ARCHIVED -  Transcript - Hamilton, Ontario 2001-12-05

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 3 

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HELD AT:            TENUE A:

 

Hamilton Convention      Centre de conférence

Centre              d'Hamilton

 

 

Hamilton, Ontario          Hamilton, Ontario

 

December 5, 2001             5 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/Hearing chef

 

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/                        1760-1761

Remarques d'ouverture par Mme A. Wylie

 

 

Presentation by Torstar Corp./                    1762-1796

Présentation par Torstar Corp

 

Questions from the Panel/                                          1797-2345             

Questions du Panel

 

Questions from Mr. Rheaume/                                          2346-2365

Questions du M. Rheaume

 

Comment by Mr. Prichard/                                                   2366-2372

Commentaires par M. Prichard

 

Comments by Mr. Cussons/                                                    2373-2383                           

Commentaires par M. Cussons

 

 

Presentation by CFMT TV                                                        2384-2409

Présentation par CFMT TV

 

Questions from the Panel/                         2410-2753

Questions du Panel

 

 

Intervention by Global Communications/                        2754-2772

Intervention par Global Communications

 

Intervention by Alliance Atlantis Broadcasting/          2773-2782

Intervention par Alliance Atlantis Broadcasting

 

Intervention by Craig Broadcast Systems Inc./          2783-2807

Intervention par Craig Broadcast Systems Inc.

 

Intervention by Torstar Corp./                                  2808-2818

Intervention par Torstar Corp.

 

Intervention by CFMT/                                                       2819-2852

Intervention par CFMT

 

Closing remarks by Ms. A. Wylie/                                  2853               

Remarques de commo par Mme A. Wylie  

 

--- Upon commencing at 0834/L'audience débute à 0834

              1760 THE CHAIRPERSON:  What an orderly crowd.  Good morning and welcome back to our hearing.  I don't even have to call you back to order anymore.  Mr. Secretary?

              1761 MR. CUSSONS:  Thank you, Madam Chairperson.  We will now hear applications by TDNG Incorporated, Torstar, 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 14,700 watts for Toronto, channel 16 with an effective rated power of 3,200 watts for Hamilton and channel 39 with an effective radiated power of 59,000 watts for Kitchener.  At least 80 per cent of the programming aired by the stations would be Canadian, each station would broadcast a minimum of 32-and-a-half hours per week directed to the communities in its coverage area.  Local and regional programs would make up all but eight hours of the station's services.  The Commission notes that Torstar is involved in the newspaper business, namely with the Torstar daily news group, including The Toronto Star, The Hamilton Spectator and The Kitchener-Waterloo Record.  The Commission may examine, among other things, the potential impact of cross-media ownership on diversity of voices in the markets that Torstar serves.  We have Mr. Galloway and his team.  Mr. Galloway, welcome.

PRESENTATION BY DAVID GALLOWAY, TORSTAR CORP./

PRÉSENTATION PAR DAVID GALLOWAY, TORSTAR CORP.:

              1762 MR. GALLOWAY:  Madam Chair, members of the Commission.  My name is David Galloway and I am chief executive officer of Torstar Corporation.  We are really pleased to have initiated this proceedings with the filings last December for licences to operate local television undertakings in Kitchener, Hamilton and Toronto.  We are proud of our vision for Hometown Television.  As a company with a significant presence in Kitchener-Waterloo, Hamilton and Toronto, and as residents of these communities ourselves, we are fully committed to these applications.  We believe they merit a decision by you to grant us the first new local television licences for the general population here in almost 30 years.

              1763 May I now present the members of our team, those who have been active in laying the groundwork for Hometown Television and who will be speaking today, as well as a number of those who are present here in the audience.  First, I would like to introduce Rob Prichard, president of Torstar Media Group, chief operating officer of Torstar, and my designated successor as chief executive officer of Torstar Corporation.  As I will be passing the reins to Rob before the channel launches, he will be leading our presentation today.  I might add, Madam Chair, according to The Globe and Mail, Rob may be leaving with me.

              1764 THE CHAIRPERSON:  Obviously a poor newspaper.

              1765 MR. GALLOWAY:  To Rob's left, and your right, is Eric Rothschild, our long-time consultant whom you know well.  Eric has been a senior executive with Maclean Hunter Ltd., and  Maclean-Hunter Broadcasting and Newsradio.  He is past president of Radio and Television News Directors' Association of Canada.  We are delighted to announce that Eric has agreed to join Torstar as a senior executive if we are successful in obtaining the licences we are seeking.  To Rob's immediate right, and to your left, is Don Shafer, vice-president and general manager of Torstar Media Group for TMG TV.  Don is a veteran broadcaster with more than 30 years' experience, and a past president of the Ontario Association of Broadcasters.

              1766 Next to Don is Rekha Shah, who has been involved in children's television as a performer, then as a producer, since she was 11 years old.  She is now director of program development at TMG TV.  To Rob's far right, and to your left, is Donna Skelly, president of News4Hamilton, our successful, interactive local news service with streaming video capability.  She is a former news anchor at CHCH-TV, with 21 years' experience in broadcasting in Ontario and Quebec.  Donna is advising us on program development for Hometown Television, Hamilton, St. Catharines, and Niagara. To Rob's far right - I'm sorry, to Rob's far left and to your far right is Jennifer Lynn, president of Lynn Communications, a diversity and community specialist and chair of the United Way of Greater Toronto.  A native of Kitchener-Waterloo and a former television executive, Jennifer is leading our outreach and feedback activities in the community and will be helping us to organize our community awareness forums.

               1767 To my left is Nancy Brown-Dacko, director of sales for TMG TV and vice-president of the Ontario Association of Broadcasters.  Nancy has managed broadcast sales for southern Ontario for more than twenty years.  She will be responsible for selling advertising on Hometown Television.

               1768 Next to her are Rob Young, partner in HYPN, one of Canada's largest media buying houses, and Jeff Vidler, partner in Solutions Research Group.  As vice president, media, at Ipsos-Reid, Jeff oversaw the viewer research file with our applications.  To my immediate right is Gord Haines, an experienced media executive who has served as chief operating officer of Alliance Communications as well as director of news and information programming in the early days of CITY-TV.  Beside Gord is Paul Osborn, president of Electric Entertainment, a respected independent production house which has provided successful programming to several networks over the past decade.  Paul has been a producer at CFTO, a news producer for CITY-TV and a broadcast executive for CFMT and CHCH with responsibility for commissioning programs.

              1769 At the side table are a number of very capable members of our team who are available to you in case you have questions in their areas of expertise.  We have filed a seating chart with you as well as a list of their names and titles.  They will be more formally introduced as they are called upon.  We are very pleased today to have in the audience the publishers of our daily newspapers, John Honderich, publisher of the Toronto Star, Yogoda Pike, publisher of the Hamilton Spectator, Fred Kuntz, president of the Kitchener-Waterloo Record, and Andrew Go, president of Torstar Business Ventures and publisher of Sing Tao, our Chinese-language daily.  Also with us today is Dr. John Evans, chair of the board who is no stranger to Hamilton.  We are also delighted to have Ruth Anne Winter, a director of Torstar Corporation and a member of our Voting trust here with us today.  Madam Chair, that is our team. I will now ask Rob Prichard to begin presenting our applications.

              1770 MR. PRICHARD:  Madam Chair, members of the Commission, we come before you today with great pride and anticipation.  We are presenting what we believe are groundbreaking applications in Canadian broadcasting, a return to the roots of local television.  We call it Hometown Television.  These are our applications for three new conventional television stations.  But they're also our application for admission to the family of Canadian broadcasting.  So let me begin by telling you a little bit about our company, Torstar Corporation.

              1771 Torstar is a private sector business with a very strong public service mandate and tradition.  We are a multimedia company with a major presence in newspapers, electronic media and publishing.  We have a history that stretches back more than a century.  We have over 7,000 employees.  We have a strong balance sheet and the financial resources necessary to make significant long-term commitments, and we are ready to make those commitments to the Canadian broadcasting system.

              1772 The Toronto Star, our flag-ship newspaper, is Canada's largest daily newspaper.  As a legacy of our founder, Joseph E. Atkinson, it stands for a proud and independent Canada, for social justice, individual rights and for strong communities, values that resonate with those  that underlie the Broadcasting Act.  Early in the 20^th century, under Mr. Atkinson's leadership, we took the lead on public health, integrity in government, and dignity and safety in the workplace.  We have fully embraced the broad, ethnocultural diversity that makes our communities such cosmopolitan and dynamic places to live, and would be leaders in interpreting and celebrating this new reality.  We're very proud that our editorial journalistic practice reflect the realities of the communities we serve.  Toronto is one of the most diverse cities in the world and, similarly Hamilton and Kitchener-Waterloo, draw great strength and vibrancy from their diversity.  In all three of these communities we have moved beyond notion of minorities at the margins to full engagement of all citizens as equal participants who enrich us as one community.

              1773 At Torstar, we believe deeply that us means all of us.  Hometown Television can make a profound difference by bringing this belief and this reality to the television screen.  Our application brings forward a new concept of local television that does not currently exist on the Canadian media landscape.  We will build three new full service television stations and some 300 jobs in Kitchener-Waterloo, Hamilton and Toronto.  We will create major new opportunities for independent producers and stimulate new economic activity.  We will add an important new element and voice to Canadian broadcasting and diversify the television dial.  We bring to these applications an unmatched depth of knowledge and relationships in these communities, born over a century of service to them.

              1774 Torstar's daily newspapers in Toronto, Hamilton, Kitchener, Guelph and Cambridge are rich public resources.  Our newspapers generate pictures and vast amounts of information analysis and entertainment every day.  Our archives and our web sites are the living history of our time, but television is the missing link.  Torstar's vision is to be the premiere source of local and regional news, information and entertainment in southern Ontario regardless of the medium people choose to use.  And drawing on our own resources, and on the best of the independent production community and Canada we will offer the deepest, broadest, and most Canadian local and regional television service that the Canadian broadcasting system has ever seen.

              1775 In our convergent strategy, Hometown Television will work alongside our newspapers to leverage our content and promote our programming.  Our 40 existing web sites are thriving.  They rank among Canada's most successful.  Thestar.com alone enjoys over 200 million page views a year.  Meeting on the web, Hometown Television and our newspapers will offer users much more than the sum of their individual parts.  Video will enrich their web experience and, in turn, expanded information from our newspapers will bring depth to the video.  Users can start with video, and then drill down into the newspapers to learn more about a particular subject or issue.  From there they can move to chat rooms, the share opinions on an issue, to vote in on-line polling or to gather additional information through hyperlinks

              1776 We are, Madam Chair, delighted with the team we have begun to assemble and confident they will be able to turn our plans for television into a reality.  But before I turn to my colleagues, I wish to address two issues that have arisen in the discussion leading up to this hearing.  Some have argued that the markets we wish to serve cannot absorb a new television station, in part as a result of the tragic events of September 11^th.  We do not agree.  Toronto television revenues are up 7.2 per cent in 2001.  Sources ranging from the Bank of Canada, the Bank of Montreal, RBC Dominion Securities to the Retail Council of Canada and the International Monetary Fund are all predicting that the softening of the economy that we are currently experiencing will not last.  They disagree only on whether the upturn will come in the latter half of 2002 or early in 2003.  Growth in 2003, when we would be launches our stations, is expected to average 4.1 per cent in Canada and 3.9 per cent in the United States.

              1777 Furthermore, the Golden Horseshoe, in which we sit today, is one of the largest, most prosperous and fastest-growing urban areas in all of North America.  According to our studies, in the past decade, only the Los Angeles area grew faster than the Golden Horseshoe.  Every projection we know shows that the Golden Horseshoe will experience vigorous and substantial economic growth over the next decade.

              1778 In its intervention the Association of Canadian advertisers stated clearly that its members will support new conventional stations in this market.  And the evidence shows that the Golden Horseshoe can readily absorb new local television licences and that our original growth assumptions are realistic and achievable.

              1779 The second issue I want to address is the suggestion that Canadians won't watch programming about themselves in prime time.  Again, we simply disagree.  We have conducted extensive market research on our programming schedule.  We have tested it, we've retested it and we're absolutely confident that people will watch.  Compelling Canadian stories and local reflection have been the foundation of our success in our newspapers for over a century.  And we believe that they will work just as well in television.  And we believe it will work in prime and peak viewing times.  Our business model is built on modest shares of tuning, but it is a robust financial model.  It's been tested both internally and externally.  The evidence shows both deep and broad appeal for Hometown Television version of local television which translates into a very sound business.  People want to see themselves and their communities on television.  We will use the unparalleled capacity of our daily newspapers and web sites in Toronto, Hamilton and Kitchener-Waterloo to promote our television schedules so that our communities will know that they can see themselves, and so informed, we believe they'll watch.  We can and we will deliver all of this and we look forward to showing you how we plan to do it.  Eric?

              1780 MR. ROTHSCHILD:  Thanks, Rob.  As Rob said, what we propose is a return to the roots of television, full-service television for the whole family.  The kind of local television programming that has disappeared from our screens.  It goes way beyond local news.  Here's what I'm talking about.  Alanis Morrissette got her start on CJOH's Homegrown Café.  The polka king, Walter Ostanek, might never have come to light if not for CKCO's Polka show.  And CHCH's Tiny Talent Time launched artists as diverse as Frank Augustyn and Deborah Cox.  A young Sheila Copps appeared on the show as well.  These programs were the training grounds for our national talent pool.  But they have disappeared. It certainty wasn't for lack of interest.  Homegrown Cafe was still attracted viewers in Ottawa when it was cancelled in the late 1990s.  We need training grounds to nurture future stars.  Our Star Search will do that.  We will also work with schools to revive the Reach for the Top tradition.  And we will provide a safe haven, commercial-free block of children's programming every morning.  It's a broad and full schedule, the likes of which we haven't seen for years.

              1781 Our research found great demand for our approach.  We crafted a schedule for Hometown Television which married our vision of community with the demand we found in the research.  We tested these program concepts with an unusually large sample, 2,800 people.  The results were overwhelming and consistently positive.  87 per cent of respondents said they would watch the kind of television we are proposing if it were available.  More than 800 letters of intervention backed up the research, many right down to specific program titles.  A large number of interveners also expressed trust in the Torstar brand, our track record in the community, and confidence that we would offer truly meaningful local programs.  The demand is clearly there.  We promise an unprecedented level of local and regional programs throughout the schedule, including prime time.  We will be overwhelming Canadian:  a minimum of 80 per cent at all times.  Our schedule contains 32-and-a-half hours of local programs and 85 and a half hours a week of regional programs that will be aired on all three stations. This sets a new standard for Canadian television.

              1782 Our schedule is grounded in news and information programming, each station will offer 16 hours a week of local news, with 16 and a half hours a week of local, non-news programming.  These non-news shows include a daily Canadian entertainment magazine which we call What's On.  It's a local cultural and social bulletin board.  And My Town, our daily roundup of issues and concerns in each community.  These local programs will be supplemented with regional programs:  Day's End, an evening news and public affairs show, Talk Time, a hot seat show that will focus on issues of the day, and a nightly documentary, Monday to Friday, in prime time.

              1783 In Kitchener-Waterloo and Hamilton, Hometown Television will be a new, local alternative.  People tell us it's long overdue and while Toronto has many stations, virtually every one has gone regional.  It's time for an alternative.  Rekha?

              1784 MS. SHAH:  Thanks, Eric.  I started working in exactly the kind of local television that Eric has just evoked:  CJOH in Ottawa, 16 years ago, in its heyday as a local station.  It was great.  I responded to an ad in the Ottawa Citizen and found myself working on local shows and children's shows like Nickelodeon's Fifteen and You Can't Do That on Television.  I have been with Torstar Media Group for just under three years, nearly since the beginning of the division's existence.  Throughout that time, I have been encouraged to develop my own production ideas.  It's because I had all these opportunities that I was able to become an independent producer with a successful series under my belt in both French and English by the time I was 26.  You haven't lived until you have applied for the tax credits, the funds, maxed out your credit cards and struggled to find a distributor for your project.  So I had some understanding of what it takes to work with independent producers.  This experience from the ground up has helped me enormously in developing programming for Torstar, building bridges, devising creative, distinct and marketable content with a shelf life and adding value through promotions, communications and advertising.  All this takes time, but the response is beginning.  For example, we're developing shows with Christopher Hume, the Star's art and architecture critic and resident pop culture guru. 

              1785 Our challenge will be to develop compelling programs that people want to watch and advertisers want to buy, much of it through the creative efforts of independent producers.  In fact, our program schedule will rely on the small and medium-sized independent producers.  Over the course of the licence term, we will spend 86 million dollars to commission regional programs.  We will offer shows for preschoolers, teens, 'tweens and seniors and all of our shows will offer information and entertainment that is meaningful right here.  Food you can find in local grocery stores.  Plants that are hardy in our climate and issues that are relevant our kids and our schools.  Don?

              1786 MR. SHAFER:  Thanks, Rekha.  The idea of having something new for everyone may be an old one, but the time has come to breathe new life into it.  As others have regionalized across the province, they've abandoned this full service approach to programming.  We see this as a tremendous new opportunity.  Viewers are wanting more and more intensely local television.

              1787 Advertising and media buyers also want and need more local air time.  My colleague, Nancy Brown-Dacko, meets clients on a regular basis.  Many of them have told her they can't buy air time that is just for Hamilton, just for Kitchener-Waterloo or just for Toronto.  What local retail group wants to pay for access for an audience too far away to serve?   Why pay for Sudbury and Ottawa if you only want Toronto?  We can offer them advertising that is cost effective and reaches the target markets they really want to reach.  That is a valuable missing piece in the system.

               1788 As we were preparing for these hearings, we made presentations and met personally with many of the elected representatives,  more than 150 of them at the federal, provincial and municipal levels.  We also met with many communities groups.  This confirmed for us that Hometown Television is truly different.  Our presentations were well received; they stimulated meaningful discussion and enthusiastic support for various ideas.  Twenty-two of our letters of support came from municipal councillors, mayors, cities or regional councils, MPPs and MPs. I also experienced firsthand the enthusiasm for our programming proposals from people in community meetings and on the streets in Kitchener-Waterloo, Hamilton and Toronto.

              1789 Jennifer Lynn helped us reach out to ethnocultural communities in our region.  She and I attended the annual meetings of the Kitchener-Waterloo Multicultural Centre which represents about 50 ethnocultural organizations in the area.  We talked about our application, about our ideas, and about how we could help each other by creating better programming that told their stories both on and off the air.  Many provided terrific unput and ideas and many provided strong letters of support.  Jennifer?

              1790 MS. LYNN: Thank you, John.  My home town is Kitchener.  This community, with its region, has changed dramatically over the years, and today is a vibrant and special place with extraordinary community spirit and diversity.  It is home to two universities, Waterloo and Wilfrid Laurier, and Conestoga College, where I'm vice-chair of the broadcasting courses program advisory committee.  It's also home to an extraordinary high tech community.  The RIM Blackberry, currently the world's hottest communications device, and probably the favourite among many in this room, is one this region's well-known exports.  And in fact, the founder of RIM, Jim Balsillie, has provided strong support for our application.  I am especially proud of the 1997 Caring Communities Award given to my home town.  Why?  The rate of volunteerism in Kitchener-Waterloo is higher than anywhere else in Canada.  One in three citizens of Kitchener-Waterloo is a highly engaged and active volunteer.  That's bound to make a difference in building community and improving the quality of life, and it does.  The reason why so many of my friends at the Kitchener-Waterloo Multicultural Centre support Hometown Television is simple:  They feel it is time for an approach that embraces our multicultural reality.  They want to be included.  And they have so much to contribute.

              1791 I have been working with Torstar to develop realistic and effective outreach and follow-up mechanisms.  Hometown Television's community awareness forums will guide and shape our policies, program content and practices.  As a community advisory mechanism and reality check, they are designed to be the lens of community and an instrument for proactive engagement.  As our communities evolve, so will Hometown Television.  The community awareness forums will be an integral part of all that our organization does, to ensure inclusivity, balance and local reflectiveness through constant feedback.  Station management will compile this feedback with issues raised by the community awareness forums and through programs like My Town, Day's End and Talk Time.  Twice a year, based on all this input, we will host a community town hall to delve into these issues of concern.  The town halls will be telecast and webcast, encouraging the broadest possible participation.  Our commitment to our true diversity will bear out in our recruitment and hiring policies and practices, on-air representation and in a whole range of rich and often untold stories.

              1792 I am thinking about the woman from Bosnia who survived the atrocities of war and built a new life in Kitchener by establishing an inspirational support group for young women who bear the scars of similar, unthinkable situations.  And I am thinking of Eleanor Rodney, one of 30 teachers recruited from the Caribbean 40 to 50 years ago to remedy the shortage of teachers in Hamilton schools.  They taught in classrooms where there were virtually no children and students of colour.  And I am thinks of Jamiesons of Six Nations, who count among their family an astonishing number of super achievers.  These are the home town stories just waiting to be told.  As Don mentioned, we met with many community organizations and individuals representing the microcosm of communities Hometown will reflect.  They are excited, as I am, about the concrete plan behind our promises and the proactive role the communities will play.  Donna?

              1793  MS. SKELLY:  Thank you, Jennifer.  My home town is right here in Hamilton.  It's a unique city and we're very proud of it.  As you know, Hamilton is a strong industrial town based on the steel industry with a solid intellectual and cultural component.  And we have inherited KW's first place for volunteerism.  Our university, McMaster, is known for many great achievements.  Under the founding dean of its medical school, Dr. John Evans, it developed the case-based method of medical education later adopted by Harvard University and now the standard for leading medical schools around the world.  Our opera and our theatre groups are perhaps the best-kept secrets in southern Ontario.  And of course the Niagara region with its award-winning wine industry has become a national treasure.  Do we see ourselves on television?  Well not nearly as much as we'd like to.  And that's why I started news4hamilton.com.  If Hamilton wasn't located next to Toronto, I am sure we would have had a second local television station here years ago.  When I first read the Hometown Television application two things jumped out at me.  First, as a mother, I absolutely loved the idea of the 10 hours a week of commercial-free kids programming.  But secondly, as a Hamilton news anchor and producer, I was pleased to see that the orientation of the local programming was not towards Toronto, but rather towards St. Catharine's and Niagara.  You have to remember that the Niagara region has a population of 400,000 people and is greatly underserved at this time.  Hometown Television will address this by opening a St. Catharines bureau to be the station's eyes and ears there.  That means our assignment desk in Hamilton will follow developing events throughout Niagara, deploying resources as needed.  This is one of the reasons we receive such tremendous support from the Niagara region.

              1794  Many independent producers in Hamilton also supported us.  They are encouraged by Hometown Television's plan to commission programs from independent producers.  In my experience as an anchor, a mother and as a resident of Hamilton, and the owner of the only independent local news web site in the city, I believe this is a very strong application and just what my home town needs.  Rob?

1795  MR. PRICHARD:  Madam Chair, before we conclude our presentation, we want to present a short video produced by my colleague, Rekha Shah.  We hope it will convey the programming excitement we feel about our proposed new television stations.

Video presentation / Présentation video

1796           MR. PRICHARD:  In closing, Madam Chair and Commissioners, we have put before you applications which we believe will set a new high-water mark for Canadian television.  We offer local and regional service that meets the needs of viewers, advertisers, and a Canadian broadcasting system, powered by the promotional tools, the editorial resources, the financial stength and the unequivocal commitment of a great Canadian multimedia enterprise.  Torstar's roots lie in The Toronto Star which was founded as the paper for the people.  In that tradition, Hometown Television will be television for the people.  Hometown Television offers an opportunity:  an opportunity to broaden and diversify the television dial, an opportunity to take television back to its roots.  An opportunity to demonstrate that Canadian content and Canadian stories can deliver compelling and financially successful television.  An opportunity to attract a new generation of Canadian talent to television production.  An opportunity to set new standards of commitment to the central goals of Canadian broadcasting.  And an opportunity to strengthen and broaden the Canadian broadcasting system by adding a strong, stable, respected and trusted new voice.  We thank you very much for your attention and the privilege of appearing, and we await your questions.

1797          THE CHAIRPERSON:  Good morning, Mr. Galloway, Mr. Prichard and your colleagues.  Before we proceed, we want to thank you for your patience for accomodating the change in our agenda.  I suppose, in the vernacular, one advantage is, now you know where we're coming from.  Or more elegantly, our questions will have a familiar ring.  If you have no objection, I will refer to you, the applicant, as Torstar which is easier for me than TDNG Inc., if that's okay because it's a shorter word, and more easy, or Hometown, of course.

QUESTIONS FROM THE PANEL/Questions du Panel:

1798           Before we -- before I ask you more pointed questions of clarifications to increase our understanding of your application or clarify areas where we may not be entirely sure we understand what you have are proposing, I would like to ask you a few questions, as I did on Monday morning with the first applicant before us, about your strategy and you actually use somewhere in your -- in your supplementary brief the word vision or your approach.  And under that section of your supplementary brief which is at page 3, under vision, you call your proposal a new kind of  of local service.  And similarly, in schedule C which is attached to part two of your application, you talk of, I quote, "a new, truly local community-based television, TV service."  And this morning, again, in your opening remarks Mr. Rothschild referred to the kind of local television programming that has disappeared from our screen.  Would it be fair to say, then, that you have characterized your proposal as a departure from a conventional over-the-air TV station as we know them now?

1799          MR. PRICHARD:  We have characterized it as a return to the roots of local television.  Roots in the following sense:  That it will be local; second, that it will be comprehensive; that is it will have a comprehensive schedule from children to grandparents and everyone in between, and that it will be over the air.  We have also characterized it, because it's local and because of the special nature of our communities, the extraordinary diversity of our communities, that it will reflect the reality of those communities that's emerged over the past half-century in Toronto, Hamilton and Kitchener-Waterloo.  And that while returning to our roots, we will be reflecting that new reality.

1800          THE CHAIRPERSON:  Mr. Prichard, I don't think you would have given your students an A for this answer.  My question was, would it be fair to say that it is something other than, or departure from, conventional over-the-air television stations?

1801          MR. PRICHARD:  I will ask Mr. Rothschild is a better student.

1802          THE CHAIRPERSON:  I know you're anxious to tell us what your proposal is, but my focus right now is to ask, is it your view, considering the considerable positions that have been taken, that there is no need for a conventional station, I want to know if it's your view that this is not such an animal?

1803          MR. ROTHSCHILD:  Commissioners, when we say that we believe this is a new local service and a departure and a new vision, what we're talking about is the type of schedule that you see in front of you which is 80 per cent, minimum 80 per cent Canadian at all time.  Where we're talking about programming being seen through a local and regional links, the overwhelmingly through our local and regional links, that is a departure from a the traditional model: in the sense that the traditional model has a preponderance of American programming in evening prime time.  What we keep hearing that is that the model is driven by -- by acquired programmed, acquired foreign programming and that Canadian programming is something that is done and is done, but is not a money maker.

1804          Well this is a departure, this is very different we are saying that we believe we can develop compelling programming, compelling Canadian programming, that will attract an audience and that that can be the engine that drives our television stations.  So in that sense it's a conventional station but a very non-traditional model.

1805          THE CHAIRPERSON:  Mr. Prichard, you mentioned earlier that in your presentation that you don't accept the notion that the economy is on a downturn that will not recover in a relatively short term, and that you are more optimistic that it would, at the end of 2002 or the beginning of 2003.  So is one of the -- do you share the view that -- that at the moment, given the uncertainties that some parties express, that a conventional television station would not be in the economic interest of other licensees, for economic reasons?

1806          MR. PRICHARD:  To the extent that we are successful in attracting revenue that would otherwise have gone to existing stations, in that sense I agree.  Our application is unwelcome from their perspective.  That said, however, we believe that this market, these markets, the Golden Horseshoe in total, can readily support an additional -- these additional licences, in that the growth we anticipate over the next seven years in this area can support not only the existing licensees but these additional three licences that we propose.

1807          THE CHAIRPERSON:  So would it be fair to say, then, that the reason why an over-the-air conventional station or traditional station should not be licensed, your position would be more because it's not needed.  There is no demand for it, therefore it's not in the public interest to license one.

1808          MR. PRICHARD:  I am not sure I understand the question.

1809          THE CHAIRPERSON:  Well, there are -- there could be one reason that there would be undue -- undue competition and therefore a significant impact on the existing licensees to perform, is one idea put forward.  The other is that there is enough of conventional television and -- and the broadcasting system needs something else.  Would that be of more your position as to why you don't think a conventional station should be licensed?

1810          MR. PRICHARD:  Our position is twofold.  First, that the markets as an economic matter because of their growth, will sustain the additional licensees without undue disruption of the existing licensees.  That's on the economic side.  On the content side, yes, exactly.  We believe that there is a case for a distinctive new offering which we put forward for Hometown Television which will complement and supplement the existing offerings available in these three communities.

1811          THE CHAIRPERSON:  I would like to address now briefly, and in a general way, what you see as the distinctive characteristics of your proposal which makes it other than a conventional station.  Mr. Rothschild raised a few minutes ago the no-reliance on American programming and we can discuss that later.  What in your view are the other characterics of your proposal that distinguishes it and makes it a new kind of television?

1812          MR. PRICHARD:  In addition, as you say, up to the commitment to being Canadian and setting a new high-water mark in that respect, the second distinguishing feature of our application is the emphasis on local.  We are proposing three separate, full-service stations.  One -- one in each of the three communities for which we seek a licence.  And each of those stations will have a minimum of 32-and-a-half hours of local programming.  In a province and in an area where programming has moved from the local to the regional to the provincial, we believe this is the opposite.  We believe by grounding our stations locally with a minimum of 32-and-a-half hours in each of those communities, that is in addition to this area, the Golden Horseshoe, of 97 and a half hours of local television, we believe that is a very distinctive contribution.

1813          Second, and in addition to that, the thesis of these stations is that they will focus on and reflect constantly the local area and the region.  We believe the business case is not only to be Canadian content, but to be Canadian content about these communities, about the people in these communities, about the history of these communities to reflect the locale and the region through our programming because we think that is what's going to attract the audiences to what is unconventional in the sense they're so heavily Canadian.  So the central thesis that we put forward is that by reflecting the communities and the reality of those communities, the diversity of those communities, the richness of these communities, by reflecting that back not just through the local programming, but through all the programming, that that will be successful in attracting the audiences that we project in our application.

1814          THE CHAIRPERSON:  Would it follow from Torstar's position as expressed that there is a need in this particular licensing process to use regulatory or licensing mechanism to ensure that what we license as a non-conventional over-the-air television station is and remains a non-conventional television station as described?

1815          MR. PRICHARD:  We -- we believe we should and we welcome the conditions of licence that will ensure that what we say today is what we will do, and if we are back here seven years later, what we will have done.

1816          THE CHAIRPERSON:  Now [inaudible]

1817          MR. PRICHARD:  I'm grateful for your confidence, Madam Chair.

1818          THE CHAIRPERSON:  We can't ignore your past, Mr. Prichard, talk in terms you understand.  So we will proceed, then, with the particulars of your application and perhaps keeping in the back of your mind this little discussion as we go forward.  Now, of course Mr. Rothschild will have to be brought up for Mr. Shafer to scratch, since you supplied us with an application on our old application form.  So I hope your newspaper doesn't dare call us dinosaurs.  Of course we already revised it and you didn't take the opportunity.

1819          The reason I bring that up is that there is an important -- an important difference at part 2 of your application, which in the old days was called promise of performance.  In this round it will be required performance, not promise.  So at part 2, at five four, the commission used to ask licensees to provide what is their station's highest schedule, viewing time, viewing audience period and you have identified at 7:30 to 10:30.  As you know, in the policy we have defined peak for the purpose of imposing requirements during peak as 8:00 to 11:00.  So it's important as we speak to know what your commitments are when you talk about peak.  Is it 8:00 to 11:00 or is it 7:30 to 10:30?

1820          MR. PRICHARD:  Eric?

1821          THE CHAIRPERSON:  Because you use the words peak often.  I can't recall seeing you using prime, but peak is -- I would like to know so that we're not talking at cross purposes.

1822          MR. ROTHSCHILD:  We have taken it as the Commission's definition.

1823          THE CHAIRPERSON:  I am sorry, it's 7:00 to 11:00.  I was just testing to see if you were listening.

1824          MR. ROTHSCHILD:  We have taken the Commission's definition of peak viewing time as 7:00 to 11:00.

1825          THE CHAIRPERSON:  Your application, your schedule, your commitments are based on 8:00 to 11:00 -- 7:00 to 11:00, when you say peak.

1826          MR. ROTHSCHILD:  Commissioner, when you talk to us about our commitments in peak viewing time we're talking 7:00 to 11:00 as defined in the policy.

1827          THE CHAIRPERSON:  Okay.  Now, with regard to priority programming, there could -- I would like to make sure we understand.  Your commitment in your supplementary brief and in a variety , quite a number of places in your application, is eight hours at peak time but a commitment especially in your supplementary brief, I guess, where there is a part at page 2 there is a very easy-to-follow summary of your commitments, and you speak of 10.5.  So can you clarify for me the difference between eight hours in peak and 10.5, and when would that be, and whether they are both commitments you would be prepared to abide by?

1828          MR. PRICHARD:  Madam Chair, the difference between the two is the hours of priority programming within peak, eight, and outside of peak, two and a half.  The particular program, Eric?

1829           MR. ROTHSCHILD:  Commissioner, we have a Canadian entertainment magazine we call What's On which is scheduled during the day, in the morning and to air again in the afternoon.  And so that falls outside of the peak viewing time.

1830          THE CHAIRPERSON:  So the 10.5 would be over the broadcast day basically?

1831          MR. ROTHSCHILD:  Yes, Commissioner.

1832           THE CHAIRPERSON:  So you would be prepared to live with a commitment, even a condition of licence of 10.5 during the broadcast day, and eight hours during peak?

1833          MR. ROTHSCHILD:  We would.

1834          THE CHAIRPERSON:  And so if that entertainment magazine didn't work out you would have something else that would replace it somewhere in the schedule.

1835          Foreign programming is another -- another issue that -- it can be confusing.  In a deficiency letter of March the 9th, and there are two, so I am speaking of the one in answer to the Commission's question of January 30.  At page 10, you say that your schedule does not include foreign programming and that discussion, again, is in another deficiency response, that one of September 12, we are at page 1, you say your schedule does not include foreign programming.  However, once we get to September 18, 2001, which is the last response to a Commission question, you do discuss that you could do some foreign programming.  I understand that your Canadian content, your Canadian content commitment is 80 per cent, that you don't have any foreign programming in your schedule but of course the schedule is certainly not something that will live for seven years; it may not live for three months.  So we can't really rely on that.  This will sound like one of Ms. Cram's old questions.  If you did have foreign programming what would it be?  I guess the old joke is 'If you beat your wife, will you do it on Saturday?'

1836          MR. PRICHARD:  I think I will give this one to Eric, in light of that comment.  Let me be clear.

1837           THE CHAIRPERSON:  We will not do foreign programming but maybe we will, so if so, what would it be, what type, from where, where would it be scheduled?

1838           MR. PRICHARD:  I will clarify our position, and Eric will answer the very specific question.  With respect to our position, our proposal to you is that the condition of licence be 80 per cent Canadian at all times including prime time.  That, as you know, means even in peak time we will have to be at least 70 per cent Canadian.  So that's our proposal to you: 80 per cent Canadian at all times, including prime time, which translates because of the mathematics, to at least 70 per cent even in peak time.  Our schedule that we filed, our draft schedule, as you know, imagines all of our programming being Canadian.  And the difference then is between the 101 hours represented by 80 per cent and the 118 hours of schedule that we put in front of you.  And on that, our current plan and our intention is for that to be Canadian as well, but because of the very essence of conditions of licence, because of our unwillingness to be here ever other than in a complete compliance with our licence terms if you grant us the privilege of proceeding, we thought it prudent to leave ourselves that margin of flexibility between 101 hours and 118 hours.  And it's that to which there is the possibility that some of that could be filled with foreign programming.  We have not made budgetary provision for it.  That is, our budgets are based on doing all our programming, Canadian.  We don't see ourselves as a participant in the major buying of -- of foreign product because we haven't provided for it in our budgets.

1839          What we see is the possibility that there will occasions on which, whether because of interest in our regions of a particular subject matter, a matching of something in our area, to something that's being produced about another outside Canada that's comparable, we could imagine at the edge, at the margin in that degree of flexibility between the 101 hours and the 118 hours the possibility that we would run a non-Canadian program at that time.  In terms of purchasing it, Eric?

1840          MR. ROTHSCHILD:  Commissioner, first of all the 80 per cent we actually did include in the promise of performance, part 2, from the outset and we said that was our commitment as a going in -- a going into the regulatory process.  We are pleased to do 80 per cent.  We think that's what does make us very different from anybody else.  We wanted the 20 per cent to be able to apply our programming, as Rob says, that's relevant to audience and that could be added to our schedule.  Our schedule, as you see in front of you, is grounded in research that we did.  These are programs that people told us they would watch, but those needs and tastes will evolve over time and we're looking for some flexibility to do that.

1841          We see buying -- that you could see on Hometown Television relevant documentaries from A&E or BBC.  Broadcasters have approached us already to see if there is -- if they have additional programming, might we be interested in buying it from them. There are independent distributors who we have spoken to who have said they have product that could be relevant and in keeping with our approach to trying to be reflective of communities from outside the country.  So that's the type of programming we're thinking of.

1842          THE CHAIRPERSON:  Mr. Prichard, you mentioned you want to be prudent.  So do we.  And you have mentioned 118 hours of local regional programming.  That's how you're pitching the proposal; that's how it's different.  On 126 hours of regulated broadcast hours, I forgot my calculator, but I believe that's 93 per cent.  I don't have to use if anyways.  Ninety-three per cent of the programming which is more than 80 per cent Canadian.  So if we were to take you at your word and say that, two of the distinguishing factors that you raised this morning for your proposal was no American and very local.  So, very local.  And then I asked you, well, would it be a good idea, perhaps out of prudence, for the Commission to keep you to this.  If we did keep you to the local, you would have 93 per cent Canadian, not 80.

1843           MR. PRICHARD:  I may have misunderstood the arithmetic.

1844          THE CHAIRPERSON:  Well the arithmetic of 80 per cent Canadian means a possibility of 20 per cent non-Canadian which is I believe about 25 hours of programming.

1845          MR. PRICHARD:  That's the 126 down to the 101, which is what I said was the minimum Canadian that we are proposing.

1846          THE CHAIRPERSON:  Yes, that's Canadian, but you are proposing local/regional and 118 hours and that amounts to 93 per cent of the programming.  If the Commission found that, as you put -- put forward this morning, that one of the distinguishing factors or distinguishing -- yes, factors in your application, is the amount of local/regional and you said 118, there you are.  That's 93 per cent of the 126 hours.  Which leaves you no room to say you're not going to do 80 per cent Canadian.

1847          MR. PRICHARD:  Madam Chair, our proposal is as follows:  That the conditions of licence be the 80 per cent Canadian at all times, including prime time; and second, that the local be a minimum of 32.5 hours in each of the three stations for a minimum of 97 and a half hours of local.  We are not proposing as a condition of licence the 118 hour commitment.

1848          THE CHAIRPERSON:  What if I were?

1849           MR. PRICHARD:  Would I --

1850          THE CHAIRPERSON:  Yes, I was taking the 118 hours as a combination of local/regional which, I believe, not only the very local makes you a distinctive station and so -- what I'm trying to explore with you is, as we get into the discussion of local/regional, it is interlocked with your position on foreign and Canadian content because there is just so many regulated hours.

1851          But perhaps we will wait and discuss local regional.  Are you saying now that only the local proportion of your programming schedule makes you distinctive?  Or I was tying it local/regional.

1852          MR. PRICHARD:  We believe what makes our application distinctive is both the local and the regional reflection and the commitments we're making in that regard.  It's the entire commitment to local and regional.  I'm simply trying to be specific on the conditions of licence.  Because the one thing that is being drilled most definitively to me since I joined Torstar, is that conditions of licence are absolutely binding.  And because of Torstar's reputation, and the nature of its commitments, if we commit to a conditional licence we are absolutely, unequivocally committed to making it.  We believe that the 80 per cent threshold would be a new high-water mark commitment for Canadian content, all the time, that will be a very large commitment to local and regional.

1853          Our current plan, the expectation we are creating with our schedule is that it will be the 118 hours, but when you ask me the question of condition of licence, so that there is no possibility of our ever being before you or colleagues seeking relief or seeking to excuse otherselves, we believe that the 80 per cent Canadian all the time, including prime time, is the position we should propose to you.  We're very pleased to discuss the entire schedule and what we have set out.  But on your specific question of condition of licence, what you have said over the last three days, I want to be precise as to what we're proposing.

1854          THE CHAIRPERSON:  Yes, and I am putting on the table the possibility that the Commission would bind you to 118 hours of local/regional programming, which then would have to -- to be merged in a per centage way with the Canadian content to make sense.  It's -- it's not -- in other words, you don't mind being bound by the Canadian content at 80 per cent, but you are reluctant to be bound by 118 hours of local/regional, despite the fact that both of these -- both of these issues or factors were raised as distinguishing factors for your proposal.  So I understand your position, but you see where I am coming from?

1855          MR. PRICHARD:  We -- I may not -- I may be missing but I wanted --

1856          THE CHAIRPERSON:  Yes, perhaps I will clarify.  Mr. Prichard, your proposal is you are not going to be like the other stations.  You are going to be a local/ regional station and I am prepared to use those with a slash in between.  And that is right through your application, it's is 118 hours.  There is in fact a lot more about that than about the Canadian content.  So if one were to say, we will keep this applicant to its word and it will be a local/regional station, it will be very different from what's there and therefore that's what has to be done, as a -- a condition of accepting your proposal as a different one that warrants adding to the system, then you would have to -- to amend your view on Canadian programming considering that at the end of the day there won't be enough hours.  I understand your position, you will understand what I am saying.

1857          MR. PRICHARD:  We expect that the vast majority of what we broadcast will be local and regional.  And as such, the vast majority of what we broadcast will be Canadian.  It will be Canadian because we're producing it ourselves or because we're commissioning with the independent production community and will, I am sure, go through the commitments we have made with respect to the levels of expenditure for new programming, new production, by ourselves and by independent producers that will be local and regional.  So that is the overwhelming vast majority.  It is both Canadian and local and regional.  That's the entire thesis of how we believe we will attract audiences, is to reflect these communities, these localities, this area.  So we're not reluctant to have a description that this must be regional, that is as you say, central to our proposition.  The only place I was resisting, Madam Chair, in the interest of being prudent and not making commitment we might not be able to honour was stopping at 80 per cent Canadian as opposed to saying the condition of licence should be a hundred per cent.  I'm saying a -- we are proposing the condition of licence -- we welcome that it be regional and local, because that, that is the essence of all that we are going to produce and commission, is regional and local.  That's how we believe we can make a distinctive contribution and it's how we believe we can attract an audience by being distinctive.

1858          THE CHAIRPERSON:  And even the 93 per cent is too high?

1859          THE CHAIRPERSON:  My -- our view is that we should set a figure, a level, that we're absolutely certain to exceed, that that is how Torstar should present itself to you, that we should be certain when we come back it will have been exceeded.

1860          You may well, at a subsequent --  if you give us the privilege, and we come back in front of you seven years later, you may well decide to raise the level at that point, when we have a demonstrated track record of delivering on it.  But we want to set a level which will be  genuinely new, that is a new high-water mark, but not at a level where there is a risk in our mind of any kind that we wouldn't be able to honour the commitment in full to the Commission in making it.  We thought the balance between expectation and certainty was found at 80 per cent which is why we propose the 80 per cent figure.

1861           THE CHAIRPERSON:  It was mentioned by one of you that there was no -- nothing in your business plan, financial statements, or projections, rather, that focused on foreign programming.  So I am curious.  Under the -- I am looking at the Toronto nine plus one pro forma statement of revenue and expenses, and there is a line of -- that is relatively high, of 1.7 million in year one rising to 2.2 in year seven.  Under sales, syndication of non-Canadian programming, what is -- what does that represent in terms of revenue?

1862          MR. PRICHARD:  Madam Chair --

1863          THE CHAIRPERSON:  What is it?

1864           MR. PRICHARD:  That refers to revenues we expect to earn through our participation in the success of independent productions which we helped finance.  And that is, as we help finance them, we plan to do two things:  First, we have provided for paying for licence fees in order to show those shows on our three stations over a fixed period of time, fixed number of opportunities.

1865          In addition in our budget, we propose to have additional funds to, in effect, invest in the independent production community.  Above and beyond the licence fees, we have made provision for investment, investment as a partner, as a co-venturer, investment in a form of whatever financing would give the greatest leverage to the independent producers.  So when they create a show it's not only for us, but they have the opportunity then to try to sell it to others both at home and abroad.  We believe that will be successful in generating revenue.  And that revenue is the line that we report there.  So we have an expense equal to it, and we expect revenue over the life of the licence and we projected it as equal to the expenditure we make above and beyond the licence fee costs that are in our budget.  So this is, if you will, investment revenue from our investments in the independent production community are participating in the success of their work in the event they are successful in selling their product to other broadcasters at home and abroad.

1866          THE CHAIRPERSON:  So the distinction here between syndication Canadian and non-Canadian is with regard to the -- the site or the venue of the distribution, rather than to the content of the programming.  It will all be Canadian programming, some of it distributed with some revenue flowing from it outside Canada and some inside?

1867          MR. PRICHARD:  That's exactly correct.

1868          THE CHAIRPERSON:  Your independent production commitment is - again, we can see it at supplementary brief at page 2 at number 9, as an average of 36 hours per week and, as we will discuss later, sometimes our calculations from other sources in your application give us 34 hours, but an average of 36 hours a week for 1,230 hours a year of programming.  And that is going to be at a cost to you of $10.6-million in year one, rising to 14.2- million in year seven.

1869          And if we calculate it from your Schedule B, which is your program description, et cetera, or in other areas, it's about 60 hours of original plus repeats a week for about 49.6 per cent of the hours of broadcasting.  And amounts over time, as was mentioned this morning, over the seven-year licence term, to over $86-million over the seven years.

1870          Now, this is intended for the local and regional independent production sector?  Or the independent production sector?  Like, do you foresee that this money will stay in the southern Ontario area so that -- or will it be broadly dispersed?

1871          MR. PRICHARD:  The opportunity to participate will be extended to all Canadian independent producers.  The subject matter that we will wish to pursue is principally local and regional reflection, and that's likely to attract, that may attract disproportionate interest from persons living and working and producing in these communities because they may be most likely to identify the opportunities to make the story proposal, to make proposals.  But there is no restriction on participation by someone from outside the region who would qualify as part of the Canadian independent production community, but we do wish to -- we both -- we both want to reflect local and regional, and we want to develop the talent pool locally and regionly, but we don't want to be exclusive, we don't want to say someone from somewhere else can't do this or can't participate.  But we think there should be, there will be the greatest interest from producers working locally and regionly because of their knowledge of the area, of the stories, of the ability to work using our facilities to the extent they need to use our facilities.  We believe this will -- this will likely work out that way, but as I say, we don't want to create a sense that just because a producer is working in Halifax that they can't participate.

1872          We have provisions for putting on the web how to access us.  We have been approached, of course, by many people since we made our announcement.  We have on the web site our how to approach us, what the process of qualification will be and the like, to make sure it's open and transparent.  But yes, at the end of the day we believe the predominance of it will come from talent, new talent, young talent, here in broadly the areas that we will be serving.

1873          THE CHAIRPERSON:  In one of your deficiency responses you define what for you is local and regional as -- it's in a letter dated March the 9th, the one that responds to the February 22^nd, at page 8, the February 22nd Commission letter.  You say local programs will be produced by the station which broadcasts the programs, and it will unique to that station.  And regional programs will refer to a programs that are broadcast on all three stations.  Is local -- local is going to be station produced, so that is simple then to follow the distinction.  When you get to regional it's a little more difficult.  I understand, Mr. Prichard, that if it's open to any -- to any producer, but it is to be regional in the sense that you have made this very important to your proposal, that you will have to have someone, somewhere, governing these funds and ensuring that what comes back is regional.  You mentioned somebody doing it in Halifax.  Somehow or other there would have to be some control over the product you get back.  Who will do that, and where will that be done?  Will that -- I think I understand from your application that this money is going to be administered from Toronto.  Will you have someone who will make sure that what you have just described is achieved, that what ends up on the screen is regional, no matter which Canadian producer produced it?

1874          MR. PRICHARD:  To be clear, the regional consists of two components.  One is regional programming produced ourselves in-house, which will be done from the Toronto studio.  And second, as you say, work we commission for the independent production community.  With respect to the management of that process, Eric?

1875          MR. ROTHSCHILD:  Commissioner, the vice-president of programming will be located in Toronto, will be responsible for dealing with the independent producers and commissioning and overseeing the production and delivery of the required programming from independent producers.  And if a producer in Halifax or a producer in Edmonton or in Vancouver or Regina wants to submit a proposal and say to us, well, they can do a production for us and that it will be relevant, I mean, our criteria of wanting it to be regional and have a regional focus and regional relevance, that's their challenge.

1876          And I come back to what Rob said before.  We think that the vast majority of the productions will be done by producers located in Hamilton, Kitchener-Waterloo and the Toronto area, but we don't want to say that they're not eligible.  If you say to us you don't think that's inappropriate, that they shouldn't be eligible if they're in Regina or Halifax, we can live with that.  We know there's an awful lot of producers in southern Ontario region.  But we didn't want to be exclusive arbitrarily.  The key and the acid test will be can they come up with an idea that is relevant.  And our vice-president of programming will be working with them through concept development, through scripting, through production, to make sure that they are delivering the type of programming that we are looking for.

1877           THE CHAIRPERSON:  Although it's doing a bit of a side bar, the program development fund will also be managed from Toronto?  Script and concept, what we call script and concept development?

1878          MR. ROTHSCHILD:  Yes, it will.

1879          THE CHAIRPERSON:  In your application, you have a sum of about $102,000 in year one, rising to 136 in --- hmmm, is it year two or is it year seven?

1880           MR. ROTHSCHILD:  It rises, I think, by five per cent a year, Madam Commissioner, so over the course of the seven years it is about $830,000.  We can talk about how we envision spending that, if you like.

1881          THE CHAIRPERSON:  This will be, well we  can -- at the moment, I just want to also ascertain that this will be managed from Toronto and the same responsibility will be exercised, that the projects are aimed at reaching your goal of regional reflection right from the start?

1882          MR. ROTHSCHILD:  That's absolutely correct.

1883          THE CHAIRPERSON:  Now, what we're not clear about is, what will be your relationship with the independent production sector, what this money will go to.  In your program description, which I usually refer to as Schedule B, but you know the description that is usually attached to the block schedule.  Those programs are identified as, that under source, as co-production.  So we would like more explanation of what your responsibility will be, what your relationship will be, where the money will go to and for what.  I am talking here about -- is it going to be licence fees?  Who is going to hold the licensing rights?  Who is going to hold the rebroadcasting rights?  Is it intended to cover production costs?  How will the expenditures be funded?  The programming budget, et cetera.

1884          I will tell you where I am going, is -- you also have told us how many millions would be assigned under that independent production initiative to children's programming, to documentaries and to variety and human interest programming.  And then if I take that amount of money and the hours and I divide it by the hours of the episodes how best I can, I end up with a certain sum.  And we ask ourselves: What is this sum going to?  What does it represent?  Is it just a licensing fee? Is it the beginning of funding?  If not, is it sufficient to have programming that is atractive in southern Ontario where there is - well, most Canadians now, I guess, get a lot of sophisticated programming as well, and yes, they want to see themselves reflected, but will it be competitive?

1885          So maybe we will take a break and discuss that.  So your relationship -- we will discuss that when we come back so there is no interruption.  And then, with a view to going at the value for your money that your likely to get, et cetera.

1886          We will be back in 15 minutes.

--- Recess taken at 0959/Suspension à 0959

--- On resuming at 1021/Reprise à 1021

1887          THE CHAIRPERSON:  Order, please.  Before we proceed to the details that we were talking about earlier, there is one other thing I wanted to pursue and did not about the expectation of -- of syndicated reward, or financial reward from syndication.  And it raises, of course, the question of if this is truly regional program it go that reflects and speaks to the residents of southern Ontario, is -- is that not contrary to the ability to raise this amount of money from distribution not only in Canada, but outside of Canada?  Would it have an impact on how regional it is?  Because even the Commission in its regulatory niceties has difficulty defining exactly what a regional program is by content.  But it certainly can foresee that the desire to distribute may in fact lead one to have programming that is more generic than it should be,  according to the proposal put forward.

1888          MR. PRICHARD:  Thank you, Madam Chair, I will answer that question, I hope we will for a moment also return to your earlier question-

1889          THE CHAIRPERSON:  You have to smile, Mr. Prichard.

1890          MR. PRICHARD:  I love this.

1891          THE CHAIRPERSON:  Oh, you do?  It's not obvious yet.

1892          MR. PRICHARD:  If we could then, after that, return to the earlier questions you were asking about regional, because I had an opportunity to consult with my colleagues during the break.

1893          On this question we don't imagine that all of the work that we commission from independent producers will be of interest beyond our region.  And therefore is -- we don't assume that all of it is likely to attract additional revenue from syndication that would flow to us.  We expect, in many cases, that we will simply pay a licence fee.  We will not make an additional investment and, in terms of our participation, that will be the end of it.  And, as you say, because the material reflecting just our region, that it may not have significant attraction beyond our region.

1894          That said, we think there are also many stories about our communities and about our region, that are of great interest to the region but should also be of great interest to the world.  We actually think think we undersell ourselves as a part of the planet if we don't think our stories, well told, well-produced can't attract audiences elsewhere.  This part of Canada, as are many other parts of Canada, we believe, is intensely interesting.  We believe there are things happening in these communities and that have happened that are of interest to the world, and not just to ourselves.

1895          So we think it's -- we think it's too narrow a vision of local and regional to imagine it's only of interest to people in that locale in that region.  We believe our success will come in telling great stories about our region and about our locale.  But we think those stories will succeed, in some cases, in attracting audiences well beyond it.  Astonishing things have happened, and will happen in our community, in this part of Canada, that are of relevance, as I say, not only to ourselves but of relevance to the world and we want to tell those stories and contribute those stories adding to the -- the body of Canadian movies, Canadian stories, Canadian documentaries, Canadian material which is of interest to the rest of world.  So we think it's only a portion of what we will commission.  We'll have this interest but we do think there is a market for first-class material that we can produce in this area and that's why we have the syndication revenues.  They're very modest in the budget.  They're very modest.  They reflect the level of investment we're making, but we do think there is an opportunity there.

1896          And we come to that view not just on our own, but we come that view after speaking with the independent production community.  In our consultations in preparing this, it was clear to us this they would wish us to make investment, in some cases, in financing above and beyond the licence fee, and that they themselves believe they can take those stories and sell them to other parts of Canada and sell them to the world.  And we want to support them in doing that.

1897          THE CHAIRPERSON:  This amounts to as I said earlier, 1.7-million and then almost a million for syndication in Canada.  How were these figures arrived at?  Like, on the basis of hours, or...?  How did you arrive at this projection?  What does it represent in terms of hours of programming that would actually lead to return?

1898          MR. PRICHARD:  Eric?

1899          MR. ROTHSCHILD:  Commissioner, it is laid out, program by program, not our by hour, in schedule 27 or 9.5 of the application.  We actually go through every show by title and tell you how many hours do we anticipate producing, which ones do see we having syndicatability, that could be of interest outside the region.  And we can take you through that.  And -- but that's one piece that is a good guide to walk through, as we have this discussion, Commissioner, you might want to find that if you don't it in front of you.

1900          THE CHAIRPERSON: Yes, that was revised quite late in the process.  It's attached -- the revision of the schedule 27 is attached to the September 18 letter?

1901          MR. ROTHSCHILD:  That's correct.  Now, that takes you through and says well, out of the shows that we anticipate commissioning from independent producers, there are eight which we identified early on that we thought had an opportunity for syndication, and it ranges from our documentaries to our gardening and cooking shows, to our home improvement show, our [dance] show, School's Out.

1902          And we -- we approached that in two different ways, Commissioner.  We -- one was in a sense a top-down, that was when Gord Haines, and I will ask him to add to this, when we were preparing the program budgets and the program formats, we looked at, well, which one might have this ability to be syndicated?

1903          We also did what I would call more of a bottom-up reality check against that, by going out and talking to distributors and saying okay, here are program concepts.  What do you think the distributability would be of these programs?  And we checked some of our programs and got reconfirmation or a reality check that yes, there was an export market.  There was a market in Canada, there is an export market beyond Canada.  We -- the explosion of new channels, we are seeing not just in Canada, but globally, that there is a huge market out there for product and -- and it's all those individual licence fees that you can see coming back from the export market or the domestic market and into what we're talking about.

1904          And of course these shows, I mean why wouldn't people be interested in Canadian stories?  Why wouldn't people be interested in our documentaries about this -- about events in this region or people in this region?  You know, we watch an awful lot of gardening shows from New Mexico or from the southern United States but we watch them here in Canada.  Why couldn't a gardening show that talks about what grows in a northern climate be of interest?  Or our cooking shows.  Emeril, which is a huge hit on cable in the States and here; the Galloping Gourmet was a huge export show, if you old enough to remember it as I was, that came out of Ottawa.  So I guess for us -

1905          THE CHAIRPERSON:  The food I can handle, but the flowers from Mexico I had no success with.

1906          MR. ROTHSCHILD:  Commissioner, so that was sort of the general setting.  If you would like us to take you through that, I would be happy to.

1907          THE CHAIRPERSON:  I understand that your list of programs, on 9.5, which is the list of programs on schedule 27 would be either evergreen programming, which works also out of jurisdiction, and programs that you feel would being regional but nevertheless of interest.  So it's been attended to in that fashion in -- in projecting revenues that come from it.

1908            Now, back to where we were before the break it was -

1909          MR. PRICHARD:  Could I go to the regional point, Madam Chair --

1910          THE CHAIRPERSON:  Absolutely.

1911          MR. PRICHARD:  -- that you raised earlier?

1912          THE CHAIRPERSON:  You can go anywhere until I stop you.

1913          MR. PRICHARD:  You're very kind.  We're lucky, thank you.  Your question was I believe --

1914          THE CHAIRPERSON:  He is smiling.

1915          MR. PRICHARD:  Your question, I believe, was what was the commitment in terms of condition of licence that we could give you, and how could that ensure for the Commission that our programming would truly be local and regional, and stay to local and regional reflecting the essence of our application?  I think that was your question.  And my answer which I think was not satisfying you, was the 80 -

1916          THE CHAIRPERSON:  It is your application, Mr. Prichard.

1917          MR. PRICHARD:  Exactly and we are trying to translate the application into conditions of licence binding and, in our view, simply totally binding on Torstar -- that is, in that sense of which, we will never come forward so seek modification over the life of the licence from you. So I was trying to be, set conditions of licence.  And you recall I said 80 per cent Canadian at all time including prime time, and 32-and-a-half hours minimum on each of the three stations local.  And you sat back, but that doesn't necessarily mean it's regional as opposed to Canadian.  That we have Canadian and then we have regional, which is a subset of Canadian.  My answer to you was, that is the essence of what we plan to do, but you are then saying well put it -- put it in writing, if you will.  Is there a way to capture it?  And what I wanted to say to you is we're happy to capture that, in both an expectation that we are creating and, indeed, a condition if we can come to a shared definition of what constitutes regional.  And as you have said in your introductory comments just a few minutes ago, there is not at present for the Commission, we believe, a clear definition of regional in the sense of reflection of the region that -- of which we're speaking, and in terms of producers from that.  We have a tentative definition of regional for those purposes and we're prepared to commit to it as a condition of licence.  Our proposal to you would be to say that 80 per cent, 80 per cent of the guaranteed content -- so the 101 hours, which is guaranteed Canadian -- that 80 per cent of that would be local and regional as a condition of licence, subject only to having a shared definition of regional.  We believe regional can be interpreted from two directions: one, it's a reflection of the region, or it's produced from within the region from producers within the region.  That is, it's either the subject matter or it's the people producing it.  And those two together would be the foundations of regional.

1918          But if you wish to go to a condition of licence that includes the regional commitment, which, as you said permeates the entire application, we're prepared to go there with you subject to only getting that definition -- one that's workable for you and makes sense to us so that we can be -- live with it and be certain it could never be said that we failed to live to it.

1919          In the alternative, we're very happy to have this recorded, the entire commitment recorded, as an expectation because that is the essence of how we plan to proceed and we plan to proceed that way because we believe it's the only way we'll succeed.  That is the essence of how we believe we can attract audience is to have that local and regional focus.  But on the precise you were asking me for, yes, we are prepared to commit to a condition of licence if that would be constructive in this.

1920          THE CHAIRPERSON:  Yes, and it is obviously difficult.  I think you do raise in your application the fact that regional as defined for the purpose of priority programming wouldn't work in this area because it is defined expressly as having been produced a number of commiters from the big cities including Toronto in Canada.

1921          So it's your application, it's your view of what regional means, I take your point that as a condition of licence the definition is difficult, but I leave it to you to show us that what indeed you propose will be what you propose and not a conventional television station.  So we can get back to that as to how commitment could be -- could be framed.

1922          MR. PRICHARD:  Perhaps, Madam Chair, we could give to your Counsel or to the Secretary, a proposed definition for you to consider with respect to this.  We did approach previously about this question of definition and we're happy to put forward a definition because it is the essence of what we'll do.  So if that will be helpful for to the process.

1923          THE CHAIRPERSON: Another way of course is to ensure that the level of Canadian content aside is the level of the promise of -- of local/regional.

1924          MR. PRICHARD: That wouldn't --

1925          THE CHAIRPERSON: -- which is something you are shying away from.  Well, it gets us somewhere, because 20 per cent foreign is 25 hours a week possibly of U.S./foreign programming.

1926          MR. PRICHARD:  What we were trying to do with these remarks was what I thought was your concern: was there was a difference between Canadian, and regional and local - you want us to be regional, and find a way of expressing that.

1927          THE CHAIRPERSON:  Yes, but now you are telling me that it's difficult and I agree with you.  It's difficult to write down what will in fact fit a regional program.  But you sure know when it's not Canadian.

1928          MR. PRICHARD:  I didn't mean to say it's terribly difficult; I simply meant to say at present you don't have such a definition, and if we were to commit to a condition of licence on the understanding that we can never be in violation of it we don't think it's difficult and we're prepared to table a definition, if that would be helpful.

1929          THE CHAIRPERSON:  But, Mr. Prichard, another way of being different is not having foreign programming and -- or having a level that is very low.  So that then you don't have to get into an argument either about the programming is regional, or perhaps has gone beyond regional, which is more difficult.  It's much easier to define what is Canadian and what is U.S. than the other way around. 

1930          So that is another distinctive factor as well, which could be helpful. Local is easy to define as produced by the station, regional is more difficult; Canadian is very easy.

1931          Before the break we were getting into the independent production question and what we want to know is number one, do you have any agreements or anywhere near agreements or discussions with producers, and what will be the plan?  What will this money accomplish or go to, and what will be the result in terms of programming rights, the right to rebroadcast, et cetera, of the hours, 1,230 a year, in three types, children's, long form documentaries and life and human interest?  We want to know more about how this works, and I told you earlier that I have made a calculation and ended up with a certain sum per hour.  And that of course raises questions as to what it will accomplish and what the quality will be.

1932          MR. PRICHARD:  This of course is a central feature of our application.  I'm going to ask Eric to respond first, but we also have with us to assist on this, Gord Haines behind me, Paul Osborn from the independent production community, and my colleague Rekha Shah as well.  But Eric is going to first.

1933          THE CHAIRPERSON:  Perhaps to make this manageable, if it's going to be the same plan for all three types of programming, you could discuss it together; if not, specify whether there will be some difference from the treatment for children's, documentary, overriding human interest.

1934          MR. PRICHARD:  Eric?

1935          MR. ROTHSCHILD:  Commissioner, the overriding plan is the same for all types of programming that we'd commission from independent producers and I - again, if I can suggest that we follow along on schedule 9.5 as a starting point and I will try and give some background and ask Gord to fill in.

1936          What you're seeing on schedule 27 is a listing of different programs that we anticipate commissioning from independent producers and/or several which we are looking at providing, in addition to the licence fee, supplemental financing as either a distribution advance or equity investment so that it helped top up the funding available to the producer.

1937          So what you see when we look at the total cost per hour of the programming we're commissioning, is 10.583, $10.6-million, and of that 7.9-million in year one is licence fees, $2.6-million is this supplemental financing.  And that's what you see going in our budget as both the expense of syndication and the revenue for syndication, is that payout and recovery of a supplemental financing.

1938          Now, how did we come up with those numbers?  Which I think speaks to the heart of your question, if I understood it correctly.  We started with our research in terms of deciding what kind of programs these communities would watch, that people into these communities felt were missing.  And we started with focus groups and from the guidance we got from the focus groups we went to our telephone survey.  Out of that we got a confirmation of a range of programs, many of which appear on this list in front of you, as shows that we will commission from independent producers.  We looked at the list of -- the programs that we wanted for our schedule, we looked at it and said, certain ones make more sense to do in-house and certain ones make more sense to do from independent producers.  We took the concepts that we had tested -- and there is where I will ask Gord to talk about it -- we took those concepts and said okay, what could be we format from each one of these programs on this list and any of the programs we have on our schedule?  And from developing the format for the program we developed a budget for the program.  Some budgets we developed ourselves, some we went to independent producers on and asked them to quote to us what it would cost to do the programs.  And that's generally how we came up with what you are seeing there and in our overall programming budget for our in-house productions as well.  Gord?

1939          MR. HAINES:  Yeah, once we knew which program concepts had survived the rigours of the research, we then went directly with the formats for those shows.  These are rough formats, because obviously the producer at the end of the day is going to have creative control over these projects but we wanted to give them a flavour for what we were looking for in terms of a general impact of the program so we took those to the independent production community and asked them, within certain parameters, to tell us what it would cost them to produce this program.  And it's important to understand those parameters because the commitment that we were making to the independent producer was more than just cash, there is a cash component, and that's what you see before you, but we also said to them, consider that you are going to get no-cost, in this process, access to the massive archives of Torstar Corporation.  There is in fact an organization within Torstar that -- that provides that kind of material now to producers, at a fee.  We will let you have access to that at no cost.  We will make sure that you have research support in culling the information from those archives and you will have full access to the photo library.  So if you are doing a documentary, this represents a significant portion of your production cost, and is a real benefit to the producer. 

1940          In some of the shows, and the documentary was one of them, we said, also consider that one of your significant above the line costs being the program host we will supply.  So those costs, you don't need to worry about it at this stage of the budgeting process. Please give us as much detail as you can.  What we got back in many instances were full production budgets, and the numbers that were in those budgets are the numbers you see reflected before you.

1941          THE CHAIRPERSON:  So if I for example take children's programming, and I look at schedule E of part 2, I think I have it -- from Toronto but that's probably helpful perhaps for our discussion.  And you see that in here, one, children's programming will be $5.4-million, correct?

1942          MR. ROTHSCHILD:  That's correct.

1943          THE CHAIRPERSON:  And then if I use the number of episodes that I take from your part B description, Schedule B, the program description, and I -- even though it doesn't have your afternoon, -- part B has only two of your children's shows there.

1944          MR. ROTHSCHILD:  Commissioner, if we go back to schedule 9.5 we actually outline for you right there the cost per episode.

1945          THE CHAIRPERSON:  Yes, but I want to see -- you also have at schedule E, 5.4-million per year for children's programming and if I take the number of hours in your part B, which is 400, although there is 600 hours of children's programming, and I divide per episode I get 13,400 or per hour at 600 hours of children's programming, 8,993. 

1946          Now, I want to know whether what you explain to me covers what you perceive to be the entire cost.  I understand that there will be some -- the entire money that will be required to produce an hour of children's programming and taking into consideration what you have mentioned about access to Torstar library, et cetera, et cetera.

1947          To keep it simple, is this the entire cost of getting that hour of children's programming on the air in money?

1948          MR. ROTHSCHILD:  Commissioner, it -- I guess the answer is to say it could be.  The producer of course -- the producer may go out and find other investors and that's the producer's right because we're just licencing the program.

1949          THE CHAIRPERSON:  So it's a licence.

1950          MR. ROTHSCHILD:  Absolutely.

1951          THE CHAIRPERSON:  At the end of the day, the producer will own the program --

1952          MR. ROTHSCHILD: The producer will own the program and the copyright.

1953          THE CHAIRPERSON: --and rebroadcast rights, et cetera.  And that -- and so, what programming is it that you will have the distribution rights to?

1954          MR. ROTHSCHILD:  We don't anticipate having the distribution rights to any of the programming.

1955          THE CHAIRPERSON:  But how will you get revenue from syndication.

1956          MR. ROTHSCHILD:  What we anticipate is that in some of the programs, and again if I look at 9.5 there is eight different programs that we have looked at where we think there might be an opportunity that those could be distributed outside of the market.  And those programs we would provide both a licence fee and additional supplementary funding for which we would either have an equity position or it could be take the form of a loan or it could take the form of a guarantee against distribution revenues.  All of it would be at risk, but it would be in addition to the licence fee and of course the choice of the producer.

1957          THE CHAIRPERSON:  So if I look at Kids Morning, I cannot do the same calculation I did and say they're proposing to spend $8,993 per hour of children's programming is what you are saying.  The simple calculation I was doing doesn't yield the answer I say it does, which, you expect that on average that would be -- the money you will have to expend to get an hour of watchable, good quality children's programming, correct?  That is not the end of the story.

1958          MR. ROTHSCHILD:  No, Commissioner, it's not.  But on the other hand if the producer decides that they don't want to go out and find additional money, then that could be the actual cost per hour, but it -- you know, you look at it on a cost per hour, Commissioner, and obviously that's an measure we have to look at it by.  And if you look at it and say well, one hour of programming is this amount of money, is -- and you say, can you really do a quality program for that type of dollars?

1959          I think one has to look at it within the overall context that with if one says to producer -- and I am going ask Paul Osborne to talk about this as well -- if you look at it and say to a producer I am going to commission from you, 400 hours of children's programming and I am prepared to sign a licence fee with you for $3.2-million that is a very different order from saying, I want one hour of programming at this type of price.  When you say to a producer, I am prepared to sign a contract like this, so they can hire a staff establish the infrastructure and have a guaranteed licence fee of $3.2-million a year for that show, and they own the show and they can go out and market the show to other countries and to other broadcasters within Canada, that's the measure by which I think you have the -- or the context in which you have to look at this.  It's not in terms of saying simply it's one hour.  It's once you have set up the infrastructure and you set up the machine, you can produce programming very cost effectively.  Paul, is there anything you would like to add to that?

1960          MR. OSBORN:  No, I think it's fair -- fair to comment here that there are many independent producers that come to table in these negotiations with various degrees of infrastructure and capability, each of whom have a different approach to tackling the sheer volume of work that's proposed here.  An undertaking of -- in the case of the - the biography series, for instance of 130 original episodes, is a substantial one, so it demands that you develop a strategic plan to execute those and still meet the -- the obligations that are expected from -- from Hometown Television that the program reflects the audience that we intend to serve here and the production standards that are going to be expected in the television series.

1961           Each of those producers who come to the table in these negotiations will have varying degrees of infrastructure or different attitudes towards a strategic plan to execute them.  But beyond that as Eric points out quite rightly, the wonderful opportunity for any independent producer to have full control of that copyright and then to go beyond the proximity of this license to be able to sell in second window, perhaps even third window in Canada and then beyond to the world.  So I am really confident that my colleagues in the independent production community, once they understand the process and the opportunity, they will be very excited about what this can be.

1962          MR. ROTHSCHILD:  Commissioner, if it could help also, Rekha Shah, who has a career that began in children's programming, could describe to you what a children's program like this could look like and what you can do with $3.2-million a year if it would be useful to you.

1963          THE CHAIRPERSON:  Can you confirm me that in the section 9.2 of your application which is a pro forma programming and production expenses, that that -- that independent production initiative is included in there?

1964          MR. ROTHSCHILD:  I can confirm that and -

1965          THE CHAIRPERSON:  And so is your script and concept development money, I see it's quite clear.

1966          MR. ROTHSCHILD:  The -- the licence fee component, Commissioner, is included in the categories other information and if I am looking -- other information, music and variety, game shows and human interest, that's where the licence fee, the $7.9-million component is included.  And then the supplemental financing is -- is included under syndication monies down below at the bottom of 9.2.1.

1967          THE CHAIRPERSON:  You say the money going to licence fees -- did I misunderstand that in some cases it in fact could be the entire cost of the program that would be covered?

1968          MR. ROTHSCHILD:  Commissioner, what you're seeing in our schedule -- schedule 9.5 and in the monies in 9.2.1 as they're translated into the form, those are licence fees that we will pay to independent producers.  The independent producer will have at his or her discretion the choice, since they own the show, to go and decide whether they want to find additional investors.  Our concern here was to make sure that what we put on the table there, if that was all they had, could they produce a quality program.  That was our starting point.  And what we found in our analysis was yes, they could.  Could they go out and get additional monies and make it an even better program or invest more money in it?  Yes, they can, but our concern was to make sure we didn't put this money on the table and say that will work great but they have a got to go and find this other money from the funds or they've got to go find other investors.  This money is sufficient to produce each of these programs as we're envisioning it.  They can go out and find additional money if they want to, that's -- that is what a producer does, --

1969          THE CHAIRPERSON:  And it is sufficient if you could have a requirement for a number of local regional programs to have all those on the air?

1970          MR. ROTHSCHILD:  I'm sorry?

1971          THE CHAIRPERSON:  I said and the monies that I see there in 9.2 would be sufficient to meet your proposal at this stage of 118 hours of local/regional, of a quality that would allow you to sell advertising and realize your revenues?

1972          MR. ROTHSCHILD:  Commissioner, that's what we -- when we built our schedule and we built our budgets that was what we saw.  And so what we have said to the Commission is that the unequivocal commitment is that we're going to spend the 10.6-million year one and ramping up over each year.

1973          THE CHAIRPERSON:  Yes.  I think you would agree with me that it is somewhat of a cornerstone of your business plan.

1974          MR. PRICHARD:  It is central to our business plan.  It's why, in one sense, our commitment is so large, it's why -- it's because of the desire to support that entire schedule that we are at a $10.6-million a year.  The other side of that, as you say, is it does mean the programming has to be economical, it has to be efficient, and it has to be structured in such a way that if the producer wishes to go further, they are able to do so and that's why we provide in our budgets, not just for the licence fees, but for the supplementary funding as well.

1975          But yes, it is our proposition that we can put on air, quality programming that, properly promoted, will attract the audience that is we predict and that these budgets are sufficient to do that.  Might I ask my colleague, Ms. Shah, to say a word?

1976          MS. SHAH:  Thanks, Eric.  I would like to talk to you a little bit about the vision for children's programming that you brought up earlier.  When I worked for TVOntario as a host and helping develop content for their first hosted kid's morning block, one of the things that we tried to do, or I tried to do as a host was really connect with one viewer at home.  The result of that was simply when I walked on the street, when I met children and parents, they actually felt like I was a part of their family.  That's the same sense, that's the same essence that we're trying to bring to our children's programming.  That when people turn on Hometown Television that they too will feel like they're coming home.  The parents will feel safe in leaving their kids in front of the TV or watching television with their children.

1977          The kid's morning block from 7:00 to 9:00 in the morning targeted to preschoolers 3 to 5 years old, very much is a get ready to learn type of feeling, focusing on the basics: ABCs, colours, numbers, big and small, opposite.  But in addition to that there is the things of sharing, families, addressing different types of family, values as well as relationships.  The program itself is a studio based program.  That's what we're envisioning, with a series of modules attached to it that would be met in every single show.  Paul can talk a little bit about the budgets and how he perceives they will be broken down by an independent producer.  But our vision is strong, and will help us bring children a very familiar, comfortable place to come home to in the mornings.

1978           THE CHAIRPERSON:  Mr. Prichard you say your commitment is -- is substantial, but so is 118 hours of programming supplied in -- in southern Ontario from which you expect to have revenues of a significant -- a significant size.  So I am just attempting to relate one to the other.  Just one small question about the children's programming.  One of the afternoon programs made me curious, was related to the school curriculum.  Can you tell me what that's about?

1979          MS. SHAH:  The way we're imagining School's Out that will be produced, it's an an hour-long after-school program that will air from 4:30 to 5:30.  With respect to the curriculum component, the School's Out is very much -- it's about being -- doing what children do, what teens do, after school: movies, music, fashion, friends.  But in addition to that there is a component that really does reflect the curriculum.  What my hope is that it reflects it with respect to a new segment: taking children to local/international and news stories but putting them in a context that they will understand.  In addition to that the web and interactivity plays a large part right now in a child's education, and I would very much like to see interactivity become a very large part of the School's Out block.  Not necessarily information about the web that is time sensitive, but more timeless.  Navigating the web, how to use it to best serve a child when they're doing their homework.  Trends, dos and don'ts on the web, educating children how to use it to their advantage.

1980          THE CHAIRPERSON:  And I think one of your properties is related to educational publishing, isn't it?

1981          MR. PRICHARD:  We were in the children's education field but that's a business that Torstar sold over the past year.

1982          THE CHAIRPERSON:  You are not anymore?

1983          MR. PRICHARD:  We have a very small piece called Learning Adventures but in the scheme of Torstar it's modest.  It's learning experiences for children but --

1984          THE CHAIRPERSON:  It's not related.

1985          MR. PRICHARD: -- it's not -- it's not -- it's not part of the proposition here.

1986          THE CHAIRPERSON:  Now, local and regional programming.  It's in most -- most places in your -- in your application you speak of 32.5 hours of -- of local programming, and certainly do in your supplementary brief.  But if we look at the program schedule, the block schedule which is of course not the last word but in the program description we find 30.5 hours only.  Is the commitment to children -- to local, 32.5 of the 118?

1987          MR. PRICHARD:  Yes. It's 32.5. Eric will reconcile for you.

1988          THE CHAIRPERSON:  In your supplementary brief it is 32.5 in a number of places.

1989          MR. ROTHSCHILD:  It is 32.5.

1990          THE CHAIRPERSON:  It gets somehow confused  when you look at Schedule B or the block schedule.  Okay.  32.5.  With regard to the children's programming, is that a commitment that you would be comfortable to make in a very regulatory way?

1991          MR. PRICHARD:  We -- we would invite you to make that an expectation with respect to Torstar's application.

1992          THE CHAIRPERSON:  Mr. Prichard already knows all these buzzwords.  I hope you are impressed with our vocabulary.

1993          MR. PRICHARD:  I love it.

1994          THE CHAIRPERSON:  We will send you a CRTC dictionary.  Ms. Cram wants to send you the telecom one.

1995          MR. PRICHARD:  We're not going there, Ms. Cram.

1996          THE CHAIRPERSON:  You are already doing well with TDMG Inc.  It sounds very much like telecom.

1997           Now, in -- so we are back to of course which -- with the 118 hours.  We know that it's 32.5 local.  And that you would be comfortable committing to, as an expectation, but not -- even though that's quite easily defined because that would be produced by the station itself.  We wouldn't get into difficult wording to identify local as we would for regional.

1998          MR. PRICHARD:  I misspoke myself.  We invite you to make the 32.5 local at each of the three stations a condition of licence.  My answer with respect -

1999          THE CHAIRPERSON:  Perhaps I misunderstood.

2000          MR. PRICHARD:  My answer with respect to expectation was with respect to the children component of 15 hours.

2001          THE CHAIRPERSON:  Yes, it probably was the way I put the question.  But would local/regional then, local you're comfortable to committing to the condition of licence to 32.5 a week?

2002          MR. PRICHARD:  Yes, we are, at the three stations.

2003          THE CHAIRPERSON:  What each station would use would be the definition that you propose, of what local is.

2004          MR. PRICHARD:  Correct.

2005          THE CHAIRPERSON:  The programming -- the program development fund, we already discussed, would be handled by Toronto with sensitivity to local reflection or regional reflection no matter where the producer comes from?

2006          MR. ROTHSCHILD:  That's correct.

2007          THE CHAIRPERSON:  And you have already thought of how this would be accomplished?  You spoke about that this morning,  Mr. Rothschild.  So you would not have for example any preconceived allocation that would go to the Kitchener London area, or this amount in Toronto and this amount maybe outside of Toronto?  Or wherever you can get proposalals and whichever producer can promise to deliver programming that would be regional?

2008          MR. PRICHARD:  That's correct.  We don't believe quotas, subdividing it are correct -- would be wise.  We believe it should be based on talent.  But it has to be talent who are going to reflect our locales and our regions and we're confident that with the talent pool spread throughout this area that it will be well distributed through the area and, indeed, the stories and the proposals that will come will reflect the different parts of the region and the different communities within the region and the producers who are throughout, we have educational institutions, as you know, throughout this region with programs in broadcasting and television and film.  That talent base will respond extremely affirmatively to this opportunity of the $10.6-million a year of new funds.

2009          THE CHAIRPERSON:  Now, with regard to the program development fund, which is what I am looking at right now, it would be administered in a similar fashion.  Would there be a cap on any amount of the 102,000 in year one, let's say, would there be a cap on one program development?  How much money one development pro -- project would get?

2010          MR. ROTHSCHILD:  Commissioner, we had looked at that 102,000 for script and concept development as a range of the number.  We want that to be the seed money to let people come and go and develop great different scripts and we would like to have more, not less.  In other words, we hadn't ever thought of it as that, that chunk would be for one person or one company.  We thought of it more in tranches of 5 or 10,000 in order to stimulate as many ideas as possible.  This is to go off for script and concept development, it's not for production and we think we can stimulate an awful lot of -- a lot of development work with it.

2011          THE CHAIRPERSON:  And have you tried to guess how many of these development projects would then reach the next level and get some of your production money?

2012          MR. ROTHSCHILD:  We don't have a firm estimate on that, Commissioner.

2013          THE CHAIRPERSON:  But that would be your hope, would it?

2014          MR. ROTHSCHILD:  Yes, you are investing the money hoping that new, even better ideas than we have going in, that we have presented to you here today will come forward and that the -- our schedule as it will be evolving because of those ideas that we are helping to nurture and develop.

2015          MR. PRICHARD:  Madam Chair, Rekha Shah will be responsible for this.  Perhaps, Rekha, you'd like to comment on this.

2016          MS. SHAH:  Simply put, as an independent producer and an emerging producer when I started my career, there are funds like this available but I think this only adds to what is out there right now.  For someone who doesn't have a track record this is probably one of the best way ways to prove your case and prove yourself to a company and I think the process that we have established really shows how you can move from step one to step two and eventually to producing your own series.

2017          THE CHAIRPERSON:  Now, I would like to look a bit at how your three stations will operate together.  You have given us three sets of financial projections.  It is clear however, I gather, that the majority of the regional programming will be produced in Toronto in the Toronto facility; would that be correct?

2018          MR. PRICHARD:  That's correct.

2019          MR. ROTHSCHILD:  That's correct, yes.

2020          THE CHAIRPERSON:  And what -- how did you allocate the programming expenses between the three stations?  Does it go beyond local, is there allocation or or an apportionment of some of the costs to regional programming that will be aired on all three that is allocated to the Hamilton or Kitchener?

2021          MR. PRICHARD:  Eric?

2022          MR. ROTHSCHILD: Commissioner, each station in their budgets, you see all of the cost for their local programming.  The regional in-house programming is produced in Toronto and the cost of that is assigned to Toronto.  The acquired programs from the independent producers, the 10.6- million of which we have been speaking about, 96 per cent of that expense is assigned to Toronto and two per cent is assigned to Hamilton, and two per cent is assigned to Kitchener and that reflects the fact that Toronto can afford the -- the revenues in Toronto can afford to sustain that level of investment, while the business plans for Hamilton and Kitchener could not.  And so that's why they have a very small portion of the 10.6-million but they pay for all of their locally-produced programming.  It primarily comes out of their news department and programming that builds on the news department infrastructure, programs like My Town and What's On, those are the ones they're producing non-news, locally.

2023          THE CHAIRPERSON:  And how did you go about allocating the revenues from national advertising.

2024          MR. ROTHSCHILD:  Commissioner, the national -- how did we come up with the revenue budgets for each of the stations?  Is that what you're asking me?

2025          THE CHAIRPERSON:  Well, revenue projections of national sales show up in all of them.

2026          MR. ROTHSCHILD: Yes.  Well, we have national we have regional and we have local.

2027          THE CHAIRPERSON:  The local I suppose is not too difficult, regional.  But national, how do you allocate -- how did you allocate in the financial projections the revenues from national, how did you --?

2028          MR. ROTHSCHILD:  We're talking national advertising revenues here Commissioner.

2029          THE CHAIRPERSON:  Yes.

2030          MR. ROTHSCHILD:  Those revenues, and I may ask Rob Young to talk about it, but those revenues you are seeing for -- all the air time revenues are a function of the projected share of tuning that we anticipate for each of the stations in a given markets.

2031          THE CHAIRPERSON:  But that wouldn't be to the local, would it, would local be then whatever that station sells in totally local air?

2032          MR. ROTHSCHILD:  The active revenue, local, regional and national is a function of their share of tuning and then the national portion of each station was built up by looking at where we projected the revenues coming from for each station in terms of national buyers and agency buys based on demand for each of the particular markets.

2033          THE CHAIRPERSON:  And the programming expenses?

2034          MR. ROTHSCHILD:  The programming expenses for each market are -- are what you are seeing in there is the -- the local programming is assigned a hundred per cent to each of the stations.  If you are asking me about the two per cent of -

2035          THE CHAIRPERSON:  96, two and two.

2036          MR. ROTHSCHILD:  The two per cent of the $10.6-million is a reflection of what we believe the business model in Hamilton and the business model in Kitchener can sustain. So we looked at it and said how much can we allocate to each of those stations and still have a viable, sustainable business in each of those markets.

2037          THE CHAIRPERSON:  In your financial you have a line for contra.  And contra revenue -- and you do speak at 10.3.3 of the -- of part one of the application of pursuing contra opportunities where appropriate and allocated four per cent of the inventory to these purposes, and to a value of half a million dollars in year one.  But it does rise in the same growth.  Although lower, at 10.3.4, you say the station has not scheduled any paid programming opportunities.  So what do you mean by contra, we all have a different understandings.  Sometimes contra is paid programming; sometimes it's advertising for -- and getting plane tickets in return.  What is it intended here?

2038          MR. SHAFER:  Madam Chair, the contra budgets that we propose are primarily for marketing promotion of the stations.

2039          THE CHAIRPERSON:  I see.  So it has nothing to do with contra in the sense that is used sometimes in radio, for example.

2040          MR. PRICHARD: Not in the sense contra was used a couple of days ago in the hearing.

2041          THE CHAIRPERSON: Or in programming, okay.

2042          Now, you have arrived at a definition of what is a regional advertiser in your supplement brief at page 22.  Can you expand on that?  What is the difference between the local and regional advertiser?  What you say there is, a retail advertiser who has a number of locations in the various central market areas.  So what would -- where would the line be drawn between regional and the national advertiser?

2043          MR. ROTHSCHILD:  I am going to start on this and then if we need some additional help on this I may ask Nancy Brown-Dacko to -- to en -- give us -- share with us, enlighten us with her experience in actually selling it.  Every company in this area creates its own definitions.  We look at national as being a brand to purchase nationally.  We see regional as being multioutlet and multimarket, examples that I can think of in this region would be Future Shop, Leons, Tim Hortons, so that's how we're defining regional.  And regional for us will be sold locally by a specialist in each of the local stations as opposed to the way it's often done which is sold by the national rep house.  Nancy, is there anything you can share with us on that?

2044          MS. BROWN-DACKO:  I think you have covered most of it, Eric.  I would like to add that the regional accounts that we're talking about today would definitely be serviced in each market and that's why we do with the local business, the local stations for Kitchener, Hamilton and for Toronto.

2045          MR. PRICHARD:  We plan the local advertising locally, we plan to have, sell the regional advertisers in a co-ordinated effort with people located in each of the three stations,  and we use plan to use a national rep house to bring us the national revenue, at least in the first instance, as we launch.

2046          THE CHAIRPERSON:  Now, one of the important aspects of this hearing brought on by interveners and by various applicants as well is the demand for the -- for their proposal which the Commission asks -- which the Commission asks the prospective applicants to look at.  And of course the flip side is a bit the impact on existing advertisers, on existing licensees, rather.

2047          You have in schedule 6, if -- I think I am correct, that 22.5 per cent of your revenues would come from local, 22.5 from regional, and 55 from national.  And you make quite a -- a case that the majority of your revenues would come from selective TV, from selective buys, I see that at -- in -- in your -- in part 1 under the revenue projections.  And we also see there at 10.3.2 the sources of the funds and 45 per cent would come from existing off-air television stations.  Reconcile for me the idea, the two, that there is an appetite now for selective buys, because the people have difficulty getting buys because of the regionization of the Toronto and area based stations but yet -- so that would be to me, or could I not conclude from that that there is no selective buying around here?  Because there is no vehicle for it and therefore these advertisers are spending their money on billboards or radio or something else.  How come 45 per cent of your revenues will come from existing television stations, if the majority of your revenues will come from selective buys, for which you say there was no vehicle for at moment?

2048          MR. PRICHARD:  I will ask Eric to answer that question.

2049          THE CHAIRPERSON:  Do I get a D for that question?

2050          MR. PRICHARD:  No, you get an A for that question, You get an A plus for every question, I assure you.

2051          THE CHAIRPERSON:  Do you understand, Mr. Rothschild.  I am going to get a PhD by the end of this session if I don't quit soon.

2052          MR. PRICHARD:  You're doing a great job.

2053          THE CHAIRPERSON: I don't respond to that.

2054          MR. PRICHARD:  The -- just -- Mr. Rothschild will answer the question.  With respect to the breakdown of national, local and regional, we have actually filed a different number for each of the three stations.  You gave the Toronto numbers, but as you know we have for Hamilton and Kitchener a somewhat different mix, but Eric will be more specific on the chairman's question.

2055          MR. ROTHSCHILD:  Commissioner you are asking me about our year one revenues.  Why is it 45 per cent?

2056          THE CHAIRPERSON:  Yes, and of course the question will be, where is it that there is likely to be, at the moment, selective sales?  Would there be some in Kitchener?  Would there be some in Hamilton?  And if there aren't any, then that going to be the majority of your funds, because you are going create a new vehicle for advertisers why do you expect to to take 45 per cent of your revenues from existing stations?  Is that not a a bit contradictory?

2057          MR. ROTHSCHILD:  It is and it isn't.

2058          THE CHAIRPERSON:  So I at least have tried.

2059          MR. ROTHSCHILD:  What you are seeing there and I think we have said in the assumptions, Commissioner, is that's what we expect to happen in year one.  Year one is a very different year for a television station.  We are launching, we're selling without numbers, we are selling without a history in the marketplace.  And so we sit there and we have talked to media buyers, we've talked to our advertising managers in our newspapers, Nancy Brown-Dacko drew on her own personal experience and we said, what do you think reasonably we can expect to draw in year one, if we have to go out and sell without numbers?  And we came up with our ratio of sources of news sources and moving from existing sources including television.  And we also looked at, in looking at precedent in terms of what happened in other markets.  It's an art, it's not a science and -- but I think what we have also seen is our projections is pretty well in line with other applicants' before you in this process.  And those are our best estimates in year one when we're coming out of the block and not having raised and we're trying to sell on is concept.

2060          THE CHAIRPERSON:  You say that your projections are similar to others, but the point I was trying to make is you emphasize that you are going to almost create a niche for yourself, where you will be the vehicle in which selective buying can be done.  And I am trying to figure out you know, where -- who is going to get the brunt of that competition and how high is it going - is the source of revenue taken from other stations be if they don't offer the opportunity for selective at the moment, which is one of your arguments.

2061          MR. PRICHARD: As you know, Madam Chair, we imagine that we offer a very focused buy, Toronto, Hamilton, Kitchener or any combination of those and that will attract some advertisers who previously are unable to get as selective a buy and will -- and are buying more broadly, but don't wish to and will also attract some buys from people who at present don't come on to the air because they can't get that selected buy.  Rob Young is our principal buyer expert and perhaps, Rob you could supplement what Eric and I have said.

2062          MR. YOUNG:  The question relates to you know, whether there is some problem in logic to limiting the source of revenue to existing stations while at the same time suggesting that there is a lack of local inventory available for advertisers and it would be --

2063          THE CHAIRPERSON: -- Excuse me but also national selective probably.

2064          MR. YOUNG: All advertisers.

2065          THE CHAIRPERSON:  -- is what I was focusing on.

2066          MR. YOUNG:  Right, all advertisers.  And it would be our -- our point of view that it's not an illogical kind of a notion because there are -- there are some advertisers who have vacated the medium as the TV stations in the Toronto/Hamilton market have moved to full provincial coverage.  But there are a number of advertisers who have stuck with the television medium because -- because it's the medium of preference, and have, if you will, they bit the bullet, they have accepted the higher costs of reaching into markets that they don't really want.

2067          So in a way, two types of advertisers here.  The ones who have said you know, we don't want to be in the television medium any more because it's become too inefficient for us so they step back from the medium, and other advertisers who have said we will take what is being given to us, we don't particularly like it, but we are prepared to pay the premiums to -- in order to stay in the medium.  And that goes very much to how the source of revenues have been proportioned between 45 per cent existing television stations and the balance, 55 per cent, which is principally going towards those advertisers who we would be bringing back into the TV medium as a result of providing coverage in markets that they really want.

2068          THE CHAIRPERSON:  That would be the 50 per cent, 30 per cent new non-TV and radio, right?

2069          MR. YOUNG:  Correct.

2070          THE CHAIRPERSON:  Money that is spent on other forms of advertising, maybe The Toronto Star.

2071          MR. ROTHSCHILD: We wish you hadn't mentioned that with the publishers in the room, but yes.

2072          THE CHAIRPERSON:  And then new TV and radio, new refers to new advertising funds going to Hometown that were not going to TV before.

2073          MR. PRICHARD:  Correct.

2074          THE CHAIRPERSON:  Correct.  You have -- it probably the same gentleman, I'll never find you on this sheet --

2075          MR. PRICHARD:  Rob Young.

2076          THE CHAIRPERSON:  --can explain to perhaps to us how the - Ipsos Reid market research was used to convert your projected audience share figures, which then of course has something to do with your projected revenues.

2077          MR. PRICHARD:  We have Jeff Vidler and Rob Young sitting side by side and they can do the hand off between them on this question.

2078          THE CHAIRPERSON: Because it's my understanding that you use that research as the basis--

2079          MR. PRICHARD:  Absolutely.

2080          THE CHAIRPERSON:  --for -- for your projected market share and revenues and then added the growth of four or five per cent over time.

2081          MR. ROTHSCHILD:  We used the Ipsos Reid audience research to determine interest levels and determine a potential share and then that was used by [Harrison Young] [inaudible], Rob Young behind us to develop a revenue model.  So why don't we start with Jeff Vidler to explain how we came up with it and if you want additional details on how the revenue model built from there, we can go back to Mr. Young would you like us to?

2082          THE CHAIRPERSON:  Yes, I don't need market 101, market survey 101, but it was explained to us yesterday by the applicant how this was done so -- in a -- if I don't get the whole benefit of your response, staff will.

2083          MR. VIDLER:  I will be happy to lead through the process for the purpose of staff and others interested.  The objective of this was a by-product of the effect of the demand research and the objective was to arrive at a realistic audience estimate that would be rooted in actual viewer demand and would reflect in effect the sensitivity of demand in each of the markets and by various demographics.  What we did, fundamentally, was apply a series of filters to the overall demand that was expressed for the channel.  We looked only at those viewers who said they were very likely to tune the channel and who indicated in a follow-up question that they expected to view it more than once a week.

2084          We took that pool of viewers, that small pool of what we considered core and secondary viewers and reviewed how much time they said they expected to spend with the station on a weekly basis -- and this is after sort of setting a frame of reference in terms of how much time they spend with their favourite TV station.  Took that figure, that tuning figure the estimate of tuning per week and then cut that in half to account for some respondent overstatement, which is typical in this kind of a setting where you're talking about hypothetical, in fact in this case, a wholly new concept of television.  Cut that figure in half and then took that adjusted figure; divided into the overall pie of tuning and then came up from that with an adjusted -- with a projected share of tuning for each of the three markets and that was then passed on to Rob Young at HYPN, who took those demand inputs and built that into the HYPN share of revenue model.

2085          MR. YOUNG:  So then Jeff gave me those numbers and those, for the purposes of staff following this, would be on page 460 of the application.  These shares of tuning were given to us for each of Toronto, Hamilton and -- and Kitchener, London.  What we did is we merged Toronto/Hamilton into one share of tuning number and we -- so we were left with basically two shares of tuning numbers: one for Toronto/Hamilton and one for Kitchener/London.  And this represents for us the potential share of tuning that Hometown Television is going to be able to achieve eventually. 

2086          These numbers are very useful for the purposes of predicting revenue for the station because there is a -- a strong relationship, a strong proxy between share of tuning and share of revenue.  And in a third -- or an additional step following this is we took those shares of tuning and re-expressed them as a share of tuning just for the television stations that advertisers can actually buy commercials on in the Toronto/Hamilton market and in the Kitchener market.  So we have to -- we have to re-express share of tuning, if you will, a share of buyable tuning, a share of tuning just expressed against stations that don't include the specialties, that don't include tuning to Atlanta, that don't include TVO.  Just looking at the stations that advertisers can buy time on in Toronto and Hamilton.  This gives us a share of revenue, a sense of share of revenue for the station.

2087          But again that's -- it's potential, we had to factor down these potentials to reflect the launch of a new station in year one.  These were factors which we looked to, recently launched stations in Calgary, Edmonton and Vancouver, to see how they built their shares of tuning over time.  And these factors were applied against those potential revenue numbers. 

2088          The only other part of the equation that we needed to deal with was an evaluation of the total television marketplace for Toronto/Hamilton and for Kitchener/London and that was the final stage in our analysis.  We -- we turn to Stats Canada reports for that information, which are in turn based on CRTC financial releases.  We looked amount the Stats Canada numbers for the Toronto/Hamilton, for the stations in Toronto/Hamilton and we looked at the Stats Canada numbers for south-central Ontario to be reflective of London and Kitchener.  We had to add CBC in there.  We had to make sure specialty channels were out of there and then we had to kind of move those dollars figures up in time three years to get to our first year of operation, and make one additional adjustment which was to take out revenues for those stations that are spilling into other -- that might be -- might be used by advertisers to reach other markets in Ontario.  That was, in essence, the exercise that was gone through to created the market valuation.

2089          So we have a value of the market, we have a share of revenue, we have that share of revenue building up over a seven-year time frame.  Just do the multiplication and that produces our annual revenue estimates for Hometown Television in each of the seven years.

2090          THE CHAIRPERSON:  The -- the exercise, using our numbers and statistics, et cetera, is to establish the entire revenues in the Toronto/Hamilton and Kitchener/London areas, correct?

2091          MR. YOUNG:  That's correct.

2092          THE CHAIRPERSON:  And then you use these steps to come to on the basis of Ipsos Reid, to come to a proportion or per centage of that large number that Hometown can expect?

2093          MR. YOUNG:  That's correct.

2094          THE CHAIRPERSON:  Now, I am really going on a limb here, would I be right that the result of that is a prediction that in the Toronto/Hamilton area that per centage would be three per cent in year one, growing to 9 per cent in year 7?

2095          MR. YOUNG:  That's correct.

2096          THE CHAIRPERSON:  Of the expected mass of revenues in those areas.  And the methodology you explained will be found in the HYPN, the four step --

2097          MR.YOUNG: I think that's correct.

2098          THE CHAIRPERSON:  -- methodology.  Well, I haven't failed yet, Mr. Prichard. 

2099          The severability of -- oh, no, before, we have asked everybody to opine on how much money goes out from this market to Buffalo.

2100          MR. PRICHARD:  Mr. Young will respond for us as our expert on this, you will find our estimates are the same range that others have put before you this week.

2101          THE CHAIRPERSON:  So 20 to 25 million range?

2102          MR. PRICHARD:  Rob?

2103          MR. YOUNG:  Yes, we are in agreement with the -- with the numbers that you have heard, which you heard yesterday.

2104          THE CHAIRPERSON:  Without specifying any particular station sometimes it's confusing because they seem to focus on the FOX station, but that would be the -- the range of money that presumably would -- would be available if one is -- were to succeed in being repatriated.

2105          The severability of your proposals.  You address that in the deficiency letter at page 8 and 9, the one dated 12 September.  And am I right in gathering that without Toronto this is not viable and also in concluding that your position is that this is a -- this is a proposal that, in arguing that it would be in the public interest or the interest of southern Ontario, and perhaps to the system to license, you would want all three antennas?

2106          MR. PRICHARD:  Yes.  This application, we cannot proceed without Toronto, your first point.  Second, yes, it's our position that the best -- the best way to advance the public interest would be to grant the three licences: Hamilton, Kitchener and Toronto.  We can accept Toronto alone, we can accept Toronto and Kitchener or Toronto and Hamilton or Toronto, Kitchener, Hamilton. What we can't do is Hamilton alone or Kitchener alone or Kitchener and Hamilton together because none of those can support, as you noted earlier, the commitment to independent production, which we have allocated principally by way of cost, 96 per cent of it to the Toronto station.  So I believe that's consistent with the answers -- response to our deficiencies.

2107          THE CHAIRPERSON:  Now if I put on the one hand that your view is it's of the public interest to implement all three, but on the other hand that Toronto would be viable alone, would you have a problem with a requirement that all three, if you were -- if they were approved, all three would be implemented?

2108          MR. PRICHARD:  We would welcome such a requirement; that is our first preference.

2109          THE CHAIRPERSON:  To see that as in the public interest, that you wouldn't just implement Toronto, even if you were given all three stations. 

2110          Now, cable distribution you address at some length as an appendix I think attachment A to a letter dated March 9^th, the one in response to the Commission's letter of January 30th.  And I think also in a later question you were asked whether you had had discussions with the cable companies because your first response to that was that no, your proposal was confidential.  Have you had further discussions with the cable companies with regard to carriage?

2111          MR. PRICHARD:  No, we have advised each of the relevant cable carriers of our plans after our applications were made public, but we have not had discussions with them.  We're confident we would reach mutually-agreeable arrangement with them and have a good relationship at present with Rogers with respect to TSTV.

2112          THE CHAIRPERSON:  Now, as in the other cases, there would be I think a possibility of overlap. Mr. Rothschild is smiling.

2113          MR. PRICHARD:  I think he's smiling because we hope you will ask Mr. Stacey some questions because we love him as a member of our team.

2114          THE CHAIRPERSON:  First for you as an applicant, what is your view about the possibility of overlap and having two of these stations, albeit separate stations, available in the same market?  I understand there will be some programming, it will station over the transmitter, but do you have a position as to what rights you would expect from cable companies?

2115          MR. PRICHARD:  We would seek carriage of only one signal in each of the markets.

2116          THE CHAIRPERSON:  Despite the fact that technically it's a different station.  And so you would be willing to say that publicly --

2117          MR. PRICHARD:  We will say publicly we would waive our right for the second or third signal.

2118          THE CHAIRPERSON:  -- you would be ready to.  Mr. Stacey maybe can answer the question as to what I put forward as a possibility or an understanding, which may stand to be corrected, that in the Toronto area we now have interconnecteded systems that make it difficult once you carry it by a cable company to limit the signal to a -- a particular area, but that you are into all the systems that are interconnected to that infrastructure.

2119          MR. STACEY:  Well, Madam Chair, as you know in the Toronto area and other metropolitan areas, cable  companies that are adjacent often carry a common lineup and sometimes it's convenient for the table operators to trunk around those common signals from one head-end to the next.  And I think I understood your question, I believe what you're asking is, is it a problem for a cable company in an adjacent area to remove perhaps one signal from a number that are being trunked around, and insofar as they go through individual head-ends, I can't really see any reason why signals cannot be added, deleted or changed.

2120           And just as an example, I did look at what occurs with the Rogers system, for instance, between the Toronto Rogers cable territory and their Whitby/Oshawa territory.  Basically it's the same lineup, the same number of signals and the same signals are being carried but they do have a number of different placements of the same signals.  So there are at least five or six channels that are carried on different placements in Toronto and in Oshawa.  So that tells us that the cable company is able to make those kinds of changes if and when it's appropriate.

2121          THE CHAIRPERSON:  By placement you mean on the band?  For example, a signal that has to be on the lower end of the band is there where it has to be, but it's carried somewhere else higher on the band, is that what you mean by placement?

2122          MR. STACEY:  What I am saying is that it's possible for the cable companies when signals pass head-ends to make changes and if it is no longer appropriate to carry a particular signal in an adjacent area because it's not a priority under your cable regulations, then the cable company does have the power to be able to remove it.

2123          THE CHAIRPERSON:  To remove it altogether.

2124          MR. STACEY:  Yes.

2125          THE CHAIRPERSON:  But you didn't just mean by placing it somewhere else.  But anyway, you are on the record as to your position on cable distribution, and I will now deliver you to Commissioner Pennefather.

2126          MS. PENNEFATHER:  Thank you, Madam Chair, good morning.  I would like to go through the area of synergies, cross-media ownership, bringing us to diversity of voices and editorial independence.  But the starting point for the discussion I would propose is your supplementary brief at page 15, which I think goes back to the starting point that Madam Chair laid out, and that is your vision why this is happening, and then move from there into the effects of that in terms of synergies and then perhaps the concerns we may have in terms of -- others may have in terms of diversity and editorial independence.

2127           And the paragraph I am focusing on, that I found very interesting, is the second paragraph on page 15, that your strategy is to consolidate its position as the premier source of local and regional news, information and entertainment in southern Ontario, regardless of the medium people choose to use.

2128          So would it be fair to describe this strategy as one of Torstar expanding its reach and its voice in this market?

2129          MR. PRICHARD:  Yes, it would be extending the reach of our voice in a sense of a presence in relating to the citizens of southern Ontario in these multiple media.

2130          MS. PENNEFATHER:  In so doing then, and I will come back to that statement, because to me it brings out some of the positive elements and perhaps some concerns because it would appear then to be one - if you follow me - one voice but through different media.  And we will see where that takes us.

2131          One of the places it is takes us, according to your supplementary brief, is synergies.  Could you expand a little more on these synergies?  I should say also that there is considerable discussion on the record on these points.  What I am trying to do now is expand and clarify on certain key areas.  Could you tell us, then, more about these synergies, what they are, some examples, and are you able to give us any sense of the kind of savings or efficiencies specifically that this convergence, or your convergence game plan would offer?

2132          MR. PRICHARD:  There are two directions to this.  One is content, and the other is promotion.  Let me deal with each of them because in our minds they are both part of what works here.  In terms of content, and our capacity to reflect local reflection, knowledge of the communities, the region, we believe our roots in these communities which are deep and long, each of the daily newspapers is over a hundred years old in these communities, we believe that gives us a knowledge and a connectedness to these communities which will greatly assist us in producing television, commissioning television, that will be response to these communities.  These papers have succeeded because of their capacity to reflect their community; it's the essence of their success.  So we think whether it's the archives that are available, the image archives of the newspapers, the photo libraries of newspapers, the talent  in the newspaper, Ms. Shah referred to Christopher Hume, the architectural critic, he being a person who knows the architecture of our region, our cities particularly well, using him as a host of a show.  There are all kinds of ways of in which the content, the written content, the archival content, the human talent can be used to give us a running start at producing television which is equally responsive to the interests and the needs of these communities.  That's the content side.

2133          The promotion side is also very important here because we think it is a key to our ability to bring audiences to the content we're proposing.  It has not been easy for Canadian broadcasters to attract substantial audiences in prime time to Canadian content.  We believe we can use the promotional power of our daily newspapers which have an extraordinary reach in terms of reaching people in southern Ontario -- two and a half people million people a week read one of our newspapers, so an extraordinary reach in these communities and we think we can use their promotional capacity to let people know what will be on Hometown Television so that people will know they will see themselves there and we believe, so informed, they will watch.

2134          There is a real difference between newspapers and television with respect to promotion.  In television, if a minute is used for proposal purposes, it's not a minute that can be sold to an advertiser.  Newspapers are different.  In newspapers, if we wish to promote our television station, as we plan to regularly in our daily newspapers, we do it not by excluding an advertiser but by printing another page. The cost of that promotion to a newspaper is only the cost of paper and Ink.  And that, we think, is the way is the way we will be able to make sure everyone in these communities knows about Hometown Television, about the schedule, drawing attention, who will be the guest on television that night on Talk TV,  Who will be there that night.  What will be on this week.  We can do that in a way that we believe is unprecedented for Canadian content, for promoting Canadian content, local content, and regional content.

2135          Let me give you an example of a the power of this.  It's enormously powerful what these newspapers can do.  Workopolis, which as you know is a career Internet-based business, but for careers, it was begun by the Globe and Mail, Globe Careers, it was put on the internet and it was getting five million page views a month.  We then formed a partnership between BellGlobemedia and Torstar to put our two - our career advertising together with theirs as a joint -- as a shared career site, and as part of that, both The Globe & Mail and The Toronto start promote the site in the way I'm describing we would for Hometown Television. 

2136          In the two months following, adding The Toronto Star's promotional power to The Globe & Mail, the page views went from five million a month to 25 million a month on Workopolis.  As you probably know, Workopolis is the one career company around the developed countries of the world where monster.com the American company, has not prevailed.  And in fact we have a home-grown, Canadian dominant player which is Workopolis and we would submit it's because of the promotional power.

2137          So our sense of synergy is that we could use the promotional power of the newspapers to drive audience to know what's there.  And then, we believe, when they see themselves they will become loyal viewers.  And on the first side, the content using the resources of the newspapers, their knowledge of these communities, the archival resource, the human resource, we believe that will give us a big head start on content, development and reflection of these communities.

2138          MS. PENNEFATHER:  I think it's on the very last few words that I am most interested. I understand totally your points about promotion and you do mention it in your supplementary brief. 

2139          I think what's important to understand here in this discussion obviously, and I know you see that too, is -- our concern is the broadcasting component of this convergence game plan, to use your phrase, and what advantages to that broadcasting component does this bring, and does it go beyond the promotion to what we're actually seeing on the screen.  How will this convergence game plan offer new diversity to the viewing public?  You have, and rightly so, in the video and just now, brought us back to the history of the newspaper and brought it forward into the present and your interest now in a new medium.

2140          One could make the argument that it is in the sense the same voice moving forward into new medium, as opposed to offering something new.  And you have indeed in other documents on file in the deficiencies, March 9 for example, in response to our January 30th letter, you make the point of a new voice.  But that new voice, in and of itself, already exists.  What is it that you will do which will offer diversity to the viewing public?  I'm talking about the effect on the public now.

2141          MR. PRICHARD:  First, I will try to answer but I welcome comments from my colleagues on this.  I want to correct, perhaps, a misimpression that Torstar has a single newspaper or editorial voice.  We don't.  Each of our newspapers has its own voice and its own editorial policy independent of each other, and proudly so.  This is a newspaper company which owns multiple newspapers, but, for example, in the last provincial election the Toronto Star supported one candidate for Premier, and the Hamilton Spectator supported the -- supported a competing candidate for Premier.  The Hamilton Spectator being on the [inaudible] side and the -- but my point is not about which side side was the right side, my point is complete independence of voice from of each of our newspapers, not a single voice.  So when I speak of us as a new voice, it is a new voice in the sense of a new participant in Canadian broadcasting which will -- in the same way that our newspapers have separate editorial voices.  As you know from our filings, we'll have a separate news gathering capacity, separate assignment capacity, separate news judgment being made at each of the stations. 

2142          So you don't want to have a single-voice image of us because it simply doesn't reflect the reality of what we are.  What's new, what we believe is new here is that because of our groups in the -- in the cities, in the communities, in the regions, we will, using the three hundred people, using the independent production community, we will put on air content that is not there at present for the viewing public. 

2143          It's in that sense that we are a new voice, that we will complement and supplement what's already available in part by drawing on our knowledge and roots in these communities and the resources we can command in our newspapers and in these communities, because we know them so well -- I mean, to create new content, to create new programming, to create an intensity of programming that reflects or cities and reflects our regions and we believe these are very distinctive, very interesting, very vibrant, dynamic communities.  They are communities which are quite extraordinary not just by Canadian terms, but by world terms.  The diversity, for example, of Toronto is not a matter of just Canadian interest, it's a matter of world wide interest, the extraordinary diversity. 

2144          We believe, in the very same way, our newspaper in Toronto has been a leader in reflecting that, interpreting that, and celebrating that.  A commitment like we are making to television in the same community can do the same -- with its voice, with its editorial judgments on its own, but using that knowledge of community, connectedness to community, rootedness in community, we believe we can do a uniquely good job.

2145          And then it's the other side, which is making sure people know it's there because we believe one of the reasons that Canadian content has not been as successful as it deserves to be, is not watched as much as it deserves to be, is it's relatively underpromoted.  We're swamped with the promotion of American product because of all of the ways in which we experience that in our daily lives and the Canadian product gets underpromoted in relative terms.  And we think by bringing the promotional power of the newspapers to bear we can put Canadian content on the same basis in front of people knowing it's there and we think that will really help with audience.

2146          MS. PENNEFATHER:  Thank you, Mr. Prichard.  You won't get any argument from me on the importance of promoting Canadian content, nor its value but I think we could focus our discussion, again, to what's on air.  And it's fair to focus on what's on the news and information programming and let's go a little further on that point.  You do say in your supplementary brief again on page 15, you describe that relationship as a positive component, you have already demonstrated that.  You say here that Torstar expects Hometown Television to work closely with Toronto Star's daily newspapers in Kitchener, Hamilton and Toronto.  "We expect reporters from the newspaper will appear as guests on programs such as Day's End.  We expect to draw the archives of the newspapers.  We expect that What's On, the daily Hometown Television entertainment magazine, will regularly feature similar material and stories as the entertainment sectors of our daily newspapers and finally, we expect a close working relationships with our daily newspapers."

2147          Not putting aside, too short a shrift the value of the interchange one would also read from that a combined approach to newsgathering, to news presentation, to news perspectives.  How would you address that concern?

2148          MR. PRICHARD:  I am going to ask my colleague Mr. Rothschild specifically to speak to the organization of the news function.

2149          MR. ROTHSCHILD: Commissioner, first and foremost what we have proposed in the application is that there would be no sharing of editorial staff.  There would be no sharing of management level so there is a separateness in terms of the organization and that's what we have proposed as part of the application.  So we have separate management, we have separate news gathering, we have separate editorial policy, there is a structural separateness of the two organizations.

2150          MS. PENNEFATHER: That's clear in the deficiencies as well so you would call that your operational separation?

2151          MR. ROTHSCHILD:  That's right.  So at the operational level that's what we have.  A separateness.  In terms of how we were talking about working together in the sharing relationship, what -- how do we see the working relationship working?

2152          You can see the editorial committee at the -- at the television station, the assignment editor, the producer sitting down each morning to figure out the daily lineup.  What are they covering. It's natural to sit down each morning and figure out the day and again at the end of the afternoon to see how are things unfolding.  And it's natural to think that at the stations you can see a conference call happening of what are we doing in Kitchener, what are we doing in Hamilton, what are we doing in Toronto.  And you can also see that that type of information would be shared with the desk at the newspapers to find out where they -- what are they covering and to see if there is anything the television station isn't aware of that the newspaper might be aware of.

2153          But at the end of the day, the television station has to go out and ensure that it provides coverage that that's relevant to its community and is, in and of itself, a terrific editorial source for that community.  I mean if your news isn't relevant, if you don't cover the stories of the day, you won't have an audience.

2154          We see an opportunity to draw on the expertise, the columnists, the experts of the newspapers to draw -- to invite them on to shows like Prime Time or Day's End and have them clearly identified as Antonia Zerbasias, the television expert from the Toronto Star being on one or our shows or Jim Kensey on wheels talking.  That will their choice, whether they choose to come on those shows and certainly no one is going to require them to do that.  But we see that there is a real opportunity to do that just as we're seeing reporters for the Globe and Mail regularly appearing CTV, and as we see reporters for the National Post regularly appearing on the CanWest Global stations.  We can see that happening with us as well

2155          MS. PENNEFATHER:  Thank you for that and I would like to reiterate that you yourselves have approached this whole question with considerable -- considerable length in both your brief and particularly the deficiencies and have proposed separation of operations.  But I think it's fair to say again that what we're talking about here is, if licensed, we are looking at a broadcasting undertaking and how that broadcasting undertaking, particularly in terms of its news and information and perhaps other programming as well, will really have the independence it should have in terms of where it sits.  And that, to use your own words, is within and under a corporate umbrella, and those terms I take from our own supplementary brief.  So that your separation of operations is your proposal as one step towards maintaining that editorial independence, and the diversity of voices that ensues from that.  Is that correct?

2156          MR. PRICHARD:  That is correct, and it is a diversity of editorial voices within, as well as for, the broadcasting division.  We see the television licences, the three stations forming a division of Torstar, a business unit of Torstar headed by a president, reporting to the chief executive of Torstar Corporation.  Comparable to the way the newspapers or the publishing company reports as a separate business unit.  So operationally separate, at the level that Eric has described, and operationally separate all the way up, but taking advantage of the positives that I have tried to set out as well.  Because we don't think it's easy to reflect community, to know community and to reflect community as we -- we believe it's a significant advantage that we bring to the application, when we say we're going to do local reflection and know these communities.  We think drawing on those resources to help us do that is very positive because we think we can be measured by the depth of resource we have and the record we have.  We have chosen as a company to reflect community, that's been our choice.  We're not a national newspaper with the Toronto Star in the way that the Globe and Mail or the National Post is.  Our distinctive franchise, our distinctive contribution, our distinctive voice in Toronto is that we reflect communities broadly of greater Toronto. 

2157          So we think it's an advantage, but we see all the risks.  We're extremely comfortable with all that you say in your CTV decision and the conditions applicable in separation.  That language resonates, I hope, on your reading with the language that we have previously filed.  We believe the two sit comfortably side by side. We're very comfortable with the Commission's position on that, and want to live to the letter and the spirit of what's your in your policy decision.

2158          MS. PENNEFATHER:  With that said then, let's go through a couple of other clarifications.  One of the responses to this issue you tabled in response to the Commission's February 22nd deficiency and your March 9th response.  And you attach a copy of a policy manual.  First of all, it says draft, is there a final version?  Or can I assume this is the correct version?

2159          MR. ROTHSCHILD:  It's still in draft form, Commissioner, and I expect it will remain in draft form until such time as we were successful in being licensed, at which time we will ensure everything remains appropriate.  And I think what you are seeing is the vast majority is locked down, but we will refine it right up until the time that we have a licence.

2160          MS. PENNEFATHER:  That's why I think it's important to ask you a couple of questions about the policy manual.  It's a very thorough presentation.  I am not a journalist, of the journalist profession.  I have had the privilege of working in an organization such as the National Film Board, but I would never presume to assess this from a journalistic principles point of view.  But it's very thorough in that regard.  What my question is is that I -- as I read it, it doesn't specifically address, or does it, this issue of the independence of the broadcast newsroom and the independence of the newspaper newsroom.  Basically, as I read this document, you have taken these principles and applied them to Hometown Television.  But within the text, or within the interpretation of the text, you see it also as a guarantee of the very independence, over and above the operational separation, of the attitude of the spirit of the intention of your proposal for independence of newsroom with a broadcast undertaking.

2161          MR. ROTHSCHILD:  We see this as a -- the policy manual is based on the policy manual that we use at the Toronto Star.  And it is a statement of principles and trying to -- and put some flesh around those principles is how we will expect that our people to govern themselves and how we expect them to operate on a day-to-day basis.  So it's in that vein that it's put forward as a policy manual.

2162           MR. PRICHARD:  I think you're right though, Commissioner, that in the text of it it doesn't address directly this issue that you have been asking about.  We wrote this as a manual for the television stations.  We have also made the commitments about independence.  We would have no reservation about embedding right into the manual, by way of preface or the first part, that statement of principles which are embedded in your policy and in our submissions and which are the operational commitments we're making.  So if the present draft doesn't, if that would be constructive to do so, again it's our intention, it's the spirit of our intention not just the letter of our intention and we would be happy to do that.

2163          MS. PENNEFATHER:  That's an interesting suggestion.  It would also be possible to -- and would you agree that we would attach this policy manual to the licence, and also that your commitment to separation of operations would appear in your licence, and as a condition of licence?

2164          MR. PRICHARD:  Yes, in each respect.  And that we -- I believe in our response to deficiency we also indicate that if we change the policy manual we would seek your approval.  As it evolves over seven years of being a new organization, to think we have written a policy manual perfectly a year before we even go to air, I think with a policy manual, with that level of detail I think it would be important to be able to have it reflect as we learn and as we develop.  But we would accept that would be with your approval rather than something we could do unilaterally.

2165          MS. PENNEFATHER:  And keeping things as simple as possible; the terminology.  It's called a code of conduct at one point to which you say you agree to a condition of licence.  So we are talking this document, we are talking about, as well, including separation in an operational sense of the newsrooms. 

2166          There is one other piece --

2167          MR. PRICHARD:  Both of those, the answer yes.

2168          MS. PENNEFATHER:  Okay.  There is one other piece to this approach that you yourself mentioned in terms of other decisions the Commission has put forward, and that is what's called a monitoring committee.  We noted in your application, it's noted in what's called schedule D that there will be an internal station committee to deal with issues arising from the codes.  Now, the codes here are the CAB voluntary code on violence, ethics and so on.  To respond to any concerns which might from time to time be raised by viewers.  This committee, does it have any relationship to the matter of editorial independence?

2169          MR. ROTHSCHILD:  Commissioner, we have three different committees under Hometown Television.  First of all there is the programming committee which we have -which ay we have filed the draft resolution from the Board to establish a programming committee to ensure the editorial independence of Hometown Television from Torstar.  The second is that we have an internal editorial committee which is -- which is a working committee that I was describing to you earlier, that is the senior management deciding on stories of the day.  The third is issues or complaints committee which you are describing right now, which is again an internal committee which would include the vice-president of programming, the news directors, to be dealing with any issues or complaints that arise from the public.  And so those are the three committees that we have.

2170          And then we have a fourth component in this and that's our community awareness forum.

2171          MS. PENNEFATHER:  If you don't mind, I would like to get to that in the next session.  But my question was specifically, was I right in assuming that one of the roles the of the internal committee, the last of the three you mentioned, would be to receive complaints, concerns, comments on this issue of editorial independence and diversity of voices?

2172          MR. ROTHSCHILD:  Yes, it would be.

2173          MS. PENNEFATHER:  It would. And this committee I think you described its composition right now and in the deficiencies.  One last question on this particular committee and its particular role in relation to what we are discussing was, in the same deficiency, March 9, response to February 22, you discuss this committee and the internal station committee which is why I raised it as potentially the committee of interest here.  And in the end you say we see no benefit enshrining an obligation to have an internal committee or the mechanisms or guidelines under which it would operate under as a condition of licence.  Can you explain what you took that position regarding the role of this committee?  Because it is raised in this response in terms of our discussion of editorial independence.  What is your reason for not also having a condition of licence in this respect?

2174          MR. ROTHSCHILD:  Commissioner, what we felt was we had put forward a range of safeguards and commitments to ensure the editorial independence of the television stations and we -- and so it was -- it was our opinion that we put -- that we wrote there, that it was -- there was no need to codify it as a condition of licence.  If the Commission in its wisdom feels it would be better to have it as a condition of licence it wouldn't be an issue for us.  We can live with that. 

2175          What we were saying is we thought we had put through a range of safeguards already and we didn't see the additional benefit of having this one.  But if in your wisdom you think that that would provide better assurance, or better tools to ensure that we fulfill this, it wouldn't be an issue.

2176          MS. PENNEFATHER:  Thank you, Mr. Rothschild.

2177           I think now go to the issue of cultural diversity and ask you again to clarify your overall approach.  Again, I am using the supplementary brief and also what's called schedule C which is section 7.1 of the application which is the program policies, programming policies. 

2178          In several places in your supplementary brief and today you talk about how Hometown will reflect the community it serves.  And you say you will reflect this in terms of programming.  And I have been listening careful you to the discussion around the programming, the programming choices.  You also clearly put on file your employment equity approach and say well that your approach on diversity includes your work force and your program content.  It's the program content that I would like to discuss.  The employment equity plan seems quite clear although I will come back to that at the end. 

2179          In discussing these programming proposals, inclusive of the independent production approach it's not clear to me how you intend, very practically -- the words are there, but how do you see in fact managing to assure, as you have said, that all your programming and all acquired programming reflects the cultural diversity of the communities that you -- you will be serving should you be licensed?  And there is the component of the forums, fora, which I would like it hear more about, but my first question really is on the choice of programming.  How will that be assured?

2180          MR. PRICHARD:  Madam Chair, could I ask for 120 second break?  One member of my team is not feeling well and I would like to be able to remedy that and be back to you in literally two minutes.

2181          THE CHAIRPERSON:  We could take our lunch break.  All my colleagues I believe have questions for you.  So if Commissioner Pennefather will indulge me, we will complete the questions she has and hopefully we will have a healthy panel back.

2182          MR. PRICHARD:  Thank you for your indulgence.

2183          THE CHAIRPERSON:  We will take a relatively short break though, 1:30.

2184          MR. PRICHARD:  Thank you very much.

--- Recess taken at 1216/Suspension à 1216

--- On resuming at 1334/Reprise à 1334

2185          THE CHAIRPERSON:  Order please.  I don't know if Mr. Noble is in the room, but if he is, I hope his phone has been turned off, and if not and you see him, tell him.  I also want to remind participants that we will hear Rogers this afternoon and we will hear you, the applicants, in reply.  So if there is any need for Gatorade, you have to get it at the break.  Are you all set to continue?  I hope you have resolved your difficulties.

2186          MR. PRICHARD:  We are.  One of your colleagues said if he feels the need to leave he should do so without interruption.  He will just slide out, if he can't stick with us.

2187          THE CHAIRPERSON:  Absolutely. Commissioner Pennefather?

2188          MS. PENNEFATHER:  Thank you Madam Chair.

2189          We were beginning our discussion on cultural diversity and indeed I was going to quote from your comments this morning where Ms. Lynn said we are excited about the concrete plans behind the promises; that's exactly where I'm at.  And what I wanted to hear more about is how you would keep to your promises that acquired and in-house programming would reflect the diverse cultural communities from Toronto, Hamilton, and Kitchener/Waterloo, and specifically -- if we take an example of the independent production funds and how you will consider this matter when choosing programming, and any other comments you wish to make on how, as specifically as possible, you see this working.

2190          MR. PRICHARD:  Thank you for that.  I am going to ask Don Shafer and to begin and then in turn Rekha Shah will comment, and Jennifer Lynn, on the two sides of our two mechanisms, but specifically.

2191          MS. PENNEFATHER:  If you wanted to go from the programming right to the advisory forum that's exactly where I was going to go.  So please feel free to do that.

2192          MR. SHAFER:  Commission Pennefather, this has been a long journey, Eric and I started this two-and-a-half to three years ago with many of the people you see before you.  When we wanted to figure out how we could do something different in television and came up with this model, the first meetings we had, we started with about 150 different ideas which have been distilled to many of the programs that you see before you today.  And the ideas are founded in research, they are founded in the history of our company.  And by being able to take the best things that we can borrow from the past and by building for the future we have a terrific opportunity.  The diversity of the programs that we see being put on the air are reflected in all of the different policies and plans and ideas that we have been working for the past two-and-a-half years.  I would like to have Rekha discuss some of the objectives of the programming policies and also talk to the various mechanisms to make sure that diversity and inclusiveness is part of everything that we do.

2193          MS. SHAH: When we begin establishing relationships with independent producers that we will be commissioning programming from, there will be a standard selection process, and in the case of Hometown Television the process will be formally established by the VP of programming.  There will also be a defined structure of producer guidelines that are available independent producers seeking to submit proposals to Hometown Television, ensuring that they meet the values and expectations set out by Hometown Television.

2194          One of the ways we hope and we know we will get programming suggestions are from the community advisory forum and Jennifer will speak to that a little bit later.  I would like to tell you about our selection criteria for producers, but before I do that I would like to you know that we have had many discussions, preliminary discussions with various producers of ethnocultural backgrounds, John Kim Bell from the aboriginal community, as well as Chuck Sian from the Chinese community, as well a Tania Lee Williams if the African-Caribbean community.  They have all expressed excitement for the opportunity to produce English language programming for our region.

2195          With respect to the selection criteria, it refers to both relationships with independent producers as well as our own programming in-house.  Content and concept is key.  Is the concept unique?  Is it something our viewers haven't seen before?  Does it fit within our own programming philosophies and does it reflect the diversity of our community as well as serve, and is it relevant to, the viewers that we serve?  How viable is the project?  What is the production financing for it and the projected financing for it?  What is the production schedule as well as an analysis of the budget?  We will also take a look at who the producer is, what their track record is, and what relationships they already have the industry.  We hope to provide some mentoring assistance to the producers, whether if be an introduction to distributors, assistance with the parent tax credits, that sort of thing, if they need that guidance.  And finally, interactivity.  Is there a component to any project that a producer brings that would enable an extension of that content, bringing it alive on-line.  Jennifer?

2196          MS. LYNN:  Thank you, Rekha.  I am going to address the community awareness forums.  As I mentioned in my earlier comments, the mandate of the community awareness forum is to be an advisory mechanism, and it is going to guide and shape not only principles but the program content and the practices of Hometown Television.  It's going to be inclusive and locally reflective in terms of its composition.  We see two streams in terms of the selection process for the community awareness forums.  One will be to establish representation from organizations that have the pulse of the community at the very core of their business and their existence.  That may be organizations like the Kiwanis, or the United Way.  It could be business organizations like the ICCC, the Indo-Canadian Chamber of Commerce.  All are organizations that are committed to diversity in the community.

2197          Then we will have another stream which is or open call to the community for interested citizens of each of our communities, because there will be forums in each one of these communities.  There will be an open call for individuals who are multifaceted and a committed to a harmonious Canada to come forward and submit their interest in being part of these community awareness forum.  They will meet once a month for about 90 minutes and they will talk about issues and trends out in the community.  They will be our eyes and our ears.  They will form the two-way communication bond which we feel is vital to ensuring that Hometown Television delivers on its promise of being inclusive and reflective.  But it won't stop there.  The issues and trends and the information that comes forward to us to will be delivered throughout the organization, it will be pervasive across the organization.  Briefing notes from these meetings will go to the president of Hometown Television, line management will be responsible with being familiar with the content of what is discussed at these community awareness forums.  And also there will be station management executives represented on the forums as well.

2198          And then we will produce two town hall meetings every year in which we can delve deeply into the issues of concern that have been raised by the community awareness forums.  So this is one the ways in which we are definitely going to be proving that we will deliver on our promises.

2199          Let me take it that step further, if I may.  In terms of the intelligence and knowledge that we expect exists with the community awareness forums, we have had some consultations with individuals to hear what were their concerns, and what might Hometown Television do that is different.  And if I may share with you some of the stories that they felt were yet untold, or individuals who were underprofiled in terms of their expertise.

2200          So when you talk about the financial sector as an example, perhaps Bay Street and Toronto is not the only place where we have financial experts.  Perhaps it's Michael Chin who is one of Canada's 50 richest people who is the founder of AIC Mutual Funds, right here in the Niagara region, would be a spokesperson.  He happens to be of Chinese origin.  Or maybe it's Harry Pandit of HSBC Bank, who could also talk the about financial sector.  Or if someone is concerned about issues of gridlock, perhaps we could speak to one of the largest transportation companies in the country, and speak to A.J. [inaudible]. 

2201          But let me talk about a little bit of lighter fair and the kinds of stories that is have not yet been told.  Pat Oak, is a Mohawk, an iron worker, a woman and a foreman that led of the construction teams in the building of the Skydome.  Or how about Raymond Louis, one of our Canadian Olympians from this very city who was the first African-Caribbean individual of -- from Canada who won the 100 yard sprint.  Or how about the Sharma family from Kitchener/Waterloo who are police officers on the K-W route Waterloo regional forest, and hold the distinction -- the one brother holds the distinction as the first ethnic officer in middle management in that region, and he speaks three languages.  The stories are endless as you can hear.  And these are the kind of stories that we are already building a databank on and which will continue to flow through the community awareness forums to help shape and guide programming content.

2202          MS. PENNEFATHER:  Thank you, Ms. Lynn, Ms. Shah, very complete answers.  Your are enthusiasm brings me to ask you though, in the final analysis, who will be deciding what gets on air, the advisory councils or the programming?

2203          MR. PRICHARD:  Vice-president of programming, in the end, has to be accountable for the programming -- taking advice, taking inputs to the process by the end of the day will be holding the licence and that's the responsibility.  But this responsibility, this person simply can't do her job or his job unless they do it in this highly collaborative, highly iterative way or it won't work.  It's not just it won't work up against our policies, we don't think it will work in terms of reflecting the communities and providing the compelling programming which will attract the advertisers and make it work.  So we think there is an imperative -- there is a moral imperative here, there is a community imperative, there is a business imperative.  And they all drive in the same direction to make sure we're deeply rooted in and a reflection of the community.

2204          This isn't a new idea for Torstar, take the Toronto Star.  The Toronto Star created a community advisory counsel for the newspaper.  Because, with the face of Toronto changing, it was a reaching out by the managing editor to have an advisory council.  It's been terrific.  It's made a powerful difference in the newspaper.  Some members have even appeared in the newspaper writing themselves on the editorial page.  So we know it makes a difference, we know it works and we know it works for us as well as for the community.

2205          We have one other I think real advantage here.  Which -- which is fortuitous but real, which is because we're new, because we have only the core of the team here that we're going to build, as we hire 300 people in these three stations to build our television stations, we have a chance now from the ground up, following our employment equity commitments, to actually build into the men and women of the stations of Hometown Television the reality and the diversity of the communities we're going to serve.  We can be inclusive at this stage, as we draw upon talent that is embedded here and it will be there from the ground up instead of trying to change directions for -- for an organization that had -- already has its work force.  Because we are in a position to go out and hire our work force, we can build this in from the ground up.

2206          MS. PENNEFATHER:  Thank you.  One final point on this subject.  As you know from previous decisions the Commission is interested in this area, in fact has included the requirement for a corporate plan which would bring together all the elements of your diversity program.  Are you willing to commit to do the same to present to us a corporate rate plan in a short period of time which would bring together all these elements so we could really see how your promises would remain concrete over the licence term?

2207          MR. PRICHARD:  We would welcome the opportunity to do that, thank you, very much so.

2208          MS. PENNEFATHER:  Thank you.  Closed captioning now, a clarification.  We note your commitment to close-caption 90 per cent of all programming broadcast on Hometown.  The question is the following:  Does this include captioning 100 per cent of news programming as is now generally expected of all over-the-air conventional television stations?

2209          MR. PRICHARD: Eric?

2210          MR. ROTHSCHILD:  It will be 90 per cent of all programming, 100 per cent of all news programming.

2211          MS. PENNEFATHER:  As of day one?

2212          MR. ROTHSCHILD:  As of sign-on.

2213          MS. PENNEFATHER: Thank you. Described video service?  A clarification.  You have committed to provide a minimum of two hours per week described programming in year one, and we have that on file in your application.  Can you confirm this as a commitment?

2214          MR. PRICHARD:  Yes.

2215          MS. PENNEFATHER:  Initially will this be your Canadian movie of the week?

2216          MR. ROTHSCHILD:  That is our expectation.

2217          MS. PENNEFATHER:  Do you foresee expanding, increasing the amount of described programming available.

2218          MR. ROTHSCHILD:  Commissioner, I think you can accept as an undertaking we are going to look to expand description as much as possible wherever it is appropriate in our programming.  We have consulted with NVRS extensively on our program schedule.  A lot of our programming doesn't lend itself to description, but we would like to see our series, if we are acquiring a Canada series, we would like to see if could get that described, but our minimum commitment is two hours a week original, starting in year one.

2219          MS. PENNEFATHER:  Not that we are in the intervention phase, but I am aware of NVR's comments on this matter and I have one last question.  How much is original?  How much repeat?  What's the total number of hours available? 

2220          MR. ROTHSCHILD: Commissioner, it's a minimum of two original hours and the schedule you have in front of you indicates that we will have -- with repeats it will be six hours a week of described programming, but it is a minimum of two original hours.

2221          MS. PENNEFATHER:  Thank you very much and thank you for your patience with my questions and your answers.  Thank you, Madam Chair.

2222          THE CHAIRPERSON:  I think we are ready to give Mr. Rothschild his "A" now.  He launched an official complaint with the Secretary of the hearing.  Commissioner Cram, please.

2223           MS. CRAM:  Thank you, Madam Chair.  Mr. Prichard, I want to go back to the commitment of 80 per cent and I want you to realize that this is being said with all due deference, but after having been here a while a I realize that people die, that people get fired and that companies get sold.  And at the end of the day, the only things we can really enforce in order to keep the nature of the station similar, is a condition of licence.  So if I understand you correctly, in the event that you were gone sir, and that's the whole point, and that I can't rely on your word, as good as it very well may be, if all you have committed to is 80 per cent, all I can be sure of is that there will be 101 hours of Canadian programming on that channel, in the event it is sold or it goes on to anybody else. 

2224          I cannot be sure that there will be 118 hours of regional or local because there is only going to be 101 hours of Canadian that I can enforce.  And do I understand then that -- that that is where you're at, that 80 per cent -- I'm not asking you to increase it but I want you to understand that from my perspective, when I'm assessing applications, I will be looking at 101 hours.  I won't be looking at is 118 because I can't enforce it.

2225          MR. PRICHARD:  Commissioner Cram, you put the position we've put accurately and I want to say a couple of things about it to make sure we are on exactly the same page.  We are committed to the 32-and-a-half hours local as a condition of licence in each of the three for the 97-and-a-half hours of new local programming coming from the three.  Second, we're committed to 80 per cent Canadian, which is the 101 hours, we're committed to it all the time. I said earlier 80 per cent all the time, 80 per cent in prime time.  I am prepared to say 80 per cent in peak time.  That is I am -- we are prepared to commit to all of that, which we believe of existing licensees is absolutely unprecedented commitment and we doing it knowingly and advisedly and openly. 

2226          I raised with Madam Chair whether it would be constructive to also have something that speaks to the regional commitment we're making above and beyond the Canadian commitment and we're prepared to pursue that if that will be constructive.

2227          MS. CRAM:  Would the regional be Canadian?

2228          MR PRICHARD:  It would of course be Canadian.

2229          MS. CRAM:  So if both the local and the regional are Canadian, then that adds up to 118 hours and that means 93 per cent.  You will only commit to 80 per cent, so I can only actually rely on a total of 101 hours.  That what is my question to you.

2230          MR. PRICHARD:  And that is correct as a condition of licence, as we're trying to take the bar up what we think is a long way.  And in light of the position as a company that would take -- not before the CRTC, as a company period, that we must, given the work we're in, we must be absolutely true to our word and we thought to set out first our intentions and our plans and create an expectation of that effect and then second to set the absolute legally binding minimum performance to which we must live, you're right as you put it.  So with your death, fired, sold, you're right, as a matter -- as a matter of legal condition.  You will appreciate on my own behalf I am not in favour of any of those developments occurring.

2231          MS. CRAM:  You appreciate --

2232          MR. PRICHARD:  I accept from your perspective that that is the proposition.  If there is anything else we could do that would, on the one hand, further affirm our commitment and our plans but at the same point respect the requirement no matter what the -- that no matter what will be -- what we have --

2233          What we are concerned about in pushing is we can imagine, for example, that if we're doing programming about our region and our locale, there may well be sister locales, matching locales.  Toronto as you probably know has a partnership with a city in China.  The interplay -- we want to be able to show a show about had a region in our -- in a place.  Many, many of the people, the majority of the people who come to Toronto come from other parts of the world.  We want, without fearing we're going to violate our condition, to be able to have a piece that is companion to a piece about our community here if there is a companion piece from a foreign broadcaster which is on the same subject.  We want to leave the space to do that without running the slightest risk of violation. 

2234          As you know from our budgets we have not made provision -- we're not going to Hollywood, we're not going into those markets.  We have been approached by other Canadian broadcast distributors, would you be prepared if you have an hour here, an hour there, would you be interested in product from different parts of world.  Our answer is, we will be interested only if it will reflect our regional and local commitment because that is going to be the brand Hometown TV.  But we don't want to be so rigid as to either risk tripping, and at 80% we think it is a very high bar, and second, so restricting the way in which the community can see itself given that this community is drawn from many parts of the world.

2235          MS. CRAM:  I think I understand your reasons why, thank you, Mr. Prichard.

2236          I wanted to move on to the syndication revenue and maybe I will take you first -- and I am not sure who I should be directing this to.  I am at a copy of your pro forma at 9.1 and 9.2.  And do I have it -- have you got it?

2237          MR. PRICHARD:  We've got it here too.

2238          MS. CRAM:  And just let me take you to one.  Under revenue you've got sales from syndication, Canadian, $902,000.  Sales from syndication, non-Canadian, $1,674,000.  And do I understand that correctly Mr. Rothschild that that is the special money at risk that talked about to those special eight?

2239          MR. ROTHSCHILD:  That's correct.

2240          MS. CRAM:  And you expensed that out on 9.2 at the very bottom under total production expenses.

2241          MR. ROTHSCHILD: That's correct.

2242          MS. CRAM:  So in year, one you're going to expense out $2,576,000 and you're going to bring in the same amount of money?

2243          MR. ROTHSCHILD:  I'm sorry, Commissioner?

2244          MS. CRAM:  In year one you are a going to expense out $2,576,000, and in the same year you are going to get the money back?

2245          MR. ROTHSCHILD:  That's correct.  May I ask Mr. Prichard to explain?

2246          MS. CRAM:  I understand that.  I am just wondering how you think you can do better than Telefilm, who gets only 40 per cent recovery on equity in the same year.

2247          MR. PRICHARD:  Two separate questions, one the pro formas and second the business proposition.

2248          MS. CRAM:  No, I am asking why they're expensed and received in the same year.

2249          MR. PRICHARD:  Okay.

2250          MS. CRAM:  And I'm asking why you think you can do that.

2251          MR.PRICHARD: The reason they are expensed in the same year the revenue is recognized is not a projection of cash flow, because of course we expect the expenditures to be ahead of the revenue, but is simply accounting pro forma, accounting not pro forma cash flow statement.

2252          MS. CRAM:  Number two, how do you expect to recover a hundred per cent?

2253          MR. PRICHARD:  Our business proposition is that when we do this on top of the licence fees, so on programming where already the licence fee is locked in, and this investment is on top of that --

2254          MS. CRAM:  Yes, these are called at risk monies by Mr. Rothschild.  Exactly the same as Telefilm, equity monies.  So where does your expectation come from that you're going to get a hundred per cent return?

2255          MR. PRICHARD:  Our business proposition that's reflected in this is an assumption that if we invest selectively with Canadian producers, who already have a guaranteed sale of what's going to be produced in the form of our licence fee, if on top of that -- this isn't investing some things in equity over here and other things in licence fees here.  This is with someone we're licensing, we're going do a production deal with, and we pay for the licence but that producer wants to go further with a vision of being able to invest more in it and then sell more.  In that case we are prepared to invest in that additional reach and on that the business proposition is reflected here, is, over time, revenues will be the same as expense as the amount of the investment.  Not the same as our expense because our expense in our budget, the first $7.9-million a year we're going to spend is gone, that is for the licence.

2256          MS. CRAM:  You're getting a hundred per cent return on your equity, which is what I was asking.  How do you expect to get --

2257          MR. PRICHARD:  We are expecting to receive back, over time, the amount we invest.  We view it as an at risk investment.  We're not projecting we're going to shoot the lights out by having to return four times what we invest, we're not expecting that we're putting money down the drain in form of no return, we're saying, for budget purposes we have projected, the two as being the same.

2258          MS. CRAM:  And how do you distinguish the position as you have just described from that of Telefilm?

2259          MR. PRICHARD:  I am personally not expert on Telefilm but I would ask any of my colleagues who are to comment. 

2260          MR. ROTHSCHILD:  I don't claim to be an expert on Telefilm either and I may ask for Gord Haines to come in on this.  But Commissioner, I think at the end of the day, what we are saying to you is we're hoping to recover a hundred per cent.  If we don't recover a hundred per cent -- you're saying Telefilm only recovered 40 per cent, and why should we do better.

2261          MS. CRAM:  Over time too, not in the same year.

2262          MR. ROTHSCHILD:  If we don't, if we only match what Telefilm does, the risk is ours and it just means we will have invested that much more in Canadian producers, and had that much more of a positive impact with the producer and it will have a marginal impact on our business plan.  Not a material impact, a very small impact, and we're prepared to take the risk and the company is prepared to put that extra money in Canadian producers.  But we sure hope we get that back.

2263          MR. PRICHARD:  Mr. Haines does have a comment to make on the Telefilm question.

2264          MR. HAINES:  Just very quickly, Commissioner.  Those top-up fees will be selective.  It will depend on the program as to whether we think that there's an opportunity to do that type of thing and if it does have the legs to travel.  And so if you take that amount of money as a per centage of the $10.6 million in year one for example, it's only 24 per cent so it's actually lower than what Telefilm would expect to recover, against the total.

2265          MS. CRAM:  Could I take you to 9.5, at schedule 27 and I just want to go through the math recognizing that's not my best subject either.  And if I could take you down to - if you have got that - down to doc biography and it says 70 per cent, what does that mean?

2266           MR. ROTHSCHILD:  Commissioner that means that we are hoping to recover as much as 30 per cent in sales -- by 30 per cent as the top up and $875,000 is what our licence fee is and that the $375,000 is that top-up that we're talking about.

2267          MS. CRAM:  Okay.  So if I have got it then, each individual one you believe in terms of cost per hour will be $10,000 an hour, on average?

2268          MR. ROTHSCHILD:  Yes.  In cash.  There are other -- I think we talked earlier about additional services that we intend to make, especially in the case of the documentaries.  But in terms of our cash investment, we see a contract with a producer for the 130 hours and then -- and it would be for the $1,250,000.  If you divvy that up by the hour, it would work out to an average of that in cash plus the additional services that we -- or facilities we plan to make available to them.

2269          MS. CRAM:  And it's your position that that $10,000 is sufficient to cover the cost of production; is that your position?  Do I understand that correctly?

2270          MR. ROTHSCHILD:  That's correct and I can ask Paul Osbourne to expand on it if you would like to understand.

2271          MS. CRAM:  No, I would like to understand this, so an average, each documentary in your mind will -- not a licence fee, but will actually cost $10,000 an hour?

2272          MR. ROTHSCHILD:  What I'm saying is that it could be produced for $10,000, if the producer is successful in going out and finding additional investors plus on top that they're going to have the services that we are going to be providing to them, the facilities, which is probably worth equal amount again in a non-cash piece of that.

2273          MS. CRAM:  I hear you.  And then you would be advancing if I have got it right, $375,000 divided by 130 on each individual one?

2274           MR. ROTHSCHILD: That's correct.

2275          MS. CRAM:  And expecting to receive that back.

2276          MR. ROTHSCHILD: We would be hoping to.

2277          MS. CRAM:  Okay.  Thank you.  On cable distribution, you have talked about waiving your rights to have more than one signal in any given market.  What about placement on the band?

2278          MR. PRICHARD:  We are prepared to meet with the cable carriers and try to find a place between two and 30 and not insist on the 2 to 13 position which we believe your regulations on their face would entitle us to ask for.  We would hope to establish a common number among the different carriers for Hometown Television so that the promotional effect will be as effective as possible, given people from these areas do work in one part of it and live another.  So if we could get a common channel worked through that would, we think help, get the branding and get the place in line.  But we are not asking that it be, other than two to 30, to be specific.  Your colleagues are recording it, we would like to have an unimpaired channel between 2 and 30, knowing that there are some between 2 and 30 which are impaired.  So unimpaired, between 2 and 30 would be our position that we would seek in discussion with the cable companies.

2279          MS. CRAM:  Thank you.  Madam Chair?

2280          THE CHAIRPERSON:  Commissioner Langford?

2281          MR. LANGFORD:  Thank you very much.  I will try to keep it short.  You people have been at this a long time and the next people are just eager to get up and take your punishment.

2282          The first question I have is really a general one and I must admit if it were put to me I wouldn't necessarily have an answer for it but I am hoping you come with more background information than I do.  I was impressed by the amount of market assessment if I can call it that, viewer assessment that you have done and you spoke about this morning.  You have done studies upon studies it sounds like, and you have found -- if I can put words in your mouth -- you found a formula that you think will work, you found products that will work. 

2283          But here's what struck me as odd.  You found exactly the same product for three completely different markets, and I found that strange.  I mean I guess you know, we had an applicant in here yesterday who is going to propose as a Toronto station with two rebroads, they're locked in, a rebroad is a rebroad but yours aren't rebroads.  You have all the flexibility in the world.  Granted you'll have different local because local in one is not local in another.  But other than that, I am surprised - somehow I don't know why - that the folks in Kitchener want exactly the same thing as the folks in Toronto.  And I just wonder whether you had any commented on that, perhaps you don't.

2284          MR. PRICHARD:  Thank you for that and I am going to ask Jeff Vidler to respond.  Because it is as you say, based on the research, although to be fair in a local component we are providing -- while the framework is it the same it will be distinctive to each of the three areas because of the local component and it comes from the research.  I'm going to ask Jeff again confirm that and comment on the query why might that be and he may or may not be able to speculate on that part of the question.  Jeff?

2285          MR. VIDLER:  It would require a bit of speculation.  I don't think it's probably entirely a coincidence that we found a similar level of demand across all three markets.  In fact, I would venture to say that if you were to test this type of local TV concept in similar markets, similar size across the country, you would probably find a similar demand.  I guess what's happening here is there is a business model because of this amount of population in this area that would make it possible to deliver this type of television in the Toronto, Hamilton and Kitchener areas.  That was the vision that Torstar had and those were the markets that we surveyed.  If you were to do the same kind of survey in Calgary or Edmonton or Winnipeg, you may find a similar kind of market opportunity.  Whether you can put together the business case to make it work would be the other question.

2286          MR. PRICHARD:  Commissioner, if I could say, we did also find, again perhaps not surprising, but when we did the surveys, the 2,800, we also coded it for ethnicity.  So we looked to see, does it cut based on the background of in community, the different make up and again, on that -- the numbers were remarkably constant across the -- it didn't cut one way or the other and I believe that on gender as well that was the case.

2287          MR. VIDLER:  Actually slightly higher appeal among women, particularly 35- to 54-year-old women with families it was a very strong family component to the demand in a lot of markets.  But certainly Rob, in terms of ethnic groups, by dividing the results, looking at them by major ethnic groups, the demand for Hometown TV was really consistent through all ethnic groups.

2288          MR. LANGFORD:  Thank you for that.  Similar vein: the other thing that surprised me -- or I don't know if surprise -- I will use the word surprise, certainly didn't shock me, but I found it interesting.  You dedicated precisely the same amount of time in each of the areas to local or regional programming, 32.5 hours, precisely the same.  And I certainly don't want to alienate Jennifer Lynn over there from Kitchener but I wonder, intuitively, it seems there would be more to cover in Toronto and less to cover in Kitchener.  And I say that only mathematically, not in the sense of quality.  But Toronto does the have the provincial government and the large, large local government and different crime levels and different, you know, bigger stories, bigger traffic, everything is more.  There just a lot more people.  And yet they get 32.5, Kitchener gets 32.5, and I just wondered about that.  I don't know whether you have any comment on that or whether you think it's a winning formula.  It's simple as that.

2289          MR. ROTHSCHILD:  Commissioner we think it's the appropriate level for each of the communities based on the feedback we've gotten in the research.  It's 14 hours of news each week in each of the markets which is actually similar, again, similar to what we have seen historically.  It's the non-news programming that really puts us over the top.  It's 14 hours of regional news, there's a couple of hours of repeats, that's 16 hours of news.  There's 16-and-half hours of non-news programming.  That is substantial and for any one of the markets it is challenging and substantial to do quality programming, good programming.  We're looking forward to doing it, but we certainly think based on feedback we got that those are the types of programs these people are looking for right across the board.

2290          MR. LANGFORD:  Do you think the smaller communities have the population base so there will be enough stories to fill that kind of time every day.

2291          MR. ROTHSCHILD:  Commissioner I just know that Jennifer and Donna are going to want to talk about this.  Absolutely, without doubt there are more than enough stories for all of the local programs. I will start with Donna and then ask Jennifer.

2292          MR. LANGFORD:  If I could just put this comment in before I'm executed here, I am only saying this on terms of population size, if 32-and-a-half hours in other words is the right amount for a megacity is it the right amount for the smaller city?  That is simply the question, it is no way meant to cast aspersions on any of the smaller centres of population.

2293          MR. PRICHARD:  We take it in that spirit entirely.  I think every member on the front bench wants to answer I am going to ask Don then Donna who is in the business in Hamilton, and then Jennifer will not forgive me if she doesn't have a chance.

2294          MR. SHAFER:  Commissioner, it's important to point out that's a minimum commitment, it's what seemed to work when we put the program schedules together.  And 32-and-a-half seem about right, but we know there is going to be a terrific programming challenge because each market is different.  And the day's events or special things that are happening that in a market will put pressure each station's schedule, and, therefore, the group schedule as well.  So it will become a juggling act and probably that's a good thing that that can happen so it has to be flexible.  So the 32-and-a-half was simply a place to start from. Donna?

2295          MS. SKELLY:  Commissioner, Hamilton is smaller than Toronto but if you encompass the Niagara region and a portion of Halton, you end up with over a million people and as I said earlier, I think had we not lived in the shadow of Toronto for so many years we would have had a second television station here years ago.  There are, despite the fact that CH has refocused on the local community, there are many stories and many issues that go unreported and I think people here deserve a station.  I think that it's long overdue.

2296          MS. LYNN:  Let me take it from the perspective of not population, Commissioner, but richness of talent that exists in my hometown of Kitchener.  There are incredible stories in Kitchener, incredible talent in Kitchener that is not only of interest to Kitchener people but we feel would be of interest to people in the golden Horseshoe where Hometown Television will serve these communities.  Let me give you some examples.  Are you aware of that one of the most internationally recognized producers of innovative children's toys is right in Kitchener, Fundmental Toys is in Stratford, excuse me.  I talk Kitchener and its region.  Or that one of the world's leaders in precision work on vintage airplanes is Walter Wireworks just outside of Kitchener.  Or if you're interested in cooking, we have exotic and medicinal mushrooms grown in New Dundee, the Shitakes and the Reshes.

2297          But here is a story that I think will give you a perfect example.  If you want to learn how to make an award winning white chocolate cheesecake with sun dried cherries adorned with Niagara region-grown pesticide-free grown flowers created by a Kitchener chef extraordinaire of Chinese decent, trained in Toronto we have that story waiting to be told.

2298          MR. PRICHARD:  Commissioner you know, we would go on.

2299          MR. LANGFORD:  We don't have 32-and-a-half hours here.

2300          MR. PRICHARD:  The only other point we want to make is that Don said this is the floor and by using our regional program we can reflect where the actual developments are with our regional programs on top.  And I think it's fair to say that we believe Kitchener and Hamilton are more underserviced at present in this area than Toronto would be in absolute terms.  So that's an offsetting direction from the population which, as you say, pushes one way, the relative underservicing pushes the other and left us with this four -- 32-and-a-half.

2301          MR. LANGFORD:  That's an interesting take as well, thank you.  The question for you, Ms. Skelly, and of course you may want to kick it over to one of your engineers or something, I was confused by something you said in your opening remarks.  You said -- and you kind of hit it again just a minute or so ago, the same theme.  You said Hamilton, "I was pleased to see the orientation of the local programming was not toward Toronto but rather towards St. Catharines and Niagara.  You have to remember that the Niagara region has a population of 400,000 people and is greatly underserved at this time.  Hometown Television will address this by opening a St. Catharines bureau to be the stations eyes and ears there."  I am afraid I didn't give it the reading you did, but what made me wonder about that was when I got out the contour map that you provided in your application, it doesn't appear that any of your signals actually go as far as St. Catharines.  So I couldn't quite understand why you would have a news bureau in a city which didn't get your signal.

2302          MS. SKELLY:  Commissioner I if I may, I would ask to pass it to Wayne.

2303          MR. LANGFORD:  I thought you might, yeah.

2304          MR. STACEY:  Commissioner, what you say is true in terms of the position of the grade B contours, but of course the -- this signal would be mandatory carriage throughout the areas encompassed by the grade B plus 32 kilometer contour, so in fact the heavily cabled population in Niagara would receive service through the Hamilton transmitter.

2305          MR. LANGFORD:  I don't -- I admire you as a person and a scholar and an academic and a professional, but are you absolutely positive of that?  It would be covered?

2306          MR. STACEY:  Yes, the grade B plus 32 kilometer contour which is the criteria for mandatory carriage on an extra-regional basis would enclose most of those areas certainly up to St. Catharines and down to Welland.  South of Welland, we might be a little beyond that.

2307          MR. LANGFORD:  I am trying to use my thumb to measure that. I guess it goes just get over that. Thank you very much, that clears it up.  So you will at least be on the cable and people with rabbit ears may be able to pick it up as well if they get a clear day or something like that.

2308          MR. STACEY:  Well, the other thing too is that I think most engineers recognize that the grade B contour positioning is a little pessimistic, and quite frequently people with outdoor antennas are capable of getting that signal quite reliably beyond the grade B contour as well.

2309          MR. LANGFORD:  Thank you for that.  And you were very, very gentle about pointing out how little I knew about that particular area of the world and I thank you for that as well.  My final question is to delve into yet another area of the world that I'm not particularly strong on, but I was taken by -- I think it was you, Mr. Rothschild, I am not sure, there were so many questions answered this morning and this afternoon.  But I was taken by your approach to purchasing programming and it seemed that you spoke of buying block lots and, therefore, at one point I think you said spending as much as $3.2 million for hundreds of children's programming and therefore getting you know, economies of scale and being able to purchase more by purchasing that way.  I think you said it a not as though we're purchasing one hour at a time but purchasing huge amounts.  But isn't the risk to that that you might purchase one that - to use another one of your colleagues, I think Mr. Haines' expression was - doesn't have the legs, and, therefore, you're stuck with hundreds of hours or an agreement to buy hundreds of hours.  How do you protect yourself against that?  Something that may meet the contract, you know, it's a kids show, it has a stuffed bunny jumping around speaking to the children or whatever, I suppose that wouldn't work anyway.  They're too clever for stuffed bunnies now, but it might meet the concept: it will be in colour, it will be a half an hour long, it will have the stuffed rabbit, it will have the toy train but somehow kids won't like it, then what will you do?

2310          MR. ROTHSCHILD:  Commissioner, I think that's always a risk you take when you sign a contract for a number of episodes of television.  And certainly we will have to be very careful in what we do and who we choose and we understand what it is they're producing and probably do tests, market testing of the programs before they go into full production and there is also -- you know, I see being part of the commercial arrangement in terms of being able to perhaps it's not all 400, it's 200 conditional on them meeting a certain criteria.  But you want to give them a large enough contract that they can achieve those economies of scale.

2311           MR. LANGFORD: I gather that in the United States for example they often just make 13 or something like that, make a pilot, make 13 and sometimes you only get to see about three of them and they come back in the summertime and you see rest of them but a lot of them just don't make it.  They're putting a lot of money into it, but for some reason they just don't have it.  Others, as we were told by an applicant yesterday, are expected not to make it and turn out to be great successes.  But I just wonder because money does appear to be tight in your proposal.  I mean, you are proposing to do a lot with a lot of money, but not a huge amount of money, and this is high risk in my opinion, to commit to a large number.  You know in order to enjoy the economies of scale, you've got to commit to a large number.  And if people don't like them, you're stuck with them.

2312          MR. ROTHSCHILD:  Well, Commissioner, I will get Paul Osborn to talk about it's like to be the independent producer who is commissioned to produce these programs.  But again you can see it being reasonable, you're talking about the large box and say well perhaps you want an opportunity to pull out after -- you are commissioning 400 hours of children's programming perhaps you want the ability to pull out after 5O hours and that -- you know, conceivably in my mind that could happen.  And that's part of the commercial arrangement you go into with the producer.  I think the point is you've got to make enough of a commitment and have enough confidence in that company that you have some sense that the initial tranche that you're doing is enough for them to get the economies they need to deliver you the program you want, that you have enough confidence, that you have tested and looked at enough and made sure the program is going to hold attention.  Paul is there anything you can add to that?

2313          MR. OSBORN:  Commissioner, if I could speak a little bit about some history that may be help.  My company, Electric Entertainment, has been in the business of producing television programs for a number of broadcasters through the system for over seven years.  And we began with a strategy of producing programs essentially for specialty channels.  Where we were given the opportunity to produce episodic television with a large number of episodes available to the commitment of that series, and I can cite examples of Jane Hawtin live which ran for four years with WTN; the program Doctor On Call which also ran.  We most recently we produced a show called Prime Business with the Prime Network.  And in investigating and putting together the strategies, and there are strategies towards producing this kind of program, the investment and infrastructure in our particular case was substantial.  We have a studio, a full studio, a full complement of post, the capability of shooting in the field, all part of our business structure and I can tell you we are not alone.  There is a brand new company here in Hamilton called Eclipse Television which also has a studio and also has facilities.  So it is a question of scale.  But at the same time you have got to recognize that the there is a demand on the producer to be able to deliver programs that have ratings.  You've got to be able to reach out and touch an audience and hold them.  And I am happy to say in the programming that we delivered in those examples that is I am speaking to you, we did that.  We did that to such success that in Prime Business for instance we were able to bring forward the Bank of Montreal as a sponsor for the program for a full season.  And so those levels of success are achievable and it's a reasonable and appropriate business formula to entertain, and one that of course I am happy to step up to on behalf of my company.

2314           MR. LANGFORD:  Well, you are taking the risks, folks, and so thank you for those answers those are all my questions.

2315          THE CHAIRPERSON:  I must say I somewhat share Commissioner Langford's concern about what programming ends up on the screen or not and I fully -- I am fully expecting each time we get a new TV application that they will be relying on the financial projections on the cost of shelves.  Commissioner Wilson?

2316          MS. WILSON:  The shelf is where you put the programming that doesn't go to air.  Of course I just wanted to thank everybody for the cough drops.  Obviously they have done the trick.  I just want to go back to -- and this is -- you have been questioned about this already by two, maybe three of the Commissioners about the cost of programming.  And I guess the reason that I am going back to this is just to satisfy myself with respect to the viability of the proposition that you're putting before us because you know, in conventional, conventional television station, you have U.S. programming, that drives the revenues.  And you don't have that here.  In the block schedule that you filed you have none at all, you are allowing yourself 20 per cent flexibility or you're asking us to allow you 20 per cent flexibility in the event that you might want some American or other foreign programming in there.  You have very high levels of Canadian content.  And you have high levels of local and regional and yet the cost per hour of programming and this goes back.  Commissioner Wylie asked you about this and I think Commissioner Cram got into it a little bit from the point of view of the syndication revenue you are expecting to generate from it.  When was the last time anybody bought a documentary?  You have 130 hours a year of documentaries which constitute a significant portion of your peak time Canadian commitment and the average cost per hour, according to Mr. Rothschild it could be a licence fee or it could be the entire cost of a documentary, when did you last buy a documentary for $10,000 that showed in prime time, that drove revenues to that channel?  And I am not talking about whether or not it can be done but as a prime time or peak time strategy, a $10,000 documentary -- and certainly I mean you know, Mr. Osborn is talking about programming strategies, but you are running the station in one of the most sophisticated markets in North America.  I applaud the local orientation it is a big gap in the system right now, but it's -- if you want people to watch, you can't run the same kind of documentary, you can't come up with sort of a formulaic approach to building those documentaries using archives and library photos, sort of like an assembly line of documentaries that you're going to show 130 of every year and expect people to watch.  Your shareholders are welcome to fund that, but I need myself, I need more reassurance that these are realistic numbers because in my experience where, you know, a typical local regional documentary is anywhere from $30,000 to $100,000 an hour and a typical network documentary is $100,000 to $350,000, even half a million dollars an hour, when you get to the really high end stuff; that's People's History or something on CBC might have been in that range.

2317          And that's not the kind of stuff that you're doing, but your business plan really hinges on this stuff, so 10,000 bucks an hour doesn't sound like a realistic projection to me.  And if that's not realistic, then it's like a domino effect all through your business plan.  The syndication of revenues are not going to come, the ad revenues are not going to come because people won't be watching it.  So I need some reassurance about -- about whether or not -- if you're telling me it a licence fee even then I would say they're bit low to me as a licence fee.  So I guess I need some reassurance that these are realistic projections.

2318          MR. PRICHARD:  Thank you for that question.  You are where I was five months ago.  When I joined Torstar --

2319          MS. WILSON: Except I have worked in television before, Mr. Prichard so that would be somewhat of a difference.

2320          MR. PRICHARD:  I was flattering myself in saying I was where you are.  In terms of question you asked, in that it seemed to me in embracing in application, there were two questions I had to press down very hard on.  The first was the audience question and the value of the audience.  That is what Mr. Vidler and Mr. Young spoke about.  We had special meetings, round tables.  We drilled into it further and I personally became persuaded by exactly what my colleagues have said.

2321          MS. WILSON:  I think the audience projections are quite reasonable.  Those satisfy me so I don't have a problem with that.

2322          MR. PRICHARD:  I did it in order.  First, I want to the audience side and we had special sessions and went back over all the research to get to the judgment that we put in front of and I am delighted that you found their representations -- I certainly did myself and felt that leg of the plan was in place.  But that's only half the leg because that assumes not just that we can do it at this cost, but that we can do good quality material at this cost because the program -- the buyers, the advertising buyers, were assuming good quality work that we would be producing to get the audiences.  So then we went and did exactly the same thing and the two people behind me to right, Gord Haines and Paul Osborn, supplemented by Rekha Shah, they persuaded me on that.  So I would like them to speak to why they believe it because they have spent a very large amount of time with independent producers, asking for budgets, asking for proposals, back and forth to a level that again -- you are the people we have to convince, not, but I'm saying we wouldn't be here making this proposition if I wasn't also persuaded with the team.  Because the risk if we're wrong on this, if you give us the privilege of licence, the risk of course, is ours.  Our shareholders are the risk holders.  We have to deliver on this.  So it was just as important to us as was the first question.  We are in this, we're in this for the term of the licence.  We're in this where the commitments are made.  I reiterate, we are a company that cannot possibly afford not to keep its commitment because of the broader business we're in and so the -- I'm going to and Mr. Haines and Mr. Osborn and Ms. Shah to comment.

2323          MS. WILSON:  Maybe before they comment, Mr. Rothschild, you can tell me are you seriously considering contracting 400 hours to a single producer?

2324          MR. ROTHSCHILD:  Commissioner, we're going sit down with the producer and see how many hours that producer needs to feel confident to develop the infrastructure to be able to deliver the programming and have the cost of scale.  It may up end up being the first 15 and an option on the additional ones assuming that we're happy with it and it delivered the ratings that we wanted.  Which by the way, for a show like that, are pretty small.  The point is it's the quality of the programming that we want. And so obviously you're not going to sit there and say it's an uncancellable contract for the 400, I think that's what you're saying to me and I'm saying no, we see it as it has to be big enough for them to the economies and yet enough if they fail to deliver --

2325          MS. WILSON:  I don't think I have heard of a contract for 400 hours before.

2326          MR. ROTHSCHILD:  I grant you that and I'm not sure that you have a heard someone sitting here they want to do 400 hours of children programming either as part of a general interest station.  We think it's a great idea and the research says it was a terrific idea.  In fact, it was one of the most popular ideas out of the research.  And in fact that's what pushed us to it, as opposed to it going the other way.  It came out of the research, people saying this is what they felt was a real need for in the marketplace. 

2327          So we believe that demand is there, the challenges to do quality programming right across the schedule.  In the case of the kids show I think -- I don't think any producer would say it's unreasonable for us to say will lock you in for long enough to make sure that you can ramp up to do the production, yet we want to make the quality levels stay up and we're happy with the show.  And so that's how we see approaching that one.  In terms of the rest of the schedule, I think that we can have Gord and Paul talk to explain to--

2328          MS. WILSON:  Maybe they can talk more directly to the cost issue which is the thing that concerns me.

2329          MR. PRICHARD:  Gord, then Paul then Rekha each on the cost, please.

2330          MR. HAINES:  Let me go back to a little bit earlier about the criteria because we didn't actually craft these budgets.  What we did was we took some criteria to the independent production community and said, if we provided you with these in-kind services that I talked about earlier and if we were prepared to put up some licence fee and probably some additional investment money, take a look at this as a block, what kind of programming can you produce for what kind of dollars and please give us as much detail as you can.  We supplied them with rough formats, what we expect the shows probably should look like and what came back to us then were budgets from the independent production community, producers who were used to producing that kind of programming within efficient budget ranges.  You can't really compare a single documentary produced for a network to a series of documentaries that are being produced efficiently by a small producer it's a different game for sure.

2331          MS. WILSON: So you're saying of those 130 hours of documentary that you are showing you would be contract out a series of them to one producer?

2332          MR. HAINES:  Well there are a number of ways to approach that and we have discussed that with Mr. Osborn and his company Electric Entertainment and let me turn to mic over to him and have him describe to you how he would do something like that.

2333          MR. OSBORN:  Thank you, I think.  We began the discussion Gord, Rekha and myself concerning the Biography series which plays in prime time and we did see, at least in seasons one and two, that commitment would be towards the biography series, a host-driven formula similar to what you can see on the A&E network which is so successful in this market across Canada.  Following through the designation of that we developed, and you know that things are very well researched here, the demand for research is pretty stringent, we developed the full course budget a detailed budget on how to we would attack that series and bring it forward and it's clear that the $10,000 in cash, comprised of licence fee and the additional financing that Eric just spoke about earlier, won't underwrite the cost of production for that.  But within the resources that are available through this licence, which are entirely unique, to my knowledge, and the great strength that comes from both Hometown Television and Torstar, the combined entity brings substantial opportunity for any producer to try to approach this.  The facilities that would be available through Hometown Television for each one of the individual stations are pretty exceptional.  There would be editing facilities, shooting facilities, camera crews and the people who can provide that.  And beyond that, there are facilities at Electric Entertainment for instance and I have had a chance to describe a little bit how that works.  But through the Torstar newspaper group there are substantial resources here that help to bring forward great elements of content that help to underwrite this budget and I am speaking here about archival materials, of photo libraries, of the research staff and availability here to provide this material in addition to the cash financing that's coming to the table.  When we started the strategizing how we would produce 130 episodes essentially for three television stations and regionally produced programming, we began with a discussion of who, in fact, would produce the episodes. 

2334          We took the view that if Electric Entertainment was providing the umbrella for this show, we would not take on ourselves certainly the production of 130 individual episodes.  But if we look the strategies available throughout the market and what these stations represent I think we're in very good shape.  We suggested here as a matter mathematical formula that it might be ideal that we looked at 13 producers who would be subcontracted by Electric Entertainment to produce these episodes.  And for the sake of a number again we would say much each of these 13 producers produced 10, you would arrive at the 130.  So if we took the strategy of a market and said seven of by seven subcontracted producers in the Toronto market, three in Hamilton, and three in Kitchener, we would then have two great values coming to play.  One, we could meet the expectation of delivering 130 which is part of the challenge.  And the second thing is that we would ensure the fact that the voices of those communities are coming back into the regional programming in a substantial way. 

2335          Now that doesn't preclude the opportunity that -- those mathematical numbers don't preclude the fact that producers outside of the market who would want to participate in this also. And certainly we know that there are, for instance, aboriginal producers who though located outside of the Toronto or the Golden Horseshoe market may well wanted to come back into it - and I believe full well they will -come back into the Toronto market and want to produce content emulating from here concerning their particular and vital interests and the stories that they want to tell perhaps from the Six Nations reserves, the stories that need to be brought forward. 

2336          So when we put together all the components of this, the cash that's on the table, the resources that come from both Hometown and from the Toronto Star Newspaper Group, understand that we are talking about the Hamilton Spectator here and we are talking about the Kitchener Waterloo Record, those are great strengths.  The approach to be able to subcontract into the market to bring back the tonnage, for us to be able to set up in our studio, build a one-time presentation set for the host to be in and shoot all the wrap-arounds, all the interstitials that brings this programming together give it a tie in so that it has a host and it has a focus and it has a brand and can stand up in the market and be a legitimate television program, we're entirely confident that we can make this happen and it will work.

2337          MR. PRICHARD:  One final brief word from Rekha.

2338          MS. SHAH:  Thanks, Rob, simply put, I agree with what Gord and what Paul were saying and first and foremost it's the idea, the content that will really speak to audiences and I am comfortable with the approach that they both take and we're taking to apply that to how we're going to work with all independent producers with Hometown Television.

2339          MS. WILSON:  Okay.  I will just ask you one quick question you have been questioned a lot on the 80 per cent, but I will ask you another one.  Mr. Prichard, did I hear you say at some point that 80 per cent of that 80 per cent would be something or other?  Did you offer -- the 80 per cent of the 101 hours and 80% works out to about 81 hours.

2340          MR. PRICHARD:  I did, after the first break this morning trying to respond to Madam Chair's earlier inquiries but if the concern was, will this material be distinctively about our locale and our regions as opposed to only Canadian being the boundary, the conditions of licence are proposed were 32.5 local for each station and 101 minimum Canadian and I thought there was a line of questioning which was -- but that may not be as reflective of this community given the regional component, could you make a commitment that it would have a regional flavour to it above and beyond being Canadian. I think afterwards Madam Chair said that wasn't actually the concern, it was more which Commissioner Cram had been pursuing, which was above the 101 and I won't repeat why I am reluctant at this stage in our lives in entering to set the bar the absolute bar at 101.  I don't think it would be prudent for me to do that. 

2341          I did say, however, that we would be prepared to commit that a very substantial, overwhelming portion of that minimum guaranteed 101 would be regional and local if we develop a definition that talked to what constituted at present, as I understand CRTC policy there is no such definition, that is the word regional appears but for other purposes.  For these purposes, as we offer this concept, we would be prepared to say as we commission this work as we produce our own content, that it would fit a definition of regional and I suggest 80 per cent, that would be 80 hours of the 101 would be regional or local.  But to make that effective as a condition of licence, we would also need a definition of regional to fit within, and I thought I understood Madam Chair to say that wasn't a place she wanted to go, but if you wanted to go there we're quite comfortable doing it because it's the essence of our proposal.  So we will be doing it this in any event.  As a matter of fact, that's what he we are going to be putting on the air, but if you want to work towards a condition that would capture that as a commitment we're not uncomfortable with it.  It's just awkward because we can't say that's the box we want to put ourselves in because as I said the box doesn't sit there now, we had worked on some possible definitions and we would be happy to explore them at some point. 

2342          But I took it in fact the principal concern was our reluctance to go beyond the 80 per cent that is the 101 hours guaranteed including the 97.5 of local, and I know you don't want to hear me a fourth time because I have tried to say it.  We can not afford --

2343          MS. WILSON:  A little tip in future: if 80 per cent is what you want, don't offer 118 hours.

2344          MR. PRICHARD:  That's very, very good advice.

2345          MS. WILSON:  Offer 80 per cent, thanks.

2346          THE CHAIRPERSON:  Counsel?

2347          MR. RHEAUME:  Thank you Madam Chair person, just a few brief questions. 

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

2348          Mr. Prichard, did you just bump up your Canadian content peak time commitment to 80 per cent or did I not hear right?

2349          MR. PRICHARD: I offered to do so attempting to respond to what I understood to be the panel's concern.

2350          MR. RHEAUME:  As the chair has explained to you, this is your application we have to know what it is you are applying for.

2351          MR. PRICHARD:  I am prepared to commit on behalf of Torstar to a condition of licence which is 80 per cent Canadian at all times, that is in terms of 80 per cent of the broadcast day, 80 per cent of the evening broadcast period and 80 per cent of the peak time as defined by the 7:00 to 11:00.

2352          MR. RHEAUME:  Thank you.  Now, independent productions.  There is very substantial commitment in terms of hours and budget, hours per year and budget per year.  Should this be a condition of licence?   1,230 hours a year and/or $10.6 million year one escalating to, I believe $14.1 million in year seven?  What are your views on that?

2353          MR. PRICHARD:  Our views are again today of course in the hands of the Commission.  Our proposal would be to look across how other licensees are licensed and to put on the table those conditions I have already proposed and to have the rest understood as our plans and our expectations that would create it.  If it were the case that the Commission were to doubt that commitment, we think we can go to a commitment in terms of expenditure, level of expenditure, which will become a term of condition.  If we did that, our proposal to the Commission would be to set it in terms of the commitment to licence fees and above that we have the supplementary funding, that being an investment decision, that being a matter of negotiation with the producers.  We don't -- we think it would be better to set the condition, if it's to be a condition of licence, that it would be best to set it at the level of licence fees that we are committing to the independent production community.  So our -- that would be where we would go with the proposal but again, in this process at end of the day we need to be responsive to the Commission's concern and if that's a unique concern, we're prepared to make commitment.

2354          MR. RHEAUME:  And how much would that be as a commitment.?

2355          MR. PRICHARD:  That is the 7.9 in the first year and then inflating up because it's 7.9 plus the 2.7 supplementary funds in fact equity investment above and beyond.

2356          MR. RHEAUME:  And how about the number of hours per year you would not be comfortable with a condition of licence in that regard; is that fair?

2357          MR. PRICHARD:  I would prefer to put it in terms of the level of expenditure.

2358          MR. RHEAUME:  Local station produced 32-and-a-half hours per week.  How much that is original and how much would be -- well, you answer the first one.

2359          MR. PRICHARD:  Mr. Rothschild is going to answer that if you will just give us a moment to go to the page.

2360          MR. ROTHSCHILD:  A minimum of 20.5 original and 12 hours of repeat.

2361          MR. RHEAUME:  Are you okay of a condition of licence in that regard?

2362          MR. ROTHSCHILD: Yes, we are.

2363          MR. RHEAUME:  Thank you.  Final question on severability.  If you were given the licence for Toronto only, are you comfortable with all the commitments that you have made as conditions of licence?

2364          MR. PRICHARD:  Yes, with the obvious exception of the local programming that we've committed to in the other two stations.

2365          MR. RHEAUME:  Yes.  Thank you.  Thank you, Madam Chairperson.

2366          THE CHAIRPERSON:  Thank you, Mr. Prichard since you are relatively new at this, the next section under the Rules is called answering the questions that were not asked.  So you have three minutes to do that.

2367          MR. PRICHARD:  Thank you, Madam Chair.  Thank you for the privilege of appearing with my colleagues today.  I also wanted to thank them, they're a great team of men and women it is a great privilege to work with them.

2368          We believe at end of the day you are likely to conclude that these markets can support new television licences and that there is a real need to be met by these new stations.  And if you reach that conclusion we believe there will be two issues principally on your minds in deciding which one of what I believe are worthy applications not only from us but from our colleagues in the other companies.  It is of course our position that when you come to that we hope you will choose us.  I suggested to you there are two reasons why you should. 

2369          The first reason why you should is I believe when all is clear, the proposition we're putting in terms of Canadian content, local commitment, reflection of our locale and of our region, is the strongest proposition that's before you.  And that it sets a new high-water mark for Canadian broadcasting.  It advances the case as if often the case when any new entrants come to Canadian broadcasting that's often a moment when the bar gets raised and we believe this is an opportunity before you to raise that bar and further advance the case of the Canadian broadcasting system and the goals that broadcasting have.  So on content, we believe it's the best proposition.

2370          The second question we believe you will face is a systemic or structural question which is, what's best for the Canadian broadcasting system?  Is it best to take an existing member of the family, an existing participant and extend its reach whether from the west, to the east, to have two to three to go deeper into vertical integration the various propositions that are before you, each of which again we would say are worthy propositions. But at the end of the day, we believe adding to the Canadian broadcasting system to the family, one more serious, stable financially strong, trusted responsible participant that can deliver on every one of the promises we have made is the best choice you can make.  This is the right place for Torstar to join the family because it's in our communities, it's in our part of the country, it's in what we do best; reflecting our communities, reflecting our locale.  We have the resources to do it, we have some of the talent we need to do it, and we will go out and recruit the remainder of the talent we need.  We will harness the great talent of the independent production community.  And we believe as a new entrant we enrich, broaden the base.  We diversify, we add to the family of Canadian broadcasting and we think it will be a better Canadian broadcasting system as a result.

2371          My last word, is what I have said repeatedly.  That if you give us the privilege of proceeding with these licences we will deliver on every single promise we have made to you.  We will never be back in front of you seeking modification or relief.  We expect to be back to seek renewal seven years later with a record of having kept every single promise we have made in response to your questions today.  We thank you very much for the privilege of being with you.

2372          THE CHAIRPERSON:  Thank you, Mr. Galloway, Mr. Prichard and your entire panel and again we thank you for accommodating the change in the agenda.  We will take a 15-minute break and then proceed with Rogers application.

--- Recess taken at 1455/Suspension à 1455

--- On resuming at 1517/Reprise à 1517

2373          THE CHAIRPERSON:  Order, please.  Mr. Secretary, please.

2374           MR. CUSSONS:  Thank you, Madam Chairperson.  We will now hear the application by CFMT TV a division of Rogers Broadcasting Limited for a licence to operate an ethnic language television station in Toronto.  The new station would operate on channel 52 with an effective radiated power of 427,000 watts.  Programming would reflect and serve the ethnic population that speaks pan-Asian and African languages.  The station, which would operate as CFMT 'too', would dedicate 70 per cent of its over all programming schedule to ethnic programming.  The applicant would provide, each month, ethnic programming in no fewer than 18 languages and direct it towards no fewer than 22 distinct ethnocultural groups.  As a result the existing CFMT TV would replace its existing pan Asia and African programming with Euro, Latino and Caribbean programming.  No amendments to CFMT-TV's existing conditions of licence would be required.  We have Ms. Ziniak and her team.

2375          THE CHAIRPERSON:  Before we proceed I understand that congratulations are in order to Ms. Ziniak.

2376          MS. ZINIAK:  Thank you very much.

2377          THE CHAIRPERSON:  I just found out that Ms. Ziniak was awarded the Order of Ontario.

2378          MS. ZINIAK:  Just last night, yeah.

2379          THE CHAIRPERSON:  I hope you won't be impossibly difficult now.

2380          MS. ZINIAK:  No.

2381          THE CHAIRPERSON:  Go ahead.

2382          MR. VINER:  That's my role.

2383          THE CHAIRPERSON:  You are waiting for the Order of Canada.

PRESENTATION BY CFMT TV/ PRÉSENTATION PAR CFMT TV:

2384          MS. ZINIAK:  Madam Chair, members of the Commission I am Madeline Ziniak, vice president, executive producer and station manager CFMT TV.  We are pleased to appear before you to present our application for CFMT 'too', a new multilingual television station to serve the large and rapidly growing pan-Asian/African language population in the Toronto Hamilton area.  With me today are Indira Naidoo-Harris, producer and news anchor CFMT, Tony Viner, president of Rogerts Media; Leslie Sole, executive vice president, television, Rogers media, and Viddear Khan, program controller, CFMT TV. At the next table, we have Jim Nelles, vice-president of sales and marketing; Jackson Ip, account executive, ethnic advertising; Alain Strati, director regulatory affairs, Rogers Media; Renato Zane, News Director; and Tom Ayley, vice president of finance.

2385          At the third table and available for your questioning are Robin Mirsky, executive director of the Rogers group of funds, David Campbell of Insight; Malcolm Dunlop, general sales manager, Barbara Jones of SailorJones Media; Kelly Colasanti, vice president operations and engineering and Steve Edwards, vice-president of engineering, Rogers media.

2386          Local programming has emerged as a key issue not just in this proceeding but across the entire television landscape.  At a time when the industry is consolidating in the face of increasing competition, can the broadcasting system continue to serve the unique needs of interests of local television viewers?  We believe that in this market CFMT 'too' is the answer to the local programming question.  Ethnic television programming is the most needed local programming.  The Toronto/Hamilton area is one of the most ethnically diverse urban areas in the world.  Currently there are more than three million people in Toronto of ethnic origin, they account for over 60 per cent of the total population.  Almost 1.9 million people or 40 per cent of the population have a mother tongue other than English, French or an aboriginal language. 

2387          This large and diverse ethnic population is keenly interested in the ethnic television programming that CFMT provides.  Our third language television programming regularly reaches a much higher proportion of its potential viewers than does comparable programming on conventional English language television stations.  We know from day-to-day operating experience that there is intense demand for a greater choice and diversity of ethnic television programming in the Toronto/Hamilton area.  This demand already far exceeds our capacity to respond.  On average, we receive about 300 proposals for the new ethnic television programs each year, from larger groups asking for more hours and from smaller groups seeking information about Canada and the local community in their language of comfort. 

2388          The studies we filed with our application clearly show that the demand for ethnic television programming, which is already intense, will continue to increase rapidly over the next decade.  Statistics Canada suggests that the ethnic population in the Toronto/Hamilton area will increase to more than four million in 2011.  By then 68 per cent of the people living in Toronto will be of ethnic origin.  45 per cent of the population will have a mother tongue other than English, French or an aboriginal language.  Some of the largest groups will continue to increase in size.  The South Asian population in the Toronto/Hamilton area will increase to 716,000 by the year 2011.  We are already seeing a dramatic increase in the demand for programming in a variety of South Asian languages such as Hindi, Urdu, Tamil and Punjabi.

2389          The Chinese population will increase to 670,000 by 2011.  Most recent Chinese immigrants are Mandarin speaking; as a result, there is now strong demand for Mandarin programming to complement the predominantly Cantonese that we currently provide.  In addition, the ethnic population is becoming much more diverse as many new groups immigrate to Canada and with that comes a real need for local programming specifically designed to assist these newcomers. 

2390          Meanwhile, longer established groups such as Italian, Portuguese and Ukrainian have experienced a resurgence of interest in their heritage, culture, and languages. 

2391          With the limited airtime and finite economic resources of a single television channel, we simply cannot meet the demand for local, ethnic programming.  This application will address that problem.  We propose to split our existing television channel into two channels. CFMT will focus on the Euro, Latino and Caribbean language population.  CFMT 'too' will focus on the pan-Asian, African language population.  CFMT 'too' will build on our existing resources including multilingual television broadcasting expertise.  Synergies with our existing channel will allow CFMT 'too' to far exceed the requirements of the ethnic broadcasting policy.  CFMT 'too' will provide more ethic television programming.  It will offer 70 per cent ethic programming overall and 80 per cent of the programming in the 8:00 to 10:00 p.m. peak time viewing period.  CFMT 'too' will serve more groups.  It will offer programming for at least 22 distinct groups in at least 18 different languages each month.  Together CFMT and CFMT 'too' will provide an unprecedented level of diversity for ethnic audiences by serving at least 40 distinct ethnocultural groups in at least 33 different languages.

2392          MS. KHAN:  The benefits for local viewers are clearly evident in the program schedules for CFMT and CFMT 'too' that we filed with our application.  CFMT currently offers 79 hours of ethnic programming each week.  CFMT 'too' will provide an additional 88 hours of ethnic television programming including 74 hours of local programming that is directly reflective of ethnic communities in the Toronto/Hamilton area.  We will offer more Canadian ethnic programming and, in particular, more Canadian ethnic programming in prime time.  We will increase programming choice for larger groups such as South Asian, Polish, Chinese, Portuguese and Italian.  We will increase the amount of programming that we provide for underserved linguist groups such as Spanish, Mandarin, Farsi, Korean, Armenian, Arabic, and Russian.  New programming will be introduced in a variety of South Asian languages including Punjabi, Bengali, Gujarati, Hindi, and Urdu. In addition, we will introduce many new programs to meet the needs of unserved linguistic groups through the Community Producers Showcase.  CFMT will work with independent producers to develop new programming in the Hungarian, Latvian, Lithuanian, and Estonian languages.  CFMT 'too' will seek out independent producer partners to develop new programming in the Somaliian, Sinhalese, Amharic, Turkish and Pushto languages.  In addition, we will offer new programming for the members of English-speaking Caribbean communities and for French-speaking black communities of African origin.

2393          MR. ZANE:  At CFMT, we believe that news programming lies at the very heart of our multilingual mandate and is one of the most person ways in which we reflect and serve local ethnic communities.  If you approve this application, we will offer more news programming in many more languages, especially in prime time.  We will launch a new weekday South Asian newscast in prime time on CFMT 'too', along with a new weekday Mandarin language newscast.  CFMT will offer expanded weekday Portuguese and Italian newscasts and will move the Portuguese broadcast to prime time.  We will also introduce a new weekday newscast in Spanish.  Many more groups will have access to high quality news and public affairs programming in their language of comfort. 

2394          To support this new programming, we will significantly expand our studio and editing facilities.  We will double the number of news crews we put in the field each day from eight to 16.  In addition, we will establish regional news bureaus in Markham, Scarborough, Mississauga/Brampton, Woodbridge and Hamilton.  These bureaus, like our existing bureaus in Ottawa and Vancouver, will enhance our ability to provide on location coverage of issues and events of direct interest to the many different communities that we serve. 

2395          Our news programs are a fair and trusted voice.  They accurately reflect the communities they serve and address the issues that are most important to them.  Our producers are drawn from the community.  They understand the languages, the cultures, the traditions and the needs of each of the communities that we serve.  CFMT 'too' will allow us to increase the amount of high quality, relevant news programming, to increase the number of groups that we serve and thereby to significantly increase the diversity of local editorial perspectives in the Canadian broadcasting system.  Madeline?

2396          MS. ZINIAK:  We have made important additional commitments to support the development of Canadian talent, and to contribute to the community, totaling 50 million dollars over the term of the licence.

2397          Currently there is no funding in Canada for the independent production of dramatic and documentary programming in third languages.  CFMT 'too' will address this fundamental inequity.  We will spend 35 million dollars on the production of at least 225 new third language dramatic and documentary programs by Ontario based independent producers.  CFMT 'too' will take cross-cultural programming to a new level.  We will commit to $7 million for a new 39 episode cross-cultural dramatic programming series.  We anticipate that our $7 million licence fee will trigger the production of a drama series with a budget of at least $12 million. 

2398          In addition, we will provide $3 million in grants to assist smaller underserved groups to develop programming proposals and to produce pilots. $2 million to fund the independent production of very high quality public service announcements.  $2 million to support the exemplary work of ethnic non-profit community groups in the Toronto/Hamilton area.  $1 million to enhance the ability of the Canadian Broadcast Standards Council to deal with complaints from the public with respect to portrayal in the broadcast media.  Jim?

2399          MR. NELLES:  CFMT 'too' will expand and strengthen the ethnic television advertising market.  Experience has shown that new ethnic programming services stimulate growth in the ethnic advertising market.  Ethnic television advertising revenues in the Toronto/Hamilton market now total approximately $25 million, for about five per cent of total advertising revenues.  We expect CFMT 'too' to grow the ethnic television advertising market by at least 30 per cent over the term of licence. 

2400          CFTM 'too' will strengthen the Canadian broadcasting system as a whole.  A substantial portion of our non-ethnic advertising revenues will be achieved by repatriating audiences and revenues from U.S. television stations. 

2401          CFMT 'too' will have minimal economic impact on other local television stations and by far the least economic impact of all the applicants.  CFMT 'too' will offer only 30 per cent foreign, non-ethic programming scheduled in non-peak prime time periods.  The advertising revenues that CFMT 'too' generates from this programming will equal only 1.6 per cent of total television advertising revenues in Toronto/Hamilton in year one, increasing to only 3.9 per cent in year seven.  These revenues can easily about accommodated with a natural market growth.  Tony?

2402          MR. VINER:  As you have heard, this application is designed to meet the real and urgent needs of local viewers in the Toronto/Hamilton area.  It will also address other policy interests and objectives.  The ethnic broadcasting policy requires ethnic television stations to provide at least 60 per cent ethnic television programming.  We know the Commission sees that requirement as a minimum, and that you would like licensees to do more if possible.  The challenge for us has always been to find a way to do so on a financially-viable basis.  This application, by creating new synergies between two television channels will allow us to do more on sustainable long-term basis.

2403          We also know that the Commission has assigned high priority to the development of strong and vibrant Canadian independent production industry.  Synergies arising from the approval of this application allow us to address that important objective.  Our commitments in this application lay the groundwork for the development of a strong and vital independent ethnic production industry that produces a wide variety of programs of interest to Canadian audiences and with significant export potential. 

2404          Rogers has been actively involved in multicultural and multilingual television broadcasting in Canada for over 25 years.  We launched a multilingual programming service on cable in Toronto in 1974 and in Vancouver in 1981.  We acquired CFMT over 15 years ago when it was in serious financial difficulty, and have provided the resources necessary to make it an outstanding multilingual television service.  This application for CFMT 'too' further reflects our deep commitment to Canadian ethnic television broadcasting. 

2405          As you know, we are seeking authority to use channel 52, as our all of the other parties in this proceeding. However, in our application, we advised the Commission that we would undertake further research to identify other channels that might be available to us.  We now believe that we could use channel 69 to achieve our coverage objectives for CFMT 'too'.  The use of that channel in Toronto could interfere are our use of channel 69 for our CFMT retransmitter in London.  We would be prepared waive our right to protection from interference if the Commission were to determine that it would be in the public interest to approve our application on the condition that we use channel 69.  Madeline?

2406          MS. ZINIAK:  Madam Chair, members of the Commission, we believe that our application for CFMT 'too' most fully and effectively meets the expectation and the requirements that you set out in your call for applications.  It also directly responds to the ethnic broadcasting policy in which you recognize the demand for third language television programming and assigned the highest priority to meeting that demand. 

2407          First, CFMT 'too' will directly respond to urgent, unmet needs for local television programming in the Toronto/Hamilton area.  Second, CFMT 'too' will provide more and better ethnic programming for more groups and will make by far the largest commitment to Canadian talent development and to the community.  Third, CFMT 'too' will expand and strengthen the ethnic television advertising market with the least economic impact of all of the applicants on existing conventional television broadcasters.

2408          For these reasons we believe that the approval of this application would be in the public interest.  We will now conclude our presentation with a brief video.

Video presentation/presentation video

2409          MS. ZINIAK:  We await your questions.

2410          THE CHAIRPERSON:  Commissioner Cram, please.

2411          MS. CRAM:  Thank you, Madam Chair, welcome.  I will be addressing my questions primarily to you, Ms. Ziniak, but simply because you have been the lead here.  Nothing against anybody else on the panel, but if anybody else wishes to answer please do.  And I also want you to know that for the purposes of my questions they will be in relation to CFMT 'too' unless I say CFMT, in which case I mean CFMT, the original.  Is that clear?

QUESTIONS FROM THE PANEL/QUESTIONS DU PANEL:

2412          With CFMT now you have rebroads in Ottawa and London.  And if the new CFMT were licensed, that would essentially mean a loss to Asian and African viewers in those areas in Ottawa and London, would it not, of at least 35 hours of programming?

2413          MS. ZINIAK:  I will ask Leslie to respond to that.

2414          MR. SOLE:  Commissioner Cram that would be true.  In our application I think we stated that it would be our very next step to equalize the distribution of both CFMTs to the same markets that CFMT one is in and we think we can convince you in due time that this concept is applicable to the current CFMT market.

2415          MS. CRAM:  What do you know about the availability of channels, vacant channels in, say, London and in Ottawa?

2416          MR. SOLE:  We have looked at it on sort of an initial basis, we believe that there is technical solutions that would satisfy our needs.  They wouldn't necessarily be large signals but it -- again because it's basically urban service like Cable 14 in Ottawa and Cable 4 in London we think this is a technical solution.

2417          MS. CRAM:  And because doing this -- rebroads would be a public process and given that there is no certainty in life, do you have a plan B if the rebroads aren't granted?

2418          MR. SOLE:  Well, yes, we do.  We believe that there are other mechanisms that wouldn't give us priority carriage that would allow us to be -- allow us to give not basic service, but enough service that there would be a wouldn't be a great disparity.

2419          MS. CRAM:  And can you tell me those plans?

2420          MR. SOLE:  Well, there is the option of convincing BDUs that we are reasonably important and necessary distance signal, which is the most obvious one.  There is the extra-regional notion.  There is the idea of moving back from the urban centres and reaching head ends.  We generally have a very creative sense of distribution.  We really believe that the concept and what we are going to provide that we could convince the regulators the BDUs in some combination that it would be good for Ottawa and London to be served.  To be frank, we thought that doing that during this proceeding would be not paying attention to the call.

2421          MS. CRAM:  Would be which?

2422          MR. SOLE:  Not paying attention to the call issued by the CRTC for the GTA, Hamilton and Kitchener, that we would be muddying the situation.  So we didn't do it at this time.

2423          MS. CRAM:  I see, can we do just a few nuts and bolts now in terms of COLs for CFMT 'too'?  Would you agree that there would be a minimum of 70 per cent ethnic programming between 6:00 a.m. and midnight by way of COL?

2424          MS. ZINIAK:  Yes.

2425          MS. CRAM:  This is Reach For The Top, you have to hit the button.  Would you agree to a COL that there would be no less than 80 per cent of ethnic programming annually between 8:00 and 10:00 p.m.?

2426          MS. ZINIAK:  Yes.

2427          MS. CRAM:  You have given no commitment about 6:00 to midnight, 6:00 p.m. to midnight, and CFMT original has a commitment to a COL of not less that 50 per cent ethnic.  Why would you not give a similar commitment here?

2428          MR. SOLE: We're comfortable with that commitment.

2429          MS. CRAM:  You so agree to a COL.

2430          MR. SOLE:  We would agree to no less than 50 per cent ethnic programming between 6:00 p.m. and midnight.

2431          MS. CRAM:  As to per present schedule, as proposed as 55 per cent; would you agree to 55 per cent for COL?

2432          MR. SOLE:  Our schedule is 50 per cent with 50 per cent Canadian content.  What turns into 55 per cent.  Right now --

2433          MS. CRAM:  The present schedule on -- proposed schedule on CFMT 'too' is 23 hours, which is 55 per cent.

2434          MR. SOLE:  As filed?

2435          MS. CRAM:  Yes.  It's the whole bit about promising and then resolving into a COL that's lower.

2436          MR. SOLE:  We would commit to 55 per cent.

2437          MS. CRAM:  Would you agree that, by COL, that you would be serving at least 22 distinct ethnic groups?

2438          MS. ZINIAK:  Yes.

2439          MS. CRAM: And that none of those none of those distinct ethnic groups would be served by CFMT, the original, in the same month?

2440          MS. ZINIAK:  Yes.

2441          MS. CRAM:  Would you agree it would have -- serve at lease 18 different language groups by COL?

2442          MS. ZINIAK:  Yes.

2443          MS. CRAM: And would you agree that those same 18 different language groups that you serve in the same month would not be served by CFMT in the similar month, in the same month?

2444          MS. ZINIAK:  Yes.

2445          MS. CRAM:  Again, talking 6:00 p.m. to midnight, CFMT has a condition as to non-Canadian, non-ethnic limits.  And the present schedule as proposed by CFMT 'too' has 19 hours of non-Canadian, non-ethnic which is about 45 per cent.  So what would you say would be an acceptable level or an appropriate level by way of a COL for non-Canadian, non-ethnic between 6:00 and midnight?

2446          MS. ZINIAK:  Leslie will respond to this.

2447          MR. SOLE:  Well, we are used to 50 per cent.  The schedule illustrates 45 per cent so I guess what we could say because -- to be clear on this, I think we would start at 50 per cent and by year five we would be back to 45 per cent.

2448          MS. CRAM:  You're 55 per cent on the other side, though.  You're pretty well locked in at 45.

2449          MR. SOLE:  If I have committed to the 55 per cent, the 45 per cent is self-defining.

2450          MS. CRAM:  Yes.  Now, let's go the money, 50 million.  In terms of the majority of the money, do I understand that both of the CFMTs will be involved?  In the sense that some programming would air on one, the original, and the other would air on CFMT 'too'.

2451          MS. ZINIAK:  Yes, that's correct.

2452          MS. CRAM:  And essentially the new programming would be developed and then it would be aired on the relevant one, whichever, CFMT or CFMT 'too'.

2453          MS. ZINIAK:  Yes, that's correct.

2454          MS. CRAM:  And some of that money is going to the Ontario independent producers initiative which will produce 225 third language half-hour dramas or docs.  It appears that right now in terms of right now, the independent producers that are from the smaller groups.  I have got the Russians, the Ukrainians, the Filipinos.

2455          MS. ZINIAK:  Yes, that's correct.

2456          MS. CRAM:  Is it your intention that these monies for these 225 half-hours would also be for the smaller groups or is it open for --

2457          MS. ZINIAK:  It really is a more open initiative than that.  We certainly invite and want the smaller groups to contribute, but it's also open to other independent producers who are at different levels in their production career.  If I may, I would ask Robin to comment.

2458          MS. MIRSKY:  Good afternoon.  Basically as you will know from our introduction there is no money available currently for third language programming so we would make this benefit available to all producers who wanted to produce in a third language.

2459          MS. CRAM:  And again, I mean it would go on either CFMT?

2460          MS. MIRSKY:  Depending on the language, yes.

2461          MS. CRAM:  So COLs, would you agree to a total expenditure by COL, condition of license, of $35 million and no less than $4 million in each full broadcast year?

2462          MS. ZINIAK: Yes, that's correct.

2463          MS. CRAM:  Would you agree to a COL for 225 original half hours to be aired during the licence term between 7:00 and 11:00 p.m.?

2464          MS. ZINIAK:  Yes.

2465          MS. CRAM:  And would that there would be no less than 30 of them aired in each broadcast year?

2466          MS. ZINIAK:  Yes.

2467          MS. CRAM:  Now, -- and the problem I'm going to have with this is we would -- should essentially be talking about CFMT 'too' when we're doing this, the Independent Production Initiative, and we're talking about a COL for the entirety.  But that really is between CFMT the original and CFMT 'too', is it?  That the 225 original half hours would be aired?

2468          MS. ZINIAK:  The -- I do have availability for smaller producers, the Community Producer Showcase is exactly that.  Where you did mention -- at CFMT that we would work with the smaller groups.  So that's more of the Community Producer Showcase. 

2469          The Ontario Independent Producer Showcase is there for new products, we are waiting for that come to from the community.  And of course we would like to give it a second window on CFMT.  Initially, though, it will air on CFMT 'too'.

2470          MS. CRAM:  Regardless of language?

2471          MR. SOLE:  I think I understand the question.  This benefit, if I could use that term, I know it's not a transaction.  This benefit would accrue as a result, as Tony said, of CFMT giving back some of its success to all communities.  So in the event that a specific language was inherent to CFMT one, that is that's where it would one and the same with CFMT 'too' summing in those number of exhibitions over the two different signals.

2472          In the case of the programming that is cross cultural, Madeline's right.  We would run it at different times and different seasons on both services.

2473          MS. CRAM:  So really what we're talking about is in the event the CFMT 'too' is licensed that we would require from you here an undertaking to apply for a joint COL with CFMT 'too' to air -- to expend the $35 million, and to air the 225 original half hours.  I think that's what it would take.

2474          MR. VINER:  Certainly we would undertake as part of this proceeding to provide a COL as to the expenditure.  I take your point on the exhibition.  I would rely on our regulatory council to say whether or not it's appropriate to have such a COL. I understand the dilemma in which you find yourself.  So we find ourselves as the chair points out -- so we would certainly take as a condition of licence as it relates to CFMT 'too' the expenditure of the money and --

2475          MS. CRAM:  Airing -- see because the --

2476          MR. VINER:  I take your point.

2477          MS. CRAM:  The point is expenditure and the airing.  The expenditure could come from CFMT 'too', but the airing would be either on CFMT or CFMT 'too'.

2478          MR. VINER:  Sure.  Could I just have a moment?

2479          MS. CRAM:  Sure.

2480          MR. VINER:  We understand the problem.  If we -- if we -- the submissions are all accepted from -- accept all the submissions that are appropriate to what we call CFMT one it might make it even easier than the original, so that you know, it would be more appropriate to air on CFMT one.  I don't know whether it's possible to provide an additional COL on CFMT 'too' -- on CFMT one.  We would be happy to do so, to indicate our desire to follow through on this commitment.  And if that were an appropriate way to do it, we would find it acceptable.

2481          MS. CRAM:  Maybe we can deal with it this anon. You will also confirm that in your letter of September 11, you agreed to provide an annual reporting for both this and the other initiatives, on the money spent?

2482          MS. ZINIAK:  Yes.

2483          MS. CRAM:  The cross-cultural drama, what year, broadcast year, do you plan on airing it?

2484          MR. SOLE:  I think the drama would begin airing prior to the beginning of the third year.  It's an approximation, but it's something that we've have wanted to do for a long time.  It would immediately go into development.

2485          MS. CRAM:  And would it be aired on both CFMTs?

2486          MS. ZINIAK:  Yes, it would.

2487          MS. CRAM:  And would you agree to COL that it would be broadcast during the 7:00 to 11:00 p.m. period?

2488          MS. ZINIAK:  Definitely.

2489          MS. CRAM:  And by COL would you agree to the licence fee of $7 million?

2490          MS. ZINIAK:  Yes.

2491          MS. CRAM:  Then the pilot development grants.  How are you planning on publicizing those?

2492          MS. ZINIAK:  We actually already have many, many proposals from the community.  I am going to ask Robin to speak about this.  But we, as far as your question how we are a going to publicize this, we presently work with not only advisory committees but also we work with print and radio language media. We would certainly take the opportunity to platform it in those various medias as well as holding workshops.  We already do that now at CFMT, and -- for a program proposals, for example we do that presently so we would actually initiate workshops in order to solicit and engage with the various producers.  Robin?

2493          MS. MIRSKY:  Just a point of clarification, are you asking about the development money that's associated with the $35 million dollar Ontario Producers Initiative?

2494          MS. CRAM:  Yes.

2495          MS. MIRSKY:  You are, okay.  Basically, as Madeline said, we would communicate with the independent production sector to the same degree as we do now on a regular basis.  And we would look for development ideas, either in the form of documentary or drama.  Producers would come to us with development ideas, a clear -- or concrete idea of how and why they need the money, what they need to develop, hire story editors, do proper research, that sort of thing, and present us with a development budget and you would go from there.

2496          MR. SOLE:  Commissioner Cram I would like to add one thing.  I was just reading Telefilm's annual report and Telefilm has undertaken to do a study on non-English, non-French, non-aboriginal funding in the next calendar year.  And we think that Telefilm and its affiliated, interested parties would be an excellent way to expose these development funds.  We would, and Robin would instruct us here, in my notes here that we would use play back, we would go to schools in -- all through Ontario.  There is a community of producers and Madeline is quite familiar with many of them.  We hope this will bring up new and exciting talent at the same time.  So I think we would go where to everyone else goes because it's a new exciting idea and we would go to the places we feel are very well connected.

2497          MS. CRAM:  Thank you.  I just got the Telefilm report and I hadn't read it.  It's interesting.  You then talked about the three million -- I thought it was three million -- to assist smaller underserved groups to develop program proposals and produce pilots; what is that about?

2498          MS. ZINIAK:  We have met with many communities who have a difficulty in reaching the first step in television production.  For example, the other week I met with the Erono-speaking group which is an Ethiopian group group who wanted to do a program but really didn't have the funds or didn't have access to production facilities.  This is something that we feel is going to -- it is a good start up for communities who, number one sometimes don't know where to turn, don't have a network yet in the production community as to how they can start producing program or at least show us a pilot.  Because we do often ask to see a pilot from the independent producers just to show us not only that the concept but also the technical quality that we're interested in.

2499          MS. CRAM:  And in terms of a typical project, any idea how much you would spend, sort of, to get it up to the pilot stage up to and including the pilot stage?

2500          MS. ZINIAK:  It really depends on the proposal and the genre, so it really depends on what the actual program is going to be.

2501          MR. SOLE:  It can be as little as a thousand dollars and as much as $5,000 or $6,000.

2502          MS. CRAM:  So with the three million over seven years, how many pilots do you think you'll get out of it?

2503          MS. ZINIAK:  We are certainly -- again it would depend on the kind of programming it would be.  But I would -- Robin could probably answer this, but I would answer specifically to the smaller ethnic communities that we're interested in as well as the other large producers, maybe Robin can speak to that issue.

2504          MS. MIRSKY: With respect to the development initiative that comes out of the Ontario Producers Initiative, we would have probably develop about 40 projects a year which would be 300, over the term of the licence.  We understand that there is no development money out there for third language independent production, so our development budgets would be rather significant because we realize we would probably be paying fully for the development phase.

2505          MS. CRAM:  So you're saying 4 to 800 over the licence term?

2506          MS. MIRSKY:  Sorry, we would put into development 40 projects a year, 300 over the course of the licence.

2507          MS. CRAM:  So if I put it into a COL, and we talked about three million over the licence term, that wouldn't be a problem?

2508          MS. ZINIAK:  No, absolutely not.

2509          MS. CRAM:  Could we put something in terms of a number of projects as a COL or would you be comfortable with that?

2510          MS. ZINIAK:  Yes, we would.  It would be 250.

2511          MS. CRAM:  Over the term of the licence?

2512          MS. ZINIAK:  Yes, over the term of the licence period.

2513          MS. MIRSKY:  I just want to clarify there are two issues with respect to development.  One is the pilot program and one is the money that is set aside for the Ontario Independent Producers Initiative itself. 

2514          MS. CRAM: I understand about the pilot.

2515          MS. MIRSKY:  Because I am talking about the Ontario Initiative.

2516          MS. CRAM:  So you are comfortable with 250 over the course of the licence term?

2517          MS. ZINIAK:  Yes.

2518          MS. CRAM:  And you would agree to a COL to that?

2519          MS. ZINIAK:  Yes, we would.

2520          MS. CRAM:  Moving on to the CBSC, you're going to be giving them a million. And Ms. Ziniak, you also sit on that.  Specifically, what do you want them to do with this money, what have you said to them you would like them to do?

2521          MS. ZINIAK:  We have discussed this certainly at the Canadian Broadcast Standards Council.  Number one we know there is a need to be able to deal with complaints that are coming specifically in areas of defamation of ethnocultural communities.  We're looking at portrayal issues.  What we have talked to them about, because we felt there was a system in place and certainly we want to enhance the system even more rather than starting something new, we thought it would be something very helpful to be able to work with different portrayal issues we know are out there and really do need attention. 

2522          We feel that, for example, even for people from the ethnocultural communities to access the material that is only printed in English.  So something such as that -- we're looking at enhancing the multilingual penetration, if you will, because people do come to us and talk about the portrayal, sometimes not only on our station but other stations of course, and aren't quite sure how to access the system.  So we thought this would be something very helpful where they indeed could learn about the Canadian Broadcast Standards Council and make it more effective by being more vocal and being more involved.

2523          MR. VINER:  Commissioner Cram, we have stalked to the CBSC and other organizations frankly about using the money in part to educate.  We would prefer to think that the issues of positive portrayal or breaches of positive portrayal are very often inadvertent, and what we require is an education process.  You need a complaint process, there is no question.  You need an ability to notify those in authority that when they feel something has occurred, but equally we think it is important that there be an outreach program with respect to positive portrayal and that's -- part of the funds are directed towards that in our discussions with CBSC.

2524          MS. CRAM:  So it's outreach and building multilingual capacity, really.

2525          MS. ZINIAK:  In principle, yes, but we also have discussed other areas that we think -- certainly we are looking at education, something as simple as even, you know, explaining the codes, which we do as a multilingual broadcaster.  Because sometimes there are issues that are addressed in the codes and we end up talking to audiences in English and other languages explaining the process.

2526          MS CRAM: And do you plan to give them annual installments over the seven years; is that the concept?

2527          MS. ZINIAK: Yes, we do.

2528          MS. CRAM:  What COL would he propose?

2529          MS. ZINIAK: Tony is the COL guy.

2530          MR. VINER:  Yes, I haven't been much today, but I am happy to accept a COL that we will expend a million dollars over the course of our licence.  So I would be happy if I could borrow the calculator and divide that into seven and make that commitment.

2531          MS. CRAM: In seven equal, annual installments?

2532          MR. VINER:  I would be happy to do that, yes.

2533          MS. CRAM:  To promote portrayal, outreach and publicity of the CBSC and its standards.

2534          MR. VINER:  Yes.

2535          MS. CRAM:  I am glad I proposed that.

2536          Now, on the PSAs, this is the two million for the PSAs.  Now you do them in Ottawa?  You do PSAs already?  Rogers does in some form?

2537          MS. ZINIAK:  The -- I think you are referring to the community channel.  We at CFMT --

2538           MS. CRAM:  Yes, CFMT -- Rogers does PSAs does it not in Ottawa? Didn't I read this somewhere?

2539          MR. VINER:  Well CFMT certainly does PSAs, this particular initiative I think is directed and Madeline can describe it.

2540          MS. ZINIAK:  We certainly know there is a need for public service announcements in languages and various issues, but we are really looking at is to be able to work with independent producers who -- and that is what the fund really is for, because CFMT 'too' will be providing things such as facilities and any kind of support material.  But this is actually to pay independent producers who want to produce a PSA for an organization or an issue depending on what that would be.  And we feel that this would be something that would be of great benefit for the producers for the first step into production.  If of course the public service announcement sometimes could be easier than producing a documentary.  So we see this as an entry for language producers or any producers who want to access the fund and we certainly know there is a great deal, there is a great need out there.  Many organizations really would want this and are excited about -- because we did do workshops and we know that this is a good idea.

2541           MS. CRAM:  So essentially your role would be coordination, groups and producers, correct?

2542          MS. ZINIAK:  That would be part of it.

2543          MS. CRAM:  And then providing facilities, production facilities.

2544          MS. ZINIAK:  And airing the PSAs as well and the funding of course.

2545          MS. CRAM:  Yes.  And the funding would go for, or to?

2546          MS. ZINIAK:  It would go to the producer.

2547          MS. CRAM:  Okay.  To the independent third language producer?

2548          MS. ZINIAK: Yes.

2549          MS. CRAM:  And so -- I hate to use that word again.  We're almost at the end of the COL stuff -- that you would spend $2 million over the term of the licence term for independent third language producers in the production of the PSAs.

2550          MS. ZINIAK:  Yes, that's correct.

2551          MS. CRAM:  Then there is community grants.  This is the one I found interesting.  It really doesn't have much to do with broadcasting it has a lot to do with PR?

2552          MS. ZINIAK:  Well actually, it does have something to do with broadcasting because for example we are looking at -- we presently are interacting with various communities to be able to enhance the capabilities. 

2553          And we're involved right now with an interfaith dialogue group that could do so much more.  We're going to be taping that so at the end it does turn into television, but we are just allowing them to have sessions such as this to be able to express themselves in a more meaningful way.  So it really would depend what the community would like to do, but that's just one example where we know this could turn into great television. 

2554          There is a lot of great issues that is communities want to discuss.  We know for example there is a community group that is working on job search for immigrant women and they would certainly appreciate having funds to be able to do more outreach and education.  This is exactly the kind of content that we want, that we would like to work with.

2555           MS. CRAM:  Okay.  And how is something like this publicized?

2556          MS. ZINIAK:  Number one, we are we're going to publicize it on the air first and foremost.  We have our advisors who are ambassadors for CFMT and they frequent many, many events.  I think word of mouth, it gets around very quickly.  Good news like this, that there is actually funding for something like this and of course we would submit this to a lot of community newsletters and ethnic print media, both print and electronic.

2557          MS. CRAM:  Closed captioning.  A hundred per cent of all news in English and/or French?

2558           MS. ZINIAK: Yes.

2559          MS. CRAM:  90 per cent of other program in English and/or French?

2560          MS. ZINIAK:  Yes.

2561           MS. CRAM:  Now, the local advisory board, you have one for CFMT one.  What is the concept, if CFMT 'too' were licensed you would split it into -- the Euro, Latino, the Caribeans would go in one, and the pan-Asian and African can could go in another, is that it?

2562          MS. ZINIAK:  Yes, we would initiate a separate advisory committee for CFMT 'too'.  And indeed if we had to change advisors around that would only work to our benefit since they have the experience presently and it would work as a very good apprenticeship committee in that sense.

2563          So it's going to be two different committees that will hold separate meetings and there could be, if necessary, a joint meeting but we see this as separate.

2564          MS. CRAM:  And how many of them would there be on each advisory board or on the CFMT 'too' one?

2565          MS. ZINIAK:  We would choose individuals who would reflect the languages we broadcast to. It could be anywhere from 11 advisers up to 15.  We like to choose advisor who speak the language and are ethnospecific, but sometimes we are able to get advisors who encompass at least two or three languages or cultures.  So that's why it's not always a mathematical equation in that sense.

2566          MS. CRAM:  And what's their tenure?  How long do they stay on this committee?

2567          MS. ZINIAK:  We have suggested a certain period of time.  We have found -- originally when we started with CFMT advisory committee we originally suggested that it would be somewhere from two to four years, but then we found that the integration into advisory committee and simply learning about the station, learning about what is necessary to be advisor, to be advisors took a little bit longer and indeed we are looking at advisors probably staying on the committee for at least five years.

2568          MS. CRAM:  And how many times do they meet?

2569          MS. ZINIAK: They would meet quarterly as a group but we have found -- and this is where they are very, very helpful to us -- that we've establish relationships, the producers establish relationships with the advisers.  They actually call them for advice or if there's issues of conflict or simply to ask what is important at this point in time in the community.  So other than just meeting quarterly, really what we have are producers meeting with the advisers when it's deemed necessary.

2570          MR. SOLE:  I would say not just producers; sales people, management, engineering.  These advisers are just fantastic.  They're available by phone all the time for us this, it's a great system.

2571          MS. CRAM:  So my next question was going to be about communication with the managers.  It doesn't appear they are inhibited in calling anybody or -- and they're made to feel free to do that.

2572          MS. ZINIAK:  Oh, absolutely.  The advisers, the advisers are actually very much involved with CFMT, not -- and CFMT 'too' of course, we hope, -- and they are invited to many, many events that we do.  They're even invited to editorial board meetings we hold with different elected officials, different individuals.  So they're very much part and parcel of the station and what we do.

2573          MS. CRAM:  And how -- when they have recommendations, how are they implemented like how does it -- does it go up the ladder or can it stop halfway and somebody just implement it?

2574          MS. ZINIAK:  Well, we -- they deal directly with management, they -- in the past, I have dealt directly with the advisers, so that indeed their advice can go somewhere and can get implemented.  But also they interact with the producers and we do submit reports, they do submit reports as far as advisers go so that we can track and follow up on different initiatives that they have suggested.  But really it turns out to be -- you know it was almost an intimate relationship, but -- one where they feel very comfortable in addressing the different production staff and simply calling and either telling us what it would do or what not to do.

2575          MS. CRAM:  Then the Producers Initiative, the $35 million, that is going to be on either CFMT original or CFMT 'too' and it appears to me that the boards were sort of advisory as to those productions.  So you would have to -- they would have to meet jointly I guess or something.  How do you envisage that working?

2576          MS. ZINIAK:  I would ask Robin to speak to this issue.

2577          MS. MIRSKY:  Basically the permanent staff at CFMT 'too' or CFMT would be responsible for making those programming decisions and licensing or commissioning those programs.  And they would work in conjunction with the advisory committee in choice of language, choice of content, that sort of thing.

2578          MS. CRAM:  And in your application you talked about feedback, by phone, multilingual phone, by e-mail, by focus groups, by polls, which all led me to wonder, what does CFMT the original do now?

2579          MS. ZINIAK:  Well, we do all those things and more.  Presently, of course, we talked about the advisory committees, and we get the feedback, and that's just one of the five mechanisms we have to track feedback and response. 

2580          We also hold focus groups both internally and externally so we would commission an external company to hold focus groups.  And frankly we have they had them internally specifically for acquired programming, for example language programming where we would screen the material and we would invite different individuals from the community to watch the programming.

2581          Also we, of course, commission research.  The professional companies that would actually indicate how we are doing in a variety of areas.  And audience feedback, there is a numerous ways that we are able to harness that.  One, we have a viewer line where people are free to phone and they certainly leave the information on the viewer line.  We also have a dedicated staff person who is the independent -- who is the information program coordinator who interacts with the viewers.  And sometimes the viewers feel more comfortable speaking in another language, and we would redirect their call to the actual producer who speaks the language.  E-mail of course; many communities are quite proficient with e-mail and send us their comments.  And also letters and direct phone calls.  I sometimes personally handle the direct calls.  We have found that ethnic audiences are pretty passionate about what they see on the air and they really don't let us get away with much.  They are not shy and tell us exactly what they think.  So that's one way.

2582          But also when we attend functions.  Just the other week it took me at least 20 minutes to get from the ballroom to my seat at an event because I had all these people coming to me not only giving me suggestions for what's existing but program proposals.  So people know us in the community and they come to us directly and give us their points of view, their suggestions, and you know, the need for more programming.

2583          MS. CRAM:  Now, market -

2584          MS. NAIDOO-HARRIS:  Commissioner, if I may add, I work with the South Asian news unit and I just want to say when we finish a show on Saturdays, by the time we get downstairs my phone is lit up, there are messages immediately after the show goes to air.  On any given Saturday I have tons of calls, some of them saying we love this, others saying you know, we don't -- we didn't like this.  But in addition to that we get a number of story ideas from the people who phone in.  And so it's a good way for the individual producers in the different units to keep on top of what's exactly happening within the their communities and within their language communities and language groups and it works quite well.  Some of the exclusive stories we have had have come from phone tips and you know, it makes us relevant.

2585          MS. CRAM:  Is your direct line put on the television?  Is that --

2586          MS. NAIDOO-HARRIS:  No, actually, it isn't.  I mean our main number is but for some reason people seem to be able to get to my particular desk pretty quickly.

2587          MS. ZINIAK:  For each program we do have a phone number for the program they are able to phone.  If I may also add, another mechanism is advertising.  Our advertisers, especially in the many ethnic languages tell us exactly what they think, and why they're going to support or not support.  So that's another vehicle that is very effective.

2588          MS. CRAM:  What you are talking about in CFMT 'too' is splitting off the original into two.  And I look at it and you're talking about the Euro, Latino and Caribbean language groups and ethnic groups being with the old CFMT, if I can could call it that, and the pan-Asian African being CFMT 'too'.  What struck me though, is the difference in the populations, at least according to the '96 census.  Euro, Latino is 2.4 million so the original will be serving 2.4 million and the new will be serving 1.1. 

2589          When you did that, did you -- were you considering the potential for increase in population? Like were you considering immigration patterns or was there a reason?  Because it's a two to one ratio that's why I'm wondering about that.

2590          MS. ZINIAK:  Before -- I'm going to ask Leslie to speak to that issue but I just want to say that number one, we had to look at the concept of how we would actually have two stations and we had to do something that we felt, you know, was the most logical and that's why we took a look at, number one, geography.  We looked at culture, language, that was most suitable and then certainly branding and marketing and felt very comfortable that these populations are going to emerge and grow.  So that's how we actually did define the two because we had to do it somehow and this felt really the most comfortable.  Leslie?

2591          MR. SOLE:  That's very interesting because we did that same thing intuitively we didn't actually add them up.  We felt that the more mature western European immigration wave of the 50s, '60s, '70s and '80s would be the 60/40 station and the growth that Madeline mentioned in her opening remarks would be accommodated by the 70/30 station.  It was as much coincidental as it was by design.  The geography and the cultural links and the potential products like foodstuffs and advertisers, and so on were also very much part of it.  It was a very difficult thing to do, to decide which station would be what, will we have a red station and a blue station?  So this was simply a mechanism to try and illustrate that we needed to serve more groups immediately.

2592          MS. CRAM:  And you did consider sort of a -- I guess I call it the maturity of the population and that issue.  Have you considered what do you do next, if the immigration patterns change?  And I mean I don't -- the Russian you will have -- there is supposed to be an influx of Russian refugees and immigrants now, but that's the only growth I can see but what if they change?  What would you do?  Would you try to rearrange the groups?

2593           MS. ZINIAK:  Well we deal with this really all the time.  We are always dealing with of course numbers, numbers are very important in the community.  But also we have to look amount the need for language programming for that a community.  And we also have to look at the talent base that is available to produce the program and to see whether or not there is also the availability of other television material.  So those are numbers are important and we're always on top of that. 

2594          We also define need and if there is -- is in a demand for that type of television programming.  So the answer is:  yes, we would change accordingly based on those elements.

2595          MR. VINER:  Commissioner Cram, if I could just add, this is the problem that Madeline has got, and people at CFMT have all the time, which is what's next.  Currently the theme of CFMT is access and service to ethnic audiences.  Full stop.  The proposal that you have in front of you tries, as Leslie has said, to divide the service in a logical way.  I think the important thing though is that we will have commitments to language groups and cultures.  That's more important than necessarily the branding.  So if in three years immigration patterns rapidly change, it may not divide up as neatly as it does now and I don't know how else to say other than that.

2596          MS. CRAM:  If we can go to market capacity and that was Mr. Campbell, with Insight.  However I will ask Ms. Ziniak and you can -- you may have to answer.  Insight projected an annual growth for Toronto in TV advertising from a low of 2.2 to 5.2.  Are they still married to those numbers?

2597          MS. ZINIAK:  If I can ask Jim to respond to that.

2598          MR. NELLES:  Thanks, Madeline and I will call on David Campbell in a moment to comment on that.  I am sure Insight will have their own views but I suspect they will stand by the numbers.  We have certainly seen through the events of the last number of months this year in general a change in the overall economic environment but I think the nature of the service that we are proposing really means that we have the minimal impact in the market and can fund ourselves pretty much out of market growth and a variety of other sources of advertising revenue which we will touch on later but I'll call on David to comment more specifically to his report.

2599          MR. CAMPBELL:  Yes, we did indeed look at three different scenarios which were growth, annual growth of 2.3 per cent, 4.3 per cent and 5.2 per cent.  The calculations that are included in the submission are the low number, which is the 2.2 number.  And maybe to add to that just recently, in fact, a competitive company to ours, Zia Toska ^ Media, released a study and a prediction that the rise in spending in the year 2002 will be 3.9 per cent which is considerably higher than what's factored into this application.

2600          MS. CRAM:  So you use the 2.2 for your calculations.

2601          MR. CAMPBELL:  Yes.

2602          MS. CRAM:  And you did say, Mr. Campbell that the market could sustain more than new one entrant in your study.  Given any change in circumstances, whether you perceive them happening or not, do you still stay by that opinion?

2603          MR. CAMPBELL:  Yes, we do.

2604          MS. CRAM:  And -- sorry.

2605          MR. VINER:  I was just going to add, Commissioner Cram I am not an economic forecaster and it may be a function of the fact that I am older than most people in the room but we have seen -- Toronto and southern Ontario has been a successful and growing part of our Canadian economy and television market has been strong.  We may be going through a flattening, I am not even sure it's a decline.  I think you have to take the long view:  this market is the richest in Canada and will continue, in our view, to be the richest in Canada.  And we should talk about 2.2 or 3.1 or -- because that's appropriate, but over the course of sort of any 10-year period Toronto has done well, has grown more rapidly, frankly, than most other markets and is the most robust. 

2606          So our -- you know our business plan for year one or year two, you know the real results may be somewhat different than that.  We think over the course of the seven years they will be accurate and our commitment stand notwithstanding those.  But sort of to take three months or four months and say, boy this is how it's going to be for the next seven years, I find it's difficult and from someone who has been the benefit of my perspective.

2607          MS. CRAM:  Longevity.

2608          MR. VINER:  Longevity is another way to say it.  I don't think it's a huge issue.

2609          MS. CRAM:  Thank you.  When you talked about two stations did you mean CFMT 'too' plus any one of the others or did you mean any two?

2610          MR. VINER:  I'll take this if I may.  It was my idea.  The -- Commissioner Cram, every suggestion includes us.  So we have done a little bit of modeling, looking at the projections provided by the other applicants and ourselves.  So we took separately each of the other applicants and ourselves and I think in all but one there was the growth in the market and the impact of -- because the impact of CFMT 'too' is accommodated within the growth, the worst case scenario, there was a negative impact on the market by licensing two for the first couple of years, and then it rebounded.  And again that's based on economic theory that it will grow at 2.2 per cent.  We know that there is lots of discussion about repatriation, we know that's on your list so we have to talk about how we might accomplish that, perhaps to contrast with some of the others but we do think that this is a robust market.  We think that it is possible for you to license one of the other applicants and ourselves.  We continue to believe that.

2611          MS. CRAM:  And I likewise am not an economist or an accountant.  But what I was wondering about when I was looking at your numbers, was when you are dividing the world in half in between one CFMT and another, wouldn't that mean that the original CFMT would lose revenue?  And so when you're talking about it only taking five per cent of the presented revenue and only 1.3 increase you're really talking about dividing that total revenue between the two CFMTs; is that correct? 

2612          MS. ZINIAK: Tom may respond to that.

2613          MR. AYLEY:  Yes, you are absolutely right.  In one of the deficiency responses we were able to set out how it did impact on CFMT, and CFMT will take a hit in 2003, if that's your first year being on air, and it's primarily in the language, third language revenue area.  And I think Jim also calculated in his projections that CFMT would take its proportionate hit on the English, but because we're such small players there, I think it was almost a non-issue.

2614          MS. CRAM:  And how much is it?

2615          MR. AYLEY:  We estimated a net loss of revenue of three million.

2616          MS. CRAM:  For CFMT the original?

2617          MR. AYLEY:  Yes, in the first year.  And -

2618          MS. CRAM:  And thereafter to smooth out.

2619          MR. AYLEY:  And then it starts to pick up again.

2620          MS. CRAM:  In schedule 13 in year one, you had your revenue from Chinese advertisers at $3.2 million and from South Asian at $800,000.  How did you derive that?  Is it because your Chinese advertisers are better developed?  Because you haven't been in the South Asian market as much?

2621          MS. ZINIAK:  I can ask Malcolm to respond.

2622          MR. DUNLOP:  Thank you, Madeline.  To come up with those figures we basically put the schedule together, put rates together and worked out a level to come up with that revenue.

2623          MS. CRAM:  Of course it was based on the number of hours of Chinese programming you would have which is substantially more than the South Asian --

2624          MR. DUNLOP:  Yes.

2625          MS. CRAM:  -- as proposed.  I see.  Year two, your sources of revenue, 63 per cent existing off air.  How did you figure that out, and who is the existing off air?

2626          MS. ZINIAK:  Jim will respond to that.

2627          MS. CRAM:  She's doing a good passing job.

2628          MR. NELLES:  Commissioner Cram it is a good opportunity to perhaps review those five different elements.  62.7 per cent is our estimate for year two in terms of existing off-air television.  I will use the repatriation word, we believe that about 5.5 million can be repatriated from Buffalo market stations in general.  And from Canadian stations we look for about a 30.7 per cent or 5.3 million.  And I should add in tagging on to Tom Ayley's pointed earlier, that of the Canadian conventional that 30.7 per cent or 5.3 million, CFMT probably takes the biggest hit of any station in this market.  It's about 3.7 million for language and about 1.6 million for English. 

2629          Working through we thought about 1.8 per cent from existing specialty services in year two, radio about 433,000 or 2.5 per cent, new revenue not currently on TV, we estimate about $3.7 million in English and language that's roughly a million dollars there for a total of 4.7 million.  And finally, new revenue from increased spending at about 970,000 and of that, 300,000 would be language.  And so it speaks to the point that others have touched on in the unique situation that CFMT 'too' finds itself it's overall market impact is -- touches down in various different sectors so it's not at if you are a hundred per cent English and going after a particular type of programming which might be prevalent on others. 

2630          Another key element in our proposals is that we don't compete in prime time.  From 8:00 p.m. to 10:00 p.m. we are meeting the mandate of CFMT 'too' as we are for CFMT.  And those are hours where perhaps 55 per cent roughly of the prime time ratings that so many advertisers require, we work in those off prime periods, when we're talking about English.  So 6:00 to 8:00 is very important, 10:00 o'clock and beyond is very important to us.

2631          And that brings us back to the Buffalo stations and certainly WUTV is the biggest target out there.  We compete with those stations every day of the week.  We have reports that Nielson produces now they do a thing called spot watch which reviews on a monthly basis all advertisers in the Toronto market.  And they calculate the amount of GRPs that are purchased, those gross rating points that are purchased for each station, inclusive of WUTV and I can tell you that they are on virtually every media buy that comes out of Toronto.  They are a significant player.  And because we don't go after those prime English rating points, we find ourselves head to head competition with them. 

2632          And that's also due to the fact that we're not doing news.  At 6 o'clock or 6:30, nor are they.  The other Canadian stations and Toronto stations do a great job of news; that's their constituency at that time.  We're pitching what we call strip programming and so on which way think is of good calibre and high quality, but we're running up against WUTV so they are our competitor, and certainly at those times of the day and we would anticipate the repatriation figure of about 5.5 million to be fairly realistic, based on the overall estimates of the size of the Buffalo market and the size of WUTV which I know the Commission has heard referenced by a number of other applicants.

2633          MS. CRAM:  So what is the overall size of the Buffalo market from Canada?  And the FOX station, what is their share?

2634          MR. NELLES:  I would echo the comment that the WUTV is in the neighbourhood of 20 to 25 million Canadian and the Buffalo market, in general, would be somewhat higher than that in terms of over all Canadian dollars.  Estimates of perhaps 35 million Canadian and beyond depending on the economic cycles at any given point in time.

2635          MS. CRAM:  So that's Canadian and --

2636          MR. VINER:  I would add if you look at WUTV between 6:00 and 8:00, virtually every break, virtually every break is filled with Canadian advertisers.  And I know Jim has a list of those in the last -- you know that have run in the last month, is it Jim.

2637          MR. NELLES:  Yes, Tony I have a full list and that would be the Nielson list that I mentioned before and even a list as recently as Monday night and one of the clients that is stuck out there was a great firm called Italpasta.  I notice it particularly because that is a third language advertiser that we originally cultivated a number of years ago and then moved them into English advertising as well as continuing with their language commitment and they have now found themselves on WUTV.  So good for Italpasta, maybe we can go get the share back with CFMT 'too'.

2638          MS. CRAM:  We talked about specialty in 1.8 of your money in year two will be coming from specialties.  Which specialties?  Have you broken that down, Mr. Nelles?

2639          MR. NELLES:  Commissioner Cram I haven't broken that down specifically to any one service and some of the other applicants have mentioned and I would echo, there are a number of rating points that specialty services offer across the country.  When advertising agencies purchase time, they often look at network first and specialty services.  They buy conventional stations and perhaps if budgets are getting strained or there are not the attractive, viable options they believe are in their clients interest, they will go back --at local level, I should say -- they will go back and purchase time on specialty services.  They don't always want from sea to sea to sea, but they sometimes are left with little choice if they don't believe there is available, attractive inventory at an affordable price.

2640          MR. SOLE:  Commissioner Cram I would like to add to that because a reference to Pizza Pizza.  Pizza Pizza being on specialty television in Canada to sell pizzas in metropolitan Toronto.  It is a very good example.  They don't buy specialty channels for format, they buy them for bulk warm bodies, 18 to 49 adults.  So it's a matter of who will give me the most for the lowest price so I can make up my ratings in the Toronto market.  It's not they're aiming Pizza Pizza towards YTV or MuchMusic, they just want Canadian and they can't fulfill their reach requirements or their audience projections without using some speciaty channels.  So it's not like McCain's being affiliated with sports, it's really just buying Canadians watching television.

2641          MS. CRAM:  So then this source would not necessarily be ethnic specialties.

2642          MR. SOLE:  On the contrary it would be -- in the ethnic part there might be -- am I right, Jim?  But this is Canadian conventional advertisers using Canadian specialty services to fulfill their conventional advertising goals.

2643          MR. NELLES:  That's exactly right, Leslie and I might if I may, ask Malcolm Dunlop to comment on the ethnic advertising side.  And before I do, I would just say that a very important component not only of CFMT, but certainly of CFMT 'too' which has been echoed in the coming years, is that we grow that pie.  It is a phrase that's often used but it is absolutely true with respect to ethnic television.  And we have indicated that we would grow it, the Toronto market, which is currently 25 million, by about 30 per cent over the licence term.  Malcolm may wish to add further.

2644          MR. DUNLOP:  Thank you, Jim.  I believe CFMT has had an extremely positive effect on the ethnic advertising in the Toronto marketplace and all across Canada.  I also believe CFMT 'too' will continue that.  When we go to sell ethnic advertising our first goal is to sell ethnic, that's what we have to do.  We have to go in and prove to clients, prove to advertising agencies, that it's something valuable for them to buy.  That's our first goal we have -- we have to sell the market, the size of the market and why it's so important. 

2645          Second thing we have to do is we have to sell television.  Why television is so important, why they should put their money in television as compared to radio or print.  The third thing we do is we sell CFMT.  That's the last thing we do is try to sell CFMT.  What we have found over the years is that in specific languages very few clients put their entire budget on CFMT.  Most of them, if they're buying Chinese, would also buy Fairchild.  I think in the years to come when they buy South Asian I think a lot of those clients will buy ATN. Where I think CFMT will really benefit a station such as Talent Vision is the fact with the addition of Mandarin programming and our Mandarin newscast this is something we're going to market very, very aggressively.  I believe that will mean that Fairchild will also benefit from our marketing of the Mandarin marketplace and it's our goal as Jim said to grow the pie.  You know, we always say in ethnic there is enough dollars out there, you know, we just have to keep growing it and growing it and get more clients.  So I believe with the licensing of CFMT 'too' that we can grow the ethnic pie.

2646          MS. CRAM:  I hear you Mr. Dunlop I guess the concern, and one doesn't want to go ahead of oneself, is there are other ethnic networks labeled class two, category two, ethnic licensees that haven't even started yet and that because of your size you are into the market and you are essentially precluding them from those advertising dollars.  What would you say to that?

2647          MR. DUNLOP:  I would say that the fact that we're there first probably is an advantage but I would also say with the new licences, the new digital licences, that by us being there, by us having commercials produced, by us going out and marketing these languages that we're going to create a market for it and ultimately I believe that the digital channels will benefit from us marketing these languages.

2648          MR. SOLE:  If I could go on record here, Commissioner Cram, we appreciate the challenges that are in front of them.  We have lived them.  The first thing I would like to say is they're one hundred per cent dedicated to a specific, ethnocultural group.  They are high quality, imported entertainment and drama services.  And most importantly, we have listened to -- in the intervention period we sat down and we have been a number of proceedings recently and said we're going to have to come to some sort of conclusion on how we can co-exist with the other television services in our category. 

2649          And we have made an undertaking that we will never broadcast more than 20 per cent of our schedule in any one language.  When you take the broad service requirement, the commitment to 40 groups, we have got to co-operate.  Currently, Malcolm gives airtime, gives airtime, to ATN to try and increase their subscriber list.  He gives airtime to Fairchild to try and increase their subscriber list.  This is a market -- this country is it moving rapidly in a direction that can be very exciting and dynamic.  We want these digital services to succeed, we want Proctor and Gamble, as a matter of course, to produce Chinese commercials.  When we were by ourselves, we were very much by ourselves.  And this new trend towards specific digital services complements our existence and we feel we have an obligation to complement theirs.  So I think this is a good thing.  And I think we want to be parted of a good thing.

2650          MS. CRAM:  Thank you.  Mr. Nelles, you were talking about WU as you call it, and I want to talk about CFMT 'too''s strategy in foreign programming.  Is it the same as the original, is it the lighter viewing on shoulder prime?  Is that the concept?

2651          MS. ZINIAK:  Just one moment.  We are actually, for CFMT 'too', looking an opportunity to produce more, to be more local.  And in fact if we have the time, I would like to take you through the schedule, actually give some detail on that fact.  But we are very interested in both of the stations to be able to give communities what, right now, is not available.  For example we produce a Polish program if we go ahead CFMT 'too', we are able to actually grow that language corridor and we would like to air Polish drama, for example.

2652          MS. KHAN:  Thank you, Madeline.  Commissioner I take you to schedule 17, page 2, where we have outlined all of our ethnic programming on schedule 17 A.  And there we show the total of 23 languages and 23 groups in this schedule.  11 languages and 10 groups have come over from CFMT and I can list those for you.  Those languages will be Cantonese, Mandarin, English for the South Asian community, Tamil, Farsi, Korean, Tangalar, Arabic, Vietnamese, Armenian and Japanese.  Also on this schedule there are 12 totally new languages, and 13 new groups.  And I will list those for you as well.  Seven of the new languages are shown on the schedule in Kujarati, Hindi, Urdu, Punjabi, Bengali, French and Hebrew.  And an additional five new languages will come from the Community Producers Showcase.  We have submitted program descriptions for them in Pushto, Amharic, Sinhalese, Somalian and Turkish.

2653          MS. ZINIAK:  Commissioner Cram, were you referring to American acquired?

2654           MS. CRAM:  Yes.

2655           MS. ZINIAK:  Sorry.

2656           MS. CRAM:  Maybe I will start over again.  I was talking about the foreign and I should have said the English language non-ethnic, presumably U.S.-acquired programming and if it's going to be the same strategy as -- as what you would be doing with the CFMT the original in terms of putting it on non-peak but on shoulder peak and having it lighter viewing.  Is that going to be the strategy?

2657          MS. ZINIAK:  I will invite Leslie to respond.

2658          MR SOLE:  The short answer, yes.  Very similar, the same characteristics, the same objectives, the same types of programs in the same structure.  It works.  What we're bringing here something that we believe is tried and true and we want to expand our ability to serve the ethnocultural groups so we can go to work.

2659          MS. CRAM:  So are your -- this is my favourite question.  Are your financial predictions predicated upon cable carriage?

2660          MS. ZINIAK:  Yes.

2661          MS. CRAM:  And in terms of cable carriage are they predicated on carriage on the basic band, a higher band or what?

2662          MR. VINER:  We would -- aware of cable companies request for some flexibility, we would be carried below 30.  We would request to be carried below 30.

2663          MS. CRAM:  So to the extent that your rights were otherwise, you are waiving your rights to allow for carriage under channel 30?

2664          MR. VINER:  That's correct.

2665          MS. CRAM:  The next one is have you had any discussions with any cable companies about carriage?  There are two others.

2666          MS. ZINIAK:  Yes.

2667          MS. CRAM:  And I am assuming that there have been no substantive problems occurred?  Thank you.  I know this is probably an unfair question, do you know about the interconnected head end and how far it would go if there were Toronto --

2668          MR. VINER:  No chance for me.

2669          MS. CRAM:  No, don't worry. 

2670          MR. STRATI: I can answer a little bit as to the interconnectedness of some of the cable systems.  If you look at some of the areas, if you look at Hamilton, for example, I know we're talking about Toronto, but in Hamilton there is a couple of different cable providers in that area.  In the Kitchener/Grand River/Guelph sort of area, there are two systems there and there are common lineups.  So I believe there is an entertainment system that, there may be two head ends, so there is that ability. 

2671          In the front cluster of Rogers Cable Systems, you will have -- I believe there is a [inaudible] in York Mills which is a large end.  I believe there is one from the former Shaw system which would be up in Richmond Hill.  And there are -- there is probably some over Etobicoke.  But for many of the applicants including ourselves, the grade B contour would surpass a lot of the cluster of the cable system in Toronto. 

2672          So at this point you're talking about the licence service area.  And in many of those instances we would we, as other applicants, would be carried.  And then in Kitchener and Hamilton you are talking about separate equations, because there isn't the interconnectedness of three, if you will, as there is with others.  So there is probably a little bit of regional interconnectedness, but probably in the -- a lot across different regions.

2673          MR. VINER:  I would remind you of the submission 245 -- Mr. Strati is a regular lawyer.

2674           MS. CRAM:  There is reference somewhere to a program called Multicultural Canada, and that would have been undertaken between CFMT and CJNT, whatever the Vancouver licence was going to be called, if it was licensed, and CFMT 'too' if it was licensed.  Can you tell me what this is?

2675          MS. ZINIAK:  This is a program that we think is very, very important.  It's a cross-cultural program.  We know that there are many issues that need to be discussed we are looking at producing this program and being able to air it not only at CFMT but also at a new station in Montreal.  We are looking at not only having audiences interact with this program, but also being able to look at diversity within communities. 

2676          For example, we're interested in looking at issues between the Muslim and Christian communities, for example, this will be in English.  And we are looking at issues that perhaps many communities share, for example home care of seniors, looking at perhaps the positive and negatives of private and public school systems.  Because many communities have chosen to send their children to ethnic-specific schools for example.  So there are shared issues, and we feel that this is a program that will be a cross-cultural endeavour and hopefully also be able to be accessible and educate all Canadians.

2677          MS. CRAM:  And so even if there were just the oldie but goldie CFMT and CJNT, you would be going ahead?  Is that the concept?

2678          MS. ZINIAK:  Yes, yes.  It's a program that, we know there is a need for that and we know there is a lot of issues, especially now, that we would like to initiate such a program.  So we are going to do Multicultural Canada regardless of any outcome or decisions.

2679           MS. CRAM:  I wanted to go over sort of the programming in terms of access by ethnic groups and how you decide which group gets access and how much time they get.  What comes first?  Do you decide the strategy of what group gets how much time and then look for groups or what do you do?

2680          MS. ZINIAK:  We -- number one, because CFMT exists, we have many, many communities that come forward and ask for programs.  So we do need to have an ethic program procedure.  Of course numbers are important, we look at of course the demographic of the community but also importantly is the need for this language program.  We also have to be able to work with the talent base to see whether or not there are existing journalists, reporters, available in that community to produce a program.  And we also look at community support for that program.  And also the availability of quality television, be it news services or anything that of course would enhance the product for this sort of program. 

2681          So that is the criteria and we make sure that we are able to tell audiences about the criteria.  And this happens either by the stations phoning us, we also have a direct relationships with them.  We have a staff position which is the independent production coordinator, whose sole function is to not only interact with potential producers or community groups, but also to start to develop community groups. 

2682          We are often -- we're in discussions actually with many, many communities who won't be on the station for at least another two or three years.  There are 170 languages spoken in the Toronto/Hamilton area.  And when one can take a look at that and see how many proposals, potentially, one could have -- so doing our best in actually right now broadcasting in 22 languages, but each of these communities and not only these language communities, but then you get into specifics such women's programming or youth programming.  So these individuals and production communities come forward to us.  They know we exist and they call us.  So that is the criteria that we do look at.

2683          When he look at the amount of programming that one can have on the station, we certainly look at again the audiences, but we also look at the support that is available for this community.  We also take a look at our schedule and see where best this would be suited because we believe in -- in actually building a schedule with language corridors.  Because we know for example, if you look at the Slavic language corridor, we know when we broadcast Russian, Polish and Ukrainian programming next to each other, that we're also capturing audiences like the Bulgarian community, the Serbian community, that have some kind of an understanding of that language and perhaps don't have a program of their own.  So that's how we look at placing it on the schedule so there are definite synergies.  And then, certainly, we look at the genre of the program.  Often we start new communities with a half hour program and then continue to develop and build them as the time does go on.

2684          MS. CRAM:  Because I was looking at mic.  I wasn't talking to Mr. Amodoe.  Anyway. I was look at schedule 18, page 6, where you have the list of the CFMT pan-Asian and African languages.  And the total duration of programming in a week and the relative per centages and so these are just sort of what? Sort of prognostications?

2685          MS. ZINIAK:  This is, to the best of our knowledge at this point in time, these are -- this is our assessment and where we think, and how long the program should be and this is based on the communication we had the community.  For example, you know we have a Hebrew program that's going to be one hour long.  And this is really after long discussions with the community who have stated that there is a resurgence, there is a need for a Hebrew language program.  And we feel with minimum risk, well as much risk or least risk as possible we would actually offer this amount of time for that community.  And if we need more details, certainly Viddear can speak to some of the allocations of different language groups and programs if necessary.

2686          MS. CRAM:  Well I would like to talk privately about the Punjabis only getting one hour when they are a larger group than the Hindu people but I'll leave that for a private discussion.

2687          MS. ZINIAK:  If I may respond we also -- that case and point, that we also do South Asian news in English and that is a very much a unifying factor and Indira, I am sure, will be happy to speak to that issue.  But also we are looking forward to different producers coming forward with the Community Producers Showcase as well as the Ontario Independent Producer Initiative.  So the community also has different opportunities to produce television in these different areas.

2688          MR. VINER:  I just want to make clear this is a complex decision.  And --

2689          MS. CRAM:  And I am not trying to micromanage.

2690          MR. VINER:  I understand.  It's not just size that of the population, though it's as Madeline has said, it is need, it's immigration trends.  There is a number of factors that go in.  It's not quite as easy as sitting down with a list and saying you're big; you get an hour.  There are a number of issues.

2691          MS. CRAM:  What I really did want to talk about was the extension of the English (South Asian) programming, from three-and-a-half hours in the original CFMT to 19 hours in CFMT 'too' -- which really comes down to 15.5 per cent of your total programming from 2.78.  And I am wondering, if in a sense, this is what Craig was talking about yesterday, that in reality focus groups of second- and third-generation immigrants, they want to keep their culture but have not kept their language.  Is that what this is -- because it's a substantial amount of your programming. And I -- when it's in English I start to say, is this proposition right?  That second- and third-generation people really would prefer programming in English to them.

2692          MS. ZINIAK:  Our experience shows that on the contrary there is a resurgence, a renaissance for those who have a language and, you know, who want to express their identity in language.  The very people that we hire, the journalists, all speak another language.  Of course, many are born here in Canada.  So indeed we see that the language is important to second and third generations.  If I could just address that issue in a deeper way. 

2693          We have seen for example the Portuguese community, where perhaps children of parents group in the '50s who the parents said you know, you're going to be Canadian, don't speak Portuguese.  The reaction to that was that the children actually started to speak Portuguese and wanted to learn Portuguese to the extent where U of T is filled, as far as their language classes, of students who wanted the language.  So we have seen that, that's one example.  Now also with countries that have gained independence, Ukraine, Lithuania, Estonia, there is a stronger resurgence, a stronger need to have language.  We know that language is culture and you need that language to be able experience and to express your language. 

2694          The fact that we have extended South Asian news in English, we look at that as news that is going to unify many, many communities, and I am going ask Indira to elaborate.  But if we look at the schedule, there is also the expansion of many new languages that presently we are not doing, such as Urdu and Bengali, Gujarati, because as we know India and the South Asian community is very, very diverse.  Indira?

2695          MS. NAIDOO-HARRIS:  Yes, Commissioner Cram.  As Madeline mentioned, South Asia is extremely diverse linguistically.  We've got Bengali, Gujarati, Urdu, Tamil, Hindu, and Punjabi just to name a few languages that exist within south Asia. 

2696          Newscasts in India are in English, and also in Pakistan.  We take daily feeds from India, and our feeds, they may come to us in English.  We take weekly feeds from Pakistan; they come to us in English.  So basically we are quite aware that with such a big diverse linguistic group, English is a language of comfort for these groups.  It is, as Madeline mentioned, a unifying language.  But even though they're linguistically diverse, in general the south Asia group does share a common culture, common experiences.  So English does help to unify and to get that -- help get the information out there.

2697          Now, if you grant us a licence for CFMT 'too', as you will see, we have all kinds of plans in the works for other languages, more specifically.  We just don't have the room right now.

2698          MR. SOLE:  Commissioner Cram I have been doing this for 15 years and this has been one of the most complicated issues to discuss, especially when you're talking to no non-South Asian groups.  This isn't about English.  This is about what's in the news.  English happens to be common currency in that cross-cultural group of communities. 

2699          There is 13.5 hours on CFMT 'too''s schedule.  Madeline mentioned in her open remarks that by 2011 these groups will be in excess of close to three quarters of a million people.  It's telling the stories that relate to that community that identify themselves as South Asian.  It's not an English newscast for South Asians, it's a South Asian newscast where English is the language that most have facility in.  It's difficult to explain, but I think the community would tell you what's best for us would be English and that's why we're there.

2700          MS. CRAM:  So in the schedule, the 19 hours that are proposed of English (South Asian) per week, that is news?

2701          MR. SOLE:  It's 13.5 hours.  19 I think is the total South Asian, including language specific. Viddear might be able to help us sort it out.

2702          MS. KHAN:  Thank you, Commissioner, on schedule 17, page 9, schedule 17.

2703          MS. CRAM:  17, page 9.

2704          MS. KHAN:  Yes.  We have highlighted all of the programming in English and French and as you can see on that page, South Asian news from 8:00 to 9:00 is listed there, that is in English.  That's 8:00 to 9:00 p.m., Monday to Friday.  And then again on Sunday 8:00 to 9:00 p.m., Sunday Edition is your news magazine.  And again on Sunday from 1:00 p.m. to 2:00 p.m., there is one hour of South Asian entertainment followed by South Asian arts and culture and then there are repeats.  The total number of hours for South Asian programming in English is 13.5.  Currently on CFMT we carry four hours.  At the time that we submitted the application we were using a fall schedule and that's since been updated, and now we do have four hours on CFMT.

2705          MS. CRAM:  So instead of that 19 on 18.6 it should read 13.5?

2706          MS. KHAN: That's correct.

2707          MS. CRAM:  That changes things.

2708          MR. STRATI:  If I can clarify what the difference is, and a mistake, perhaps, in schedule 18, page 6.  You did refer to 19 hours.  There is 13.5 hours of English South Asian programming.  We would add to that.  And you will see it's not actually on the schedule 18, I should have listed it but it actually is in the schedule.  There would be South Asian programming but it would be in language.  So you would have the South Asian drama from 4:00 to 4:30, as well as the Bollywood movie on Sunday afternoon from 2 to 5 o'clock.  That's five and a half hours.  So that takes you from 13.5 to 19. 

2709          And that five and a half hours, those dramas -- perhaps some would be in English and some of them would be in Punjabi and other languages as well, especially for the movies.  And to take the jump from the existing CFMT to CFMT 'too', 3.5 to 13.5, that's roughly 10 hours, and that gives you the sort of the South Asian updated weekly news case that's repeated in the morning as well.  So that's sort of the breakdown of the hours.

2710          MS. CRAM:  And my penultimate question, I define ethnic programming as, groups speaking to themselves, and groups finding themselves on  television and finding their home on television, ethnic groups.  I define cross cultural as groups speaking to other groups, and learning to understand each other.  And I see a distinction between the two in the sense that one is more Ethnic-centric and more concerned about the individual ethnic group whereas the cross cultural is more about society as a whole.  Would you agree with those definitions?

2711          MS. ZINIAK:  I would say that ethnic language programming is about Canada.  Everything that we produce in language, although it is in that language of that ethnic group, this is a local program produced by the people here and for the audiences that are here.  Of course the ethnic communities are going to talk about issues that are pertinent to themselves, but also we are being able to reflect on issues and also be able to portray communities and individuals.  I think it makes a great contribution to finally see a program where there are -- there are individuals from that community on the air.  And I think when we look at ethnic language programming, it is local and it's about Canada.  Because we deal of course with international issues, but how they affect the communities here.  We look at the ethnocultural Canadian perspective and I think that's what that is all about.

2712          Certainly the cross-cultural programming is programming that's accessible because it's in English, it also deals with different issues.  But certainly, on our language programs we often do interviews with individuals who perhaps can't speak that language and we would actually have translators.  So we are also bringing familiarity to the communities of individuals who aren't from that particular ethnic group.  And I just wanted to maybe ask our news director to give some detail in had a matter.

2713          MR. ZANE:  Thanks Madeline, that's correct.  The focus of most of our programming is community first because we're looking at specific events and how they impact specific communities.  That is our starting point.  And that's where we dedicate most of our energies.  As far as the news programming is concerned, we try to find a different angle in the sense that we look at how events affect these communities.  We're not so much interested in going after crime, chasing fire trucks and things like that.  We devote most of our energy trying to tell those very important stories or elaborate on the issues of the day  to the communities and how they reflect their life in Canada. 

2714          The fact that this work in different languages also makes it local.  And people though don't tune to us to watch our news because they are so interested in the news from the home country.  The specialty channels are already doing a good job of that.  They're turning to us to see how we filter this mass of information every day.  We package it and edit it to reflect their interests and their concerns.  If I may, just one quick example.  If -- a hypothetical case -- if Ukrainian church were to burn down in Ottawa/Carleton for example, that story is not of interest to the mainstream conventional newcaster in Toronto that is doing in English for a mainstream audience. But that story does become intensely local for the Ukrainian community and that's the sort of work that we do.

2715          MR. SOLE:  I accept that.  I will accept your definition, and make a final comment.  There are plenty of places in Toronto and Hamilton and Ottawa and London for cross-cultural programming to develop and become part of the Canadian English language mosaic.  Yesterday, Commissioner Pennefather asked one of the applicants, did you include everyone in your sample.  Well, did you include everyone in your schedule?  What we do is very important.  We are about communication.  We are about Canada.  Yes, ethnic groups are speaking to themselves, but ethnics -- people that have been here longer are telling people that just got here what it's about, what it's like, where services are, how the schools work, what the laws are.  That is a very critical function that we play and we're proud to play it.  And on the cross-cultural issue, we will go shoulder with anybody in the country to try and increase the reasonable positive presence of ethnocultural Canadians everywhere.

2716          MS. CRAM:  So -- and this is -- this doesn't include the why you should get the frequency in question.  The same question that was asked yesterday by Commissioner Pennefather.  Right now, in these times, how is the public interest served better through ethnic programming as you have described it, or through cross-cultural programming?

2717          MS. ZINIAK:  I think certainly if you look at the service requirement, I think it has to be the marriage of both.  I think it's extremely necessary to be able to express oneself and to get information in ones language of comfort.  People of course speak English or French but it's very different if you are able to get information or express yourself in a language that you're comfortable with.  We know of situations where individuals will refuse to do an English interview because they're ashamed, they don't feel comfortable either of the way they express themselves in English or of their accent.  So the imagine the potential that's being lost. 

2718          So we're able to bring in talent, individuals -- I mean not only develop in talent who either can't function in an English or French medium, and feel extremely confident in a language medium.  So I think Canada, at this point in time, that's what it's all about.  I mean if we're looking at Toronto for example with 170 languages, and we're broadcasting right now merely in 22 I think we have a lot of catching up to do.  And I think that to even give more detail, ask Indira who is on the line producing with communities.

2719          MS. NAIDOO-HARRIS:  Yes, Commissioner I can say post-September 11th for example, this kind of programming has become extremely important to our communities.  They're very interested in just exactly what are the rules and regulations out there when it comes to hate crimes for example, and that kind of thing, what kind of protection they have, and this addition to that, just stories that relate to them. 

2720          For example, we were contacted by a Muslim woman at one point who -- just the date after September 11th -- who said my children were just devastated by what happened.  Because they were wondering whether or not the fact they Muslim meant that they were terrorists, and I have been trying to explain to them that one doesn't go with the other.  And just started to talking to us on the phone about this.  We decided to do a story on it, and we did a story about her family and how she went through the prayers and also explained that Islam should no be equated with terrorism.  And in addition to that it piqued her son's interest so much that he wound up setting up a web site inviting other Muslim teenagers to write about how they felt post-September 11^th.  That's the kind of stuff we do.

2721          MS. CRAM:  Thank you.  I will pass it back to Madam Chair.

2722          MR. SOLE:  Just so you know, our choice was ethnic.

2723          THE CHAIRPERSON:  Mr. Viner, in the deficiency letter of September 12th, 2001, you mention that you were analyzing the possibility of finding another channel.  Now, this was actually today, towards the end of your presentation, made quite concrete by identifying a channel and also by indicating that you, as an applicant, wouldn't have a problem if you had a different channel, if there were more than one station licence in the market.  So in order to give other applicants the opportunity if they so want in their intervention to address this, since possibly they would not all be on frequency 52 now, can you give us some idea as to how far you are into identifying channel 69 as a possibility?  Like is it something that is close to putting together a technical brief?  How real is it?  So that the other applicants had have a sense of that, and the new factor it introduces, that not everybody may be mutually exclusive.  And your statement, if I understood you, that you as an applicant would not have a problem if you were licensed along with someone else -- which hasn't been a reality until now because everybody was on frequency 52.

2724          MR. VINER:  Commissioner, I would like to ask Steve Edwards our vice-president of engineering technology to answer in a moment.  But just to clarify, we said we would find 69 acceptable whether or not the Commission --

2725          THE CHAIRPERSON:  So it is something that can be done?  The only problem is the -- the interference with the retransmitter in London.  But it's not just an embryonic belief that there is a frequency there; it's a reality?

2726          MR. VINER:  I will ask Mr. Edwards.

2727          THE CHAIRPERSON:  Do you know where I'm -- I just want to see just how serious this is, so that in fairness the other applicants can respond to your comments and light of a change.  It's not that we have a problem with it, but I think in fairness people should know just how real this is.

2728          MR. VINER:  Steve, can I ask you to respond?

2729          MR. EDWARDS:  Certainly.  Good afternoon.  It's been the Commission's practice in the last several hearings to ask if they would be prepared to accept other frequencies if they were licensed.  And in anticipation of that, we and I believe some of the other applicants, did some analysis of the spectrum in the Toronto area and, technically, channel 69 is quite usable.  As it turns out, because we already use channel 69 in London, we can make particularly effective use of it by tailoring the patterns of the two transmitters and the powers to make them work well together.  There are in fact some other channels that we believe could be used as well, various --

2730          THE CHAIRPERSON:  I only wanted you to speak to the one that you actually put forward.

2731          MR. EDWARDS: Okay.  Technically there is no problem that we are aware of with channel 69, it should be quite usable.  There are some potential political pitfalls which we believe are manageable in that Industry Canada has recently asked for comments and opinions about whether the spectrum from channel 60 to 69 could be shared.  Now as part of the CAB submission to Industry Canada, a study that was prepared by Wayne Stacey was included.  And that showed rather conclusively that with or without our use of channel 69 in Toronto, the concept of sharing television spectrum with LAN mobile in southern Ontario was simply a non-starter.  For example, fully 50 per cent of the DTV allotments in the Toronto area are, in fact, between channel 60 and 69.  So it is our belief that channel 69 could be used, and it would be provide coverage very comparable to what we have proposed for channel 52.

2732          THE CHAIRPERSON:  And have you actually filed anything or talked to Industry Canada about this?

2733          MR. EDWARDS: No, we didn't think it was appropriate.

2734          THE CHAIRPERSON:  This is your view as the applicant's engineer.  I know this is not going to be very engineering-like, but would it have any effect on the use of 52?

2735          MR. EDWARDS: Sorry, I didn't hear.

2736          THE CHAIRPERSON:  69 would have no effect on the use of 52 --

2737          MR. EDWARDS:  No.

2738          THE CHAIRPERSON:  -- and the parameters that have been suggested.  Now, what would it do to your retransmitter in London?  Would it actually impair it so that the service would no longer be available?

2739          MR. EDWARDS:  With the power that we have proposed now, just -- with the power that the transmitter is operating at in London now, and with sufficient power to give us equivalent coverage to channel 52 proposal, there is a small area of overlap which could give rise to some interference.  Again, by judicious shaping of patterns and powers we couldn't make that work well to our advantage.  It wouldn't work as well for other applicants because then we would be in a position of having to give up something without getting something for it, if you know what I mean.

2740          THE CHAIRPERSON:  So what you are talking about here is just to your -- to Rogers' CFMT retransmitter in London would require some shaving and some tweaking which you would do yourself.

2741          MR EDWARDS: Correct.  Not to say that others couldn't use channel 69 at well, but they couldn't use it at the same power level that we could.

2742          THE CHAIRPERSON: Now, I can't recall exactly and I don't have the correspondence with me, but help me -- Rogers complaint about the use of 52 -- no, the use of one of the frequencies by Alliance Atlantis.

2743          MR. EDWARDS: Yes.  You are talking about the Hamilton proposals.

2744          THE CHAIRPERSON:  And then they suggested an answer from Industry Canada.  Does that effect at all the proposition?

2745           MR. EDWARDS: No, no that's yet another issue.

2746          THE CHAIRPERSON:  Thank you.  I didn't think so but I couldn't find the letter concerned.  That's helpful since this was now put on the table and combined with your view that the current submission would actually allow for you and someone else to be licensed.  I will turn it back to Commissioner Cram.

2747          MS. CRAM:  The last question.  Why should you be licensed ahead of anybody else, or approximating that?

2748          MS. ZINIAK:  I think our application is all about demand.  It's all about the changing landscape of Toronto and Hamilton.  And in fact the landscape and environment has changed so much that we aren't keeping up with it.  I am -- I would proudly like to offer so many communities air time that right now I am turning down we're turning down.  The proposals that we're getting are coming through fast and furious.  Even for example on my ride here, the individual driving me was someone who speaks Orono and he is from Ethiopia at end of his ride he gave me his card to talk to me about getting a program on the air.  So that's just one example.  So it would be so important to be able to satisfy not only all of the ethno-cultural communities that we are merely touching the surface of, as I said 170 languages, and what are we doing to keep up?  We're up to 22.  So the demand is there, the need is there, the commitment certainly is there.

2749          I have been working in media for, specifically ethnic media for 30 years and I remember when audiences wanted to be able to work, or communities wanted to work a company that would believe, would invest and actually be able to emancipate the communication of communities to be able to express yourself in language.  Sure, ethnic media exists in print in electronic and radio.  It continues to develop.  If anything we're seeing a proliferation, more, we're not seeing less and I think if we take a look at what we're able to do, what we are a able to contribute, give back to the Canadian community, give back to the broadcasting industry, I think the expectations of our audiences are there.

2750          We are giving 50 million dollars to this industry in places that are unprecedented, opportunities not being able to be actualized.  We know that there are many, many audiences out there and communities who are willing and want to be able to access this money but they're not able to get.  And in fact, they are being hampered or they're sacrificing themselves in the sense that to fund their own documentaries for example, you know, that they have diminished their quality of life because they believe in this so strongly. 

2751          And I think certainly more and more in Canada as a democracy you are looking at individuals and people coming to Canada specifically to be able to express themselves to access information.  They're coming here for a better life. As well as those who are here to develop their own lives and I think cultural affirmation is very important and you cannot separate language from that.  Language is key and local is key.  And we look at that and then we look at the broad service requirement when we look at how many languages are out there, how many audiences are out there who aren't getting the information they need and aren't seeing themselves on television. 

2752          I think it's about self-esteem I think it is giving back to communities what is necessary.  And I think when you look at the demand, it's there, we hear about it all the time, the demographics alone speak to that, notwithstanding the fact that you know, to get into various stories of why and how that need is expressed but simply the demographics and where the demographics are going.  We know that, as we said, 60 per cent of the population is going to be speaking neither English nor French,  and I think when we take a look at licensing something like CFMT 'too', it is truly an attribute, it is truly different, and with that we are affirming the fact that ethnic television, that ethnic viewers are vitally important to the Canadian broadcasting system and to finally to be able to express that.  We know that we will make a difference, and I think that the need and the demand is there.

2753          THE CHAIRPERSON:  Thank you, Ms. Ziniak, Mr. Viner and your colleagues and we thank you for your cooperation. We will take a half hour break to give all the applicants the opportunity to get into their aggressive intervention mode.  So we will be back at 6:00.

--- Recess taken at 1732/Suspension à 1732

--- On resuming at 1816/Reprise à 1816

2754          THE CHAIRPERSON:  Welcome back.  Mr. Secretary, please.

2755          MR. CUSSONS:  Thank you, madam Chairperson.  We are now at phase two of the competitive process, where we invite our applicants to come back in the same order and intervene to each other's applications.  Each applicant is allowed a maximum of 10 minutes for this exercise.  We will start with Global Communications Limited, Mr. Noble.

INTERVENTION BY GLOBAL COMMUNICATIONS/

INTERVENTION PAR GLOBAL COMMUNICATIONS:

2756          MR. NOBLE:  Thank you, Mr. Secretary.  Madam Chair, Commissioners, we thank you for this opportunity to appear before you during the intervention phase of this proceeding.  As we've indicated in our written intervention, and reiterated during our appearance before you above on Monday, we believe that the introduction of new general interest conventional television stations in these markets is neither warranted nor needed at this time.  Such licensing would further destabilize an already seriously fragmented television marketplace, a marketplace that is already well served by exhibiting operators.  Some of the applicants claim that new local television service needed in southern Ontario because no new conventional service has been licensed in 30 years.  This argument fails to account for the following additions during that period.  The Licensing of CFMT and CITS TV, and disaffiliation from the CBC of CFPL and CKVR, two stations carried on cable in these regions.  Together these have added into the marketplace additional levels of local programming, increased diversity in program formats, and increased availability of news and entertainment programs. 

2757          At present, this marketplace is the most diversified in North America.  Viewers in southern Ontario have access to ten English language conventional television stations, in addition to two French language stations providing a wide and diverse menu of viewing options that include innovative programming concepts, ethnic programming, religious and family-oriented programming, and not to mention the very best in Canadian and foreign prime time offerings.  This does not take into account the multitude of specialty services introduced in the past 10 years including CP24, which offers a comprehensive regional news service focusing on this area.  This market is very well served. And this is confirmed by a number of surveys filed by competing applicants where respondents overwhelmingly stated that they were satisfied with current offerings. 

2758          It is interesting to note that during CTV and Global's last licence renewals, no one intervened in these markets advocating the need for increased local commitments from our stations or claimed that these markets were severely underserved.  Of the 12 stations currently serving the market, nine relying on advertising market to fund their operations.  While some representatives in the industry claim that they find it difficult to buy market-specific advertising, this perceived demand does not necessarily warrant new licensing.  The Commission has the ability to make structural changes that could address those needs.

2759          A number of other important factors should also been taken into account.  First, the financial stability of Toronto and southern Ontario help subsidize our commitments as well as those of our multi-station groups in other markets across the country.  Destabilization of the marketplace in Ontario could impair our ability to provide the same level of service in those smaller unprofitable markets.  Two, the introduction of new conventional services in these markets would place an burden on programming funds such as the Canadian Television Fund which cannot meet current demands of existing conventional and specialty television services.  There is also potential for impact on the supply and pricing of Canadian programs.  Three, increased fragmentation could make it increasingly difficult for existing broadcasters to meet their current significant programming commitments.  And four, the introduction of a new foreign-program buyer in the market will cause disruption in the acquisition market and will drive up prices for foreign programming. 

2760          Some of the applicants claim that they could meet their foreign programming needs to some extent by acquiring rights to unused programming held by existing foreign buyers such as Global.  However this seems unlikely, given that Global has no excess programming due to its own requirements for the Global television network and for Hamilton and Victoria.  One of the benefits of the acquisition of WIC stations was the restoration of balance in the foreign programming rights market.  By introducing another buyer, we will find ourselves back where we were only two years ago. 

2761          Another claim by the applicants is that they would not necessarily compete for top rated U.S. programming, choosing instead to broadcast instead alternative, less popular U.S. shows, or even non-U.S. foreign programming.  While there is merit in the argument that these shows would provide some degree of diversity in the market, they would not likely garner the large audiences needed to generate the necessary revenues to meet their Canadian programming obligations including local programming on a sustainable basis.  Whether the foreign programming element is made up of top rated or less popular U.S. shows, a new conventional television service would result in more dollars leaving the Canadian system.

2762          There are also a number of larger policy implications at stake at this time.  The Commission is currently in the process of considering a number of important policy issues that it has yet to rule on or complete.  The outcome of these proceedings could significantly change the dynamics of marketplace or result in additional fragmentation. 

2763          They may also require some degree of re-engineering of the marketplace. These include: one, a review of the carriage of local and distance signals by DBH; two, a review of the Commission's policy on community and low powered television services; three, the conversion from ALR to digital television; and four, the migration of analog specialty services to the digital tiers. Ken?

2764          MR. GOLD: The economics of the marketplace which we have already discussed at length must also being taken in account.  Since 1998, the combined local and national ad revenues of conventional television broadcasters in Ontario have declined on a constant dollar basis, yet for most of that period GDP was growing at a healthy rate.  So we have an anomaly.  The economy has shown strong growth from 1998 to mid-2001, yet conventional television revenues have declined on a constant dollar basis.  The structure of the industry is changing. 

2765          What has happened is that specialty services reached critical mass and as a result they have absorbed the year-to-year advertising growth in the system.  So even without the anticipated economic downturn, and even without the tragic shock of September 11th, serious questions must be raised about the capacity to absorb new conventional format stations because of the structural change that was already occurring. 

2766          Today, the cyclical changes of economic downturn and economic uncertainty now have been added to the structural change of no growth for conventional television.  It is a combination of factors that should not be taken lightly.  It is not possible to predict the timing of an economic recovery with absolute accuracy, but once economic recovery starts, the structural trend that was in place before the economic downturn will still be present. 

2767          So that is the context within which we consider each of the other four applicants at this hearing, the conventional format applicants.  In general terms, we believe that the same thing can be said of each of the four applications.  First, if any of them are licensed they will severely damage the economics of the television market in Ontario.  Second, if any of them are licensed it is likely that it will upset the structural balance of program buying for non-Canadian programs.  Third, each of the applicants has overstated the size of the advertising market on which it will impact.  Fourth, each of the applicants has underestimated the impact it will have on the market.  And Fifth, most of the applicants have filed revenue projections that are inconsistent with what they claim to be the rationales for the respective applications.  In our written intervention we included a detailed analysis of the competing applications, including what their impact would be on the market if licensed.

2768          It is clear from this analysis that none of the four other applicants can truly claim that they can enter the market without severely damaging the other conventional broadcasters.  Impacts range from one seventh to one 12th of market revenues, we would submit that any of the four applications would represent a severe shock to the conventional television stations currently serving Ontario.  Using the applicants' own projections, it is clear that despite the promises of new local revenue sources, or new ethnic revenue sources, the real impact of the proposed new stations would be where it always is; mainly on the national advertising revenues of conventional stations already in the market.  Gerry?

2769          MR. NOBLE:  For all of these reasons we urge the Commission to deny the four applications for conventional format stations.  And we are ready now to answer any questions.

2770          THE CHAIRPERSON:  Counsel?  Thank you very much.  Mr. Secretary, please.

2771          MR. CUSSONS:  Thank you Madam Chairperson.

2772          THE CHAIRPERSON:  We will see you again at the last phase.

2773          MR. CUSSONS:  I would now like to invite representatives of Alliance Atlantis Broadcasting to come forward, please, and present their intervention.

2774          THE CHAIRPERSON:  Mr. MacMillan?

INTERVENTION BY ALLIANCE ATLANTIS BROADCASTING/

INTERVENTION PAR ALLIANCE ATLANTIS BROADCASTING

2775          UNIDENTIFIED SPEAKER: Madam Chair, commissioners, we would like to comment on the applications today by both CFMT and Torstar.  I will address the CFMT and Michael MacMillan will address Torstar.

2776          My comments on CFMT to be brief but we think it's important to address the statements and the conversations that took place today regarding the potential of another channel being used by CFMT, should it be licensed.  We believe that should the CRTC decide to license both our application and the application proposed by CFMT, that GTTV would still be able to implement its business and programming commitments and we would not oppose CFMT 'too' also being licensed.  This is premised on the approval of our application, of course, as filed.  Lastly, GTTV would be approved on the channel that we have applied for, namely channel 52, and that the licensing of CFMT 'too' would be on the alternative channel that they have suggested to you they could now use.  Michael?

2777          MR. MACMILLAN:  Thanks, Mark I will try to be equally brief.  We didn't really propose to intervene against any applicant.  But given the lengthy discussion that happened this afternoon or earlier today at least, concerning production costs and program costs during the Torstar discussion, we felt compelled to comment.  We were concerned that our silence on the point would be tacit agreement with the numbers and the discussion that had taken place. 

2778          We think that the discussion of budget levels for prime time programming that were bandied about, $10,000 per hour, specifically, don't bear any relationship with the kind of resources and the kind of budgets that are required.  Now I have had some passing association with production costs over the years and I am somewhat familiar with it.  And you know, the discussions specifically as the main example was about a biography documentary, 10,000 bucks an hour.  Well it should cost $200,000 per hour for this kind of material if it's going to gain the kind of audiences and ratings and therefore revenue that we're all talking about.  For example, our series The Canadians which is a biography series, it does $200,000 per hour in addition to the hosting which we provide separately and some stock footage which we get from CTV separately under a separate deal with them.  So it's a direct apple-to-apple comparison to the example cited.  And so across the board the numbers were just in the wrong level.

2779          Also we're not remotely familiar with broadcasters or producers buying or commissioning or producing programs in 400 hour bucketfulls.  That's just not how the industry works in terms of prime time programming.  In terms of recouping a hundred per cent of investment costs, if we could get the phone number of the person responsible for that, we would like to hire them because I would love to have that experience. 

2780          But seriously, major resources are required for impactful programming and this is a conventional over-the-air, general interest channel we are talking about, not a community channel and not a niche specialty channel.  So it is possible to spend $10,000 on hand puppet kids shows or stand up comedy or that kind of thing but not for the impactful programming that is required for the big ratings that's required to garner $400 million of revenue over the term of the licence.

2781          So that's the comments on that program cost discussion.  And all of our comments.

2782          THE CHAIRPERSON:  Thank you very much.  Mr. Secretary, please.

2783          MR. CUSSONS:  Madam Chairperson, our next intervenor is Craig Broadcast Systems Incorporated.

2784          THE CHAIRPERSON:  Welcome back.

2785          MR. CRAIG:  Thank you.

INTERVENTION BY CRAIG BROADCAST SYSTEMS INCORPORATED/

INTERVENTION PAR CRAIG BROADCAST SYSTEMS INCORPORATED

2786          MR. CRAIG: Good evening, Madam Chairperson, Commissioners, Commission staff.  We had some discussion yesterday about a commitment that you asked us about for acquiring programming relating to the ethnic initiatives that we had in our application and I would like Ms. Strain to put something on the record, if you would like us to.

2787          MR. RHEUME:  Yes.

2788          MS. STRAIN: We would be prepared to commit that 20 per cent of our Canadian acquired programming would be programming that essentially fits the definition of type E programming in schedule two of the Television Broadcasting Regulations, and specifically it would be a program in English or French that is directed toward ethnic groups or toward the general public and that depicts Canada's cultural diversity.

2789          MR. CRAIG:  Hello, my name is a Drew Craig.  To my right is Jennifer Strain, to my left is Deborah McLaughlin sorry beside Deborah is Cam Cowie.  We have intervened in writing against Global, CFMT and Torstar.  Having seen the presentations against Global and CFMT, we have little to add to our written comments.

2790          However we note that CFMT's business model contemplates losses of a staggering 75 million dollars over the licence term, and we question why they want this license when they can use their existing license to provide the same programming.

2791          With respect to Global, we note that the Commission uncovered the fact that Global also plans to give analogue specialty programming an airing on the proposed service, but the real problem with this proposal is trying to acquire conventional right to digital programs.  The vast majority of programming acquired by the digital services is for the digital window only.  They have no ability to allow these programs to be broadcast on a conventional outlet.

2792          We also have some additional comments about Torstar and the Alliance Atlantis applications.  First we will deal with Alliance Atlantis.  Craig chose to stay away from focusing solely on traditional newscasts as the core of our schedule as the incumbents are not already -- are not only already doing it, but are dependent on it to achieve their business plans.  Nonetheless, Alliance Atlantis is spending 58 million dollars over the licence term - 48 per cent of its Canadian programming expenditures -on programming that everybody's research, including their own, says is not in high demand.  We should all be concerned whether they can make that work.  Frankly, it seem dubious to us that this large and unnecessary news expense has the effect of ratcheting up the per centage of revenues spent on Canadian programming which, in a competitive hearing such as this, must be closely scrutinized and adjusted for. 

2793          We experienced a real disconnect as we read Alliance Atlantis's application, and it wasn't cleared up in the presentation yesterday.  The incumbent broadcasters covering the news affecting these communities when it happens -- we would submit it doesn't happen often enough to warrant such grandiose plans for five news bureaus.  We are also skeptical as to how news feeds from one of the local areas will be appealing to viewers in the other areas. 

2794          Finally, their research shows that 76 per cent much those surveyed stated that local television stations should combine traditional programming with cultural diversity programming.  And yet their application is it remarkably devoid of any significant plans in that regard. 

2795          I would like it turn now to the Torstar application.  As we stated in our written intervention, we acknowledge that Torstar has lots of experience in the print media, and we respect that.  But they have none in conventional television and it shows.  Their projections are simply not realistic.  They are anticipating nearly 21 million dollars in syndication revenue to be derived from the sale of regional programming that Mr. Prichard indicated would be so saleable that Torstar will be able to get one hundred per cent of its investment back.  If they don't, it virtually wipes out the profitability over the licence term. 

2796          This is compounded by packet that they vastly overestimated the size of the market.  Of all applicants, Torstar's estimate of market size is by far the highest, a $100 million over TVB's number.  We normally wouldn't focus that much on the estimates of the market size, but if the Commission is preparing Can-con promises, there is an apples-to-apples issue. 

2797          They anticipate budgets for programming that are unrealistically low.  They try to justify this by suggesting multimillion dollar license fees to single-source producer to produce hundreds of hours of such programming.  That approach doesn't spread the money around to various producers.  Indeed, only the largest producers would have the kind of efficiencies had that would allow for the production of that much programming for such low license fees.

2798          Finally, the Torstar model suffers from the same problems the Alliance Atlantis proposal does, they both offer an abundance of unneeded news, and in the case of Torstar there is no new editorial voice in the market.  There is lots of talk about cultural diversity programming but no plans as to how the programming will actually reflect that diversity.

2799          Here is the summary of the applications as we heard them over the last few days.  Global wants a rerun channel, CFMT wants another channel they don't need in order to achieve their programming goals and it will not be financial viable, at that.  Alliance Atlantis is asking for a news-laden licence, the demand for which has not been demonstrated and Torstar is asking for a licence that is not likely to be viable and offers no new news diversity in the market.  And finally, and importantly, these possibilties would create rather than solve structural issues in the Canadian broadcasting system.  And we leave you with this question:  What is the future of a GTA-only station for Alliance and Torstar?  What is the future of the stand-alone models that Alliance Atlantis and Torstar have advanced?

2800          Thank you Madam Chair person, Commissioners, Commission staff.

2801          THE CHAIRPERSON:  Commissioner Langford?

2802          MR. LANGFORD:  I was listening to you rather than following your written brief and maybe it's in here and you didn't read every word if it is I apologize.  But what would your position be if this Commission were to licence CFMT as they suggested we could this afternoon - it's beginning to meld in my mind - on channel 69?  Would you still be interested if going ahead and having a licence on 52?

2803          MR. CRAIG:  I would have to say that we think the market can stand one service and we think our model is the model.

2804          MR. LANGFORD:  That's your preference, but as we get to decide, I suppose you would have to answer my question, yes or no.  I'm sorry to be so blunt but if we were to licence CFMT, would you still want your application to succeed, or do you want to wait another 30 years to apply?  That was editorial, I apologize.

2805          MR. CRAIG:  That's a tough question, but our position would be we would certainly take the licence with CFMT.

2806          MR. LANGFORD:  Thank you very much.

2807          THE CHAIRPERSON:  Thank you, Mr. Craig, and your colleagues.  We will see you at phase four.  Mr. Secretary, please.

2808          MR. CUSSONS:  Madam Chair person the next intervener is TDNG Incorporated, Torstar.

2809          THE CHAIRPERSON:  Welcome back.

INTERVENTION BY TORSTAR CORP./

INTERVENTION PAR TORSTAR CORP.:

2810          MR. PRICHARD:  Madam Chairman, Commissioners, you gave us very thorough, very fair and very recent hearing, and we suspect at this time of day you wish to hear no more.

2811          THE CHAIRPERSON:  You would be surprised.

2812          MR. PRICHARD:  We of course would be pleased to answer any questions you might have of us but we believe the questions and the answers exchanged over the last few days with the applications clearly in front of you.

2813          In saying that I don't wish to have our silence on the matters that have been said in the last 30 minutes to be taken as acceptance of them, but we will rebut them in our rebuttal when we appear again and so in the absence of any questions we have no more to say.

2814          THE CHAIRPERSON:  Commissioner Langford.

2815          MR. LANGFORD:  Same question, I don't see how we can escape asking you.  If we were to licence CFMT on channel 69, would you still want to go ahead with your plans?

2816          MR. PRICHARD:  Yes, we would.

2817          MR. LANGFORD:  Thank you very much.

2818          THE CHAIRPERSON:  Thank you gentlemen, see you at phase four.  Mr. Secretary, please.

2819          MR. CUSSONS:  Finally, Madam Chairperson I would line to call on CFMT TV, division of Rogers Broadcasting Limited.

2820          THE CHAIRPERSON:  Welcome back and proceed.

INTERVENTION BY CFMT/INTERVENTION BY CFMT:

2821          MS. ZINIAK:  Madam Chair, members of the Commission.  In the call for applications, the Commission advised applicants that they would be expected to set out their proposals for local and regional talent development.  The other applicants have proposed support for local and regional talent development over and above normal course of business expenditure, ranging from $1 million to $15 million over the term of the licence.  In contrast, we have committed to provide additional funding over and above normal course of business expenditures for the independent production of Canadian, ethnic television programming totaling $45 million over the licence term.  Included in this is a groundbreaking commitment to spend $35 million to support the production of --

2822          THE CHAIRPERSON:  You will stick to intervening?

2823          MS. ZINIAK:  Yes.

2824          THE CHAIRPERSON:  And not to rearguing your -- I am sure you can could that.  Well the idea is not to re-pitch your application.  Do you want five minutes?

2825          MR. SOLE:  Please.  I think we were going to make a comparison, but we understand.

2826          THE CHAIRPERSON:  You understand.

2827          MR. SOLE:  Madam Chair, we have prepared a comparative negative intervention and if --

2828          THE CHAIRPERSON:  Well just do your best.

2829          MR. SOLE:  If it seems inappropriate, we will ear reserve our comments to phase four.

2830          THE CHAIRPERSON:  You understand that you are supposed to criticize the other applicants. So go ahead and try to keep it within the bounds of fairness.

2831          MR. SOLE:  We are fine, we will make further comments in phase 4 this is more of the same.

2832          THE CHAIRPERSON: I don't want you to think we're cheating you out of your 10 minutes.  Would you like more time?

2833          MR. SOLE:  You mean to re-prepare the written remarks?

2834          THE CHAIRPERSON:  I'm sure Ms. Ziniak, as an Order of Ontario recipient, can fix something quickly that keeps it within the bounds of fairness.

2835          MR. SOLE:  Well, we could start tomorrow morning, if you like.

2836          THE CHAIRPERSON:  Good enough.

2837          MR. SOLE:  Thank you very much.

2838          THE CHAIRPERSON:  That's acceptable.  It would mean that we wouldn't -- why don't you take 10 minutes?  I think it's wiser to finish this phase, otherwise everybody one is going to have to be0 back here tomorrow.  So we will resume in 10 minutes and give you your 10 minutes. I find it difficult to not intervene if you approached it that way.  So 10 minutes we will be back.

2839          MS. ZINIAK:  Thank you.

--- Recess taken at 1847/Suspension à 1847

--- On resuming at 1853/Reprise à 1853

2840          THE CHAIRPERSON:  Order now please.  Ms. Ziniak is ready now for a most aggressive intervention with lots of criticism.  Thank you for your understanding.

2841          MS. ZINIAK:  The call advised applicants that they would be expected to demonstrate that there was a demand for their proposed service.  The other applicants have recognized there is a demand in the Toronto/Hamilton market for local programming, they have also recognized and spoken at about the astounding size and diversity of the ethnic population in the local market.  Yet none of these applicants has made the logical and necessary connection between these two key factors.  In a market with predominantly ethnic population demand for local programming is best met by local ethnic programming.

2842          Yesterday, the Craig panel told you that there was little demand for more third language programming.  We disagree.  It is true that larger groups already have access to the high quality programming that CFMT provides and, if they can afford it, to ethnic specialty television services.  Even among those groups there is an appetite for more hours of third language programming.  But the members of many other ethno-cultural linguistic groups currently have access to little or no programming in their language of comfort.  Their needs are not being met.  Their issues and concerns are not being addressed we would be pleased to answer any questions that you may have for us at that point.

2843          THE CHAIRPERSON:  Ms. Ziniak, I feel very proud of myself that I could stop an Order of Ontario recipient in her tracks.  You are comfortable that you have the proper opportunity to intervene?

2844          MS. ZINIAK:  Yes, absolutely.

2845          MR. LANGFORD:  This obviously just won't be the same question that I have asked the others.  As late as it is I haven't gotten that far off the off the rails, I can assure you.  But I am interested in your views on the compatibility of your proposal with other proposals.  So it is in a sense the same question, but turned around with a different focus.  If you were to be licensed on 69 and one of the others on the other channels, 52, so that we have two new entrants and obviously you know what the choices are, which -- if any of them, would be most compatible with yours.

2846          MR. SOLE:  We had a difficult time as you can see intervening against any of them.  You know, I have been doing this for 30 years and I have learned not to do the Commission's work.  We feel any of them would be compatible with CFMT 'too'.  They offer different things; they have different notions in what the market needs.  Again, we had difficult time reflecting on what was good and what wasn't good.  We think that what we want to do is expand what we do in the market.  We think that the other applicants endeavour to serve Toronto, Hamilton and Kitchener in different configurations for their own reasons.  We believe in competition.  So we would be happy to co-exist with any of them, Commissioner.

2847          MR. LANGFORD:  Well, I wouldn't ask you to do my own work for me, although it is an intriguing possibility and I will give it some thought.  I'm not quite sure how I could do it but never pass by an idea without thinking about it.  Let me sharpen the question a tiny bit. 

2848          The Craig application, for example, has quite a lot of the type of programming you sometimes do.  So I would call it perhaps ethnic programming but in English.  Would the market absorb both you and Craig in those fields, in those measures?

2849          MR. SOLE: Sure.  The Craig application is ethnic programming from national sources.  It's not local programming, it's from ATN, it's from Fairchild.  It doesn't relate to the needs of the local South Asian community, it's designed for the national South Asian community.  So in as much as we co-exist with ATN, we would co-exist with Craig's notion of what ethnic programming they think is needed here.  In as much as that any additional ethnic programming in English language is part of our mission and purpose, we commend them.  But the difference being our South Asian programming is for people in this market and theirs is designed for all Canadians.

2850          MR. LANGFORD:  Thank you very much.  It wasn't really very hard work, was it?

2851          THE CHAIRPERSON:  Thank you very much and we will see you again at phase 4 with a full rebuttal, no doubt.

2852          MS. ZINIAK:  Thank you.

2853          THE CHAIRPERSON:  Good evening to all and we will start phase three tomorrow morning at 8:30 with the CHUM intervention.  I also wish to advise that Alliance Atlantis has deposited some numbers that were asked of them and they are available in the public file on the public file and I gather some copies will be made available as well.  Thank you and good night to everyone.

          Whereupon the proceedings adjourned

          at 1858, to be reconvened on Wednesday,

          the 6^th day of December, 2001, at 0830/

          L'audience est ajournée à 1858,

          pour reprendre le mardi 4 décembre 2001

          à 0830

 

 

 

 

 

 

per/par:          ______________________________

                MINORI ARAI, CSR