ARCHIVED -  Transcript - Hamilton, Ontario 2001-12-03

 

 

CANADIAN RADIO-TELEVISION AND

TELECOMMUNICATIONS COMMISSION

 

CONSEIL DE LA RADIODIFFUSION

ET DES TELECOMMUNICATIONS CANADIENNES

 

Public Hearing/Audience publique

 

Call for applications for a broadcasting licence to carry on a television programming undertaking to serve all or any one of Toronto, Hamilton and Kitchener, Ontario/Appel de demandes de licence de radiodiffusion visant l'exploitation d'une entreprise de programmation de télévision pour desservir chacune des villes Toronto, Hamilton et Kitchener (Ontario) ou l'une d'entre elles

 

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VOLUME 1

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HELD AT:                      TENUE A:

 

Hamilton Convention Centre    Centre de conférence

d'Hamilton

 

Hamilton, Ontario             Hamilton (Ontario)

 

December 3, 2001             3 décembre 2001

 

 

BEFORE/DEVANT:

 

A. Wylie                      Chairperson/Président

M. Wilson                     Commissioner/Conseiller

B. Cram                       Commissioner/Conseiller

J. Pennefather                  Commissioner/Conseiller

S. Langford                 Commissioner/Conseiller

                         _ _ _

 

D. Rhéaume                  Legal Counsel/

Conseiller juridique

 

M. Amodeo                     Hearing Leader/Chef

d'audience

 

P. Cussons                  Hearing Manager/Gérant

                              Secretary/Secretaire

 

DISCLAIMER

 

 

 

 

TRANSCRIPTS

 

 

 

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

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

 

 

 

TRANSCRIPTION

 

 

 

 

Afin de rencontrer les exigences de la Loi sur les langues officielles, les procès-verbaux pour le Conseil seront bilingues en ce qui a trait à la page couverture, la liste des membres et du personnel du CRTC participant à l'audience publique ainsi que la table des matières.

Toutefois, la publication susmentionnée est un compte rendu textuel des délibérations et, en tant que tel, est enregistrée et transcrite dans l'une ou l'autre des deux langues officielles, compte tenu de la langue utilisée par le participant à l'audience publique.

 

 

 

Canadian Radio-television and Telecommunications Commission

 

Conseil de la radiodiffusion et des télécommunications canadiennes

 

Transcript/Transcription

 

Public Hearing/Audience publique

 

 

 

Index of Proceedings/Index de la séance

 

 

 

                                                  Paragraph

 

 

Opening remarks by Ms. A. Wylie/                       1-10

Remarques d'ouverture par Mme A. Wylie

 

 

Presentation by Anne Marsden,                    12-27

The Auditors, The Canadian Family Watchdog/

Présentation par Anne Marsden, The Auditors,

The Canadian Family Watchdog

 

 

Comments by Mr. Cussons/                              33-38

Commentaires par M. Cussons

 

 

Presentation by Gerry Noble,                          39-62

Global Television Network/

Présentation par Gerry Noble,

Global Television Network

 

 

Questions from the Panel/                            65-857

Questions du Panel

 

 

Questions from Mr. Rheaume/                        860-930

Questions de M. Rheaume

 

 

Closing remarks by Ms. A. Wylie/                    937-938

Remarques de clôture par Mme A. Wylie  

--- Upon commencing at 0900/L'audience débute à 0900

OPENING REMARKS BY MS. A. WYLIE/REMARQUES   D'OUVERTURE PAR MME A. WYLIE:

         1 THE CHAIRPERSON:  Order please.  Good morning, ladies and gentlemen and welcome to this public hearing to examine a number of applications from five parties to obtain licences for television stations in the Toronto, Hamilton and/or Kitchener areas.

          2 The five applicants we will hear this week are Global Communications Limited, TDNG Inc. or Torstar, Alliance Atlantis Broadcasting Inc., Craig Broadcasting Systems Inc. and CFMT TV, a division of Rogers Communications Inc.  My name is Andrée Wylie and I am the vice-chair of broadcasting for the Canadian Radio-television and Telecommunications Commission and I will be presiding over this hearing.  My colleagues on this panel are, to my immediate right, Martha Wilson, who is the Regional Commissioner for Ontario.  And to her right, Commissioner Joan Pennefather.  To my immediate left, Commissioner Barbara Cram who is the Regional Commissioner for Manitoba and Saskatchewan and, to her left, Commissioner Stuart Langford.

          3 Staff assisting us at this hearing are Michael Amodeo, hearing leader, Donald Rhéaume, legal counsel, and Peter Cussons, manager of our public hearings group and the hearing secretary.  Do not hesitate to speak to Mr. Cussons if you have a procedural question. 

          4 Before we proceed any further, allow me to provide you with some background information concerning this hearing process.  On May 10th, 2001, the commission announced they had received applications for television programming licences to serve Toronto, Hamilton and Kitchener and it issued a call for applications from other parties also interested in providing broadcast television services to those areas.

          5 Global and Torstar have each applied for licences for English language television stations to serve Toronto, Hamilton and Kitchener.  Alliance Atlantis has applied for an English language television station in Toronto, with retransmitters in Hamilton and London/Kitchener, while Craig has applied for an English television station in Toronto, with a retransmitter in Hamilton.  CFMT television has applied for a licence for an additional ethnic language television station in Toronto.

          6 As it examines each application, the panel will look at a number of issues:  The impact of the licensing of additional television services in Toronto, Hamilton and Kitchener will have on the broadcasting system and on the affected markets.  How the proposed service will benefit local and regional programming as well as achieve the aims of the Broadcasting Act.  The business plans and studies put forward by the applicants will also be examined, as well as possible shared investment or cooperative programming buying arrangements with Canadian or foreign broadcasters.  How each applicant plans to promote Canadian talent, particularly local and regional talent.  The panel will also explore issues such as common ownership and cross-media ownership, as some applicants already own broadcasting properties or newspapers in the Toronto, Hamilton and Kitchener areas.

          7 Before proceeding to the hearing of the applications we will hear a general representation from Mrs. Anne Marsden of the Canadian Family Watchdog.

          8 We expect the hearing to last approximately six days.  We will not sit on Saturday or Sunday.  Starting tomorrow we will begin at 8:30 and end at approximately 6:00 o'clock with a break for lunch.  We will advise you of any change in the schedule as we proceed.

          9 Cell phones and beepers must be turned off when you are in the hearing room.  They are an unwelcome distraction for the participants and commissioners.  We will expect your cooperation at all times during the hearing in this regard.

          10 Mr. Secretary, please.

          11 MR. CUSSONS:  Thank you, Madam Chair.  So we will now hear a general comment from The Auditors, The Canadian Family Watchdog.  Mrs. Marsden.

PRESENTATION BY ANNE MARSDEN, THE AUDITORS, THE CANADIAN FAMILY WATCHDOG/PRÉSENTATION PAR ANNE MARSDEN, THE AUDITORS, THE CANADIAN FAMILY WATCHDOG:

          12 MS. MARSDEN:  Thank you good morning and thank you for extending an invitation to The Auditors, The Canadian Family Watchdog, to make a general representation and provide food for thought with regard to the role of the media, particularly the medium of television in obtaining and maintaining the democracy we all value so much.  Mr. David Marsden sends his regrets.  Responsibilities in the hydro service industry as part of a team makes it impossible for him to be here today.  Dave is not here in body but he is certainly here in spirit.  He is, without question, the wind beneath my wings and is a major contributor to both my presence and presentation today.

          13 Dave and I are the founders of The Auditors, the Canadian Family Watchdog.  We operate on a volunteer basis.  We are not, and will not become, a charitable organization.  Family watchdogs use their own household budget and any assistance they give to families or other watchdogs is performed on a pro bono business basis.  We have been part of the Canadian scene for some 15 years as founders of many respected organizations.  Dave and I are Christians who believe to love God means to serve him and there is no better way to serve him than to serve the people.  We also believe everyone is our neighbour, regardless of colour, creed, sexual orientation, ability, challenges, profession and, yes, even political strife.  Further, we are commanded to love our neighbour as ourselves.

          14 The Auditors has a vision for Canada.  We see it as a debt-free world leader promoting freedom for all.  The freedom is based on John 8, verse 32: "You will know the truth and the truth will set you free."  We aim to utilize the skills, faith and sense of humour God has seen fit to bestow upon us until the vision materializes.  To do anything less is not being obedient.

          15 Over the past 15 years through the fore mentioned organizations Dave and I have had the privilege of working with countless Canadian families in every conceivable situation that touches the family.  With the exception of the Supreme Court, we have participated in proceedings as covered by the federal, provincial justice system.  Peer review we have been involved in, as we call it including the college of surgeons and physicians, press council, Ontario's judicial council, the Canadian judicial counsel, police complaints commission and individual police services boards have all been well audited.

          16 Rotary International has a four-way test of everything they say and do.  One, is it true?  Two, is it fair to all considered?  Three, does it promote friendship and good relations?  Four, is it beneficial to all considered?  Which more or less covers the basic for our audits.

          17 Our audit results, regardless of the subject, have been remarkably the same, almost without exception, especially when it comes to number one, is it true.  Suppression or manipulation of the truth, we are sad to say, seems to happen with far more frequency than one expects in a country with a constitution, rule of law and belief that we are a democracy.

          18 "You will know the truth and the truth will set you free" is surely is a motivational scripture for all those associated with the media, particularly television with its ability to let us see the truth.  Members of the media play just as important a role in establishing and maintaining a free, democratic society as do armed forces, police and firefighters; some would say more so.  The loss of eight members of the media during this war on terrorism, which takes up so many of our thoughts these days, leaves us with no doubt as to the sacrifices that have been made to ensure we read, see and hear the truth, the whole truth and nothing but the truth, as it pertains to terrorism in Afghanistan. 

          19 Our research and personal experiences leave us with no doubt that the voice of the media is not unlike the voice of the church when it comes to truth and freedom.  We are all aware of the atrocities and violation of human rights that take place when the church and media are unable or unwilling to be a voice of truth.

          20 One needs go no further than examining the final report of the truth and reconciliation hearings in the post-Botha regime.  A Canadian newspaper reported, the commission laid the heaviest burden of guilt on the white Apartheid governments.  They also condemned lawyers, judges, church officials and journalists who, through collaboration or silence, perpetuated the Apartheid system.

          21 The Canadian courts are on the record that the media is as important as the opposition party when it comes to democracy.  The importance of the media's role increases at the municipal level, where there is no opposition party.  The ability to make an informed choice, not just a choice in all matters, but particularly at election time, is a basic democratic right. But how does the average person become informed if our media does not take on the role?  Surely expensive billboards, glossy brochures and other forms of campaign literature should not be where the elector gets the information associated with making one of the community's most important decisions.

          22 This week is the beginning of Advent.  Many of us witnessed the first candle lit.  John McArthur stated, if we could get rid of the trappings of Christmas we could see the simplicity of the Christmas message, which is God becoming man.  We would add, to provide to mercy and grace for the wrongdoer and wronged.  Surely Guy Paul Morin and the many like him who suffered so badly because of the manipulation or suppression of truth were the beneficiaries of that grace which was absolutely necessary to see them through their experience with the justice system in a nation that is free.  Taxpayers who realize the truth of how much suppression of truth costs also require a large dose of this grace.

          23 I mentioned our vision earlier.  Many think this is an impossible goal, however I am used to thinking big and I have never yet been disappointed.  When it seems my vision is not being been fulfilled I just hang on to the promise, "He will give you the desires of your heart."  As a child I developed a considerable physical handicap which saw doctors counselling my parents to place me in an institution.  They chose not to and treat me as they did my physically-abled brother.  It was their choice, which encouraged me not to restrict my goals or dreams and to ignore the obstacles to their accomplishment.

          24 Dave and I and fellow watchdogs can see absolutely no reason why our vision for Canada cannot be fulfilled either.  Our audits show where we need to smarten up to use our tax resources for the benefit of all Canadian families.  There is enough money; we just need to use it more appropriately.

          25 And now the purpose of my presentation today.  We encourage all connected with the media, and particularly television who are here today, or become privy to our presentation, to unite with us and actively work towards our vision for Canada.  We ask that you use three things: your skills, your faith and your sense of humour.  Especially your sense of humour.  And discover for yourselves how obstacles dreamed of by others can disintegrate before your very eyes.  Every wall eventually falls and Titanics do sink.

          26 Written on the inside cover of a Bible rescued from a demolished church, I discovered the words "When you see something wrong and you try to put it right you become a point of light.  All it needs to disperse the darkness is a single point of light."  What better time to make a commitment to bring some light into the darkness than the week the first candle of advent is lit?  What better commitment could one make than to work through whatever medium you are party to towards freedom through truth as opposed to condemnation through silence?

          27 Thank you for your attention, your patience and your interest.

          28 THE CHAIRPERSON:  Thank you, Mrs. Marsden.  We thank you for coming to see us while we are passing through Hamilton.  I hope that you will be pleased that somebody sees us as a watchdog because my mascot has been deposited on the table before I arrived.  So we certainly are perceived by some members of the audience as watchdogs, and it's a role we try to play in -- from a variety of perspectives, hopefully including yours as well.  Thank you again.

          29 MR. LANGFORD:  And, unlike the fluffy white one, we have teeth.

          30 MS. MARZOLINI:  We have too.

          31 THE CHAIRPERSON:  We will now take a ten-minute break or 15 minutes, probably, to allow the first applicant to come to the panel table.

--- Recess taken at 0915/Suspension à 0915

--- On resuming at 0930/Reprise à 0930

          32 THE CHAIRPERSON:  Order please.  Mr. Secretary.

          33 MR. CUSSONS:  Thank you, Madam Chair.  I would

just like to announce that the CRTC exam room is located

on the second floor in Albion C.

          34 This hearing, as Madam Chair mentioned earlier, is to consider competing applications for new television services, and the hearing will be conducted in four phases.  In phase one, we will hear each applicant in the agenda order with the exception of Torstar, who will follow the order at a later time.  Since they have applied for three separate originating stations to serve Toronto, Hamilton and Kitchener, Global and Torstar requested 30 minutes each to make their presentation.  The Commission granted these requests.  The remaining applicants have a maximum presentation time of 20 minutes.  In all cases questions from the Commission will follow presentation.  I should add that it is our intention to complete our review of Global today and begin with Alliance Atlantis tomorrow morning.

          35 In phase two, the applicants reappear in the same order as they presented their applications to intervene against the other applicants.  10 minutes is allowed for this purpose.  Questions from the commission may follow in each intervention.  In phase three, the Commission hears all other intervenors from outside parties who wish to oppose, comment on or support the various applications.  10 minutes is allowed for each presentation with the exception of CHUM Limited who requested, and were granted, 20 minutes.

          36 Phase four provides an opportunity for the applicants to return in reverse order and reply to all interventions.  10 minutes each is allotted and, again, questions may follow.

          37 I will now introduce our first applicant, Global Communications Limited, who have applied for licences to operate English-language television stations in Toronto, Hamilton and Kitchener.  The new stations would operate on channel 52 with an effective radiated power of 100,000 watts in Toronto, channel 46 with an effective radiated power of 1,430 watts in Hamilton and channel 39 with an effective radiated power of 77,000 watts in Kitchener.  All of the programming aired by the station would be Canadian.  Each station would broadcast a minimum of 15 hours per week of local programming directed to communities in its coverage area.  The station would air 48 hours of programming weekly obtained from licensed digital programming service providers and broadcasters.  The Commission notes that Global has a presence in Hamilton with CHCH-TV and in Paris with CIII-TV.

          38 In the context of the common ownership policy, the Commission may examine this issue.  The Commission further notes that Global is part of CanWest Global Communications Corp, CanWest, who has purchased from Hollinger Incorporated a number of major, daily Canadian newspapers, including the National Post, and a number of daily and weekly newspapers in smaller Canadian communities.  The Commission may examine, among other things, the potential impact of cross-media ownership on the diversity of voices in the markets that Global serves.  We have Mr. Noble and his team.  Mr. Noble.

PRESENTATION BY GERRY NOBLE, GLOBAL TELEVISION NETWORK/PRÉSENTATION PAR GERRY NOBLE, GLOBAL TELEVISION NETWORK:

          39 MR. NOBLE:  Thank you, Mr. Secretary.  Good morning, Madam Chair, Commissioners and Commission staff.  My name is Gerry Noble and I am the president and chief executive officer of Global Television Network.  With me today, to my right, are Loren Mawhinney, vice-president Canadian production.  Next to Loren is Doug Hoover, the senior vice-president of programming and promotion for Global Television Network, and on my left is Charlotte Bell, vice-president, regulatory affairs.  In the row behind me, on my left are Greg Treffry, director of corporate development, Global Television, Katie Fullerton, vice-president sales and marketing, CanWest media sales, Ken MacDonald, national vice-president of news, and Patrick O'Hara, general manager for CHCH-TV in Hamilton. 

          40 At our side table are Ken Goldstein, chief strategy officer, CanWest Global, Angela Marzolini, vice-chairperson for Pollara Research and Gordon Elder, our engineering consultant.  Also with us today in the audience is Leonard Asper, president and chief executive officer of CanWest Global Communications, our parent company.  Mr. Asper is here in his capacity in that role and also representing the interests of the Asper family who, as you all know, are our owner, taking a keen interest in this process.

          41 The "Purely Canadian" concept is based on the premise that in the multichannel world that is already upon us, helping the consumer find Canadian programs and Canadian channels will be a fundamental necessity for building audiences for Canadian choices on the dial.

          42 Commissioners, a year and a half ago you allowed us to grow and become a truly national voice for Canadians when you approved our acquisition of WIC's television assets.  At the same time we agreed to take on some very significant commitments, both on the local and national levels.  You asked us to step up to the plate and we delivered.

          43 Less than a year ago, along with CTV, we appeared before you to renew each of our conventional television licences.  Again, we laid out impressive plans for the Global Television Network for the next licence term.  These included spending of more than one billion dollars in Canadian programming, as well as important commitments to serve Canada's blind and vision-impaired community as well as plans to better reflect Canada's cultural diversity.  I am happy to say these initiatives are already well under way.

          44 But in the short time since those two hearings, the Canadian broadcasting system has undergone significant change and increased fragmentation.  Canadian broadcasters are investing millions of dollars each year in order to provide viewers with quality, domestic programming services in conventional and specialty television while competing for viewers in an increasingly competitive environment.  Today Canadians have a multitude of viewing choices.  This is especially true in Canada's largest television market, Ontario.  Our investments in Canadian programming and new Canadian digital specialty services need to be supplemented by aggressive promotion in order to increase viewing and grow audiences for domestic product in the new media marketplace.

          45 While we share the Commission's vision in promoting diversity in the Canadian television system, we feel that the time has come to recognize that watching diverse channels is only the first part of the process.  Getting Canadians to watch those channels is what we need in order to make that diversity sustainable.  This is where "Purely Canadian" comes in.  "Purely Canadian" can provide the much-needed promotional vehicle to help ensure that Canadian choices have a prominent place within the broadcasting system.  It can be a dedicated destination for viewers to not only see Canadian programs they have missed in the past, but sample Canadian programs from the new digital specialty services.  In addition, new, innovative local and regional programming will focus on communities, events and people unique to each region which will enhance local television service and provide a different style of community reflection.

          46 "101", our regional programming hosted and produced by students and for students will give journalism students attending local universities or colleges the opportunity to create their own programming and, at the same time, to develop their talents and skills.

          47 "Up Next", our entertainment magazine, will profile and thereby promote local Canadian artists and performers in these three markets.

          48 "Local Heroes", our daily "good news" program will be dedicated to showcasing local heroes, positive community stories, amateur sports and local community events and activities.

          49 While the "Purely Canadian" services would use conventional frequencies, they would use those frequencies in a new and imaginative way.  It would promote all Canadian programs and services, not just those from Global.  The stations would be available on a priority basis on BDUs about would not be controlled by BDUs, much like the "barker channel" concept.

          50 Not only does "Purely Canadian" help achieve the important goals of the Broadcasting Act, respondents to our survey overwhelmingly supported the idea.  In the Pollara survey that is part of this application, respondents were asked if they ever wanted to watch a particular Canadian television program but missed it due to scheduling or because it was no longer on the air.  Almost half, 46 percent, said that they had had that experience.  In fact, the Pollara survey found that consumers want this kind of a channel.  Of those who indicated they had missed a Canadian program they had wanted to watch, 81 percent say they would be likely to watch "Purely Canadian".  It is also extremely important to note that interest in "Purely Canadian" is linked strongly with the likelihood of subscribing to the new digital specialty services, thus "Purely Canadian" not only promotes Canadian programs but it also has the potential to accelerate the consumer acceptance of the new Canadian digital channels.

          51 I would now like you to turn you attention to the video presentation in order to give you a better feel of what this service might look like.

--- Video presentation/Présentation video

          52 MR. NOBLE:  Commissioners, we are pleased to appear before you today in the context of what we consider somewhat unusual circumstances for us.  When the Commission issued its call for applications for new television services to serve Toronto, Hamilton and Kitchener last May, most observers would have predicted that Global would be appearing before you as an intervenor in the process, not as an applicant.

          53 Even before the shock of September 11th, it was clear to us that prevailing structural and cyclical factors were indicating that this was not the time to license a new conventional-format certificate. So we began the process with the assumption that Global would be an intervenor.

          54 At the same time we believed as one of Canada's leading media companies it was important for us to explore innovative and perhaps more productive ways of utilizing available frequencies in Canada's largest television market. Perhaps it was time to create a new television model that would help support existing structures rather than create new ones that would most certainly disrupt the system.  It became clear to us that wasn't good enough to simply intervene in this process; we needed to come up with an alternative.  We began to view this process as an opportunity to propose an entirely new idea that would use the conventional frequencies in and the resulting priority carriage to accomplish two important goals: First, to increase the audience for all Canadian television programs and particularly for Canadian programs on the new digital specialty channels; and second, to accomplish that goal with the minimal disruption to the economics of the Canadian television system. That is the genesis of the applications you have before you today, "Purely Canadian."

          55 We realize that there will be a temptation by some applicants to try to guess the length of the current downturn, and to assume that while the current situation may be uncertain, the economy will be in a recovery mode by the time a new station starts operating. That's what they hope.  There are two reasons to reject that argument:  first, no one knows for sure the length or depth of the downturn, and no one knows for sure the timing or speed of the recovery.  It is not good enough to simply assume that the economic recovery will occur at just the right time for the launching of a new conventional station. 

          56 Second, let's remember the shape of the conventional television-revenue curve before the current economic uncertainty.  We are not dealing with an interruption to curve that was going up; we are dealing with an economic shock to the system that was already experiencing slow growth or no growth.  In addition to those very real revenue issues, there is also an important structural factor on the cost side: the cost of non-Canadian programming.  If a new conventional-format station were licensed in these markets it would represent the potential for a new buying force for non-Canadian programming which would create is serious risk of upsetting the current markets and raising the costs for that programming.

          57 On the "Purely Canadian" application -- only the "Purely Canadian" application meets the two fundamental economic tests that should be applied in this process.  It does not disrupt the conventional-television advertising market and it does not disrupt the program buying market.

          58 In every licensing process the Commission is faced with a complex balancing act.  This process is no exception.  Indeed, because of present structural and cyclical trends, as well as the current economic uncertainty, the process is even more complex at this time.

          59 We would submit, however, that "Purely Canadian" is the only application before you which represents the right balance of factors.  It will promote diversity by promoting Canadian programs and services from other broadcasters. It will introduce new, innovative local content in Toronto, Hamilton and Kitchener.  It will not disrupt the economics of the broadcast-advertising market in Ontario, and it will not disrupt the structure of the program-buying market across Canada.

          60 It is a cliché, of course, that necessity is the mother of invention, but it is a cliché because it captures the underlying truth. In this case sustainable diversity in our system is the necessity and I and we think that "Purely Canadian" is the invention that can make it happen.

          61 In conclusion, we believe that "Purely Canadian" will bring the greatest benefit to Canadian programming and to the Canadian broadcasting system and cause the least disruption to the industry.  We firmly believe that licensing traditional, conventional stations at this time would cause significant disruption to the marketplace and that, under the circumstances, "Purely Canadian" presents the best licensing option.

          62 Commissioners, my name is Gerry Noble, and I am Canadian.

          63 THE CHAIRPERSON:  Good morning, Mr. Noble and your colleagues.  The acoustics in this room will certainly keep us all on our toes as it causes a bit of technical feedback. I wonder if you spoke further from your mic it would help.  Can you hear him?  So we will really have to pay attention and please don't hesitate to ask for repetition and I will do so as well if we can't hear each other.  Do you hear that as well?  Yes.  We will do our best.  Can you hear me now better?

          64 MR. NOBLE:  Yes.

QUESTIONS FROM THE PANEL/QUESTIONS DU PANEL:

          65 THE CHAIRPERSON:  For ease of reference and if your panel has no objection, I will use the term Global rather loosely, to refer to all and/or any broadcasting or other undertaking that CanWest controls.  And where necessary, I will specify where I am speaking of the Ontario Global signal or CHCH or "Purely Canadian".  Is that acceptable?  Because it won't always be Global as we all understand, but it will be easy to talk to each other in that fashion.

          66 Before I proceed to questions which are more specific and aimed at clarifying your application, I would like to raise some issues that are more general and may flow from your strategy, your vision or your approach, or your philosophy in this particular hearing.  Would it be fair to say that you are opposed to the licensing at this time of a new conventional station?

          67 MR. NOBLE:  Yes, that's correct.

          68 THE CHAIRPERSON:  Now, in your supplementary brief at page 3, you state that it would be economically disruptive and could actually be counterproductive to license a conventional station and I believe that your presentation this morning repeated that statement.  You also say that it's your intention to intervene -- you explained this morning again the same thing you said in your supplementary brief that simply intervening was not enough,  that you applied as well proposing a totally new and creative economic or programming model using it over the frequency.  Would it follow from this position that the only proposal that we should license, in your view, is one that is clearly not a conventional television station?

          69 MR. NOBLE:  Would I -- I term it as traditional conventional television station, which would be a combination of television, news, entertainment, U.S. and Canadian programming.

          70 THE CHAIRPERSON:  Are those, in your view, the determinative characteristics of a conventional television station, the type that we should not license?

          71 MR. NOBLE:  Yes, that's our view.

          73 THE CHAIRPERSON:  Would it also follow from your position that a proposal acceptable to Global would require some licensing requirements that are ensuring that the service licence is, and remains, something other than a conventional television station?

          74 MR. NOBLE:  As we currently define them, yes, definitely.

          75 THE CHAIRPERSON:  And would it follow from your position that there would need to be some regulatory intervention, that some may call micro-intrusion or micro-regulation, to achieve that goal of ensuring that who is using the frequency is not a conventional station and remains something other than a conventional station, that it may  require some regulatory requirements, be they by condition of licence or any other means, to hold the applicant to a proposal which in your view should not be anything near a conventional television station?

          76 MR. NOBLE:  In the two primary areas we focused on in both our -- in my opening comments and also in our application you will hear later in our intervention, is that our concern is on two fundamental equations: one revenue, and one foreign program costs.  If you were to license something, and you -- to use your term, micro-regulate, it would have to license a broadcaster that would somehow regulate how they purchase foreign so it doesn't disrupt what is already a fragile market and therefore generate the revenues, the level of revenues that they would need to operate.  Our argument is that Toronto is the engine that drives the Canadian broadcast system.  It's the market that makes -- it provides revenue --

          77 THE CHAIRPERSON:  We will have lots of opportunity to talk about that, I am now asking you just as a preliminary question whether in your view it may well -- or it may well follow from your proposal --that we should not license a conventional station and you are giving me

the determinative characteristics of that which is that you should not do American programming;  you should probably not do news, et cetera, that to hold a conventional station to this type of proposal or performance over time may require additional regulation.

          78 MR. NOBLE:  Yes, that's correct.

          79 THE CHAIRPERSON:  And would you agree that it would also  follow from your position that that would be true of your proposal as well?

          80 MR. NOBLE:  Yes.

          81 THE CHAIRPERSON:  And if I look at this screen more than at you more it's not because I am scared, it's because it's easier to hear you when I see.  You can hear me now?

          82 MR. NOBLE:  Yes.

          83 THE CHAIRPERSON:  We will have immediately the opportunity to talk about -- about the market capacity as you see it.  And you acknowledge like many economists in your presentation today that it is very difficult to know for sure the timing or speed of any recovery and to even know just how deep the market problems may be.  And my understanding is that often downturns takes take a while

to show up in the advertising industry, especially on TV.  What has been your experience to date as to the effect of this downturn?  In your own TV and media property, broadcasting media property.

          84 MR. NOBLE:  We started to feel the downturn back in January of this year.  We were predicting -- were predicting slowdown in the summer which we experienced.  We raised our expectations for the fall because of some schedule changes we made and some audience gains, and also with the significant changes that happened in Vancouver market.  As a result of those changes in Vancouver, we actually, our sales position this year as compared to last year is better.  We have done very well.  But that is a direct result of -- of what the changeover in Vancouver did.  Overall, in Ontario, we are flat to slightly up over last year and that results from increased audience share.  Not from a robust market.  So as we increase our audience share we were able to increase our revenues, but we are into the feeling any growth at all over all in the Ontario market.  As company, as a consolidated basis in the television business at least, we have experienced growth coming out of the Vancouver market.  And we experienced good growth out of Alberta.

          85 THE CHAIRPERSON:  Would it be fair to say you haven't lost major accounts or major advertising opportunities that you experienced before?

          86 MR. NOBLE:  There was some fear in the market that after the events of September 11th that there may be a lot of advertisers who did pull their accounts and we -- there was -- we lost a couple of minor ones, but overall we came out of it very well.

          87 THE CHAIRPERSON:  Now, I of course it's not the time to intrude on the -- on the intervention stage, but I did read your intervention and many of the applicants use the GDP growth forecast figures to try to see what the situation will be in the future.  And I think you pointed out this morning or it's certainly obvious that the earliest possible time that a proposal that we hear this week is implemented would be the fall of 2003, correct?

          88 MR. NOBLE:  Correct.

          89 THE CHAIRPERSON:  You have, I guess, like everyone else, looked at the Conference Board forecast figures which predict a bit of a what I suppose you could call a surge in the GDP growth going into 2003.  Do you have any faith in this type of -- of prediction, that there would be low growth possibly below one percent, although not as bad in the Toronto area.  And what I would call a surge, the predictions are almost five percent in GDP growth for 2003.  Do you have any faith in this prediction?  Or if not, why not?

          90 MR. NOBLE:  It is the same board that predicted three percent growth for this fall, if you want to get into the detailed economic analysis assumptions we made I will turn it over to Ken Goldstein.  Can you comment?

          91 MR. GOLDSTEIN:  The business of predicting at the moment is very, very difficult.  There are so many unknowns, so many uncertainties, that I would be very, very hesitant to say that we can predict with certainty there will be a downturn of only something and an upturn of something else, and put that kind of a date on it.  I note you mentioned the projection for Toronto particularly of course as we get to smaller units not to suggest Toronto is small, but it's certainly smaller than Canada as we get to smaller units the margins of error on these predictions get bigger.  There is also a significant concern that the Ontario economy is most affected because of the auto industry and other links by the downturn in the American economy.  So we've got the kind of double uncertainty here.

          92 The second point I would make, and I think has to be reiterated, is that we cannot look at the overall economy independent of the television economy.  We have to look at the structural and cyclical together.  And we were in a situation beginning in about 1998 from which conventional television was flat or down slightly.  And that was at a time when there that was same kind of five percent growth or four percent growth happening in '98 and '99 and 2000.  So with those two things happening, one, the general economic uncertainty, and second the fact that we started in a flat position, I would be very, very cautious about assuming that an uptake will occur at just the perfect time.

          93 THE CHAIRPERSON:  Considering, Mr. Noble, the effort that is brought to this process, including struggling with the echo in this room for six or seven days and all the effort that has been put into preparing applications, it is obviously partly your view that we should err on the side of caution towards adding something to the system since you are here with an application, albeit a different model.  Your experts say it's difficult to predict; so should we predict downward rather than upward, considering the context and the time it will take to get a proposal on the air and the possibility that it could be extended for a month past the year that usually is promised by applicants?

          94 MR. NOBLE:  Madam Chair, I would obviously encourage the Commission to use caution, and tell you that what the broadcasting industry in Canada needs now more than anything is stability.  We, as I started to mention before, the Toronto market is very important to the Canadian system, as is Vancouver.  And in Vancouver there has been in the last year, two new entries to the market and they're considering licensing a third.  That causes significant disruption in that market.  To cause more disruption in the Toronto market creates instability.  We've just now come out of our first year under the new priority rules: eight hours a week, 60 hours a week on the Global station, that hasn't sort of fully worked its way out.  There are other issues that are before the Commission, the DTH carriage issues.  I would -- if there is anything that would help this industry to continue to get through the economic -- and continue to grow, it's stability.  Introducing a new traditional conventional broadcaster in this large marked will disrupt that.  Will disrupt it on the regulatory side and it will certainly disrupt it on the foreign-program buying side.

          95 THE CHAIRPERSON:  Let's look at the core of your proposal now, the programming.  I think it can be described at the most preliminary level as 96 hours of second or third or fourth window programming of which 48 hours will be co-op programming that abilities or access given to other participants in the market.  And then the remaining 30 hours would be local and regional programming but with no news and a hundred percent Canada content.

          96 MR. NOBLE: Correct.

          97 THE CHAIRPERSON:  So I would like to look at the prime time hours that are committed to -- in your application.  First of all, will some of the co-op programming go to filling your priority programming in peak time, or will all the peak hour -- the priority be Global programming, or Global-related programming?

          98 MR. NOBLE:  No, that's correct. -- We would expect the co-op programming would contribute some of the priority hours to this service.

          99 THE CHAIRPERSON:  Now, why is it that - well, first of all when I look at your block schedule I see 10 hours of priority programming but in your application you commit to eight hours.  Why not more than the usual eight hours, considering that this is described as a -- in large part, a syndication channel for Canadian programming? why not make it closer to syndication for priority programming?  And is the eight hours nevertheless what you are committing too?  I think in your supplementary brief as well, somewhere you referred to 10 hours and 10 hours can be found in your block schedule.

          100 MR. NOBLE:  I will ask Loren to respond in detail, but I think the -- the reason we did not go beyond the eight, and we'll tell you why - ten mentioned somewhere if it is, is that we also want to use this service to help expose some of the digital Canadian offerings to -

          101 THE CHAIRPERSON:  Wouldn't some of that programming with priority programming.

          102 MR. NOBLE:  Some of the digital it's possible, yes, but not by design.  These will be the hours that will be created for the digital channels.  They won't necessarily fit the priority licence.  But Loren, over to you.

          103 MS. MAWHINNEY:  Madam Chair, when we drafted the mark schedule it was very preliminary and we expect that a minimum of eight will be priority.  You are correct that there does show 10, but we didn't actually have commitments for titles and we're trying to give an accurate sampling of what the schedule could look like.  So at that point, we have got 12 hours a week and we assumed that three quarters of that would be priority, and that's how we came up with the eight.

          104 THE CHAIRPERSON:  Yes, it's not only the block schedule, your supplementary brief also refers to 10 hours but what is in the application is what you are prepared to commit to, which is eight hours.  Will the scheduling of that priority programming be identical on all three stations, or will it be different?  I know it will be the same priority programming but may it appear at different times?

          105 MR. NOBLE:  The plan is to have it appear all at the same time.

          106 THE CHAIRPERSON:  All at the same time, and all the same programming?

          107 MR. NOBLE:  Yes.

          108 THE CHAIRPERSON:  So the only difference between these stations will be the 15 hours of local programming.

          109 MR. NOBLE:  Correct.

          110 THE CHAIRPERSON:  And the scheduling will be identical although the content may be different.

          111 MR. NOBLE:  Correct.

          112 THE CHAIRPERSON:  So that all three stations will do the same thing at the same time and only 15 hours a week.

          113 MR. NOBLE:  Yes.

          114 THE CHAIRPERSON:  You also commit to 12 hours a week of drama and documentaries, on average.  That's at page 7 of your supplementary brief.  And that will be in prime time, not in -- in peak time.  But will that 12 hours also include some other priority programming and in fact be counted into the eight hours of priority programming?  Like will some of those dramas and documentaries actually be Canadian, and priority?

          115 MS. MAWHINNEY:  Yes.

          116 THE CHAIRPERSON:  So there could be that 12 hours could in fact include counting the eight hours and vice versa.

          117 MS. MAWHINNEY:  I'm not sure I understand, Commissioner. I am sorry.

          118 THE CHAIRPERSON:  You are committing to eight hours of priority programming but also to 12 hours on average a week of documentary -- of documentaries and drama.  So if one is trying to find eight hours of priority and the 12 hours, there may be some overlap.

          119 MS. MAWHINNEY:  Yes, you're correct.

          120 THE CHAIRPERSON:  Because some of that documentary programming and drama will obviously be priority.

          121 MS. MAWHINNEY:  Priority, that's correct.

          122 THE CHAIRPERSON:  Mr. Noble.

          123 MR. NOBLE:  Yes?

          124 THE CHAIRPERSON:  Oh, I thought you had something to say, your mic was on.  I am being very attentive as you can see.

          125 How much of the priority programming will be broadcast once on "Purely Canadian"?  Obviously it's all second window programming, correct?

          126 MR. NOBLE:  Correct.

          127 THE CHAIRPERSON:  Second or even third, so we can say original and repeat but how much of that programming may indeed be,  if we use the normal nomenclature, "repeat."

          128 MR. NOBLE:  I think Doug --

          129 THE CHAIRPERSON:  Repeat on "Purely Canadian".  Program X, for example, may be played twice or three times or may it not, and how much of the priority programming may be in that category?

          130 MR. HOOVER:  I would venture to say that all of the programming would he repeated at least once within in each broadcast year.

          131 THE CHAIRPERSON:  Within each --?

          132 MR. HOOVER:  Each broadcast season. Each broadcast --

          133 THE CHAIRPERSON:  -- Season.

          134 MR. HOOVER:  Yes. From September to August 31st.

          135 THE CHAIRPERSON:  So if you were to be asked for a commitment about how much of the programming will be played, or the priority programming will be played once, what would be the ratio you would be prepared to say is something you are -- you are prepared to commit to?

          136 MR. HOOVER:  You mean how much of a --

          137 THE CHAIRPERSON:  Of the priority programming will be seen more than once in the season so it will be one to one or...?

          138 MR. HOOVER:  We hadn't contemplated a conditional licence that would --

          139 THE CHAIRPERSON:  I haven't said that word yet.

          140 MR. HOOVER:  I --

          141 MR. NOBLE:  It's coming.

          142 MR. HOOVER:  I suppose I have been before you enough that I know it's coming.  We hadn't in our analysis sat down and determined a repeat factor on a given broadcast year as yet.  Particularly when you consider that 50 percent of the schedule is cooperative programming and we will have to work out those type of detailed logistics with our co-op partners.

          143 THE CHAIRPERSON:  Is it not somewhat important for us to get a fix on the type of service that will be on the air to know just how much repeat there will be?  Especially since, as we will discuss later, your proposal will require a certain amount of partnership or co-operation with other broadcasters, we will discuss that next, and if it doesn't work out as well as you planned, could we then see a repeat channel or a recycled channel to a large extent by having the same programming on an undue number of times perhaps if you haven't contemplated that, you can and let us know later.  You understand what I am -- what I am driving at?

          144 MR. NOBLE:  Yes.

          145 THE CHAIRPERSON:  Do you have any comment as to the validity of my question?

          146 MR. NOBLE:  The only comment I would make, Madam Chair, is we will be reliant on other Canadian partners and it would be -- they could limit our ability if they so desired, to hold -- to not participate, and that could create --

          147 THE CHAIRPERSON:  Yes, so that would either provide a golden opportunity for CanWest to recycle its programming or offer a service to the area that is -- that has too many repeats.

          148 MR. NOBLE:  But the desire isn't to recycle Global.

          149 THE CHAIRPERSON:  Yes, but it can be recycled with a low-pace hour or high-pay salary.

          150 MR. NOBLE:  For this channel to be a success it has to be the best Canadian from everyone.

          151 THE CHAIRPERSON:  Perhaps it is something you will want to address.

          152 MR. NOBLE:  Thank you. We will consider it.

          153 THE CHAIRPERSON:  You may want to look at whether you have a cap on what you think would be a valuable service in spirit if, as you put your proposal forward.

          154 So let's talk about co-op programming, which is to a large extent, a novel approach in -- that makes your proposal a novel approach, as you have stated earlier this morning, if it is indeed that occurs, we would get a syndication for Canadian programming or a syndication channel.  96 hours of that programming would come from digital Canadian services or conventional services and would definitely have had a window already.  You say on page 8 of your supplementary brief that 48 hours will be offered to other licensed Canadian digital services -- service programmers and broadcasters on a contra basis.  Do I read from offered that if there is no takers, that 48 hours will be filled otherwise, presumably by -- with Global programming?

          155 MR. NOBLE:  Or purchased.

          156 THE CHAIRPERSON:  Pardon me?

          157 MR. NOBLE:  Or perhaps purchased.  If those broadcasters don't want to participate in the -- by taking the air time and in selling it, perhaps we could buy some of those runs.

          158 THE CHAIRPERSON:  So it's possible that that programming would not come from services other than Global services, that you would purchase some as well and it would not be on a contra basis. So I'm to read --

          259 MR. NOBLE:  That's not -- that's not planned,  but if you will to fill your schedule.

          260 THE CHAIRPERSON:  So I am to read offered exactly as what it means in English, offered on certain terms and perhaps not taken?

          261 MR. NOBLE:  Well, it would be obviously open to negotiation, but the plan is to offer other broadcasters or holders of Canadian broadcast programs -- which could be a producer -- the air time, the time slot, we will talk to them about what type of programming we're looking for, and in return for use of that program, they will receive 50 percent of the air time availabilities.

          262 THE CHAIRPERSON:  Now, in a response to a deficiency question at page 5, this is a response to question 8B. I know there was more than one deficiency question dated 12 September.  There were two; I believe this is the first one.  You say that - I'm reading now from 8B.  "As per our application no more than 48 hours of non-local programming per broadcast week will be provided by Global-affiliated broadcasters."  So if the offer was not taken, you say, Mr. Noble, you would purchase programming.  Would you make sure that -- so that would be programming that is not provided by Global-affiliated broadcasters, even on a sub-licensing basis?  It would be other than programming that is Global related.  In other words, your response to 8B, no more than 48 hours of non-local programming per week will be provided by Global affiliated broadcasters."  Is that a commitment?

          263 MR. NOBLE:  Yes, it is.

          264 THE CHAIRPERSON:  That it will not be programming that was licensed or aired on Global.

          265 MR. NOBLE:  Currently licensed to air on Global, it may be.  If we -- There is a lot of programs in Canadian libraries across the country that we would be making access to.

          266 HE CHAIRPERSON:  Could "Purely Canadian" for example sub-license from another Global property programming beyond 48 hours that is Global related?

          267 MR. NOBLE:  That's not the correct -- that's not the plan, no.

          268 THE CHAIRPERSON:  That's not the plan.  So that only 48 hours that will be Global related is a commitment.

          269 MR. NOBLE:  Yes.

          270 THE CHAIRPERSON:  And you would find some way of ensuring that if you can't get it from other broadcasters you will get it in some other way, but not -- it won't come from Global related properties.

          271 MR. NOBLE:  Yes.

          272 THE CHAIRPERSON:  You are obviously aware that those who don't think your proposal is the best, but theirs is, would -- well, I hope I am not giving anybody any ideas, but I doubt it, that this will be a Global recycling channel.

          273 MR. NOBLE:  We have heard that comment, but no.

          274 THE CHAIRPERSON:  So it may be meant.

          275 MR. NOBLE:  That's why we're giving half the inventory to other people.  I would be very surprised, once we were awarded the licence, that we would not get CHUM, CTV, the Craigs, other broadcasters or indeed producers who have a library of product coming forward, offering their Canadian programming for broadcast on "Purely Canadian", I would be very surprised.

          276 THE CHAIRPERSON:  But it would depend on the terms that "Purely Canadian" offers.

          277 MR. NOBLE:  50 percent of inventory is very good terms.

          278 THE CHAIRPERSON:  Let us now raise the ugly C word.  How would you react to a condition of licence that would hold you to no more than 48 Global-related programming on "Purely Canadian"?

          279 MR. NOBLE: I suppose we would limit it, provided that somehow you were able to issue a condition of licence to the other broadcasters that they offered their product to us.  I don't want to be held to ransom by someone who can --

          280 THE CHAIRPERSON:  Or -- certainly you wouldn't go as far as saying we would set the terms of your offer so that it would be acceptable.

          281 MR. NOBLE:  I believe in the open marketplace in that situation, Madam Chair.

          282 THE CHAIRPERSON:  Oh, but you are seeking regulatory approval today.

          283 MR. NOBLE:  Once we get it.

          284 THE CHAIRPERSON:  You know that your former colleagues were reminded that sometimes [inaudible]. Or maybe you were in Australia at that time.

          285 MR. NOBLE:  I missed that hearing.

          286 THE CHAIRPERSON:  That's right.  Ms. Bell, she can shake your memory.

          287 MR. NOBLE:  Thank you, Madam Chair.

          288 THE CHAIRPERSON:  Now, would you be -- if we were to go as far as imposing a limit of some sort on the amount of syndicated programming, would you want to have a -- a ratio as between priority programming and non-priority programming that comes from other broadcasters?

          289 MR. NOBLE:  I think as part of the overall -- what you are suggesting is 50 percent of the priority should come from Global and 50 percent should come from others? I would prefer flexibility, perhaps maybe in some parts -- some times of the year a hundred percent comes from someone else.  Because what we can do, from a promotion and programming point of view, is run week long festivals of Cold Squad or Traders or Blue Murder.  The sort of, every night of the week you can get your Blue Murder fix and Cold Squad fix.  And that -- if we did that, we would -- if we had a regulation that limited, that said 50 percent Global priority, 50 percent others priority, we wouldn't have that flexibility.

          290 THE CHAIRPERSON:  Now, we all have our own understanding I guess, depending on our age, of what contra means in broadcasting.  I suspect for you it means what you referred to at page 8 of your supplementary brief and you repeated again this morning, that the parties will receive 50 percent of the commercial availabilities in the

programs.  Now, I would like to understand how this would work.  So let's say you would go to CHUM or CTV and you negotiate a proposal whereby some of their programming would end up on "Purely Canadian".  You would say then that half of the 12 minutes are theirs for putting advertising in?

          291 MR. NOBLE:  That's correct.

          292 THE CHAIRPERSON:  Would it be in the sense of contra in some cases be their responsibility to fill the six minutes?

          293 MR. NOBLE:  We would give them the option, they could sell it on their own if they had a local sales infrastructure, a national sales infrastructure.  We would say you can sell that on your own, or you can have us sell it for you.

          294 THE CHAIRPERSON:  Now, if you -- if either they or you is -- you are unable -- especially if you are the party agent for selling it you are unable to sell the 12 minutes, and you sold on their behalf and on yours, would -- if Global could fill the other six minutes, would it or part of the six minutes, or if --

          295 MR. NOBLE:  Well, now you're getting into negotiating.

          296 THE CHAIRPERSON:  Well, you are telling us that this will be a syndicated channel for Canadian programming, but that it will not be a recycling channel for Global properties.  Therefore, it's important to understand how you will entice or help or genuinely try to only use 48 of those 96 hours for your benefit.  Which of course could be great for advertising program costs and also I suppose, promoting your only channels, et cetera.

          297 So it's important that I am not negotiating with the other broadcasters but I am trying to ask you to explain to us what your plan will be so that we have a sense of whether it's likely to work and be what you say it's going to be.

          298 MR. NOBLE:  I think to answer directly, our -- the first position is you take your six minutes and sell it or have us sell it.  I suppose a more equitable method may be leave it us to sell all 12 minutes and we will give you 50 percent.  If we only sell six minutes we give you 50 percent.  What we are hoping to be able to do is have

the other broadcasters use this 50 percent of this air time to add on value to their other program properties, on their existing stations.  They may be able to use it as added value to certain of their other sales.  So we -- we've essentially said you can have half the inventory.  We haven't drilled down and said this is hour we're going to partition it, but -- the goal -- the sense is they have half the value of that programming in that time slot.

          299 THE CHAIRPERSON:  That is the end that half the value of the program goes to the source of the program.  Now, I understand when you file this proposal that you may not have -- I believe it was in August, August 8, yes -- That you may not have had negotiations with anyone.  But have you discussed with the broadcasters who expect to get this [inaudible.] Are you closer to seeing -- you have spoken to some licensees and they are quite anxious to sit down and negotiate with you?

          300 MR. NOBLE:  Only in a general sense.  But as part of this proceeding at one point in time all of the people who would be supplying were applicants in the process but one.  So there really wasn't a desire to talk on that level, but I -- I --

          301 THE CHAIRPERSON:  No one can discuss --

          302 MR NOBLE: No one was in the mood to discuss--

          303 The CHAIRPERSON: alternatives if they didn't get their proposed licence.

          304 MR. NOBLE:  -- to discuss alternatives. However, Doug Hoover has had conversations with some other parties and he may have some further comment.

          305 THE CHAIRPERSON:  They may have more negatives than positives I suppose.  Maybe they wanted to know about those as well.

          306 MR. HOOVER:  I think it's fair to say that in this economic environment and challenges that are facing all the broadcasters, conventional and cable and digital, that a number of us are having discussions.  Those discussions are -- are evolving around mechanisms whereby, as an industry, we can create a better offering environment for us all. 

          307 And it is in that sort of spirit that we have had some -- some conversations, primarily with Corus, and looked at the strengths that Global as an organization has, its program interests tend to be adult programming, and their strengths which programming interests tend to be youth and children's programming.  So we have discussed in very general, broad strokes, how we might complement each other's objectives.  I think that kind of discussion in the industry is taking place: in the rating services; in mechanisms we used for requesting simulcasts: how can we as an industry be more efficient and join forces where our objectives may not be individually competitive.  And so it's in that sort of environment that those discussions took place.

          308 THE CHAIRPERSON:  Mr. Hoover, are there program-rights issues involved in this plan in the sense that would there be situations where the broadcaster has the right to one window or two, but not sub-licensing rights?  Would that be -- become an issue in some cases?

          309 MR. HOOVER:  Certainly the -- the clearance of rights will have to be assured and there may be programs that were initially licensed for broadcast on a, say, digital channel, and at the time of acquisition had not been contemplated for use on a over-the-air service and it would be a requirement of our service to ensure that those clearances are granted by the producer and have been acquired by the cooperative partner that is supplying the program or by ourselves.  We certainly do not believe that that will be an obstacle.

          310 THE CHAIRPERSON:  So in some cases the program could come from a conventional station and "Purely Canadian" would provide it a second window on another conventional station, i.e. -- well, not conventional station, sorry, Mr. Noble, over-the-air station, before it gets on a specialty service.

          311 MS. MAWHINNEY:  Yes, that's correct.

          312 THE CHAIRPERSON:  And in your experience, Mr. Hoover or Ms. Mawhinney, you don't think that the rights issue will be a barrier to achieving this.

          313 MS. MAWHINNEY:  Madam Chair, we generally buy a number of telecast rights so in our case --

          314 THE CHAIRPERSON:  Yes, but we are talking here about co-op programming which is not Global-related.

          315 MS. MAWHINNEY:  Correct, but I assume that before somebody would share a window with us, they would recognize that they would be using up one of their telecast rights, one of their plays.

          316 THE CHAIRPERSON:  So could that come into the -- the -- into the financial equation or negotiation of "Purely Canadian" and the broadcaster concerned?  Will -- that will have a financial impact, that they have to clear the rights before even trying to sell their six minutes.

          317 MS. MAWHINNEY:  Yes, but generally they would have those rights, they would have purchased those so they would be factored into their equation that this play would be valuable enough to warrant using up a right.  Because generally you clear --

          318 THE CHAIRPERSON:  Including broadcast on another over-the-air station.

          319 MS. MAWHINNEY:  Yes.

          320 THE CHAIRPERSON:  Through sub-licensing.  Now, in the same letter of deficiency and your answer to question 3A, you say, and I quote, "cooperative agreement -- programming refers to programming that will be sub-licensed from the digital specialty services and other Canadian broadcasters".  Can we conclude from that that there will not be any co-op programming coming from analog channels, specialty channels?

          321 MR. NOBLE:  No, I don't think you can conclude that.

          322 THE CHAIRPERSON:  I have not found in either your supplementary brief or in responses to deficiencies the word -- when you talk about specialty services, it's always qualified by the word digital.  But that's also true, let me see if I am correct, in your supplementary brief at page 7.  I cannot see anywhere -- I haven't of course looked at the programs that you show in your block schedule.  But you always talk about digital and conventional stations.  Or digital specialty but you're saying you will also negotiate with analog specialty channels.

          323 MR. NOBLE:  The program slots will be available to all Canadian broadcasters, including analog services.

          324 THE CHAIRPERSON:  And the reason also is that why I had assumed it would be digital, was your stated aim or vision or approach was first and foremost to promote digital.

          325 MR. NOBLE:  Correct.

          326 THE CHAIRPERSON:  So I thought you would limit yourself to the digital channels for sub-licensing programming.

          327 MR. NOBLE:  We would include special --

          328 THE CHAIRPERSON:  You would include analog. 

          329 What type of programming will you be looking for, some to fulfill your priority commitment, and other commitment in drama and documentary you may end up finding as a requirement, and 48 hours that would not be from Global.  Are you looking at blocks or types of programming or how will you get a brand out there or some loyalty to the service?  Will it be mystery block, children's programming in blocks or -- and therefore will you be looking for specific types of programming rather than willing negotiators -- do you know what I mean?

          330 MR. NOBLE:  I know exactly what you mean and I will toss it to Doug in a moment, but the - we are looking at all -- all kinds and all -- including children's and teens.

          331 THE CHAIRPERSON:  Yes, I am trying to get a sense of what this channel will look like.

          332 MR. NOBLE:  How will it be scheduled essentially.

          333 THE CHAIRPERSON:  Yes, there will be 96 hours of 126 during the broadcast day that will be sub-licensed programming or syndicated programming.  Will it be mystery followed by something completely different?  What is your plan for scheduling, and what type of programming will you be looking for?

          334 MR. NOBLE:  Before I try to sound like a scheduling expert, I will toss it right to Doug.

          335 MR. HOOVER:  Although it's not a conventional station, we will be scheduled like a conventional station--

          336 THE CHAIRPERSON:  Ah-ha.

          337 MR. HOOVER:  -- in that we will program the schedule with a view to ensuring that the program itself is compatible with the audiences available at the time of broadcast.  And that would tend to have you gravitate towards children's programming in the morning, as an example.  It would tend to perhaps move to preschool children's programming a little later in the morning.  We would ensure that more adult fare is scheduled after the watershed hour.  So it's our intent to recognize all of the principles of responsible program scheduling and to attempt to, you know, ensure that the schedule maximized viewing by placing programming at times that is -- has an audience that is as compatible as possible with that program.  We will also attempt to be as consistent as possible.  You know it's one of our cornerstones in television in this schedule and because it is "Purely Canadian", will afford us the luxury of having a very consistent schedule.  So that if we establish perhaps a movie on a Saturday night as an example, it would be our intent to attempt to schedule a movie 52 weeks out of the year in that same time period.  And I think that's one of the inherent benefits of a station of this nature.  It enables us to brand it very, very clearly and to provide something that -- that people can rely on in a very consistent fashion.

          338 THE CHAIRPERSON:  Now, if I look at your application, let's say your supplementary brief at page 5, and also at page 4 and 7, I can, I think, extract from that that the strategy of your service is to promote the new digital programming services to help potential subscribers get a better sense of the value of these services and the promotion of subscribers moving to digital technology.  That is one very major aim that runs through your application; I am aware that you also want to promote Canadian programming in general, by giving it another window over the air and also provide local and regional programming, but it runs throughout that this is a syndication of Canadian programming and in large part, digital.  You, of course, have now told us that some of the programming will come from analog services, most of which are established and certainly would not fit within the strategy that I just extracted from your proposal.  Would it be necessary for the Commission to -- to hold you to this aim, if it believed that it was a valuable addition to the broadcasting system, by requiring that, indeed, a large number of these programs come from digital services and not well-established analog services.

          339 MR. NOBLE:  One of the issues with the digital channels is although they're producing a certain number of hours, is that they don't fit the priority classification in many cases.  So --

          340 THE CHAIRPERSON:  But that's only eight hours a week.

          341 MR. NOBLE:  Correct.

          342 THE CHAIRPERSON:  See, your approach as we discussed earlier this morning, is that the market conditions and predictable or non-predictable market conditions in the near future should foreclose the possibility of a traditional, conventional over-the-air service and you come forward with, I guess what you would describe as a lower economic impact proposal, that is beneficial to the broadcasting system and one of the benefits is to promote digital.  If we were to find that most of the program that is sub-licensed is a combination of analog, from analog channels as well as conventional, over-the-air stations, would it be fair to say that your aim or your approach has not been -- has not come to fruition and that what every applicant says of the other is you license something and you get something else.

          343 MR. NOBLE:  We have never done that.

          344 THE CHAIRPERSON:  Would it be necessary to have that aim, to insist that a certain number of those indicated hours indeed come from digital if you are going to promote digital?

          345 MR. NOBLE:  Yes, we will -- I will get my brain trust here working on the level that we believe can fit into the application.

          346 THE CHAIRPERSON:  I would be very surprised if no one from Global ever said that "don't license that party because they don't -- they don't do what they said they would."  That's usually the first thing we see in most interventions.  But in any event, the trick is to hold the applicant, especially in this particular round, if we license to their proposal.

          347 MR. NOBLE:  Yes, we could --

          348 THE CHAIRPERSON:  So if you reach the aim of digital, how much effort should you have to make to ensure that some programming comes from digital?

          349 MR. NOBLE:  We will come back with a proposal, Madam Chair.

          350 THE CHAIRPERSON:  Now, after -- after saying that we would want some assurance, there is a certain amount of digital programming is on, I will ask you a question which may be contradictory, which is, is a syndication channel for -- to promote the digital services not somewhat counterintuitive?  In the sense that if your aim is to move subscribers to digital, and you show them the most popular, the best of the digital for free, why would they be enticed by this particular channel or station to actually subscribe to digital?

          351 MR. NOBLE:  They won't see all of it obviously because --

          352 THE CHAIRPERSON:  If you are successful the best, probably, or the most popular.

          353 MR. NOBLE:  The idea is create an environment that would encourage them to subscribe to digital and watch the Canadian digital channels, not watch all those other U.S. channels that are brought over the border.  But I guess from a marketing and viewership pointed of view -- Doug, you may have some comments on that.

          354 MR. HOOVER:  I would like to comment, if I could, on why the emphasis on digital if I could for a moment.  When we were constructing our schedules for the digitals that we launched most recently, we found it difficult to create Canadian original programming in an environment of such a narrow viewing opportunities.  The dynamics of the size of the universe available to the digital channel compared to the practical economics of producing the program is a very challenging task.  We felt that one of the advantages of a channel such as "Purely Canadian" is to create an additive effect so the accumulative audience of the digital channel and the "Purely Canadian" channel would enable the economics of Canadian production for the digitals to be more easily achieved and so that's an aspect. 

          355 And then secondly is the opportunity for us to create awareness.  We believe that the success of the digital channels will ultimately lie with people trying it and liking it and to -- to not be a subscriber after the free preview -- there is a lack of awareness of what the product is.  "Purely Canadian" makes that product continue to be available to the consumer as a -- an opportunity to -- to taste it, if you like, and hopefully acquire an appetite and then seek out the originating station.

          356 Inherent in "Purely Canadian" is a wonderful opportunity for cross promotion, an opportunity to remind people that if they have enjoyed this program on "Purely Canadian", that that program and others of a similar nature are available on a digital channel.

          357 THE CHAIRPERSON:  So you have plans to make sure that aim is reached by yourselves or providing the opportunity when this programming is aired, to actually advertise or promote the digital channels from which it comes.

          358 MR. HOOVER:  Most definitely.  And also with all of the other programming.

          359 THE CHAIRPERSON:  Would that be done by "Purely Canadian" or would the opportunity be the provider of the sub-licensed product?  How do you visualize this?  Let's say there is two programs, or a block or some type of programming, there will be air time, promoted and prepared by either you or the supplier of the program, to advertise the fact that this is a sampling from X digital channel, which you can get by calling X number --

          360 MR. HOOVER:  Most --

          361 THE CHAIRPERSON:  -- Or going to a web site, or whatever?

          362 MR. HOOVER:  Most definitely.  We would most likely prefer if the originating channel produced the actual promo because it would be then compatible with their style and graphic and nature of service.  But it's definitely our intent to make a great deal of time available for the cross promotion of the originating station, digital channel, whichever.

          363 THE CHAIRPERSON:  Now, Mr. Hoover, if you are very successful at doing that, and you are also successful or you are required to get the programming from digital channels in a certain number of hours per week, would it not -- would success not make "Purely Canadian" irrelevant over time?  Because everybody will subscribe to digital.

          364 MR. HOOVER:  I don't think we could ever in the global culture, ever contemplate being too successful.

          365 THE CHAIRPERSON:  You can't contemplate such success in your endeavor.

          366 MR. HOOVER:  No.

          367 THE CHAIRPERSON:  There will always be a need for this promotion.

          368 MR. NOBLE:  If I may, Madam Chair, certainly in the licence term, if digital penetration reaches a 50 percent point in the next seven years or so, 50 percent of the country who don't have it, if a hundred percent of the country has digital television at some point in time, then the digital promotion aspect of "Purely Canadian" is redundant.  And then the station at that stage we would probably request that we move to a "Purely Canadian" everything.

          369 THE CHAIRPERSON:  So you wouldn't be so successful as to have it irrelevant in a seven-year licence term if were you licensed is your answer, that digital is not going to move that quickly.

          370 MR. NOBLE:  That's fairly quick; I don't think so.

          371 THE CHAIRPERSON:  Now in the case of analog services, obviously that would not be a name for a number of services that have already very high penetration on the tiers without particularly without choice.  So if you do -- which as I said earlier I have the impression you would not --  sub-license programming from analog channels -- but if you do, it would certainly not have that component.

          372 MR. NOBLE:  No, that's true, but still, the number one goal here is to promote Canadian programming.  It's to sort of convince Canadians that there are a lot of great Canadian programs out there and if you found it difficult to watch it the first time, here it is again.  "Purely Canadian" will be a destination.  People will know, this is a Canadian channel.  There is Canadian programs I have missed. I'm going to go there and try to find them.

          373 THE CHAIRPERSON:  Now, the other 48 hours then that would be a Global-related, do you have a sense of whether it would have more of a priority programming than what you sub-licensed?  I have the impression that would be the case because digital don't necessarily have the same number, or to the same extent, programming that would fit

the priority designation.  So the programming that would -- now, I am talking about the other 48 hours, not the one -- the hours that are co-op, which would be possibly, or more probably, Global-related programming.

          374 MR. NOBLE:  Correct.  And we really haven't worked out a separation between the two.

          375 THE CHAIRPERSON:  But it would be more likely to include the priority programming, I gather.

          376 MR. NOBLE:  Correct.

          377 THE CHAIRPERSON:  Because I thought I heard Ms. Mawhinney say earlier that there would be a not as easy supply of priority programming from digital programming, correct?

          378 MR. NOBLE:  That's true.

          379 THE CHAIRPERSON:  What do you see as the sources of that programming?

          380 MR. NOBLE:  Sorry, Madam Chair.

          381 THE CHAIRPERSON:  From Global.

          382 MR. NOBLE:  You mean,  who would be providing the programming to Global?

          383 THE CHAIRPERSON:  Well the other -- my -- is my understanding correct that there will be -- what you

are envisaging is 96 hours of syndicated programming, of which 48 would be co-op?  And I think I saw somewhere a definition of co-op programming which is programming that you sub-license from parties that are not Global related.  I assume that even -- that if we just took your proposal as is, up to 48 hours, or 50 percent, of that would be Global-related, would come from Global sources.

          384 MR. NOBLE:  Correct.

          385 THE CHAIRPERSON:  Now, what would be those sources?

          386 MR. NOBLE:  It would be --

          387 THE CHAIRPERSON:  Well, --

          388 MR. NOBLE:  There would be programs that we have purchased from the independent production community; it would be programs that we have created or purchased for our digital channels; --

          389 THE CHAIRPERSON:  Yes, that's what I meant, would it come mostly have -- you have a number of conventional stations now.  My recollection is you are bound by conditional licence to have different priority programming on some than on others, therefore you have more than eight hours.  You have some digital category two channels.

          390 MR. NOBLE:  Yes.

          391 THE CHAIRPERSON:  One category one and one analog so how do you see where this programming will come from?

          392 MR. NOBLE:  It will come from all sources.  What I started to say earlier is we really haven't broken it down.  One hour for mystery, one hour for Lone Star; two hours from Global.

          393 THE CHAIRPERSON:  Neither in general -- in a general way, whether for Global, syndicating or recycling programming that was on their over the air stations of greater value or is likely to make a better "Purely Canadian" station.

          394 MR. NOBLE:  I think you know what Doug's plans are to try to schedule programs that will interest the audience.  Another season of Traders.

          395 THE CHAIRPERSON:  And also the -- are you not factoring into that your desire to promote your digital channels?

          396 MR. NOBLE:  Yes.

          397 THE CHAIRPERSON:  So that would come into the equation as well.

          398 MR. NOBLE:  Yes, it would when we come back with the level of digital versus non-digital, we would apply the same formula to the Global 48 hours as we would to the other 48 hours, to the co-op 48 hours.

          399 THE CHAIRPERSON:  Now, in -- in your supplementary brief at page 7, you talk about the additional 12 hours or -- not additional, but that 12 hours in prime that would be drama and documentary programming.  And of that, 90 percent would come from independent producers; is that correct?  I am taking this from page 7 of your brief.

          400 MR. NOBLE:  Loren, do you want to answer that?

          401 MS. MAWHINNEY:  Yes, that's correct.

          402 THE CHAIRPERSON:  And -- and you would make a -- it's also in schedule 9 of the application at page 5.  And in schedule 9 you also say that 75 percent of this would come from non-affiliated -- I guess non-Global affiliated -- companies.

          403 MS. MAWHINNEY:  That's correct.

          404 THE CHAIRPERSON:  And I think -- I think you were asked and answered yes, that the definition the Commission as used based on 30 percent equity is how you define a non-related company.

          405 MS. MAWHINNEY:  That's correct.

          406 THE CHAIRPERSON:  Why is that in prime and not in peak?  Since it's drama and documentary programming on -- some of it could be early or later.

          407 MS. BELL:  I think it just goes beyond the eight hours, the commitment eight hours and we would go beyond that and I guess prime or peak is 7:00 to 11:00.  We're just saying we're going to go beyond that in the evening broadcast period.

          408 THE CHAIRPERSON:  And considering the fact that this is a channel to promote other Canadian programming and so on, why is the commitment not a hundred percent, let's say, that it would be non-Global affiliated of the programming that is from independent producers?

          409 MS. MAWHINNEY:  I think it would be difficult to have a "Purely Canadian" station and not exhibit some programming that came from our affiliated production company.  Certainly we anticipate that even if we were fortunate to have a relationship with CHUM, for instance, who may decide to participate in some evening co-op programming hours, that they would have some programming from our own affiliated production company.  So therefore, we volunteered the 75 percent number thinking that was reasonable, and yet allowing enough flexibility that we would be able to acquire the -- a maximum number of hours that were out there.

          410 THE CHAIRPERSON:  And is that a commitment that you would be prepared to -- to accept, as it has been accepted as a requirement or even a condition of licence, that -- that 75 percent being from non-affiliated companies?

          411 MS. MAWHINNEY:  Yes.

          412 THE CHAIRPERSON:  Because we will discuss this later, but obviously the potential here for Global using an additional frequency in these markets for its own interest or self-interest, does make it a non-conventional proposal and therefore perhaps the conventional requirements in some areas are not high enough to balance the other -- let's call it allegation, I guess because it has been used, that this proposal would be a recycling channel for Global and not proper use of over-the-air frequency.  So you would be bound at a minimum that that programming would come in those ratios, going on affiliated Global properties.

          413 I think we will take a 15-minute break and come back and speak about the local and regional component of your proposal.  So we will be back in 15 minutes.

          --- Recess taken at 11:05 a.m.

          --- On resuming at 11:25 a.m.

          414 THE CHAIRPERSON:  We will now talk about the local and regional programming component which is the other 30 hours when 96 is deducted from 126.  Now, you referred to it as community reflection in your supplementary brief.  Order, please.  And 15 hours is to be devoted to regional programming and 15 to local.  And in a deficiency response, at question 5, you more or less define it -- define regional as broadcast on all three stations and local as unique to one station, correct?

          415 MR. NOBLE:  That's correct.

          416 THE CHAIRPERSON:  Also in your supplementary brief at pages 11 and 12 you talk of it being a local -- to be made up of a daily Monday-to-Friday two-hour block, and an additional two-hour block every weekend, and each block being made up of three distinct programs.  "Local Heroes", "Up Next" and "101," and some of them would be locally produced and some for the region.  When I look at your schedule, is it intentional that on Saturday there is actually three two-hour blocks, correct?  On the block schedule, the 17.  Is that to make up three -- it's not just two, two-hour blocks Monday to Friday, and then an additional two-hour block Saturday and Sunday, there is actually four hours on Saturday, correct?

          417 MR. NOBLE:  Just looking at that.

          418 THE CHAIRPERSON:  Six hours, rather than four.

          419 MR. NOBLE:  Six, that's correct.

          420 THE CHAIRPERSON:  Is that correct?  That is not just a missing line there.  12 two, two, component, is there on Saturday as well as Monday to Friday, correct.

          421 MR. NOBLE:  Yes, that's right.

          422 THE CHAIRPERSON:  It took me the longest time to find that additional two hours.  I missed a line and I thought well, let me find out for sure what it is.  I almost woke up the staff in the middle of the night to find that out.  So I am glad I found the right answer by myself.  Now, this program -- this programming -- is the schedule -- if I get from the schedule what is original and what is repeat, is that what you plan to do and what you would be committed to if a -- if there was a requirement for original to repeat?

          423 MR. NOBLE:  Yes, that's correct.

          424 THE CHAIRPERSON:  And so that would be -- and if I look at the schedule I find a different number of hours than I would if I looked at the program description that is also attached to schedule 17.  The block schedule shows seven hours of local programming that is original.  But if you calculate it from the program description that follows, you will get seven hours -- six hours rather than seven.  So if there was a requirement, what would it -- what would your commitment be?

          425 MR. NOBLE:  I believe it's six.

          426 THE CHAIRPERSON:  Six hours of original programming.

          427 MR. NOBLE:  Yes.

          428 THE CHAIRPERSON:  Of that type of programming.  Now, the original would be early in the day and then it would be repeated in another block; is that the plan?

          429 MR. NOBLE:  Yes.

          430 THE CHAIRPERSON:  Now, how -- and some -- all the hours in peak will be repeated from -- from the programming during the day then, the original block will be 12:00 to 2:00.

          431 MR. NOBLE:  I believe the original block is from 1:00 to 2:00 and repeated again -- sorry, 12:00 to 2:00, correct.

          432 THE CHAIRPERSON:  12:00 to 2:00 would be the original.

          433 MR. NOBLE:  And then repeated from 6:00 to 8:00.

          434 THE CHAIRPERSON:  And then on the weekend there would be some...

          435 MR. NOBLE:  On the weekend it's 6:00 to 8:00.

          436 THE CHAIRPERSON:  Yes, and there is some programming which is not identified as repeat on Sunday.  Is that intentional?

          437 MR. NOBLE:  Ken has the answer.

          438 MR. MACDONALD:  Yes, that's correct, Madam Chair.  The program "Local Heroes" would be new episodes on the weekend.

          439 THE CHAIRPERSON:  A new one.  Now, something else to the -- you have a characterization of the G is group production.  Sometimes regional is identified as group production.  For example, if you look at the 6:00 to 7:00, but that's the only place where I see group production.  Do -- does that mean regional?  There is only one hour that has this -- this -- designation of G, which says it's group production.

          440 MR. MACDONALD:  Yes, that's correct, but Madam Wylie, let me just add to your confusion, if I may.  We have -- since filing this application, we have done some tweaking and revisiting and in point of fact "Up Next", the one-hour program "Up Next" we have determined would be better as a local program, in other words a discrete program in each of the markets even though you see it classified as regional.  So that will also skew your ratio of local to regional.

          441 THE CHAIRPERSON:  So "Up Next" should be identified as local.

          442 MR. MACDONALD:  That's correct.

          443 THE CHAIRPERSON:  So "Up Next" would be the program that would obviously more be fitting as unique to each station.

          444 MR. MACDONALD:  That's correct. That and "Local Heroes" would be the local programs.  There would be a little bit of regional content in those programs, but they would be discrete programs focusing on local, and the program identified as "101" would be, in fact, a regional production.

          445 THE CHAIRPERSON:  And I am not to read anything special from the fact that the 6:00 to 7:00 is -- has an additional G there for group production?  I should think of local, regional, local unique to the station, regional, aimed at the of interest to all three stations and aired identically in all three stations.

          446 MR. MACDONALD:  That's correct.

          447 THE CHAIRPERSON:  Now, this -- you say that this programming in Hamilton and Toronto will come from the CHCH and Global facilities and in Kitchener your first choice is to do it from the cable operator facilities, but there is in your capital cost commitment to actually have Kitchener facilities, if necessary.

          448 MR. MACDONALD:  That's correct Madam Chair, we have considerable infrastructure in Hamilton and Toronto, as you know.  In Kitchener we would have to have a definite presence, like a physical presence, and this could be accomplished through partnerships such as the one you mentioned or an independent satellite operation.

          449 THE CHAIRPERSON:  You mentioned.

          450 MR. MACDONALD:  Correct.  I'm sorry.  Or an independent satellite operation.  I should mention too that the majority of this programming would be taped programming and post-production in many cases could be conducted at either our Hamilton or Toronto facilities where we have considerable infrastructure.

          451 THE CHAIRPERSON:  It's your application that mentions the possibility of using the cable operators' facilities in that -- in that town.  But you do say you will have a Kitchener station.  Suppose you were to use the facilities of the cable operator, and not need to build any of your own.  What will be your presence as an over the air service in Kitchener, since you say you have a station in Kitchener?

          452 MR. MACDONALD:  I think -

          453 THE CHAIRPERSON: -- like how will people know what your call letters are or how will people know where you are and what you are in Kitchener?  And that goes for the Global installations, or the CHCH installations.

         454 MR. MACDONALD:  I think the stations is probably best defined as what you see on the box, which is a reflection of the community and surrounding communities, surrounding core community with stories told to you by people who live and work in the area about people who live and work in the area, in terms of local reflection, local -- local focus.  And to that extent that -- that would be accomplished in all three markets regardless of whether some post-production work were to be done in Hamilton or Toronto or -- in other words, this would be I think the proof is in the pudding.  I think it would be a local service on the air.  There would be people working in the cities on this programming.  So to that extent you do have a station, I think is what you see is on the air that is most important.

          455 THE CHAIRPERSON:  Yes, I understand, but for the local production part, if you are expecting, I suppose, a community to -- interested people --  to know you are there and where you can be found, and spoken to people have either complaints or ideas about what should be the local component, I would have assumed you want some type of -- of a visibility.  Maybe not the same as CHUM, in your face at the corner of Queen, but nevertheless an identification of some sort.  Not only on the screen but -- or am I being dinosaur-ish, this doesn't matter anymore.

          456 MR. MACDONALD:  No, I understand what you're saying and I think we would definitely have a presence in the market and I think the nature of the programming is such that that presence would be felt each and every day in terms the gathering of material for these programming -- for this programming, and the work of the people who are presenting and producing the programming.  And also the various partnerships, in the case of Kitchener with the area colleges, Conestoga and so on, we think we have a very definite presence in that market and, again, ultimately on the air with a fairly robust schedule of local reflection.

          457 THE CHAIRPERSON:  Now, although you are quite clear in the application that you will use existing facilities, you have provided for capital costs related to studio plan of 3.6 million.  At 6.4.1 of the application, and I think somewhere you have given a detailed breakdown of what this -- these facilities would be.  Can you explain to me what this 3.6 million would be devoted to, if you are successful in using Global facilities in Toronto, CHCH facilities in Hamilton and cable operated facilities in Kitchener?

          458 MR. NOBLE:  It's -- primarily it's play-out facilities, editing facilities, the camera and equipment to produce the local and regional programming.

          459 THE CHAIRPERSON:  Is that because it would be a strain on the facilities that are there or is it intended to, if they were used as well for "Purely Canadian"?

          460 MR. NOBLE:  There is a big advantage to using Global and CH, but we -- in order to do the proper service for these channels, there is additional equipment required, and that's what it provision is for.

          461 THE CHAIRPERSON:  Have you spoken to the cable company or made any arrangements, or discussed the possibility of the use of their facilities, or do you know what their facilities consist of in Kitchener?

          462 MR. NOBLE:  We have not spoken with the local cable operator, no.

          463 THE CHAIRPERSON:  Now, in your supplementary brief in page 10 you say in your local regional programming you will target communities surrounding the city core.  I assume that's the city core in Toronto, in Kitchener and in Hamilton, but would it be fair to say

it's mostly in Toronto?

          464 MR. MACDONALD:  No, I don't think so.  I think that there are -- there are many thriving communities for example outside of the Kitchener/Waterloo area, Elora being one, any number of them.  And all of them very rich and diverse, both culturally and in terms of community events.  And really this, what we are proposing with this application is, as you have noticed, is heavily concentrated on reflection in terms of cultural and community events and -- and local personalities.  And I think that all too often with stations serving a core market given their mandate and their news mandate, many of those stories in the smaller communities are not told and I think that's one advantage of this service, that it could concentrate, not entirely on the outskirts of these communities, but to a greater extent than current services are currently doing so.

          465 THE CHAIRPERSON:  How will you do that?  I don't understand you to be proposing to have a presence in these surrounding communities and I saw that there is a new term, the "905 communities," that will be blamed on us too, I suppose.  How will you reach these communities, how will you do that?  To fulfill that aim of not just serving the city core?

          466 MR. MACDONALD:  Well, I think with dedicated reporters and photojournalists for one, there is a student component to this as well.  Although it's primarily for the program "101", there are eight or nine post-secondary educational institutions in all three of these regions or around these regions which have active broadcast and broadcast-journalism programs.  We would seek to involve those students on one program in particular, "101", but also in certain extent to contribute to the other programs as well.  And in addition to dedicated reporters and photojournalists, we also do have, as we have mentioned, fairly strong news-gathering capability in two of these three markets already.

          467 THE CHAIRPERSON:  Now, you -- while we are speaking of "101", that you will have contact -- educational institutions so they would not only be city core institutions but also possibly some in communities that surround the core.  And they are obviously crucial to "101" being a success.  Have you discussed these plans with any of the -- of those institutions yet or identified which ones would be involved in this programming,  which would be quite a few hours?  Maybe you will have to have a pretty definite plan because you will -- "101" will be half an hour, every day.

          468 MR. MACDONALD:  That's correct.  These programs will be largely taped in advance so there is an opportunity to work ahead on the schedule.  Many of the issues dealt with these in these programs will not be time sensitive.

          469 But to answer your first question, or your original question, Madam Chair, yes, we have had discussions with a number of these colleges and Mohawk being one, I think you are going to hear from them this week. Conestoga College; Sheridan College; Niagara College; the media studies group at McMaster.  There are other colleges as well that we have made aware of our plans, have not had detailed discussions with Centennial College, Humber, Seneca.  But in all the discussions we have had there has been a real interest in how this might work and you're right.  It would require a fair bit of coordination, but while these programs would be produced by the students, and -- and that's something we feel is key, there would be the infrastructure backing them up of "Purely Canadian" and the existing Global and CH stations.  In other words, there would be producers and edit staff and so on, on hand to coordinate and work with the students in pulling these things together, which is a benefit to students at well -- being attached to an established broadcaster in major markets, and also will assure that the programs make air and make air with quality.

          470 THE CHAIRPERSON:  And what is your response to the suggestion that this programming produced by students will not be local programming this particular aspect of it of, maybe, the necessary sophistication or will it be hands on, are you aiming to have it of the same broadcasting production quality as of next and "Local Heroes".

          471 MR. MACDONALD:  Of course we would expect a high quality to the product.

          472 THE CHAIRPERSON:  You expect it, but will you demand it?

          473 MR. MACDONALD:  Yes, absolutely.  But having said that, we want to give a the students a chance to learn and to express themselves as well.  We think this program is an opportunity for them to deal with not only student issues but -- perhaps one program will be a round table with a number of students from a number of institutions talking about you know the current events in Afghanistan and a student viewpoint and perspective on that.  We think there are all kinds of possibilities for this programming.  We have the expertise and the skill and indeed many of the instructors of these programs bring a lot to the table as well.  And we think we can produce quality programming and innovative programming that will be regional in nature and will we think attract an audience.

          474 THE CHAIRPERSON:  You -- your response to questions about disruption and economic disruption in the market and the fact that Global owns newspapers in those markets and the fact that you are not aiming to having a conventional television station, is in some part hooked to the fact that you won't do news.  So you will not do news.  If there is, for example, something of importance of a big fire or a hostage-taking or some dramatic murder you will not cover it in Kitchener, Hamilton, Toronto or the communities surrounding them?

          475 MR. MACDONALD:  No, we will not be --

          476 MR. NOBLE:  Not on "Purely Canadian;" we will cover it on Global and CH.

          477 THE CHAIRPERSON:  But not on "Purely Canadian".

          478 Now, you did eventually file a Pollara study to find out if there is demand.  Did you test whether there is demand for more local programming?  I am referring here to one question which included "'Purely Canadian' would also offer programming that reflects your local community by covering local events and people."  That's the first question I see in the Pollara study.  Would that not have elicited an understanding that there would be news when one decides on whether there is a positive response to the proposal?  Is there someone here who can speak to that --

          479 MR. NOBLE:  Angela can speak directly to the Pollara.

          480 THE CHAIRPERSON:  -- And whether I am missing something and whether there is something that will tell that there won't be local news?  Or that the ordinary Canadian when he or she reads "covering local events and people" may well think that there would be local news.

          481 MS. MARZOLINI:  Well, I'll read that part of the question again, Madam Chair. It says, "'Purely Canadian' that would also offer programming that reflects your local community by covering local events and people." In that question we didn't specifically refer to news, no, but it would be local coverage, local events, people, that type of thing.  So no, there was no reference specifically to news in the question, but that's -- that's as far as we got in that respect.

          482 THE CHAIRPERSON:  Well, my question was, more importantly, there is nothing there to indicate that you would not have local news.  In testing the acceptability of the proposal.

          483 MS. MARZOLINI:  That's correct.  In that question we were looking specifically at the concept of "Purely Canadian".  It also described other facets of the service as well but no, we did not say there would not be news in the question.

          484 THE CHAIRPERSON:  As a poster would you not think that that is -- possibly has an effect on the results? When it's not made clear that this proposal would not have local news and that one has to read that "covering local events and people" is through some other means?

          485 MS. MARZOLINI:  Well, I think you have to look at the question in its entirety.  This is one short sentence within it.  The question that we asked was first,  "I would like to get your opinion regarding a potential new TV channel that would be available in anyone who owns a television regardless of whether or not they have cable or satellite service.  This channel 'Purely Canadian' would broadcast Canadian programs to greater Toronto, Kitchener, and Hamilton areas.  The channel would provide new opportunities to view Canadian drama and documentary programs and would promote and showcase Canadian programs that will be available on the new digital specialty services. 'Purely Canadian' would also offer programming that reflects your community by covering local events and people." And then,  "Do you think this service would be a very positive, somewhat positive, somewhat negative, or very negative addition to the Canadian television system?"  You can see that the question is covering all aspects of the application, the services that would be offered.  This one particular part you are referring to is vague, I agree with you on that, but the question as -- as a whole reflects the application, I am confident read the results in that respect.

          486 THE CHAIRPERSON:  Mr. Noble, how important is it that there be no news on the station, local or otherwise, for it to be taken out of the description over-the-air conventional television service?

          487 MR. NOBLE:  Certainly, in the traditional model of conventional television, news is a very important aspect of the offering of a conventional television station so --

          488 THE CHAIRPERSON:  Considering -- excuse me, go ahead.

          489 MR. NOBLE:  When we looked at this we determined that CKCO in Kitchener and CHCH in Hamilton and CITY-TV and CFTO in Toronto provide excellent local news service to the viewers.  There wasn't in our view an appetite for more news, that's why we didn't consider it period, as something that would be -- be relevant to "Purely Canadian".  I think the viewers are well served.

          490 Now we obviously had to come up with some concepts that reflected the local community and we didn't want to compete with the local broadcaster in that area that's why we developed these concepts.

          491 THE CHAIRPERSON:  Now, you -- you make quite -- you place a lot of emphasis on the fact that the Commission should not, at this time in the greater Toronto area or Hamilton or Kitchener, license a traditional over-the-air conventional station because you don't want economic disruption.  I gather that one item that would be distinguishable, since you are a hundred percent Canadian, would be no competition in the purchase or airing of popular American programming.  Would you -- would you consider the fact that there would be no -- no news also an important factor in not causing economic disruption?

          492 MR. NOBLE:  There is evidence to suggest a new news service in the market only fragments existing news viewers, it doesn't create new news viewers.  So from a competitive point of view I would agree with that statement.

          493 THE CHAIRPERSON:  So to go back then to our early morning discussion, would that be an area where the Commission to further your aim or your view, should actually prohibit the -- the airing of news on the service.

          494 MR. NOBLE:  Well, any news service obviously would have to make -- it's local contribution in other ways.  If you prohibited the news and you prohibited the American, you would end up with the "Purely Canadian" so in that respect I think that's ideal.

          495 THE CHAIRPERSON:  On the other hand if it became a good idea to put that news in, then we would be halfway to traditional, wouldn't we, which you don't think it a proper proposal --

          496 MR. NOBLE:  That's correct.

          497 THE CHAIRPERSON:  -- At this time.  So you would envisage, if you were the regulator making sure there is no news and no American programming, wouldn't you.

          498 MR. NOBLE:  Yes.

          499 THE CHAIRPERSON:  And of course that leads to the question of, how does the regulator explain or justify the airing of news on an over-the-air frequency in three cities in the largest market in Canada.

          500 MR. NOBLE:  Sorry, was that a question?

          501 THE CHAIRPERSON:  How, if we envisage a positive decision, how would you advise us to write the fact that we have found it necessary to prohibit the -- the airing of news on an over-the-air frequency in three large cities in the most populated area of Canada?  Like how would you go about justifying that.

          502 MR. NOBLE:  Well that's a dilemma, isn't it.  I think that our position is that a combination of news offerings in the local market, with foreign programming, creates the instability and therefore in our view, from the economic view point, applications fail in terms

of -- in terms of what they contribute to the system.  Nor do they take more out.  So in that sense I don't propose to give advice to the Commission, but it would be perhaps not to license any.

          503 THE CHAIRPERSON:  Now, in the Pollara study, should I be able to find any clear test other than the question we are looking at, to determine that there is a demand for more local/regional programming to the tune of 13 hours per week?  Is there something I can find there

other than the mixed question that you and I were discussing earlier?

          504 MS. MARZOLINI:  There is another question that refers to other types of programming, Canadian programming.  We asked respondents in each area if they have ever wanted to watch a particular Canadian television program for the first or second time, but missed it due to

scheduling or because it was no longer on the air and we found that half, almost half in each area said that they had in fact missed a program.  And of that group we found that 81 percent of them said they would be likely to watch "Purely Canadian".  So there is a good indicator.

          505 THE CHAIRPERSON:  But how is that an indicator of a demand for more local programming?

          506 MS. MARZOLINI:  I see.  There is nothing specifically in that area, no, not in the research.

          507 THE CHAIRPERSON:  And do -- Mr. Noble or one of your colleagues, have you any sense or done any other survey that indicates that there is a demand for local programming?

          508 MR. NOBLE:  Not except looking at the various ratings for the market.  As I said earlier, Madam Chair, we applaud the efforts of CKCO and CHCH, our own channel, and CFTO.  We think they do cover their regions very well, very broadly and very well.  In that sense we don't see a huge need for more traditional, local-style news and community reflected programming.  And that's why we developed this -- this

alternative.

          509 THE CHAIRPERSON:  The three programs that will form your local programming they will all be produced in-house, albeit with the help of students and their institutions in the case of 101, but this would be in-house production.

          510 MR. NOBLE:  Correct.

          511 THE CHAIRPERSON:  Yes.  And those students would come to your facilities and be involved in both the production and perhaps the choice of ideas that will be put on and -- but -- or do you foresee actually going to these institutions, some of which probably have some

facilities, depending on their size?

          512 MR. NOBLE:  It would be a of both, but Ken I will ask you to elaborate.

          513 THE CHAIRPERSON:  And the expenses will be  yours, it will be an in-house production.

          514 MR. MACDONALD:  Yes, Madam Chair, that's correct.  But see, it is a combination of both.  We see the students being assigned on a regular basis to preparing certain local pieces.  And then that's

contributed to the -- to the program for post-production when the program is assembled and we may have one particular college take the lead on the actual production of the program for a month or six or eight weeks, perhaps in conjunction with credit program at that college and being responsible for producing the program and drawing together the bits from the other colleges that are being produced.

          515 THE CHAIRMAN:  And this would be at your expense, not theirs, if there is a need for expenditures.

          516 MR. MACDONALD:  That's correct.

          517 THE CHAIRPERSON:  So then it will be volunteering, basically.  It would be as if you were producing this program in-house with volunteers.

          518 MR. MACDONALD:  Yes, that's correct.  It's -- in some ways it's like a huge work term or internship for these students.  We all take interns every year from these colleges.  This is taking that a huge, huge step forward.

          519 THE CHAIRPERSON:  And another level of this involvement.  Now, you -- children and teen programming now, at page 11 of your supplementary brief you say that you could carry up to 35 hours of children's programming.  And up to 12 hours of programming aimed at the 12 to 17-year-old demographic.  So there is a word could and the word up to and I believe in deficiencies you were asked to specify at question 13 and that -- that question was not successful in pinning you down because it reads "while we plan to carry some children's and youth programming we have not determined what extent in terms of hours per

week."  Have you by now?

          520 MR. NOBLE:  Doug, where are we with that?

          521 MR. HOOVER:  Global itself is not a producer of children's programming at this phase of our evolution.  And --

          522 THE CHAIRPERSON:  But if I may, some of children's programming could come from digital services other than conventional broadcasters.  You have told me now that some could come from analog, could come from youth TV, Teletoon.

          523 MR. HOOVER:  That's correct, Commissioner Wylie and the reason -- where I was going with my response is the vast majority if not all of the children's and youth programming is envisioned as being co-operative programming and we would then rely --

          534 THE CHAIRPERSON:  Excuse me I missed what you said.

          535 MR. HOOVER:  We envision the sourcing of children's  and preschool programming to be through the cooperative part of our arrangement.

          536 THE CHAIRPERSON:  Yes, as I expected because you don't own Teletoon.  Yet.

          537 MR. HOOVER:  And because we are no longer a large in-house producer of programming targeted to children, so we are a little hesitant to make large-volume commitments to programming targeted to children when we don't have a large library to draw upon from our own resources.  And we will be very actively encouraging the involvement of people that are -- organizations that hold those rights.  But it is difficult for us to place with the same degree of confidence volume commitments that we can, let's say on drama, which is an area that we do have a greater degree of expertise and a greater volume of production internally.  So it's only because it isn't part of our current library of programming that we are a little cautious.  We really do hope that the producers of children's programming and the services that present children's programming will be very active, involved participants in "Purely Canadian" and we do think that "Purely Canadian" will be a valued source for organizations such as CBC and TBO to create another viewing opportunity for their children's programming.

          538 THE CHAIRPERSON:  Well, is there not in fact in Canada quite a bit of Canadian -- children's programming available.

          539 MR. HOOVER:  There is quite a substandard library primarily because it tends to be evergreen, but it's not in the control of Global and not in our inventory.  It resides with others that specialize in that area and like I say, we're -- we're anticipating that they'll want to participate and want to participate with great volumes of programming.  It's just that at the time of this presentation we can't guarantee the exact number of hours and volume.

          540 THE CHAIRPERSON:  Has Global itself not been a broadcaster that has had in the past, in the recent past, a number of programs in the children's area.

          541 MR. HOOVER:  Yes, we -- traditionally we were a fairly large producer, but a producer through independent production companies as a condition of our licence and we no longer hold those rights.  They have gone back to the producer who have in many cases made subsequent sales to Teletoon, whomever.

          542 THE CHAIRPERSON:  So you're back to the dilemma of access to it.  On the other hand you have raised the titillation of quite a number of hours for children as -- to the Commission.  Is there any level of commitment that you would be prepared to assure us would be on the air?

          543 MR. HOOVER:  I -- I believe --

          544 HE CHAIRPERSON:  Because right now we are left with the verb "could" and "up to."  So that could be none, or one hour a week.  Well, perhaps you want to speak to that later?

          545 MR. NOBLE:  We are back with the -- with the other aspects.

          546 THE CHAIRPERSON:  Because of 35 hours a week of programming to children, plus 12 hours is 47 hours of programming.  So when you look at 126 hours and try to get a fix on what is the service going to be like, that's a big chunk without any commitment.

          547 MR. HOOVER:  We -- we place that emphasis on children's and youth programming having a sense of the volumes of programming that is available.  And you are quite correct in that historically there have of been a lot of children's and teen programming produced in Canada.  So we are very optimistic that we will be able to achieve those levels but I think that we would like to discuss specific numbers.

          548 THE CHAIRPERSON:  Fair enough.  You also, if we look at your block schedule, we also see that the -- of the 35 hours approximately 23 percent or eight hours per week would be not original because we understand as discussed earlier, that it would already have been aired somewhere, but first time on "Purely Canadian" so original to "Purely Canadian" and of the teen programming, 23 percent or roughly three hours a week will be first time on "Purely Canadian."   You may also want to address now or later whether this type of ratio of originals to repeats on "Purely Canadian" would be something that you would be comfortable to be held to.

          549 MR. HOOVER:  We will certainly discuss that.

          550 THE CHAIRPERSON:  Now, do you consider that "101" is going to be a program for teens?  Is it included in the 12 hours aimed at the 12 to 17 demographic?

          551 MR. NOBLE:  No it's not, it's aimed at community-style events produced by the students.  There will be items in there that presumably the students will prepare that interest themselves as producers but it won't be specifically directed at that market.

          552 THE CHAIRPERSON:  Do I understand then that "101" would not be part of those 12 hours directed at teens?

          553 MR. NOBLE:  That's right.

          554 THE CHAIRPERSON:  It will be more co-operative programming or syndicated programming.

          555 MR. NOBLE:  Correct.

          556 THE CHAIRPERSON:  Coming from other sources.  In the area of cultural diversity, to finish the programming area, you were asked if your plan that you were required to file pursuant to your renewal would also be applicable to "Purely Canadian".  I understand that plan is generally to provide specific commitments with regard to corporate accountability, to cultural diversity and programming and community involvement as it relates to portrayal and presence.  How -- am I correct that that plan would also be applicable or used for "Purely Canadian"?

          557 MR. NOBLE:  Yes, that's correct.

          558 THE CHAIRPERSON:  And how -- how in general would you apply it to that proposal?  How would you --

          559 MS. BELL:  Are you referring to the co-op

programming only?  Or the fact that those 48 hours may not be --

          560 THE CHAIRPERSON:  I suspect that the application of this plan CHCH or to Global would be different considering this is a syndicated programming purchasing from others, et cetera.  How would -- would it be a different application would it require some tweaking because of the different type of proposal that you are getting into.

          561 MS. BELL:  You are correct I think it would probably require a little bit of tweaking especially in light of the those 48 hours that would not -- that we would be acquiring from other broadcasters.  What we might want to do is include a clause of -- in the contracts that we would have with the other participants to ensure that their programming meets our standards, that sort of thing.  We might want to include them in round tables that we might be having in terms of these -- of discussing these issues.  To be honest we haven't worked out exactly the details as to how we would change the plan but indeed we would alter it to meet the specific needs of these services.

          562 THE CHAIRPERSON:  And presumably the aspect of choice, so what you purchase as you mentioned.

          563 MS. BELL:  Absolutely.

          564 THE CHAIRPERSON:  Would take greater importance.  With regard to the visually impaired and your commitment or lack thereof for described video, in your application at 7.8 you say that I quote "you will undertake to secure wherever possible programming that has been visually described which should increase over time as more program being becomes available".  Why, considering you are aware, and you have yourself made specific commitments in the case of Global, why are you not in a position to make any commitments with regard to "Purely Canadian"?

          565 MR. NOBLE:  Well, we would -- Madam Chair, to the extent that we are using library hour source other members of the broadcast industry, those programs may not be visually described and certain of our historic programs are not visually described.  There is no provision in this application to visually describe those -- those hours.  However, for the hours that we do receive from co-op partners and our own hours, which are visually described, those would be broadcast as visually-described hours.

          566 THE CHAIRPERSON:  So for example if you had on "Purely Canadian" some syndicated programming from CTV quite possibly it could be described.  So you're -- because they have a commitment and -- et cetera so you would think the possibility of -- with your proposal of having more described programming available, than less, is probably the case.

          567 MR. NOBLE:  Going forward it would be easier, but to use another example, if we did -- Traders was not visually described, and if that went into the schedule on "Purely Canadian" it would not be separately described for this service.

          568 THE CHAIRPERSON:  So the answer is, you would simply leave us with this comment that it should increase over time and you undertake to describe programming wherever possible without any specific comments or ramp up as was done with the renewal over that station.

          569 MR. NOBLE:  That's correct.

          570 THE CHAIRPERSON:  Now, I have a few question on your financials.  Your market share in year one is 1.8 and year 7, 2.2 and am I correct in understanding that this growth is simply by -- your reference point is the growth in the population proportionate to the growth in the population -- not to increase popularity of "Purely Canadian"?

          571 MR. NOBLE:  Katie?

          572 MS. FULLERTON: It would be a combination of both.  The increase in the latter years is due to the population increase.

          573 THE CHAIRPERSON:  And your revenues would be three million projected in year one, rising to 6.5 until year seven.  And am I correct that in proportion of national to local remained at about 94 percent.

          574 MS. FULLERTON:  That is correct.

          575 THE CHAIRPERSON:  So you are not of the view of some of the applicants that is there is pent-up local advertising needs in the area, or is it because of the type of service you will have or because you will not go after it, which one is it?

          576 MS. FULLERTON basically in large part it's due to the nature of the service.  We based our revenue projects on the audience and the ratings on the programs we deliver extrapolated that from the costing in the market so it is the nature of the service.

          577 THE CHAIRPERSON:  So this despite fact that you would have 30 hours of local programming a week for example, would I be right in thinking that that would be the hours of programming that would more likely give opportunities for local advertisements?

          578 MS. FULLERTON: Yes, that would be the program.

          579 THE CHAIRPERSON:  But nevertheless that would be six percent.  Do you know what the Canadian -- the Canadian average is what, hovering around 19 percent -- Mr. Goldstein, would probably know -- in television,  of local to national.

          580 MR. GOLDSTEIN:  I would think it would be about a five to one ratio, so that would be about right.  It obviously varies from market to market.

          581 THE CHAIRPERSON:  And in the Ontario CMA, what would you understand the proportion of national to local in over-the-air television to be?

          582 MR. GOLDSTEIN:  I can answer that.  For the province, we're looking at about a -- this is 2001, dramatically different than any of the last four years because it's been essentially flat, it's been a six to one ratio between national and local.  And in Toronto it's about a seven and a half or eight to one ratio.

          583 THE CHAIRPERSON:  Does the low ratio of local

advertising, is that aimed at making sure that your

proposal has no economic impact?  Is it because you don't

think that the advertising is there or because you won't

go after it, so to speak.

          584 MR. NOBLE:  The business plan is focused more on the national ad scale, that's correct.  But the fact that we won't be running significant news in the market sort of precludes a big -- a big -- a lot of inventory to sell to local advertisers who news has the -- as a good vehicle to advertising locally in.  And yes, although we will be selling some local ads for our local programs we really don't see ourselves as competing directly for those sales in Kitchener and Hamilton markets.

          585 THE CHAIRPERSON:  I didn't see anywhere in your application but I stand to be corrected, any reference to this so called repatriation from the Buffalo stations, which is a component of many of the other applications.  You did refer to it, however, in your intervention, -- but we don't want to encroach on the intervention --stage but I would like you to tell us as an applicant what is your view of the amount of advertising that flows to the Buffalo station?

          586 MR. NOBLE:  Ken?

          587 MR. GOLDSTEIN: To the Buffalo stations collectively, or the one that has been earmarked by a number of the applicants?

          588 THE CHAIRPERSON:  Either or both.  You of course speak -- or at least your client speaks a lot about the fact that the market cannot sustain another station and of course the competing proposals say no, no, the economic predictions are good and on top of that we can repatriate from Buffalo.  Whether that station or the stations, do you have a view as to -- because it has an impact, you know, in some cases I think it's -- I think that it's put forward that is much as 25 million can be repatriated.  So if that's the case, that the economic disruption argument takes a different colour, so what is your view or your client's view because of their broadcasting experience of what actually does flow to Buffalo yearly?

          589 MR. GOLDSTEIN:  Well, since September 1st my client is also me.

          590 THE CHAIRPERSON:  But you are not a broadcaster yet.

          591 MR. GOLDSTEIN: I won't go there.  The Buffalo share, I guess, if you will, probably peaked two or three years ago.  There was a time when the Buffalo stations were taking something on the order of about 20 million dollars out of the Ontario market.  Since then their audiences have gone down and they are taking less out of the market.  I have seen the numbers that you are referring to. 

          592 I was also able to check on the actual revenues of one of the stations in question, the one that is always pointed to WUTV, which is the FOX affiliate.  And the claim has been made that that station alone is taking a 25 million Canadian out of the Ontario market.  The problem is that the station's gross revenues in American dollars is only 26 million and if you adjust for exchange and adjust for agency commission because you have to do that when you compare the American and the Canadian numbers, you find that the 25 million claim can only be sustained if we accept the fact that something on the order of two-thirds of that station's revenue are coming out of this side of the border -- which I think is unlikely because it is a full FOX affiliate in a good-sized market and it would be doing what one would expect a FOX affiliate would be doing in terms of its normal revenues from the market.  So I would guess that the amount of revenues that are allegedly available to repatriate have been somewhat overstated.

          593 THE CHAIRPERSON:  But you are not prepared to -- to suggest a number.

          594 MR. GOLDSTEIN:  No.

          595 THE CHAIRPERSON:  Nor a range -- just that it's less than 25 million, it could be 24.

          596 MR. GOLDSTEIN:  Well, I think it's less than 20, and when one says that there is a pot of money allegedly there, one also has to talk about exactly what you are going to do to repatriate this.  I mean the station isn't going to stop programming, it's not going to stop being carried on cable.  And so it's -- you can't just easily snap a finger and say oh, well, there it is it will all come here and it's painless.

          597 THE CHAIRPERSON:  Now, Mr. Noble, do you have anything to add?

          598 MR. NOBLE:  Just perhaps that the last two fall seasons, for the first time I think in some recent history certainly we went unsold, and I understand CTV is unsold this year and perhaps CHUM is in the same position.  But in the fall,  where traditionally a broadcaster have never gone unsold, we have available inventory for sale.  And I know CTV does and I don't want to speak for CHUM, Jerry can tell you when he's up here. 

          599 But what that says is we have commercial availabilities at the moment.  Some of it is structural, some of it's economic, some of it's September 11^th.  That would suggest to me that the money going south of the border has trickled to a stop, because if it is still going south, we will get it back.  So I don't -- I don't think there is a lot of money that either we or anyone else will repatriate easily from Buffalo.

          600 THE CHAIRPERSON:  Now, in -- in deficiency response at question B at page 8 of the deficiency, you state that the financial projections filed are not severable and that you contemplate the launch of the three station as a group and you also in that same -- on that

same page in the deficiencies indicate that Toronto and Hamilton will be sold together but that actually Hamilton and Kitchener will be a drain, will be subsidized by Toronto.  Do I understand correctly?

          601 MR. NOBLE:  I think we stated somewhere that both Hamilton and Kitchener are supported by the Toronto application.

          602 THE CHAIRPERSON:  So if the Commission were to find your proposal to be valuable addition to -- to the -- to the area and to the broadcasting systems because it has implications beyond the area through the syndication proposal, would you commit nevertheless to launching all three stations concurrently if you were -- if the Commission were to approve your proposal?

          603 MR. NOBLE:  Concurrently?

          604 THE CHAIRPERSON:  Yes.

          605 THE CHAIRPERSON:  Despite the fact that the other two stations would be more or less a financial drain?

          606 MR. NOBLE:  We would launch them at the same time.

          607 THE CHAIRPERSON:  So you would accept to not launching one without other two.

          608 MR. NOBLE:  I'm sorry could you say that again.

          609 THE CHAIRPERSON:  That you would be prepared to commit that you will launch all three stations, you are not to launch Toronto without launching Kitchener and Hamilton.

          610 MR. NOBLE:  We would launch all three, correct.

          611 THE CHAIRPERSON:  Because presumably when one gets a

licence one can decide not -- you would be committed to concurrently launch all three.

          612 MR. NOBLE:  Correct.

          613 THE CHAIRPERSON:  Given the subsidization and the net loss when I look at your financials, which start being 750,000 a year in year three, and stay hovering around that level all through to year seven, would it not be fair for your accountant, if not the regulator to ask what's in this proposal for Global.

          614 MR. NOBLE:  That's a fair question.  We prepared this financial projections on a stand-alone basis, which means if we were Joe Block down the street launches a station, this is what it would look like.  There are some inter-company charges for Global for technical and management and sales and costs and there is some programming costs.  And if you back those out, the stations become marginally profitable, I believe, by year three, and growing from there.  Very marginally.  Not a significant contributor and we have I believe a reconciliation to present that financial picture if -- if

the Commission would find it helpful.

          615 THE CHAIRPERSON:  You're saying that what I am looking at when I look at your schedules is -- does not take into consideration synergies and what would actually be the bottom line.

          616 MR. NOBLE:  Indeed it does take into account the synergies but we are charging for them.

          617 THE CHAIRPERSON:  I see.  If you back them out you would have a different bottom line.

          618 MR. NOBLE:  Correct.

          619 THE CHAIRPERSON:  That would look better to your accountant.

          620 MR. NOBLE:  Absolutely.  We are not going launch a business that loses money.

          621 THE CHAIRPERSON:  That's why I ask when I look at this sheet, then we ask ourselves.  Because remember in this process you started as an intervenor and so it is a legitimate thing for us to ask what's in it for you and is this going to happen if you were the successful applicant

          622 On that happy note, I think we will break for lunch and I notice that the -- the echo seems to have disappeared so we are doing better, Mr. Noble.  I hope you smile more often after lunch.  So we will have lunch and resume at 2:00.  (French spoken)

          --- Luncheon recess taken at 12:28 p.m.

          --- On resuming at 2:00 p.m.

          623 THE CHAIRPERSON:  Order please.  Welcome back.  You have filed a coverage max for all three stations.  When I look at them, would I be correct in concluding that the Toronto station would provide service to Hamilton, and not Kitchener?  Without cable distribution.  The Hamilton station -- but the Toronto station would provide service to Hamilton.  The Hamilton station would cover Toronto.

          624 MR. NOBLE:  There is some overlap in the signals, yes.  Is that the question?

          625 THE CHAIRPERSON:  Well, in looking at the maps without cable distribution, am I correct in understanding that the Kitchener station would not reach -- the Kitchener coverage would not reach Hamilton or Toronto, but the opposite would be true?  Like what is your view of the overlap without cable distribution?  Are there three antennas?

          626 MR. NOBLE:  There is section of overlap with the three antennas by the B contour, by the A contour there is significant overlap.

          627 THE CHAIRPERSON:  But the Kitchener antenna, the Kitchener coverage would not be greater than Toronto, would it, just over-the-air.

          628 MR. NOBLE:  Just over-the-air, correct.

          629 THE CHAIRPERSON:  Is a there somebody who can cover answer the question?  If I look at the coverage maps it is not obvious to me that the Kitchener antenna would cover Toronto or Hamilton.

          630 MR. NOBLE:  Our engineer seems to be still at lunch.

          631 THE CHAIRPERSON:  Well, we will ask -- is he supposed to be here?

          632 MR. NOBLE:  Yes.

          633 THE CHAIRPERSON:  Mr. Noble.

          634 MR. NOBLE:  Can't control all my staff.

          635 MS. BELL:  Here he comes.

          636 THE CHAIRPERSON:  You saw him coming.  Oh, Mr. Elder, you are the missing engineer.  I am looking at the coverage maps and first without looking at cable distribution, would I be right that the Kitchener antenna would not provide coverage to Toronto or Hamilton in

either A or B contour?

          637 MR. ELDER:  There is some grade B contour overlap, which is inevitable.

          638 THE CHAIRPERSON:  What about the Toronto and Hamilton antennas?  Would they cover each other even without cable distribution?  Would they cover most of Toronto, will they be --

          639 MR. ELDER:  You mean the Hamilton one?

          640 THE CHAIRPERSON:  In Toronto or the Toronto one in Hamilton.  What would be the coverage, just over-the-air?

          641 MR. ELDER:  I am looking at a comparative contour map at the moment which I can easily table with the commission, and the grade B --

          642 THE CHAIRPERSON:  That's not been filed?

          643 MR. ELDER:  No.

          644 THE CHAIRPERSON:  All I have are three distinct coverages, Kitchener, Hamilton, Toronto.  But perhaps you can speak to that as to, would everybody get signals over the air?  Two, one?

          645 MR. ELDER:  In the principal market area, the A contour is necessary for excellent coverage in urban areas.  So that would only apply to each of the cities.  The B contour encloses Hamilton from Toronto, for example.  But it doesn't provide first class coverage.

          646 THE CHAIRPERSON:  And what about the Hamilton signal into Toronto?

          647 MR. ELDER:  It covers approximately 50 percent or 60 percent of Toronto with its B contour.

          648 THE CHAIRPERSON:  But not with the A contour.

          649 MR. ELDER:  The A contour only goes just to Oakville.

          650 THE CHAIRPERSON:  Now, Mr. Noble, at page 5 of this supplementary brief, you refer to and I quote, "the resulting priority carriage on the BDUs in these markets."  And I suspect you -- that the priority carriage, you are talking about, that would be true of anybody we license, including Global.  And I think you made a reference to that this morning, again, in your presentation.  That led me to believe that you expected the cable carriage at page 4 of your presentation the stations would be available on a priority basis on BDUs but would not be controlled by BDUs like the market general concept.  Am I right in assuming that you go that you are expecting that anybody licensed over the air would have the benefit of the priority carriage regulations that are in the place.

          651 MR. NOBLE:  Yes.

          652 THE CHAIRPERSON:  And that in many -- in some markets, if not in all three, Mr. Elder stands to correct me, you would have four stations available to the consumer.

          653 MR. NOBLE:  Not --

          654 THE CHAIRPERSON:  Not Kitchener, perhaps.

          655 MR. NOBLE:  Well, it is my understanding there is guaranteed coverage if your grade A contour is picked up by a cable but there is no guarantee if as B.

          656 THE CHAIRPERSON:  So does -- can Mr. Elder answer that?  Whether in Hamilton, Toronto and Kitchener or any of them Global would have four signals available to the viewer on the air?  Global, CHCH, "Purely Canadian", Hamilton, "Purely Canadian" Toronto, there is four.

          657 MR. ELDER:  Are you asking me, Madam Chair.

          658 THE CHAIRPERSON:  Yes, unless Mr. Noble wants to answer.  My question is, if you are relying on priority carriage by BDU, as the regulations stand at the moment, in those markets one could say that with the addition of two if not sometimes "Purely Canadian" signals, there would be four at a minimum Global signals available to the viewer.

          659 MR. NOBLE:  We are only expecting one in that market to be picked up one of the "Purely Canadian" not all three.  Some -- if that clarifies in Toronto on the Rogers cable system we would expect them to carry the Toronto one but not Hamilton and then Kitchener one.

          660 THE CHAIRPERSON:  But is it not true that if the BDU regs were applied a they exist, the result -- I am putting forward, would be corrected, there would be four Global signals.

          661 MR. ELDER:  I haven't assessed that and I am not -- I am not up-to-date on carriage priorities.

          662 THE CHAIRPERSON:  But don't you know offhand that the cable operator in Hamilton and Toronto and visa versa would capture that signal.

          663 MR. ELDER:  They certainly could pick it up.

          664 THE CHAIRPERSON:  And if they can, and the contour is high enough in quality and the BDU regs are high, then it would be carried.

          665 MR. NOBLE:  Commissioner if that's the rule we are only expecting one them to be carried in each market.  We don't expect all three to be carried on the cable system.

          666 THE CHAIRPERSON:  So you would volunteer, or agree to the cable operator applying and you would go along with that to not carry more than one "Purely Canadian" signal in that cable operator's territory.

          667 MR. NOBLE:  Yes.

          668 MS. BELL:  Exactly.

          669 THE CHAIRPERSON:  And you wanted to be on record as saying that.

          670 MR. NOBLE:  Yes.

          671 THE CHAIRPERSON:  How many signals, how many Global signals in Hamilton right now in my hotel room.

          672 MR. NOBLE:  Currently in Hamilton?  Two.  CHCH and Global, correct.  Sorry, over the air I think there might be Paris.  Hamilton is serviced by -- there's two.  Charlotte tells me it's two.

          673 MS. BELL:  It's two.

          674 MR. NOBLE:  Our Halifax signal doesn't reach into Hamilton.

          675 THE CHAIRPERSON:  Finally got a smile out of Mr. Noble.  And would the same be true in Toronto, that you would have Global, CHCH as carried in Toronto.

          676 MR. NOBLE:  Yes, it is.

          678 THE CHAIRPERSON:  And the "Purely Canadian".

          679 MR. NOBLE:  Correct.

          670 THE CHAIRPERSON:  So we would be beginning it with three and you are comfortable having the cable companies hearing you say that that they could apply for that exception which may well be necessary, depending on strength of the signal Mr. Elder may eventually able to narrow.

          671 MS. BELL:  We would insist on priority carriage in the local territory.

          672 THE CHAIRPERSON:  If the regulations applied you would be carried probably much more, so it's more a question of saying if the cable operator applied to not do what the regs say, we will agree.  With one "Purely Canadian" signal.

          673 MS. BELL:  If there is an overlap.

          674 THE CHAIRPERSON:  In each territory.

          675 MS. BELL:  Exactly.

          676 THE CHAIRPERSON:  Is your business plan, that is your financial projections, based on cable carriage of "Purely Canadian" on a priority basis on the low end of the band in each market?

          677 MR. NOBLE:  It was based on the carriage at below channel 30.

          678 THE CHAIRPERSON:  So based on your rights on at least one signal per market.

          679 MR. NOBLE:  Correct.

          680 THE CHAIRPERSON:  Your right according to the regs.

          681 MR. NOBLE:  Yes.  As I understand the regs according to the regs, at least one would have to be carried from 2 to 13, and we recognize that that may not be appropriate.

          682 THE CHAIRPERSON:  Yes, there is always complications about regional this or regional depending on the strength of the signal but at least we are clear that you would want the Toronto signal carried by the cable companies.  My understanding, which may be faulty, is that in some cases head ends are interconnected: once you carry

one signal you carry it throughout Ontario; is that correct, Mr. Elder?

          683 MR. ELDER:  That's correct.

          684 THE CHAIRPERSON:  And that on analog there isn't really much possibility of preventing that, of doing it by postal code region so that if you pick it up in Toronto, it's in Brampton, if not Brantford.

          685 MR. ELDER:  Perhaps the Commission could prevent that.

          686 THE CHAIRPERSON:  I thought that technologically it would be difficult if not impossible to limit it -- that you can do it on the digital, but not analog.

          687 MR. NOBLE:  I'm not sure that's completely accurate.  I want to refer to a cable specialist and get the correct answer.

          688 THE CHAIRPERSON:  Yes, well perhaps later on in the process you will be back at reply, you may -- you may want to address that.  Because that obviously will have an impact, we will hear from the intervenors, the cable operators who are concerned with that aspect of it in light of their view of the lack of analog capacity.  But your financial projections are based on each signal being picked up by cable in each area.  Have you had any discussions yet with the cable operator in that regard and have you informed them of your -- of your position regarding cable carriage?

          689 MR. NOBLE:  We have had no form discussions but they are aware obviously of our application.

          690 THE CHAIRPERSON:  Except as I just went through, unless I am wrong, the regs as they stand will give you more coverage that what you are prepared to accept, I believe.  Anyway, Mr. Elder, perhaps we can clarify that.  Because there is a question of what in fact you would be entitled to, what you are prepared to forgo and what are the technical possibilities of limiting it and all of that is mixed, of course, with the idea of concentration of ownership, cross ownership, et cetera, which we will get into later because the more the regulations are used as they are, the stronger the argument that perhaps this would be a bit much in terms of the number of Global-related signals that would be carried by cable.

          691 MR. NOBLE:  You're suggesting --

          692 THE CHAIRPERSON:  Pardon me?

          693 MR. NOBLE:  -- Three is too much, is that what you're suggesting?

          694 THE CHAIRPERSON:  Obviously that's a point and it comes up that if the system as it works now, either from a regulatory perspective or -- and a technical one, the problem of -- of concentration of ownership and three, four signals in the same market, it becomes stronger.  I gather you are not prepared to forgo cable carriage.

          695 MR. NOBLE:  No, we're not.

          696 THE CHAIRPERSON:  So Mr. Elder, do you know what I am talking about?

          697 MR. ELDER:  I know what you're talking about but I am afraid I don't have answers at the moment.

          698 THE CHAIRPERSON:  But perhaps later on in the -- or we will hear from probably -- well, you have read the interventions that the cable carriage puts a completely different grid on the application in terms of -- of the coverage and the issues of concentration of ownership and more than one signal in the market.

          699 Now, that also has an impact on the next subjective a few questions on which is the potential impact of your proposal on other broadcasters, which is of great concern to you and underlies basically your approach to this hearing.  And you tell us that you have chosen a model for "Purely Canadian" which is designed to minimize the economic impact on the existing licensees could I assume that statement includes impact on the Global stations?

          700 MR. NOBLE:  Correct, some of the revenue will be coming off of us as well, but not to any large extent.

          701 THE CHAIRPERSON:  Now, you have chosen not to -- not to broadcast any news, but am I to conclude that in your view news is the money maker and that's part of the reason why you won't do any.

          702 MR. NOBLE:  No, news is a very expensive investment in any new undertaking.  Ultimately you can make money, and we wanted to have in this application a novel approach that did not require huge revenue stream in order to finance -- in order to finance the concept.  If we had applied for a service that included news oor revenue -- our revenue projections would have had to have been changed substantially in which would have had to generate a lot more audience in order to finance the news and that would negatively impact the market we are trying to avoid.

          703 THE CHAIRPERSON:  And not because news is a revenue generator but because it's expensive so if there is encroachment on your - the level of your share, the existing broadcaster share, that's in your view an negative economic impact -- that you are doing something expensive and you are losing viewers rather than -- rather than the fact that you can make money on the news.

          704 MR. NOBLE:  Negative impact on all broadcasters in the market.  That's the premise of this whole application, that there wouldn't be any impact.  And if there was --

          705 THE CHAIRPERSON:  I was focusing on your choice not to do news.

          706 MR. NOBLE:  In order to do we would have --

          707 THE CHAIRPERSON:  Spend more money.

          708 MR. NOBLE:  And then attract more revenue. We would have had to perhaps not go with the "Purely Canadian" concept and add some foreign programming, again, which would ultimately be cheaper than some of the Canadian and attract additional audiences.

          709 THE CHAIRPERSON:  Now, in schedule 14, applicants are asked to tell us where -- where they estimate their -- the source of their revenues will be.  And you have said that "85 percent of your revenues would come from existing services and 15 percent from existing radio services, possibly new revenues brought into the industry advertisers which could not currently advertise on television or radio."  So you are not expecting to -- to get any revenues that would otherwise have gone let a say to analog channels, specialty channels?

          710 MR. NOBLE:  Some of it will come from there.  It will be priced accordingly to try to drag back some of the revenues leaking from conventional broadcasters to the specialty side, but not a significant portion.

          711 THE CHAIRPERSON:  So the split of 85 to 15 broadcast stations is 85 percent.  Considering your presence in the markets, are you expecting some revenues being cannibalized from Global and CHCH?

          712 MR. NOBLE:  Some.  But again, it's not -- it's not significant, we are able to continue to operate.

          713 THE CHAIRPERSON:  Is it your view that the request in -- in schedule 14 for potential source of projected revenues is not a science, but an art.

          714 MR. NOBLE:  If it were a complete science there would be a lot more of us.

          715 THE CHAIRPERSON:  And that 85 percent from existing services, and only 15 from radio and new advertisers, that you may indeed, get some from -- no, that would be quite a bit of it that would have to come from your own stations.  If it's 75 percent from off-air stations, who are the other some of it would come from the CHUM stations?

          716 MR. NOBLE:  Some of the intervenors, correct.

          717 THE CHAIRPERSON:  What percentage do you think would come from your stations?

          718 MR. NOBLE: If you do it on the pure share basis, it would be based on a current market share.  I don't have those figures.  Perhaps, Katie, you have them?

          719 MS. FULLERTON: No.

          720 THE CHAIRPERSON:  Which would not, be the same, depending how successful you are, and what you plan to do, but go ahead.

          721 MS. FULLERTON: No, I don't have the latest figures here.

          722 THE CHAIRPERSON:  I am sure you know.

          723 MS. FULLERTON: To Gerry's point I think it is an indication that yes, each station would come from it would be basically all stations in the market, Canadian and perhaps some American.

          724 THE CHAIRPERSON:  Considering that your conditions of licence for CHCH require you to do 36.5 hours of local programming, am I correct?

          725 MR. NOBLE:  Yes that's correct.

          726 THE CHAIRPERSON:  Would there not be an additional danger that local programming would compete with 30 hours that you will do on "Purely Canadian"?

          727 MR. NOBLE:  We are trying to design it so it doesn't compete directly.  It's different style of local and no, we don't think it will.

          728 THE CHAIRPERSON:  Unfortunately I won't be able to name them, but I know that there are programs on CHCH that will look like -- that you know, according to their description, may well look like "Local Heroes" and "Up Next".  I knew the title but I have forgotten.

          729 MR. NOBLE:  Ken could perhaps help, or Patrick could help and step in.

          730 MR. MACDONALD:  Madam Chair right we do with a very robust local schedule on CH, there is both a heavy local news load, but also local reflection as well in terms of community events, community theatre and so on.  But CH is really serving -- it's local, but's serving a broad constituency in Hamilton, Halton, and Niagara.  And it's - it covers many of the major groups in the city and as many as it can  request in the surrounding area given that it does have a news, weather and sports mandate in a more traditional sense. 

          731 Our feeling is with this service we could get to many of the communities which don't receive as much service as they otherwise might.  We could offer expanded coverage of community theatre groups like St. Catharines or Burlington, whether it's Theatre Ancaster's production of Fiddler on the Roof or an arts festival or a busker's festival in Dundas, these other events that we could do a more in-depth treatment of, longer interviews.  People like to see themselves on television, that's what Local Reflection is about.  And while we can accomplish a great deal of that on CH, I think we can reach out to more

communities and greater reflect the diversity of what is a very dynamic region and city through this service as well without directly competing with CH.

          732 THE CHAIRPERSON:  I knew sooner or later somebody would make me say Hamilton Halton.

          733 MR. MACDONALD:  I smiled when I said it but you didn't see it.

          734 THE CHAIRPERSON:  That region is obviously covered by Hamilton, right?  So I can see perhaps the 905 suburbs in Toronto, but the 15 hours of intensely local on "Purely Canadian" would compete with the 36.5 hours that you do on CHCH because if I recall at the hearing having to deal with all these Hs you certainly were covering more

than just Hamilton core.

          735 MR. MACDONALD:  Exactly.  And I think -- but I think what we are trying to do with this service because there is no traditional news mandate, Patrick and his people in addition to providing that reflection, have a responsibility to provide local news, issue-oriented news as well as spot news or hard news.  And they're doing a very good job on that and they're doing a good job on reflection but it has to be balanced.  It's a heavy programming schedule, there is a lot of core news issues in the city.  As you recall, prior to our acquisition of CH, there was not strong local news coverage and that's something that the viewers throughout Hamilton, Halton and Niagara told us periodically.

          736 THE CHAIRPERSON:  You do that so well.

          737 MR. MACDONALD:  Thank you.  So we're already covering that.  Indeed, the community access channels have a heavy emphasis on municipal politics, council meetings, issue hotline shows and so on, as do we at CH and that's a valuable service. 

          738 I think what we're trying to do with this service is in part, in one part of it, give more opportunity to the broadcasters of the future in terms of "101", to contribute and to learn their craft and on the other hand to try and shine the spotlight in other areas

that despite best efforts and ample resources perhaps broadcasters don't reach or can't reach on a regular basis, or to provide expanded coverage of these events and to cover the local heroes in the communities: the person down the street who gives his or her time to start a breakfast program for kids, or perhaps someone who is behind one of these many festivals throughout Hamilton and the Kitchener area as well, and gives their time. The great unsung heroes, the volunteers; they do get some coverage now you are absolutely right, but there is a way to do more in-depth coverage and reflect those many municipalities and smaller centers.

          739 THE CHAIRPERSON:  Mr. MacDonald, I must say when I came back from the Vancouver hearing when you had the hearing about taking control of CHCH I came back home and for weeks I told people I lived in "Hottawa Ull". 

          740 Now, where all of this leads us of course to the discussion which you knew would be coming: which is one about common ownership.  You dismiss it quite the idea of the third window if not the fourth, depending on how we can manage this technologically, which Mr. Elder will let us know.  You will have a third window in the market, and you dismissed any question about an exception to the rule, you already have one in the market with the Global and CHCH by saying  well, we won't do news, therefore it's not an issue.  And this is in the second deficiency question at question 2. 

          741 And by saying that well the news stations will use conventional frequencies they will not really be conventional stations in the same manner as other stations in these markets and therefore we would not be in conflict with the rationale underlying the commission's policy. 

          742 Now, over and above the concern the Commission may have about editorial diversity, et cetera, if you look at its past decisions on its concern over common ownership of television stations in the same language, in the same market, is another -- looking for the English word, a (speaking French) -- something that runs through the decisions.  Which is -- a thread, common -- a thread.  Is the one that says that the Commission do not -- wants to also prevent undue competitive advantage.  And we have already discussed the fact that 48 hours of 96 hours of syndicated programming could be broadcast on "Purely Canadian" from a source that is a Global source and also the possibility that depending on the success of your plan in negotiating for core programming there may be even more than -- than 48 hours of syndicated local programming on. 

          743 Would that not be possibly an undue competitive advantage in Global's capacity to amortize this program and cost -recycle its programming, give more airing to its programming in the same market, in the same language using an over-the-air frequency if we don't talk about diversity of voice or opinion at moment but focus on the thread, undue competitive advantage which one can find in the Commission's decisions, what is your answer?

          744 MR. NOBLE:  That's why we have addressed it by offering a significant portion of the schedule to our competitors.

          745 THE CHAIRPERSON:  Would it be a problem for you if the offering were converted until it's required.

          746 MR. NOBLE:  As part of the licence?  We offer again --

          747 THE CHAIRPERSON:  If you are so concerned about the fact that you can't negotiate yourself into your very proposal, where are we supposed to be?  You know, if your answer is "well I will offer it, but maybe it won't work" but that's the basis of your -- of your proposal.

          748 MR. NOBLE:  Well, we certainly use best efforts, but if we have a commitment to do it.

          479 THE CHAIRPERSON:  Maybe you can't do it you can't implement and return the licence.

          780 MR. NOBLE:  I would be very surprise if our competitors weren't interested in participating in this.

          781 THE CHAIRPERSON:  We have been surprised before.  What would your reaction be if the Commission said we are not prepared to overlook the undue competitive advantage and -- and provide Global with a recycling channel in three big markets in the most populated area of Canada, and therefore we will hold them to the amount of Global-related programming that they can air on those antennas?

          782 MR. NOBLE:  We would --

          783 THE CHAIRPERSON:  And if we did that, what would be the level, the level you -- you proposed?

          784 MR. NOBLE:  If we didn't have access to all the Canadian that we are proposing to run, it would be - the "Purely Canadian" concept wouldn't work.

          785 THE CHAIRPERSON:  Well you wouldn't answer concern about undue advantage.

          786 MR. NOBLE:  Well, there is undue advantage and there is undue advantage.  This is a station that owned the licence term I think it gets, from a revenue point of term, six million dollars in revenue.

          787 THE CHAIRPERSON:  You don't think that having three frequencies in Toronto, Hamilton, Kitchener area is an advantage in a regulated world where the spectrum is regulated?  And Mr. Goldstein told us the future is open-ended we don't really know what may happen in the future.

          788 MR. NOBLE:  Well, given the style of the station that we have crafted, I don't see any real competitive advantage.

          789 THE CHAIRPERSON:  That's exactly what I want to hold you to is the style of the station, where a broad source of existing programming, be it non-conventional station or specialties, and now we hear also analog channels be would be given an additional window is a

different story from Global recycling in its products.  Have we lost you?

          790 MR. NOBLE:  I am --  you've lost me.

          791 THE CHAIRPERSON:  You are asking us to allow you a third frequency in three large markets.  That will be true if you are on the air.  It will be even truer if you benefit from the cable carriage that you expect you will have.  One of the Commission's concerns of common ownership of stations in the same language in the same market is whether the broadcaster who can exploit these -- these frequencies has an undue competitive advantage compared to its competitors.  Would you not agree that if this turns out to be 30 hours of local regional programming produced by new and advertising which would be sold by you and 96 hours of which 85 could be Global related, as you implement your own digital services and you already have stations across the country,  that one could say that would be a competitive undue competitive advantage which would be mitigated if in fact 50 percent of that programming is co-op.

          792 MR. NOBLE:  I am having difficulty with this undue advantage when --

          793 THE CHAIRPERSON:  Well take my word for it, it's in the decisions.  You may not agree with it, but we're asking you to justify how, on that level, rather than editorial voice, which we will discuss as well, we should say it's okay for Global to have three over-the-air

frequencies in these markets.  Would it not be easier to write the decision if we could say they will not put in their syndicated programming more than half of their own?

          794 MR. NOBLE:  And I have no problem with that, provided that other broadcasters participate.

          795 THE CHAIRPERSON:  Well isn't it your responsibility to see to it whether this is going to work when you are [inaudible].

          796 MR. NOBLE:  True. Just to go back to the competitive advantage issue, we see this thing in the multi-channel universe as essentially when it gets carried on cable, a cable channel, if you just want to compare who has what, we will have, with this three positions, on cable systems, where CHUM has currently I believe eight -- CTV -- CHUM has eight or seven, CTV has eight, Corus has five, in terms of pure camera position, what the viewer sees, what the viewer sees and what the viewer watches.  So from a competitive point of view, from dial position point of view, we are actually well behind our competitors.  Now I realize that under the policy that it doesn't make sense that way, but from that angle, from the viewer's angle which is what we're looking at here: fragmenting audiences, how to maintain and control that,  they don't know the difference between -- don't know the difference between the fact that Global's got two, or three, and --

          797 THE CHAIRPERSON:  Well, Mr. Noble it seems to me when we talk about editorial voices it's important for the viewer, but I think that when we talk about competitive advantage we're talking about your competitors.  I agree that the viewer with regard to drama or documentaries or children's programming, as opposed to news and public

affairs is transparent, who owns it or puts it on.  So competitive advantage of course is not the viewer, it's your competitors.  But you started a paragraph of the decision by saying that indeed your competitors also have many signals but I was talking about over-the-air signals.  When you talk about eight for CHUM you are including specialty channels as well.

          798 MR. NOBLE:  Correct.

          799 THE CHAIRPERSON:  Another paragraph?  You will not commit, obviously, to a cap on the number of hours of syndicated programming that will be on this channel and will be from Global properties.

          800 MR. NOBLE:  We will consider it as part of -- what we're coming back with tomorrow.

          801 THE CHAIRPERSON:  At least you understand where I'm coming from.  You may not agree with it, but understanding is more important than agreeing at this point.

          802 MR. NOBLE:  I understand.

          803 THE CHAIRPERSON:  Now let's go back to editorial voices.  You take the position of course that -- that is not a problem because you don't do news.  You will, however, broadcast category 11, human-interest programming; program two B, long-form documentary programming and in fact human interest includes -- I am sure Ms. Bell is aware of what the categories say, includes  coverage of community events and documentary - "long-form documentaries includes in-depth analysis of specific subject or point of view."  If I look at your description of programming of the programming "Up Next" and "Local Heroes", they were described as "local and regional arts/current affairs."  Is it your view that diversity of editorial views and editorial -- and the issue of -- editorial independence is a concern only in relation to news, pure category one programming or could it involve current affairs, that type of programming that "Local Heroes" and "Up Next" will be?  I am talking about editorial views, choice of treatment, emphasis analysis.  Can it also be imparted in -- in that programming.

          804 MR. NOBLE:  Ken.  I'll turn to Ken, our news expert.

          805 MR. MACDONALD:  Madam Chair, I think you have to define what the nature of the programming is.  We use these titles "current affairs" and "the news." and I think what this service is going to primarily do is cover community events in a non-controversial way.  The closest you would come to current events in this service as proposed would be I suggest in the "101" show which may be provocative, and as I said earlier we don't want to put parameters on the discussions of students, both serious and non-serious, and that really is going to be within the purview of the students to put that together.  And we will of course ensure that it conforms to broadcast standards, et cetera, but the other events I think are largely non-controversial.  They're community support events and I cannot see how there would be a concern about editorial diversity there just simply because it's not issues-oriented programming.

          806 THE CHAIRPERSON:  Are you saying that "Up Next" and "Local Heroes," then, will look more like news-type programming, coverage of affairs what's going on, that a lot of broadcasters tell us is included in their portfolio?

          807 MR. MACDONALD:  No, I am saying it would be more sheer reflection.  It may be more extended interviews with the cast members of a play in a community theatre group in a small town.  It may be an interview with artisans at a particular craft show in the Elora Gorge or something like that.  But I don't think you will see a controversial item on the -- on the summer jazz weekend in Burlington or the -- you know the summer concert series in Kitchener or October-fest.  But it will go beyond just -- News coverage of these events tends to be a minute 30 item or a quick splash of video on a newscast.  And these programs will have the opportunity to go a little bit further and to explore the people behind these he events, to do sort of virtual tours of these events, almost performing a service for people who will actually attend these events.  But also to introduce us to people in our own communities that make a difference, whether it is in "Local Heroes" or whether it's up-and-coming artists and profiles of those artists.

          808 THE CHAIRPERSON:  Is there that much going on in Hamilton that you will be able to do a half hour every day, six days, actually and then another -- am I right, another half hour of new programming on the weekend?  Without going into what is described in your application as stories-focused programs, not just covering affairs and so on, but who are the heroes? Which is a choice.  It is -- it has an editorial context.

          809 MR. MACDONALD:  I have about -- I think five pages of events going on in the Hamilton area which I can table.  But seriously to take your question seriously -

          810 THE CHAIRPERSON:  Instead of going dancing tonight I should look for affair.

          811 MR. MACDONALD:  That's right I can show you where they are.  To answer your directly I don't think every program  is going profile every event that is going on.  We might take half of an episode of "Up Next," for example, to explore one production or event or spend the day with the artist at his or her home.

          812 THE CHAIRPERSON:  I was focusing more on "Local Heroes" which will be stories focused on who is a hero and who is not.

          813 MR. MACDONALD:  "Local Heroes" may be, in the purest sense, the unsung heroes we talked about, the volunteers and so on, but they also could be local athletes, junior athletes, it could be young people, it could be a list of people in the community.  As I said earlier, people who make a difference by organizing events and giving of their time and -- I mean there is a broad spectrum there but I don't think we would have any problem filling those hours of programming.

          814 THE CHAIRPERSON:  So those are concerns of course in concentration of ownership: diversity of voices and then competitive advantage.  There is also the question of cross-media ownership.  Interestingly in schedule 9 at page 4 you indicate that you have developed working relationships with local media outlets including

local newspapers to -- enhance the local stations' programming service.   guess in programs such as "Local Heroes".  And that is referred to as well in your supplementary brief at page 15.  What do you foresee doing

with the newspapers?  I will read that sentence page 15 of supplementary brief and I quote: "this program 'Local Heroes' will not replace the local newspaper but enhance and expand on the stories and coverage of events, working with local community print outlets, with story ideas that are found in newspapers such as those in the Global's family, et cetera, et cetera, will be used to enhance the program." should there be a concern about the cross media ownership of the newspapers and -- and the television station with regard to the choice of -- of subjects and program such a "Local Heroes"?

          815 MR. MACDONALD:  Madam Chair, most of the papers that we mentioned in the supplementary brief, and I have a longer list here, are community papers, the weeklies.  And they're wonderful repositories of information, dates, events, contacts and it's more that they would be a fabulous resource.  Certainly they would contribute ideas but I see them more as a resource in the market.  Having them already there is a big plus.  You get a lot of researchers on the phone trying to nail down all of these various events and the contacts and the people on the phone, when in fact with newspapers you do have people who are in touch and have a place already where this information is coming in freely on a daily basis so I think it would be a valuable resource but I don't this is being an editorially-coordinated project with the papers in that respect.

          816 THE CHAIRPERSON:  Before leaving, Mr. Asper assured me that there was constitutional expertise on the panel to tackle the following question.  But why should Global not accept the same statement of principles and practices with regard to this station and the monitoring currently that is imposed on -- on the other Global

related stations?

          817 MR. NOBLE:  If we said we wouldn't, we were wrong. We would.  We could accept the same --

          818 THE CHAIRPERSON:  That you are prepared to accept the same --

          819 MR. NOBLE:  Absolutely.

          820 THE CHAIRPERSON:  And also the monitoring --

          821 MR. NOBLE:  Absolutely.

          822 THE CHAIRPERSON:  --Requirement.  Would you see the need for a different monitoring committee or use the same --?

          823 MR. NOBLE:  Absolutely.  No, we could use the same committee.

          824 THE CHAIRPERSON:  Now, one last area related to technical issues.  You know that -- then I will let you go dancing if you wish.  You are well aware that especially in Toronto, which is the -- the necessary area we are about to cover that everybody is applied on the same frequency, 52.  And at end of the -- of the competitive process we often give the opportunity to the applicant to tell us why it is that we should be compelled to give Global the frequencies applied for when they are also applying for, which is the case in the core of these applications by another applicants.

          825 MR. NOBLE:  Thank you, Madam Chair.  I think that I will refer back to my opening remarks.  That what the industry needs more than anything else at this juncture are development and stability.  In Toronto and Vancouver markets are the two significant markets which drive the Canadian broadcasters.  Vancouver, as you are well aware, has two new entrants and potentially a third on the way.  That creates problems for all existing broadcasters in that market.  In Toronto we have a market where we have shown no growth over the last three, four

years, and the prospects of continuing growth occurring in the economic climate this year are not very good.  Toronto is the engine that drives the Canadian broadcast system.  So from pure revenue point of view we don't think the other applications are -- we think the other applicants at this stage would introduce too much uncertainty into the market and fragment the revenue too much and in addition we think the other applications would once again have the potential of substantially increasing the bidding for the foreign-program product which again negatively impacts the Canadian broadcasting industry.  For that reason, and the fact that this application has real merit from the point of view of the concept, "Purely Canadian" concept, we think that our alternative to the traditional convention station is a real positive contributor to the national system, a contributor in the sense that it won't effect the local market to the local system so that all broadcasters can participate in the success of this new idea and can

continue to operate with some stability in the market.

          826 THE CHAIRPERSON:  Mr. Noble, you -- both in your written -- in your written application and in our discussion today, mention the fact that you had started as an intervenor in this process.  And then I go back to page 3 of your supplementary brief and your comments today that simply intervening was not enough.  Would your first choice be that not one of the proposals be licensed and if the Commission in its judgment licensed one that it be yours but that is your second alternative.

          827 MR. NOBLE:  My first alternative is to license ours.  And my second alternative is -- I don't have one.

          828 THE CHAIRPERSON:  I would have thought it was no licence at all.

          829 MR. NOBLE:  Well, if -- if the wisdom of the Commission if you think that's appropriate that would be my second.  The first is to license our application.

          830 THE CHAIRPERSON:  But you are not as sanguine as I thought you were, no, and that your second alternative would be none.  Are you changing your mind.

          831 MR. NOBLE:  No, my second alternative is none.

          832 THE CHAIRPERSON:  You had to be compelled though.  Thank you very much for your patience.  Commissioner Cram have questions for you and we will have three minutes to tell us what a great proposal you have before us.  Commissioner Cram.

          833 MS. CRAM:  Thank you.  I have a few questions in terms of selling as Commissioner Wylie and I both thought the Commission of this being selling the diginets.  Is there any kind of programming, Canadian programming from the specialties or the diginets that you would not show?  And by that, I am referring to programming that is -- probably needs no help like sports.

          834 MR. NOBLE:  We have no plans to show sports.  We wouldn't obviously show American from diginets -- it would have to be appropriate for the time period and the fact that this is free-to-air service so there is some programming on some of the diginets that would not be appropriate for this service.

          835 MS. CRAM:  So you're saying sports would not be appropriate then.

          836 MR. NOBLE:  We have no plan at the moment to do sports.

          837 MS. CRAM:  And you would agree that you would not program sports on your new channel if that were licensed.

          838 MR. NOBLE:  Live sports.  I am sorry, Commissioner Cram, I wouldn't mind the option of covering local sporting events; when I mean local, I mean a local minor hockey game but professional sports -

          839 MS. CRAM:  I was talking about the diginets or specialty CTV Sportsnet or something like that.  That appears to me to not really need much support from anybody to -- to be successful.

          840 MR. NOBLE:  Right.

          841 MS. CRAM:  I am constantly caught by -- by this application in the terms that you can't have an editorial voice, you can't have news from the common ownership point of view in order to be -- not get caught up in that.  And yet at the same time you will be doing community events. And I don't know when community events morph into news, and that's what concerns me.  Because if we were to give you a licence, we certainly wouldn't want you to do news and we wouldn't want it to be an editorial voice.  I understand that the concept of community events but the second I hear "expanded coverage of events" and Mr. MacDonald talking about "expanding coverage" and about your reporters, I immediately start to think that in two years' time if you're licensed you will just be regular news.  Is there some way we can limit that, so it will not become news?  And when I say that I'm wondering if we can use the terms time-sensitivity, if events are not time sensitive, or some coverage that is not time sensitive.  And I will give you an example.  The burning down of a Hindu temple here in September; nothing wrong with coverage of you know, of what the community is doing where they worship now, but a heck of a lot wrong with you know, putting it on the next day with you know, two seconds of -- you know, one individual saying well I'm not sure where I'm going to go worship.  Do you see where I'm coming from.

          842 MR. NOBLE:  I see what you mean.  We are looking more at the community event stuff going on where there is a tractor-pull going on or a dog show or something.

          843 MS. CRAM:  Dog shows would be good, very good.

          844 MR. NOBLE:  Where the cameras go and actually attend the event and then later broadcast not five-minute news piece but a half hour sort of here is what's going on at the local dog show.  That style of things.  It's not -- we don't -- we're not looking at this as anywhere near close to a hard-style news type of thing.

          845 MS. CRAM:  I know that, but the second you do that you're talking about style and you're talking about subjective issues and what I am trying to do is have some objective way of pinning it down in a COL to ensure that it would remain, if we were to give you a list that said you were to remain not having news.  And I have been sitting here thigh trying to think of how we could do it and I don't know. Mr. Hoover?

          846 MR. HOOVER:  I was just going to suggest that there is a phraseology that we sometimes use, and that is "timely but not dated."  And as you were speaking about the events of the fire, the kind of coverage that you're talking about is timely but it's not day and date of the event and it struck me that -- that a -- an after-the-fact

discussion about the event or coverage of what people are doing now, is timely, it's timely coverage but it's not day and date like a news cast would be.  So and so it's not something that expires, the value of the program doesn't expire like a news cast does after that date and

time.

          847 MS. CRAM:  So it is not time sensitive then, that is the issue.

          848 MR. HOOVER:  Not time sensitive in the same way that a newscast is time sensitive.

          849 MR. NOBLE:  Ken has some thoughts too, Commissioner Cram.

          850 MR. MACDONALD:  I know what you're saying Commissioner Cram, but we believe that these markets are already well served from the news standpoint.  Non-time sensitive I am fine with, except some of these events we are promoting in these programs, we would want to promote them in advance or as the event is coming up or going on, out of necessity for the promotional value.  But other than that, we would be fine with that kind of limitation.

          851 MS. CRAM:  Now, the other thing I was concerned about when you were talking, Mr. Noble, about going back to the drawing board and figuring out how much was going to be coming from analog specialties and how much from the diginets.  What I didn't really understand, I guess, is, -- when you come back, can you give us some number of programs that originally derived from the diginets, the digital networks?  In other words, it appears to me that digital networks are now taking a second to third window.  So if we go from a specialty to a diginet, to a conventional I want to know if there is a  breakdown on that, and the breakdown directly from the original programming of the diginet.   I mean that would be important.

          852 MR. NOBLE:  I understand. We can do that in our analysis.

          853 MS. CRAM:  The next thing you talked about that your business plan was based on carriage under channel 30.

          854 MR. NOBLE:  Correct.

          855 MS. CRAM:  So you would then, for the record, waive any other carriage to which you would otherwise be entitled?

          856 MR. NOBLE:  Correct.

          857 MS. CRAM:  Thank you.  That's all my questions.

          858 THE CHAIRPERSON:  Thank you.  Counsel?

          859 MR. RHEAUME:  Thank you, Madam Chairperson.  Just a few very brief clarifications. 

QUESTIONS FROM MR. RHEAUME/QUESTIONS DE M. RHEAUME:

     860  MR. RHEAUME:  Your programming schedule, is it correct to say 22 and a half hours of local programming a week, and seven and a half of regional?

          861 MR. MACDONALD:  That's absolutely correct.

          862 MR. RHEAUME:  And you would be prepared to live with the condition of licence to that effect?

          863 MR. MACDONALD:  Yes.

          864 MR. RHEAUME:  Okay.  Are there any plans to broadcast any of those programs, the regional and local, on either CH or CIII?

          865 MR. NOBLE:  No.

          866 MR. RHEAUME:  Not at all.

          867 MR. NOBLE:  No.

          868 MR. RHEAUME:  So there wouldn't be a problem with condition of licence in that regard.

          869 MR. NOBLE:  Okay.

          870 MR. RHEAUME:  If you want to think about it, that's fine too.

          871 MR. NOBLE:  I just -- listen, I -- if the program is successful, I wouldn't mind sharing it with the rest of the group frankly, but I understand where you're going with that and we agree to accept the condition.

          872 MR. RHEAUME:  Thank you.  Priority programs.  You indicate separate and distinct on the proposed service, separate and distinct from CH and CIII.  Over what time frame is that separate and distinct, is it over a broadcast year, or more or less?

          873 MR. NOBLE:  Doug?

          874 MR. HOOVER:  No.  We have -- we have had some past experience with program sharing with other broadcasters, specifically the CBC, Traders.  Who we have -- we have currently some restrictions between various conventional services.  It's our feeling that -- that we can best help promote and advance benefit to the originating broadcaster by not creating what time windows between the exhibits from the conventional service and from "Purely Canadian" that are lengthy.  And so it would be our view that a portion of the programming may actually air on "Purely Canadian" within the same broadcast week or

within a seven-day window.  It makes both the cross promotion of the program advantageous, and it helps in the coordination and -- and the barter aspect with the co-op programming, in that the commercials that are carried on both the originating broadcaster and "Purely Canadian",

that it can be the same commercials, they're not going to be outdated and so we would in this proposal suggest that the programs not be restricted in the same nature that they are between CH and Global.  Because we feel it's in the best interest of the advancement of the

programming.

          875 MR. RHEAUME:  I am not sure if my question was clear, or maybe there is a bit of a misunderstanding here.  In the deficiency of 12 September 2001 you do refer to priority programs, on the new service, would be separate and distinct from CH and CIII.  So is there a change of plans here?

          876 MR. HOOVER:  We did have rethinking, in fact, since that filing and we did feel that it perhaps wasn't in the best interests of the -- the concept of "Purely Canadian" to be a -- a promoter Canadian programming to limit all of the dramatic programming from not within the same broadcast year.

          877 MS. MAWHINNEY:  Can I elaborate a little bit on that?

          878 MR. RHEAUME:  Absolutely.

          879 MS. MAWHINNEY:  For instance on the CBC schedule, a number of their programs are aired twice within the same week.  For instance "This Hour Has 22 Minutes" is aired on Friday nights and on the same program is repeated again on Monday.  The CBC bundles together the entire viewing population to get their numbers that they sell to their -- to their advertisers for that particular program.  When we shared Traders with the CBC it only, in our view and the CBC's view, increased the total audience share to that program because it wasn't the same group of individuals watching the program.  When we have repeated not within the same broadcast week we have repeated "Ready or Not"; one year we ran all the originals, and the next year we ran new originals plus repeats.  And those repeats helped stimulate interest in the program and increased the -- the viewing to that particular series so we think that it's helpful in some instances to have a repeat factor in excess of what we filed in our deficiencies.  You are quite right in the deficiencies we said it wouldn't be repeated within the same broadcast year, now, after some discussion internally we thought that if we had a maximum of six hours of our priority program per week that could be duplicated we would be increasing our audiences to those particular programs, whichever they are that we choose.

          880 MR. RHEAUME:  So that duplication would come from either CH or CI?  Because you have currently a condition of licence that -- you have a condition of licence that says that the priority programs on CH and CI have to be separate and distinct.

          881 MS. MAWHINNEY:  That's correct.

          882 MR. RHEAUME:  You do not want that for the new service.

          883 MS. MAWHINNEY:  We are suggesting an  amelioration of the that condition for this licence.

          884 MR. NOBLE:  Well, we would propose to run the priority programs that are on C3 on Global as well as on CH on "Purely Canadian".

          885 MR. RHEAUME:  I am not sure if I understand the answer.  What are you --

          886 MR. NOBLE:  I am lost on the question too.

          887 MR. RHEAUME:  I guess I am back on the deficiency letter that is separate and distinct and there has now been a change, and you would want to have priority programs on the new service that would be also broadcast on CH and/or CI.

          888 MS. MAWHINNEY:  Correct.

          889 MR. NOBLE:  Correct.

          890 MS. MAWHINNEY:  To a maximum of six hours a week.

          891 MR. RHEAUME:  How significant is that to your plans if the commission were to say no, we're going to hold you to what your application says?

          892 MR. NOBLE:  Could I just have a minute, please?

          893 MR. RHEAUME:  Absolutely.

          894 MS. MAWHINNEY:  Okay, we're back.

          895 MR. RHEAUME:  Go ahead.

          896 S. MAWHINNEY:  Okay.  Is the question that, you are actually talking about similar programs -- the same programs from CH and or Global could not be run during the same broadcast year on "Purely Canadian"?

          897 MR. RHEAUME:  Just the priority programs, the same condition that you have currently that requires separate programs, separate and distinctive programs between CH and CI, if you have the same condition on the new service.

          898 MS. MAWHINNEY:  What we're saying is that part of the thrust of this application is to promote Canadian programs and to create a larger audience and a greater awareness of those particular shows.  In some instances it's beneficial for those shows to be seen in that market on -- during more than sooner than a year apart.  So we rethought what we had said in the deficiencies and thought you know, how could we best make work and we thought if we were held to a maximum of six hours a week that could be aired on either CH or Global, could be repeated on CIII.

          899 MR. RHEAUME:  If the Commission were not to agree with you on that and hold you to what is in your application, would that be a drastic situation for you?

          900 MR. NOBLE:  Well, what is in the application is the ability of "Purely Canadian" to broadcast those priority hours from Global and from C3 and from CTV and from CHUM and from anyone else who so desires to participate with us.  And the only restriction that we had was -- that we said we would have was the fact that we would offer 46 hours or 48 hours to everyone else.  The other 48 hours would be generated by Global and we're going to come back tomorrow with the schedule that says what the breakdown between that is between priority and non-priority hours.  Now, if we're getting to the repeat factor which is something that I think your question relates to, perhaps I am wrong.

          901 MR. RHEAUME:  No, that's fine.  So the separate and distinct no longer applies, that's what you're saying or you don't want that anymore.

          902 MR. NOBLE:  Correct.

          903 MR. RHEAUME:  That's fine.  Now, just one final clarification.  I am not sure if you said you were going to come back with an answer on this.  The 48 hours of development of digital.  If the Commission were to determine that this is absolutely fundamental to your application and you are going to have a condition of licence in that regard, would you say that your project is not workable and you will not accept the licence?

          904 MR. NOBLE:  If all 48 hours were digital?

          905 MR. RHEAUME:  As per your application, if that was imposed as a condition of licence, a requirement that you have those 48 hours of co-op program, I guess you called it.

          906 MR. NOBLE:  Cooperative programs, yes.

          907 MR. RHEAUME:  Yes.

          908 MR. NOBLE:  If that were a condition of licence, would we would accept the condition?

          909 MR. RHEAUME:  Would you accept the licence if

that were imposed as a condition?

          910 MR. NOBLE:  We would want to go back and calculate our assumptions with the split between digital, non-digital, analog services, competitive services and make sure that we could -- our assumptions worked so that we could live with the condition.  And I am not in a position to say that today that we could live with that

condition.

          911 MR. RHEAUME:  So you are coming back with an answer on this likely tomorrow?

          912 MR. NOBLE:  Correct, tomorrow.

          913 MR. RHEAUME:  Is that what you discussed?  This week?

          914 THE CHAIRPERSON:  Well, presumably you won't be there tomorrow in this seat.

          915 MS. BELL:  We can file an answer with you tomorrow morning if you like or we can discuss it when we are on the intervention.

          916 MR. RHEAUME:  The question essentially was, is the 48 hours support to digital services, if this was considered as fundamental and imposed as a condition of licence, would the project work or not?

          917 MR. NOBLE:  48 hours worked for the support of digitals ,some of the 48 hours would come from digital channels and there were 48 hours being offered to on a co-op basis with other broadcasters.  There was no discussion or anything in the application that said 48

hours a week would be from the digital services.

          918 MR. RHEAUME:  I am not sure if I understood your last point.

          919 MS. BELL:  Could I just clarify the question that you are asking us is would we accept a condition of licence that 48 hours the programming a week would be sourced from non-Global affiliates?  Is that your question?

          920 MR. RHEAUME:  Syndicated digital specialty programming, I believe that's what you say in your application.

          921 MS. BELL:  I don't think the application ever stated that 48 hours would be from the diginets;  I think it would be a combination from the digitals and other broadcasters.  That was the proposal in the application.

          922 MR. RHEAUME:  I will double-check your application.  Thank you.  That's it for now, Madam Chair.

          923 THE CHAIRPERSON:  My understanding is the new component brought forward now is the analog channels.  They were not -- nowhere in the application that I have seen did you say that you would not but nowhere did you say that you would get programming.  It always says conventional broadcasters and digital services, correct?

          924 MS. BELL:  It always included conventional, yes.

          925 THE CHAIRPERSON:  So if you propose to actually respond in light of the concerns we may have about whether or not you agree with their validity, with beyond your competitive advantage, the extent to which this will help the whole system not just Global, if you propose to have a breakdown which is more refined and more prepared to be subject to a commitment or possibly a condition of licence you should do that as quickly as possible, make it available to the other -- to the other applicants and we will also try to make sure that a hearing or the intervenors are aware if they want to respond by intervention time.  So do you have a commitment you can make as to timing as to -- if you choose to do that, when you will do it.

          926 MR. NOBLE:  We will have it available tomorrow morning.

          927 THE CHAIRPERSON:  And give it to the secretary and counsel and the secretary can try and make it as available as possible.

          928 MR. NOBLE:  Yes.

          929 THE CHAIRPERSON:  Is that it, Counsel?

          930 MR. RHEAUME:  That's it.

          931 THE CHAIRPERSON:  The mic is yours, now, Mr. Noble.  I thought I would ask you another question.  Do you still feel like a Canadian or do you wish you would be in New Zealand right now?

          932 MR. NOBLE:  I am happy to be in Canada now.  In fact the weather is so lovely it's hard to work in here today.

          933 THE CHAIRPERSON:  And my dog is in [inaudible].

          934 MR. NOBLE:  Thank you, Madam Chair, and

Commissioners.

          935 "Purely Canadian" is a departure from the traditional conventional television model,  and that's on purpose.  You have heard -- you have heard us describe what the station is about, what we hope to achieve.  And the fact that, uniquely, this is a first time that

essentially we are inviting all broadcasters to participate in something new, something innovative, something that we think will help the Canadian broadcast system overall, help the Canadian production industry overall.

          936 But the premise, the starting point for us was why obviously for the Commission, why license something new in Toronto.  And our position still is, you shouldn't.  Our position is that it's our application supports the broadcast industry, it supports other broadcasters, it supports Canadian programming.  Another applicant, another station in the Toronto market could have serious detrimental impact on the Canadian broadcast system.  The economy isn't ready for it in Ontario, the market isn't ready for it in Ontario and we believe that the industry going through what is -- has gone through in the past, what is -- having to absorb in Vancouver, it's not the time to

license something on a traditional basis.  We think it a time to look at something fresh, something new, something innovative something all can participate in.  If we presented our case well today I think that when we are awarded the licence if you see fit to do so, that we will

invite and we will attract all other broadcasters in Canada to participate in this and hopefully, eventually, it's something we can roll out across the rest of the country.  Thank you for your time.

          937 THE CHAIRPERSON:  We thank you and your colleagues for your patience and your cooperation.  I want to make sure you all understand that we are only hitting our stride.  Tomorrow we will have a longer day definitely.         

     938 We will hear Alliance Atlantis application first, the Craig application next and we will hear Torstar on Wednesday morning.  And we thank you again and whether you go dancing or not I hope you have a nice evening.

--- Whereupon the proceedings adjourned at 3:23 p.m., to be reconvened on Tuesday, the 4^th day of December, 2001, at 9:00 a.m./ L'audience est ajournée à 1523, pour reprendre le mardi 4 décembre 2001 à 0900

 

 

 

 

 

          Per/par:  ---------------------------------

                     MINORI ARAI, CSR