonstrate that the proposed service would have been of exceptional importance to the achievement of the objectives of the Act, warranting what would in effect be mandatory distribution on the basic service of distribution systems at a monthly subscriber fee. Neither is the Commission convinced that the evidence of demand filed justifies carriage of the proposal on the basic service."
  295. Exception service? How is it possible for an informed and presumably aware tribunal of Canadians to determine that this application and the one before would provide a service that is anything but of exceptional importance, not only to the Act but to the national interest.
  296. WTM intends to enable all Canadians to have access to the views of the peoples of the world on events we all see as of importance. In addition, WTM will enable Canadian viewers to have direct windows on the interests that others on our globe see as important.
  297. From my perspective, we in positions of influence have a responsibility to ensure that Canadians are provided with the diversity of world views. No longer is it acceptable in this, the most diverse country in the world, for our citizens to be exposed to views that are essentially those of English and French speaking global communities.
  298. I know from my journeys as an MP but also as a Canadian who enjoys international travel, that the diversity of perspectives is as great as the diversity of cultures, probably greater. Understanding the world and the events shaping the global community demands that our citizens be given the opportunity to view for themselves these other perspectives. Without this knowledge how can we adequately participate in decisions that impact on all of us? How, as a nation so dependent on trade, can we compete and expand if we continue to assume the world is as it is portrayed by media which is rooted solely in our traditional models and understandings.
  299. We aren't Americans. We are Canadians and we are sincerely interested in perspectives held by others sharing this very small planet.
  300. Views and perspectives on the world, it's peoples and events are not culturally, politically or historically neutral. WTM will be an essential service. Those who cannot see the relevance, the immense importance of this proposal from the public affairs programming alone surely are out of touch with the global community and Canada itself. Every Canadian in a position of influence should be working to increase our national accessibility to the diversity that was, is and will be in the future the major influence on the international affairs of the nation.
  301. As a nation so dependent on international trade it becomes of particular importance that we are in a position to make informed and independent decisions. World Télémonde can provide us with the opportunity to be the best informed as well as the most diverse country. The benefits of this application extend beyond those of a regular applicant. It's benefits will truly be in the national interest.
  302. As I said earlier, to have rejected the earlier application on the grounds of questioning its contribution to the Act is just incomprehensible.
  303. Canadians have heritages that provide links to the world. This is a part of our heritage that we, as many other nations already do, must turn to our advantage internationally. WTM offers the perfect vehicle for encouraging and providing momentum to this development.
  304. Making the public affairs of the many nations of the world, along with their cultures, accessible to all Canadians, in both official languages, turns WTM into an international bridge, a two-way bridge that will promote understanding, interaction and access to opportunities currently accessible to only a few.
  305. Contributions to the Act, accessible to all, utilization of the two official languages, a bridge to the cultures and interests of the peoples of the world, direct expressions in the original productions of local TV from all parts of the world.
  306. Although I am no expert regarding the Broadcasting Act I know that either in the Act or in the regulations of the Commission there is a hierarchy of services. Obviously Canadian services that serve to satisfy unique and unfilled needs of Canadians must be considered of high importance. WTM is such a service, a fully and truly Canadian service. I believe it would be obvious that this service must be given the carriage that its status demands. Carriage that will give it the greatest exposure to Canadian viewers.
  307. Last year the Commission questioned the level of public interest. When I look at the market studies, 1986 to 2000, 14 years of studies, one every four years or so, I look at this proposal as a business venture. I was in business before I decided to make the weekly pilgrimage to Ottawa.
  308. As a business proposal, do these studies give me confidence in WTM? First, this is a new product. No other service like it is available to Canadians today, and the demand for this product has grown study by study.
  309. Market testing is impossible, however, I can see that the demand for this product exists in the marketplace. I know that the features of our culturally diverse marketplace and those of the globe are not going to disappear. I know that the general interest in the dynamics of diversity here at home and around the world will remain in demand. Here is a venture that can position itself to respond to that need. If it has the appropriate reach into the marketplace, I would say, as a business person, it's a winner.
  310. How many of you have experienced enjoying an evening with a new Canadian family, listening to a short-wave radio station from their country of origin at the time when events of international importance are occurring?
  311. The perspective on these events are often somewhat different in Europe or Asia and the resulting discussions, comparing the European or Asian view with that of Canada or the US, are truly enlightening. These Canadians possess a more comprehensive understanding of world events than those of Anglo or Franco Canadians. Under our current viewing choices, Canadians will never be in a position to acquire this depth of understanding.
  312. As a Canadian who has chosen to enter political life, I obviously have an interest in the well-being of the nation. This nation that is unlike any other in the world. Unlike any other not just because of its cultural diversity but because of its closeness of its relationship to its huge neighbour. To ensure that we retain our sense of "I am Canadian," we must ensure that we do not lose ourselves in the strength of our neighbour. We must do this in such a way as to not damage an important relationship. One reasonable strategy is to assure that we have exposure to the rest of the world. Exposure culturally and through public affairs and documentaries.
  313. World Télémonde will provide this model and will provide it so that it is accessible to all. As the WTM schedule indicates, it is based on 50 per cent Canadian production with the other half covering the various regions of the world.
  314. This is important. North America is not one of those regions. The people behind this application understand that the need for more of the same programming is bad for business, bad for the subscriber, bad for the viewer and bad for the country.
  315. So once again I must return to the rational behind last year's decision and reiterate how can this application not make a unique and invaluable contribution to the Act, to the broadcasting system and to the nation? I know of only two ways: you say no once again or you limit its capacity to reach the audience it needs and the audience which keeps asking for it.
  316. It is difficult at time to adjust to change. It is, I think, particularly hard for bureaucratic organizations. It is hard too when the change is one of substance, of content and a challenge to traditional approaches.
  317. You deal with change, but more often it is a change of a technological nature. WTM requires that you deal with change of substance. WTM will provide a service unlike any other on our system. WTM is driven by an understanding of Canada and the world that is not traditional and that is distinct from that of all other services.
  318. Commissioners, the licensing of this application is of importance in the many ways I have described. That it requires you to apply a different understanding and analysis is part of its importance because it is an application of substance breaking away from the traditional. This is the kind of innovation we must encourage, not discourage.
  319. Thank you for allowing me to bring my message to you. I look forward to watching WTM and being a better-informed and entertained Canadian next fall after you have granted its licence. A licence, which as I have stated, is of exceptional importance to Canadians and to the advanced development of Canada.
  320. THE CHAIRPERSON: I was assigned to ask questions of Ms Beaumier, but obviously I won't be able to.
  321. Commissioner Williams says I could ask questions but I probably wouldn't get any answers.
  322. So thank you for that. Thanks for the video and that concludes the intervenors.
  323. I am just wondering Mr. Iannuzzi if you would like to take 15 minutes before your reply?
  324. I think I would like to take five minutes if you don't mind. So we may as well come back in ten. We will take a five minute break but I will see you in ten minutes.

    --- Upon recessing at 2:42 p.m. / L'audience est suspendue à 14h42.

    --- Upon resuming at 2:55 p.m. / L'audience est reprise à 14h55.

  325. THE CHAIRPERSON: Welcome back. We are on the home stretch.
  326. MR. D. IANNUZZI: How true. How true.
  327. THE CHAIRPERSON: Any time you are ready, Mr. Iannuzzi.


  328. MR. D. IANNUZZI: Thank you, Madam Chair.
  329. We will make this both our rebuttal and closing statements if at all possible. The rebuttal is very, very limited. We were -- I personally am sorry that Janet Yale didn't stay to listen to the interventions for the simple reason she may have learned that there is a distinct difference between ethnocultural programming and ethnocultural licensing and multicultural broadcasting and multicultural licensing. And if she had that in the right context, we may not have been referred to, twice, as evil.
  330. Madam Chair, I wish to deal briefly with three matters: carriage, demand surveys and exceptional importance. First, carriage.
  331. I apologize that there has been some confusion over carriage. We have spent many hours with the Commission staff in preparing the carriage compromise position presented in our application. What Commissioner Cardozo has called "modified dual status with a twist," we thank the Commission and Commissioner Wylie in particular and other members of the panel who have put forward additional options.
  332. It is not easy in a few minutes to appraise what each of these options means in practice. The decision for us must be based on two criteria. One, the financial ability to provide the service, and two, the access rights of Canadians.
  333. WTM Télémonde would accept any of the three following scenarios for carriage in majority language markets.
  334. One, the modified dual status on the highest penetration tier set forth in our application. Two, the carriage arrangements for Télé des Arts appropriate to the WTM application in two official languages, that is, mandatory carriage on the highest penetration discretionary tier in both Class 1 and Class 2 systems. Three, modified dual status with carriage on tiers with 60 per cent plus penetration on Class 1 and 2 cable, DTH and MDS. And for minority language carriage we would accept either what is set out in the application or as in the Télé des Arts Decision for the minority market.
  335. Next I would want to deal with the demand surveys. Commissioner Cram has expressed a concern that some of the surveys might not indicate demand because the survey questions did not mention Canadian multicultural issues and programming. The reasons the surveys emphasize world programming is that world programming is the draw.
  336. When Canadians come to our channel, they will also find terrific Canadian diversity programming. Building these links is also part of why the two components of world and Canadian diversity programming make one powerful service.
  337. In conclusion, Madam Chair, exceptional importance is the last but certainly not the least because this is the whole crux of the argument.
  338. This week, two high profile institutions, the Mayor of Toronto and the Stratford Festival each put a cultural foot wrong. In one case, right in his mouth. They did so out of ignorance, but since both at least have had the decency and apologized. It is hard to imagine a Canadian displaying this level of misunderstanding about the United States. We see and hear too much of American cultural sensitivities in our media.
  339. But we enjoy no such daily window on the wider world, a world in which Africans are making both war and peace. In which much of the world has Sabbaths and Chivalits (phonetics), which just aren't familiar to us but matter very much to these people and to their cultures and the beliefs in Canada. I believe this is not successfully being done by existing conventional and specialty broadcasters. We believe World Télémonde will help fill such cultural deficits.
  340. We have drawn Commissioners' attention to successful working models in Channel 4 in England, world links in the United States and the most especially SBS in Australia with which WTM has close ties. If the concept works in Australia, it is also reasonable to accept that it would work in Canada. In fact, we hope that after 20 years of licensing we too will get a special recognition of exceptional service, broadcasting service by the Banff Television Festival.
  341. We have presented extensive evidence that the World Télémonde will make a material contribution to the objectives of the Broadcasting Act. In short, we submit that World Télémonde is a service of exceptional importance in the national interest.
  342. Madam Chair, thank you very much for the considerable effort you have made to consider this application. The ways you have gone to great lengths to accommodate us and to make us feel that this application is being heard in the best light possible and that your consideration will be given and hopefully in a very, very positive way.
  343. I would like to thank Commissioner Cardozo, Commissioner Wylie, you, of course, Madam Chair, Commissioner Cram and Commissioner Williams. And the staff and the legal staff and especially our good friends on the right who have made it possible for our intervenors and tried to plan these last three days in as accommodating way as possible. Thank you.
  344. THE CHAIRPERSON: Thank you, Mr. Iannuzzi. I know it has taken quite a lot of time and it has been spread over a couple of days but I think we have had a good exploration of your application and we thank you for your time.
  345. I am going to before we close off entirely turn you over to our legal counsel for a couple of short questions.
  346. MR. P. McCALLUM: I believe you had made an undertaking to Commissioner Cram to explain how the COMPAS survey had been weighted. Do you have that information?
  347. MR. D. IANNUZZI: I thought it was read into the record just at the end of the intervention. Do you want to find it again?
  348. MR. K. JOHNSTON: The sample study of a thousand voting age Canadians, November 11th to 14th year 2000. Surveys of this size are deemed accurate to within 3.5 per cent -- percentage points 19 times out of 20.
  349. MR. P. McCALLUM: I think that is the margin of error, not the actual weighting of the survey. If you don't have that information, can we establish a date for that perhaps? Can that be furnished by say, Friday, the 29th of next week?
  350. MR. K. JOHNSTON: Absolutely. Yes.
  351. MR. P. McCALLUM: Thank you.
  352. THE CHAIRPERSON: That is it. Thank you so much.
  353. Mr. Secretary.
  354. MR. M. BURNSIDE: One final matter of business, Madam Chair, and that is to point out that items 9 through 26 listed in the agenda also form part of the consideration for this panel and a decision will be rendered in due course.
  355. Thank you. This hearing is now adjourned.
  356. THE CHAIRPERSON: Thank you, Mr. Secretary.
  357. Thank you very much.
  358. I would like to thank our court reporters and our interpreters for helping us get through this week. I know it was a challenge at times but we appreciate your efforts.

--- Upon adjourning at 3:06 p.m. / L'audience est ajournée à 15h06.












I, William Jones, a certified court reporter in the Province of Ontario, hereby certify the foregoing pages to be an accurate transcription of my notes/recordings to the best of my skill and ability, and I so swear.



William B. Jones, CVR

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