ARCHIVED -  Transcript / Transcription - Gatineau, Quebec 2002-04-25

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Mandatory Order - Pursuant to Section 12 of the

Broadcasting Act, the Commission calls the following

persons, namely: Vidéotron Ltée; CF Cable TV Inc.;

Vidéotron (Regional) Ltd.; Vidéotron (RDL) Ltée; and

Télé-Câble Charlevoix (1977) Inc.

Ordonnance exécutoire - Par conséquent, conformément

à l'article 12 de la Loi sur la radiodiffusion, le Conseil

demande aux personnes, soit: Vidéotron Ltée; CF Cable TV Inc;

Vidéotron (Régionale) Ltée; Vidéotron (RDL) Ltée; et

Télé-Câble Charlevoix (1977) Inc.




Conference Centre Centre de Conférences

Portage IV Portage IV

Outaouais Room Salle Outaouais

Gatineau, Québec Gatineau, (Québec)



April 24, 2002 le 24 avril, 2002


Volume 2






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


However, the aforementioned publication is the recorded

verbatim transcript and, as such, is taped and transcribed in

either of the official languages, depending on the language

spoken by the participant at the public hearing.





Afin de rencontrer les exigences de la Loi sur les langues

officielles, les procès-verbaux pour le Conseil seront

bilingues en ce qui a trait à la page couverture, la liste des

membres et du personnel du CRTC participant à l'audience

publique ainsi que la table des matières.

Toutefois, la publication 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

Mandatory Order - Pursuant to Section 12 of the

Broadcasting Act, the Commission calls the following

persons, namely: Vidéotron Ltée; CF Cable TV Inc.;

Vidéotron (Regional) Ltd.; Vidéotron (RDL) Ltée; and

Télé-Câble Charlevoix (1977) Inc.

Ordonnance exécutoire - Par conséquent, conformément

à l'article 12 de la Loi sur la radiodiffusion, le Conseil

demande aux personnes, soit: Vidéotron Ltée; CF Cable TV Inc;

Vidéotron (Régionale) Ltée; Vidéotron (RDL) Ltée; et

Télé-Câble Charlevoix (1977) Inc.



Andrée Wylie Chairperson / Présidente

Andrée Noël Commissioner / Conseillère

Jean-Marc Demers Commissioner / Conseiller


Pierre Lebel Secretary / Secrétaire

Peter McCallum Legal Counsel / Conseiller


Claude Doucet Hearing Manager /

Gérant de l'audience.




Conference Centre Centre de Conférences

Portage IV Portage IV

Outaouais Room Salle Outaouais

Gatineau, Québec Gatineau (Québec)

April 24, 2002 le 24 avril, 2002




Cable VDN Inc. 321 / 2151

Bell ExpressVu Limited Partnership 386 / 2501



Commission Counsel 396 / 2549




LOOK-1 Diverses lettres (en

liasse) 434 / 2781

Gatineau (Québec) / Gatineau, Québec

--- L'audience reprend le mercredi 24 avril 2002

à 0902 / Upon resuming on Wednesday, April 24,

2002, at 0902

2144 LA PRÉSIDENTE: Bonjour, mesdames et messieurs. Nous sommes maintenant prêt à procéder à la Phase II de cette audience.

2145 Good morning, ladies and gentlemen, we shall now proceed to Phase II of the hearing.

2146 Monsieur le secrétaire, s'il vous plaît.

2147 LE SECRÉTAIRE: Merci, madame la présidente.

2148 And, we will now hear from Cable VDN Inc. and appearing for VDN, messrs. Philip Gale and Gary Sherman.

2149 THE CHAIRPERSON: Good morning.

2150 LE SECRÉTAIRE: Could you turn your microphone on, please?


2151 MR. GALE: Good morning, Commissioners, Commission staff, madam Chair.

2152 My name is Philip Gale and, I am the founder and President of Cable VDN.

2153 With me today, I have Gary Sherman, VDN's Director of Legal and Regulatory Affairs.

2154 Thank you for allowing us this opportunity today, to come before you to clarify this very difficult situation.

2155 VDN received its license in 1997 and commenced offering cable television services to residents to Multiple Unit Dwellings in the Montréal area in the fall of 1998.

2156 Our license was granted in an era when the Commission was endeavouring to promote competition in the cable industry, with the goal of increased consumer choice and the development of superior means of providing cable television services.

2157 Over the past four years, we have met with great challenges, success in terms of our network expansion and customer acquisition.

2158 We have invested over 25 million dollars in the construction of high performance fibre optic network that is approaching 400 kilometres and growing. The network currently passes over 200 thousand homes and Multiple Dwelling Units.

2159 We have approximately 8,000 customers, in over 200 apartment buildings and condominiums throughout the Montréal area.

2160 Sometimes we use the existing Vidéotron wire, sometimes, we have installed our own wire.

2161 One thing that has always been clear to us, that is the policy of both the Commission and the Federal Government that the inside wire was to be made available for competitive services and, it was not meant to be used by an incumbent cable operator as a barrier to competition.

2162 Regulations were drafted and years of effort were put in by Commission, Commission staff, by all of the cable companies in Canada to determine a fair and equitable solution.

2163 VDN has been an active participant in the CISC inside working group and we have always indicated that we are ready and willing to pay for our use of the inside wire provided that the terms and conditions were approved by the Commission.

2164 Now, all of a sudden, Vidéotron and Quebecor have taken an extreme anti-competitive actions in order to frustrate the policies of the Commission and the Federal Government to inflict damages on the businesses of their competitors and to rob individual customers throughout Québec of their right to a fair and open choice of service providers.

2165 These abusive tactics must be stopped and the Commission must make immediate use of all of its powers to help resolve this crisis before it is too late.

2166 Mr. Sherman.

2167 MR. SHERMAN: Thank you, Philip.

2168 I am going to deviate at some points from my script, unfortunately, given there were a number of comments yesterday by the Vidéotron panel, which I feel must be addressed but I will advise the Commission when I do so.

2169 VDN's position in this dispute is clear and we believe that we have raised ---

2170 THE CHAIRPERSON: Mr. Sherman, it's not necessary because the transcript will have the complete text so, go ahead.

2171 MR. SHERMAN: Thank you, madam Chair.

2172 VDN's position in this dispute is clear and we believe we have raised the key issues quite extensively over the course of our submissions.

2173 With respect to the Section 9 problem, Vidéotron is clearly subjecting its competitors to an undue disadvantage contrary to Section 9 of the regulations.

2174 The burden of the outrageously high five dollar lease rate will not have any impact on Vidéotron since money will simply be transferred from one Quebecor company to another Quebecor company.

2175 As to any Quebecor claims that the five dollar rate is just and reasonable, there is already an ongoing CRTC process to establish a just and reasonable lease rate.

2176 Mr. Péladeau indicated that Vidéotron would be filling its submission and I am sure the Commission will give it a fair and impartial analysis.

2177 THE CHAIRPERSON: Our translators are going to have a problem if you do not lower the speed of your delivery!

2178 MR. SHERMAN: Thank you, madam Chair.

2179 In our opinion, this hearing is not the proper place for debate over the just and reasonable lease rate. Quebecor's refusal to accept the Commission's determination is sufficient evidence to conclude that for the purposes of the regulations, the Câblage QMI interest rate and terms are unjust and unreasonable.

2180 VDN is certainly willing to pay for our current and ongoing use of the wire but, it will have to be at the rate, eventually, determined by the Commission. Not a rate arbitrarily determined by Quebecor.

2181 Alternatively, we will be willing to pay the 0.44 $ lease rate and then, adjust retroactively once the Commission has set the final rate.

2182 As indicated in our submissions, the other CQMI terms and conditions are also unjust and unreasonable. The worst of them is that VDN would be reasonable for the full cost of the repair, maintenance and replacement of the Quebecor wire and then, still be expected to pay five dollars per month for the wire which we had just paid to replace.

2183 Now, Mr. Doré indicated yesterday that CQMI would in fact be responsible for replacement of inside wire, if it was in poor condition, provided it was due to an abusive use of the wire by a teledistributor.

2184 In the first place, this is not indicated in any place in the contract. And, Section 9.1 of the installation contract clearly indicates that:  The télédistributeur is responsible for remplacement de toute composante du câblage interne.  There is no mention that the wire will be of good quality, there is no indication of this what so ever.

2185 Currently, the Vidéotron wire that we are using for thousands of our customers is outdated and in need of replacement. I honestly do not believe that CQMI would be replacing all that wire immediately upon our signature of the contract.

2186 Mr. Péladeau indicated that if they were any dispute over who was responsible for the replacement of the wire, it could simply be brought to Court.

2187 I do not think that is a very agreeable solution for any party. And besides, how could we possibly go to Court claiming they were responsible for the replacement of the wire when there was no term in the contract indicating that they be responsible for the good quality of the wire.

2188 What happens if there is a new client that used to be with Vidéotron and the wire is of inferior quality? Do we have to wait for CQMI to determine whether it or Vidéotron is responsible for the replacement of the inside wire? It simply not workable as it is.

2189 With respect to Section 10 of the regulations, we have always maintained that CQMI is merely a shelf, company created solely for the purposes of allowing Vidéotron to escape its regulatory contractual obligations.

2190 We feel that for all intents and purposes, Vidéotron should still be treated as the owner of the inside wire and as such, Vidéotron's violation of Section 10 is clear and incontrovertible.

2191 We are also given a lot of information yesterday regarding CQMI which we have never had the ability to deal with before. In the first place, it has approximately one actual employee. We were indicated that it had two but, one of those employees was the President of the Board of Directors and I do not think that is an actual employee.

2192 Essentially, they have one employee. They in fact, have more lawyers representing themselves in actions against the other companies than they do actual employees.

2193 We have also been told that there were three contracts signed on February 8, 2002: un acte de vente, un contrat d'utilisation et un contrat d'utilisation.

2194 This is very interesting because CQMI really did not interest prior to February 8, 2002. There was simply a numbered company that had no active status, no employees, no assets, nothing.

2195 So, the question that is brought to mind is, who drafted the CQMI contract? Certainly, it would not have been CQMI, they could not possibly have done all that in the space of one small day.

2196 We were also been advised that Mr. Doré et Mr. Gingras had meetings and discussions and, the notes will hopefully be provided to the Commission. This is where the five dollar lease rate was determined and this is where the whole plan for CQMI was formulated.

2197 When was all this accomplished? It was accomplished long before CQMI ever came into being. So, clearly CQMI really had no part in this contract other than simply to sign a document once it came into being.

2198 When did the Vidéotron Boards approved the sale? All in the same day? I find it very hard to believe that CQMI has played an active role in this transaction.

2199 There is also this issue of this second  acte de vente  which we never been provided with. Initially, the first time this was asked of the Commission -- and I go back to page 425 of the Public File -- Mr. Trépanier of Vidéotron was asked to provide a copy of all the contracts and agreements between Câblage QMI and Vidéotron.

2200 His response to that -- also in page 425 -- was that there are two contacts: le contrat d'utilisation et le contrat d'installation.

2201 In the same letter, he was also asked -- on page 428, at question 6 -- what is the nature of the relationship between Vidéotron Ltée and its affiliates and Câblage QMI Inc?

2202 His response was:

 La relation entre Vidéotron et CQMI sont régies par la convention... 

Which was the contract of utilisation.

 une convention relative à l'installation de câblage intérieur en édifice. 

2203 Which would be the installation contract. No mention whatsoever of any kind of  acte de vente .

2204 Later, at page 502 -- because those answers were not really considered explicative enough  -- Mr. Trépanier was specifically asked, by the Commission, in a letter at page 502 of the public file -- to provide all agreements relating to the transfer of ownership of property of the inside wire, shares and/or assets -- I note shares, there -- between Vidéotron Ltée and Câblage QMI Inc.

2205 His response to that was to provide  -- at page 536, of the public file --  the acte de vente  which has been provided to the public file prior to this moment which mentions that the price of the asset was one dollar plus other valuable considerations.

2206 Now, it turns out that there is a completely contract. An entirely new  acte de vente  that specifically indicates shares.

2207 I see no mention of this whatsoever throughout Mr. Trépanier's comments. He was given many opportunities to provide these documents and, to date, we still have not seen a copy of them.

2208 I think this is very clear evidence that Vidéotron has gone out of its way to not help the Commission in resolving this dispute and this is clearly part of the problem that we have been dealing with.

2209 Back to the text. Vidéotron's condition of license. That Vidéotron violated a condition of its license in selling wire to CQMI is also very clear.

2210 The Commission may have removed the requirement that a licensee owns its subscriber drops but Vidéotron was still subject to the license condition that it continue to operate, in fact, its broadcasting undertaking, including subscriber drops, unless it received Commission authorization to do otherwise.

2211 In attempting to place the inside wire out of the reach of the regulations by selling it to CQMI without Commission authorization, Vidéotron committed a clear violation of a condition of its license.

2212 As we have already indicated in our filed submissions, Quebecor is acting in violation of the policies set out by the Federal Government in their 1996 Convergence Policy Statement, as well as many of the policies established by the Commission in numerous public notices.

2213 In 1997, the Commission removed the requirement for a licensee to own its subscriber drops. It did so for the express purpose of implementing the Commission's stated policy objective of providing subscribers with the ability to connect their inside wiring to the service provider of their choice.

2214 At that time, the Commission also indicated that it will remain the responsibility of each licensee to take appropriate measure that it has effective control over the operation of its undertaking in keeping with the requirements of its license, the Act and the new regulations.

2215 The transfer of wire, to CQMI by Vidéotron, is clearly a violation of those principles in that, now the wire cannot be governed within the regulations. Vidéotron also violated the undertaking it gave to the Commission in September 1999 when, along with all the other incumbent cable companies, Vidéotron promised that ownership of the inside wire would remain with the party regulated by the Commission.

2216 Mr. Trépanier indicated once again that no such promise was ever made. But, I go back to the CTTA letter which is included at Annex E of our submissions. In paragraph 2 of that letter, it's very clear that it says:

"Customers will be able to receive service from the service provider of their choice and ownership of the inside wire would remain with the party that is regulated by the CRTC."

2217 To me, that could not possibly be any clearer, but obviously it confuses Mr. Trépanier!

2218 Quebecor's actions have caused significant damage to VDN and to many other parties as well.

2219 The CQMI letter received on February 12, 2002 was designed to create a deliberate break in VDN's business. There was no opportunity for competitors like VDN to continue with uninterrupted service even if we had wanted to comply with CQMI's outrageous terms. The CQMI letter didn't even include the contract we were expected to sign. We had to wait until the end of the week before they provided us with a copy.

2220 This ongoing break in service has caused a significant amount of damage to VDN, much of it incalculable. For example, VDN had just spent over $250,000.00 connecting our network to Le Sanctuaire du Mont-Royal, a large multi-building condominium complex in Montréal. We had already held customer information sessions and we had already marketed the building in full. Vidéotron were well aware that we would be commencing to provide service at Le Sanctuaire on February 13, 2002.

2221 The CQMI letter appeared to be timed to coincide with the very day VDN was ready to commence serving customers at Le Sanctuaire. This way Quebecor could inflict the maximum amount of damage on DVN and on the hundreds of customers who had already signed up for DVN services.

2222 A number of customers at Le Sanctuaire had their services disconnected by Vidéotron before VDN was made aware that we would not have access to the inside wire. Several of these customers were left without cable service for several days and all of them were forced to go back to Vidéotron service.

2223 A number of there were told that they would be charged fairly high connection fees. In most of those cases we personally pleaded with the Vidéotron representatives to waive those fees, declaring it was not the customers' fault. So, essentially, we were forced to go begging to Vidéotron for the protection of these customers who had been victimized by this entire scheme.

2224 All in all, hundreds of customers at Le Sanctuaire were deprived of their choice of service provider. DVN's investment sits unused as we have been barred by CQMI from serving customers in the building. To add insult to the injury, Vidéotron has been remarketing the building offering the already existing customers high discount prices that lock them into Vidéotron service for at least one year. Quebecor's goal, apparently, being that even if VDN does get access to Le Sanctuaire, there will be a lot fewer available customers and VDN will have a much harder time recouping its investment.

2225 In addition to the Le Sanctuaire problem, we have hundreds of residents in other buildings connected to our network who have already asked for VDN services, but due to this dispute, are unable to be connected. Other buildings have signed contracts with VDN to allow us to commence offering services, but we have been forced to postpone or cancel these contracts in light of the current dispute.

2226 Since February 12, 2002 VDN has been barred from providing service to a single new customer in any of the buildings where the inside wire is subject to Quebecor control and, as a result, millions of dollars of investment have been stranded. Our business has largely been shut down and we have been forced to lay off a number of employees.

2227 Furthermore, while we are stalled by Quebecor, Vidéotron is aggressively trying to win back VDN customers in other buildings as well with heavily discounted packages not available to other Vidéotron customers.

2228 In addition to all of the foregoing, Quebecor's control of the wire has made it difficult for us to provide service to our customers without a lengthy delay since we have to first get Vidéotron's permission to resolve any of our own problems.

2229 For example, last Friday night, we received a call from a customer who had apparently lost her service. This is usually the result of an inadvertent disconnection of the customer at the demarcation point which is inside the box on that drawing over there that was prepared yesterday by Mr. Hurteau.

2230 It is a problem that can be solved in five minutes by the simple reattachment of the customer's inside wire. Unfortunately, while we were prepared to assist the customer immediately we had to wait till Monday because the demarcation point is obviously locked inside Vidéotron's Customer Service Enclosure. On Monday morning, the customer advised us that she would be returning to Vidéotron's service, not because our service was inferior, but because she was uncomfortable with the fact that our ability to provide service was dependent on Vidéotron.

2231 Essentially, by their control of the inside wire, Vidéotron and Québec is subjecting our customers to second-class treatment. This is an unacceptable situation and the Commission needs to ensure that the demarcation point for inside wire must not be locked inside the incumber's CSE, otherwise no new entrant will ever be able to assure their customers of high quality service.

2232 Quebecor's most recent abusive tactic was launched just last Friday when CQMI issued a Statement of Claim against VDN in Superior Court. Attached, is a copy of that Statement of claim as Annex A to our submissions. We have also been advised that they have launched similar actions against Bell, against Look and against StarChoice.

2233 The claim demands that VDN be ordered to pay the $5.00 rate and it also asks the Court to disconnect all of the VDN customers currently using CQMI wire, and this is the last paragraph on page 4 of the dispute, of the Statement of claim. Quebecor clearly wants VDN to waste time and money fighting a legal battle in Superior Court when inside wire is a matter that is clearly in the jurisdiction of the CRTC to regulate and we are here before the Commission and discussing this very point.

2234 In addition to all the other people that have been victimized by these actions, building owners and condominium boards have also suffered damages at the hands of Vidéotron and Quebecor. A number of these buildings signed contracts with Vidéotron specifically indicating that Vidéotron would have to provide access to an alternative service provider if ordered by the CRTC. Now, the CQMI scheme allows Vidéotron to escape their contractual obligations to those building owners.

2235 Moreover, many of these buildings contracted with Vidéotron knowing that Vidéotron was a licensed company, licensed by the CRTC, that is. These building owners are now stuck with a company that will refuse to follow any of the Commission's directives and are in a much weaker position.

2236 In conclusion, the Commission must issue a mandatory order ordering Vidéotron to comply with Sections 9 and 10 of the Broadcasting Distribution Regulations as well as Vidéotron's own conditions of licence.

2237 The mandatory order should specifically indicate that Vidéotron is to provide VDN with access to the inside wire and that such access must be provided on terms and conditions, including a lease rate, which have been accepted by the Commission.

2238 Examining this dispute from a balance of harm perspective, it is clear that while our access is blocked, the harm being done to VDN, other competitors and to individual consumers, greatly outweighs any harm which would be done to Vidéotron or CQMI, if we were allowed to have access to the inside wire in the interim.

2239 There would be no prejudice in VDN having access to the CQMI inside wire since all damages which might arguably be suffered by CQMI or Quebecor would be easily calculated. Quebecor has already filed their declaration with a calculation of what the damages are and these damages would be entirely compensable. On the other hand, the current damages being suffered by VDN and by customers is incalculable.

2240 Quebecor knows this, which is why they are fighting tooth and nail against any attempt by the Commission to bring order to this dispute, even on a temporary basis. When they were asked if they could arrange for VDN to have access to the wire in the interim, Vidéotron replied that it was not in their power to do so.

2241 Yesterday, we found out that they did not even ask CQMI. They simply did not even bother trying to assist the Commission. It was not in their interest, they have no intent of supporting the Commission in this dispute.

2242 Quebecor wants to do as much damage as possible in as short a time as possible and, in as short a time as possible and, they do not care whether they have to violate the regulations and policies of the CRTC, to do it.

2243 This is not a war between Quebecor and BCE, as has been attempted to be portrayed in the media, nor is it a war between digital provider and analog provider. We are an analog provider, as it happens. This is a war between Quebecor and the entire broadcasting industry including, in particular, with the Commission and, its role in regulating the industry.

2244 If Quebecor succeeds in disconnections all of DVN's customers, Vidéotron will then be in a position to retake everyone of those lost subscribers since they will have no other available choice. Furthermore, future customers will think twice about switching services if it becomes aware to them that their choice can be taken away at any moment. This would be a fatal blow to competition in MUDS, not just in Québec, but throughout all of Canada and it would be an affront to everything the Commission stands for. This must not be allowed to come to pass.

2245 Quick and immediate action must be taken by the Commission in order to protect the public interest and to foster open and fair competition. VDN must be given access to inside were pursuant to the Commission's policies and regulations and Quebecor's unfair and anti-competitive barriers to competition must be removed.

2246 We are prepared to take any questions that the Commission may have or Commission staff may have, but Philip Gale would first like to make a few points regarding the CSE and drawings.

2247 MR. GALE: I just wanted to clarify, yesterday, a few things had happened with the CSE because it is a key to all of our businesses because blocked access, inaccessible, not available, on our own time, is a major problem. What I will do is I will just move the blackboard over and, explain it to you.

2248 The key to the CSE that everybody is aware of, is access. We all must have access. Access can most easily be achieved by a common patch panel. Just to give the Commission a real pointer on this, what happens is over the monopoly situation and, all the CSEs -- this is a standard in the industry. We buy the same CSE as Vidéotron does, to a tee. The only thing different is the label on the box is VDN, instead of Vidéotron.

2249 When these were designed -- and, let's take an example of 100 unit building -- you have 100 subscriber drops coming down into this box. To connect them to the multi-tap or to the splitter is easy. The moment you get 50 wires, that is to say, a competitor manages to get a 50 per cent penetration rate, you have 50 jumpers in this box -- which has been the case with VDN in the past -- it is not manageable. And what happens, in Montréal where we compete heavily with Vidéotron, the majority of the wire is far more than 15 years old, 20 and 30 years old. The wire is dry, the wire is brittle.

2250 What happens here is this becomes a big clump of wires and whenever somebody comes and does some work, inadvertently they will knock this or something will happen and, 90 per cent of the service calls which we are required to perform because our customer is either without service, has poor service or snowy pictures, is the connections.

2251 All that is required, like Gary explained in the submission, is five minutes, have access to this jumper and, to put a brand new connector on it and then it works like a charm. With it locked behind the CSE of Vidéotron, it is impossible to access when we need access. If our customer calls us at nine o'clock this morning, you know, we are not going to be able to have service for two or three days, so, totally unacceptable.

2252 In our buildings where we have rewired, which is about 30 buildings, even for our own use we installed a common patch panel. Why? It is very low cost, about $200 or $300, it is locked, it is secured. All these wires come to a panel which is -- I'll make a little design to make it very simple for the Commissioners.

2253 Me McCALLUM : Could you use another colour perhaps, other than green?

2254 MR. GALE: Well, it is really very simple because all it is, this is what we will call a "patch panel" and, all that's required is the wires that were connected here get connected to a common patch panel and then, a jumper gets provided to Vidéotron's box or gets provided to VDN's box or Bell ExpressVu's box. That way, when you have service or you have a problem, this patch panel is commonly available to everybody and, it is secured.

2255 Another issue I noticed yesterday, Vidéotron really harped on the piracy issue. I do not know what their issues are on piracy, but we actually gave up locking the CSEs and, the NDUs that we served because they are constantly broken open. And, what we found is greater than 70 percent of the NDUs that we serve, the CSE is in a locked room. It is in a room that is only controlled by the janitor or by the building manager. It is not in a common area. So, it is very simple to not have to worry, you know, but having extremely high security.

2256 Let me just review my notes. Another item I would like to be clear with the Commission on, is when Mr. Doré I think -- or Mr. Péladeau -- mentioned yesterday about additional outlets, that they leave them behind.

2257 I would say greater than 95 per cent of the time when VDN connects up a new customer, the subscriber drop, where it enters the apartment or the condominium wall-plate, everything gets replaced brand new. A jumper to the television set is new, installed and paid for by VDN. The second and third outlet, the wire is all replaced also by VDN because we provide a 100 channel analog service, we cannot use 30 year old wire, it is very difficult for us, so we just replace that stuff, it is very low cost, we have a cost about $35 which we pay the contractors, which labour and materials, everything is included.

2258 So, all we have to worry about is that 100 feet of cable from the CSE to the wall-plate, and if that works properly the rest of the wire we just totally replace.

2259 It is extremely important for the Commission to think about this as a long-term solution. This is a 20 or 30 years business. VDN has just planted the seeds, puts its foundation, where over 200,000 homes we passed. We have not even ramped up yet and started connecting up customers at the pace we want to.

2260 So, it is extremely important that we look at the CSEs, these patch panels, the inside wire issues and come up with very long term solutions.

2261 Ourselves, as I have mentioned earlier, we no longer lock a lot of the CSEs which were in a locked room because now we just employ inspectors and the inspectors are around on a daily basis, they follow up behind the contractors and they also do audits. So, we do not have the issues of contractors connecting up one or two because it does happen. We have the issues also, the employees, the contractors get off at $100 on a daily basis I am sure of, and they will just connect the customer up and he is on. By having inspectors we have alleviated all of this.

2262 Thank you very much and, we are open to questions.

2263 THE CHAIRPERSON: Thank you. Monsieur le conseiller juridique, s'il vous plaît.

2264 Me McCALLUM : I wonder, Mr. Gale, just so that there is no confusion for the Record. I think we will want that drawing for the Record, but I wondered if you would maybe high-light in pink over the lines that you have drawn so, that the Record will be clear as to what you have drawn over what Vidéotron has drawn? So, if I give you this pink marker, could you just sort of go over?

2265 MR. GALE: Sure. What I would like to do, I would not mind taking the undertaking of the Commission, of providing the Commission a few visual drawings, either electronic format or in fax format, that they can actually have a picture. We can provide digital pictures because we have digital pictures of the installations, we will provide a few different pictures for the Commission of exactly what an installation looks like, if necessary.

2266 THE CHAIRPERSON: I hope you do not have an allergy to pink!

2267 MR. GALE: I'm sorry? No!

--- Laughter / Rires

2268 Me McCALLUM : And, I think the attachment outlined your group, as well. And what are the words you have written on the top, there?

2269 MR. GALE: "Common patch panel".

2270 Me McCALLUM : "Common patch panel"?

2271 MR. GALE: This is a common patch panel and, what we have done in the past is we provide access to this patch panel and the cost for a patch panel like that is about $200.00, $300.00.

2272 Me McCALLUM : If you are thinking of providing further copies for the Commission's use, when would you be able to get those into the Commission?

2273 MR. GALE: By Friday.

2274 Me McCALLUM : I think that would be useful. You will serve a copy of those on Vidéotron?

2275 MR. SHERMAN: Of course, yes.

2276 Me McCALLUM : And, Vidéotron would have till, say, Tuesday of next week to comment on those drawings, should they have any comments.

2277 MR. GALE: That's fine. Thank you.

2278 Me McCALLUM : I will confirm, of course, with Vidéotron that that's acceptable, but obviously they would have a chance to comment on those. Could you describe then, and you may have to use the drawing again, what exactly was involved with the connection of a subscriber in a multiple unit dwelling in Vidéotron territory before February the 8th?

2279 MR. GALE: I do not really need to get up for the drawing. VDN uses contractors across the city of Montréal, so does Bell ExpressVu, sort of These contractors have all worked for Vidéotron over the last X amount of years.

2280 So, what happens is, in the beginning when we were providing service for the first two years of our undertaking roll-out, the majority of the boxes were -- put it this way. How Vidéotron would work is we would fax the paper to the customer service group, they would go in the morning, do their disconnection and we would come and do the connection exactly like Mr. Hurteau explained, yesterday.

2281 Me McCALLUM : So, what has changed since February 8?

2282 MR. GALE: What has changed since February 8 is basically we do not have access. When we send a fax to Vidéotron advising them of the disconnection, if we continue to do that, they would be disconnecting customers and then, when we show up to the CSE, there is no wire made available to us to be able to provide the connection to our customers.

2283 Me McCALLUM : This new patch panel that you have described, how many buildings have they been put into so far?

2284 MR. GALE: We use that where we wire the buildings ourselves. I do not think there is very many that we use with Vidéotron because there was never any arrangements made directly with them, but it's an extremely important issue at large multi-unit dwellings. Anything above 150 units, there is a tremendous amount of wires, a tremendous amount of spaghetti and it is a real mess.

2285 And, if you do not bring your wires to a common patch panel, even for our own jumpers, and that may be I'll explain over to the drawing.

2286 In a case where, you see here, you see four wires, you must imagine that there are areas where there is six of these boxes with 50 wires each -- it is a "ton of spaghetti", VDN has got its box over here. So, what VDN does, it instals its own patch panel right here beside. This would be the VDN-CSE, this would be the VDN patch panel and, this would be Vidéotron boxes, let's just say 1, 2 and 3.

2287 When Vidéotron puts the jumper here, makes it available outside of its box, we take this wire from here and then, we connect it to our patch panel and then, from our patch panel we go to our box because these boxes just cannot accommodate all those wires.

2288 It is just too hard to deal with and here, we would put what we call a "piece of cable tray" that, when you get 50, 60, 100 customers, you have to manage that wire somehow, because when service calls happen -- unfortunately customers do not happen when it's 70 degrees and sunny! It's Friday night, it's 9:00 and it's raining!

2289 So, you have to be able to identify these wires. So, you need to keep them in an orderly fashion. So, they are numbered and that's where the common patch panel is the only way to manage it.

2290 MR. McCALLUM: I am trying to understand this patch panel, whether it forms part of the inside wiring that would belong to Câblage QMI or which side of the demarcation point it is at, or whether it is part of the subscriber drop.

2291 Can you address that?

2292 MR. GALE: In VDN's view, Vidéotron is already installed at these buildings. They have been there for 30 years, 20 years, 10 years, whatever the case may be. They have their installation.

2293 We feel that it is the responsibility of the new entrant to pay to have installed a common patch panel, which is a few hundred dollars, maybe a bit more, and then we would take the wires that are in Vidéotron's CSE; we have installed them to the common patch panel. Vidéotron would then patch its customers over, and neither one of us would have to wait for each other.

2294 One of the big problems today -- and it has happened in the past -- is when Vidéotron won back a customer, we didn't get notified. They would just go inside the box, disconnect the jumper here, connect them back up, and we would continue billing the customer. Two months later what would happen is the customer would call us up because he has a bill that he is in arrears, and he would say, "Well, we switched to Vidéotron back in December." "Oh, well thanks for letting us know."

2295 Until we make this simple for all the new entrants to come to an area where it is all accessible, especially in the area of service -- in the competitive environment you lose your customer with a phone call. So, it is extremely important that this become common and that all of us have respect for each other's property.

2296 MR. McCALLUM: The patch panel is not something really contemplated in the regulations, so I am still trying to understand.

2297 MR. GALE: That is correct. What happens is in the regulations the subscriber drop is here. The issue today is all the subscriber drops end up in Vidéotron's customer service enclosure.

2298 All we are bringing to the Commission's attention is that if this is going to be the case ongoing, I have a feeling there is not going to be competition in MDUs to what the Commission wants. It is not going to happen. It is going to be too much trouble. It is going to be too expensive. All of us have a margin of about $15 a month to serve a customer.

2299 One of the big problems that we have noticed in MDUs that we serve with Look, ourselves and Vidéotron, the customers jump from provider to provider to provider, and none of us get paid.

2300 Unless we can make this seamless -- and the only way to make it seamless is to get the demarcation point in a common area that we must all agree on. It is unfortunate how the CISC couldn't come to these agreements. This was stuff that we all proposed at the CISC.

2301 There would be a common patch panel. The new entrant would pay for the common patch panel. If a second new entrant came into the building, they would split the cost 50 per cent. So, if it was $1,000 because it was a big building, and I paid $1,000 to fix it and Look showed up, they would give me $500. We have done that with cameras with Look TV.

2302 If Look is in a building and we are in a building and a camera costs X amount of dollars, we split the cost 50/50. It is very simple.

2303 When it is all under Vidéotron's control, what do we do?

2304 Just to reiterate, the subscriber drop is all here. The patch panel was not contemplated by the regs, but in our opinion it is the only workable solution. If we all have to reside with Vidéotron -- and as we all know, Vidéotron and CQMI are best buddies -- what is going to be in the interest of Vidéotron or CQMI to provide VDN or Bell ExpressVu or Look or Star Choice good service when the crappier the service, the more likely they will stay with Vidéotron?

2305 MR. SHERMAN: I think also it is worth adding that in the event of any kind of labour dispute at Vidéotron, there won't be any service for anyone in the community. So, it would be necessary for us to be able to go and provide service for ourselves. We couldn't possibly rely on the other party in the event of a labour dispute.

2306 MR. McCALLUM: I think Mr. Sherman talked about Vidéotron's wire being outdated and in need of replacement. Would you explain what is meant by that.

2307 MR. SHERMAN: I think in fact a lot of the wiring in the buildings in Montréal is quite old right now. It is Vidéotron-owned wire, and now apparently it is CQMI-owned wire, according to what we have been told. The wire is not really of high quality. People call and complain that their picture image is not as strong as it could be. A lot of it is mini coax. I am sure Philip could explain that better.

2308 In Vidéotron's own responses they acknowledge that there is a lot of wire out there in their system that needs replacing. So, I think there is no question that there is a lot of wire out there that is quite old.

2309 They have also indicated that a significant proportion of their wire has no value because it is so old. In CQMI's calculation of inside wire, they indicated that a significant portion was essentially worthless. So, clearly, much of that has to be replaced.

2310 MR. GALE: Just another point about the wiring for a second. One of the biggest issues that we have is that you have two types of wiring in an MDU. You have what we call internal wiring, which would usually be installed in conduits, and you have external wiring that is attached to the building and usually covered with a moulding or possibly not covered with a moulding.

2311 When a wire is defective, I don't see any way that we are going to come to any agreement on how we are going to be able to pull the wire out from the conduit to replace it on an ongoing basis.

2312 Also, as mentioned in our submission, it makes no sense for VDN to start replacing wire and giving it to CQMI after we have paid $100, $150 to replace it.

2313 MR. McCALLUM: How prevalent within VDN's territory is the situation you described in the diagrams?

2314 MR. GALE: Ninety-five per cent of the buildings that we serve.

2315 MR. McCALLUM: So, that particular configuration ---

2316 MR. GALE: Without a common patch panel, though.

2317 For example, we serve 250-odd buildings but 200 of 20 units or more, we only have in those about 30 that we have rewired. So 170 would be exactly the way Vidéotron mentioned yesterday. They control the CSE. They install a jumper inside their box. They provide a six-foot piece of wire outside of their box, and we connect on to that wire.

2318 I want to bring up two other very important issues that come up on a regular basis. There are two major problems with that.

2319 The one problem is 90 per cent of the service calls are the connections. When Vidéotron puts a connector on there, they can't test anything. They don't know if it works or it doesn't work. So, when they make that connection inside the box it is a problem, because you don't know if it is going to work or not work. It could be defective.

2320 If we have to come and connect the customer in the afternoon, what do we do if it doesn't work? The customer is out of service for at least a day.

2321 The second issue which is really prevalent in Montréal is that a lot of this wire is over 15 years old, and it is not correctly marked. For example, if you have a disconnection for apartment 706 and you disconnect 106, but really you didn't disconnect 106; you disconnected 706 because the "7" on the top is worn, is faded. And now Vidéotron has inadvertently disconnected its own customer. VDN comes to hook up, and we are providing service to the wrong customer. We are stuck again.

2322 So, you have two problems. Vidéotron's customer -- probably a good paying customer -- is now out of service. And VDN can't provide service to its customer.

2323 MR. McCALLUM: What percentage of the buildings have now a patch panel, in your experience?

2324 MR. GALE: We would have to get back to you to qualify that. By Friday we could give you an exact number of the buildings we serve.

2325 MR. McCALLUM: What percentage of the buildings in the service territory are VDN's buildings in the sense that VDN has wired the building, and in what percentage of the buildings do you depend on dealing with VDN?

2326 MR. GALE: Do you mean Vidéotron dealing with VDN, or VDN dealing with VDN?

2327 MR. McCALLUM: VDN dealing with Vidéotron.

2328 In other words, in what percentage of the buildings that VDN serves does it not depend on Vidéotron because it is has already rewired the building?

2329 MR. SHERMAN: Mr. McCallum, I believe we have answered the question in the public file. I would have to dig up the page.

2330 We were specifically asked for the numbers of buildings where we served where we used inside wire. It is in here somewhere.

2331 MR. GALE: Maybe you would like to continue and Mr. Sherman could look up that number.

2332 MR. McCALLUM: That is fine.

2333 The other question I had is that we heard yesterday that Vidéotron is in the process of updating the security arrangements for the various buildings. I wanted to get from VDN's perspective the percentage of the buildings where you do depend on Vidéotron it has the upgraded new secured CSE and what percentage has the not yet updated CSE arrangement.

2334 MR. GALE: Approximately a week after we got the letter they must have blitzed and done every single solitary building that we served and locked the service closure up with a big padlock, big enough to keep your garage door closed at home.

2335 The CSE is exactly the same CSE that was there before. All they have done is they have purchased a hasp, which is a device that you put a padlock on, and they have installed a big master padlock. I guess internally at Vidéotron those keys are not readily available, whereas every single contractor across Montréal had the keys previously to Vidéotron's CSEs in, I would say, 95 per cent of the buildings.

2336 Your question, once again, just to confirm: In every single solitary building VDN serves, the CSEs are locked up solid as a rock.

2337 MR. McCALLUM: One of the things we heard yesterday was that there may be some movement or some degree of negotiation for the "contrat d'utilisation" that was presented to the competitors, because some of the things we were questioning about there were no specific terms to address it.

2338 Can you give, from VDN's perspective, the degree of negotiation that would have been available, or was available, or is available regarding the terms and conditions in that contract?

2339 MR. GALE: To the best of our knowledge, Gary has been dealing with Mr. Doré and virtually nothing is negotiable.

2340 One thing I wanted to make clear is that when we all stopped working on the CISC, it was presented to the Commission that the incumbent would work with the non-interference model.

2341 We had proceeded with our business, working with the non-interference model. That is the only way, in our opinion, that it is going to work. It has to be on "a bonne foi", on a goodwill basis. You are going to have inadvertent accidents that happen due to the age of wire, due to technical mistakes, due to incorrections of wiring. If we do not work together in this as an industry, it will go from bad to worse to worse.

2342 MR. SHERMAN: Perhaps I could respond to that.

2343 As Mr. Sherman indicated, I did speak to Mr. Doré in some of the letters, and we really never got beyond the $5.00 rate. I asked if the $5.00 rate was negotiable, and I was advised that it was not. I assumed there was nothing else negotiable.

2344 At that point there was no point negotiating any additional terms since the $5.00 was not negotiable. That was pretty much the key issue of the contract.

2345 Mr. Doré never indicated that any other portion of the contract was negotiable, and the terms of the contract seemed so oppressive on their face that we really didn't bother trying to negotiate anything. To negotiate at that point might have seemed like a validation of the $5.00 rate.

2346 I would point out that on page 223 of the public file we identified that there are 35 buildings that have essentially been wired by VDN, and seven of those buildings have apparently dual wire between VDN and Vidéotron. That is on page 223.

2347 THE CHAIRPERSON: Mr. Sherman, I think your 5th March letter changed that to eight.

2348 MR. SHERMAN: Yes, you are right. That would be on page 552, where we did indicate that it is eight. Thank you very much, Madam Chair.

2349 We also indicated on page 552 that the number of buildings is 148 where Vidéotron controls the wire.

2350 It is 152 buildings with over 20 units, but there are a number of buildings with 12 to 19 which Vidéotron has apparently counted as part of their 20-unit buildings because they are part of larger blocks. They are buildings that are attached.

2351 So, we have actually listed it as 192 buildings that were being blocked from access.

2352 MR. McCALLUM: One of the thing that you said, Mr. Sherman, in your presentation this morning, in talking about who drafted the contracts, that they resulted from discussions with Mr. Doré and Mr. Gingras, and you said that these discussions had occurred before Câblage QMI came into being.

2353 I don't think that is quite accurate. I think the company existed at the time those negotiations took place. Is that correct?

2354 MR. SHERMAN: Yes, Mr. McCallum. The company, in a numbered company form, without assets, without employees, without anything, existed prior to February 8th. I think that is what was indicated by the Vidéotron panel.

2355 The numbered company may have existed prior to that, but it didn't have any employees. It wasn't Câblage QMI Inc. It had no real existence other than as a shelf company prior to February 8th.

2356 That is our position, at least.

2357 MR. GALE: Another point is that if the would have had everything organized and ready when we got served with the letter on February 12th or 13th, why didn't we get a copy of the contract at the same time? Why did it only come three days later?

2358 MR. McCALLUM: If anyone had known that the inside wire of Vidéotron was for sale, do you think parties might have bid on it?

2359 MR. GALE: I don't really know. When we look at the kind of money that can be made, of $5.00 a suite and the $35 disconnection, you are talking a recouping of your investment in eight and twelve months. I think you would have a bidding war for the wire.

2360 MR. McCALLUM: So if VDN had known that the inside wire may have been available, would VDN have bid on it?

2361 MR. GALE: It is far too speculative to determine that. First of all, we feel as our business it is definitely an essential facility. Without that piece of wire, our customers don't receive any service. If the wire is inferior, they are going to receive lousy service.

2362 So, it is absolutely essential that we are able to operate the wire, that we can control the wire, that we can fix the wire, that we can do what we need to provide our customers with adequate service that we can continue growing our business and continue keeping the customers that we already have.

2363 MR. McCALLUM: Could you provide details of the investments that you refer to in your presentation this morning?

2364 On page 1 you talked about $25 million in the construction of a fibre optic network, and somewhere else you said that you are providing analog service. Somewhere else you talked about if Vidéotron is allowed to succeed -- and I am looking at page 4, near the bottom where you say:

"Since February 12, 2002 VDN has been barred from providing service to a single new customer...and, as a result, millions of dollars of investment have been stranded."

2365 Could you give details as to what you meant by those investments.

2366 MR. GALE: Is your question: Are we willing to provide details of those investments to the Commission?

2367 MR. McCALLUM: No. I am asking not for a spreadsheet where you give all the details but a summary of what was involved for those investments.

2368 I am thinking verbally, in response to my question.

--- Pause

2369 MR. GALE: What we could do is we could use the Le Sanctuaire du Mont-Royal as an example. Basically, for us to enter into an MDU north of 100 units, the investment is as follows: We must take the fibre from our fibre backbone, bring the fibre into the building, install our electronics, install our CSE and all that. It works out to about $30,000 to $50,000 per building.

2370 Is that sufficient to answer your question?

2371 MR. SHERMAN: Le Sanctuaire, in this case, is a multi-unit complex with seven buildings. We have brought our services to all of these buildings, as far as I know.

2372 MR. GALE: Five of the seven.

2373 MR. SHERMAN: Five of the seven for the moment, which is why we put $250,000 as an investment at Le Sanctuaire alone.

2374 Additionally, beyond that, throughout our network every time we go to a building we physically extend our network to that building. That involves leasing conduit spaces, building our own conduit spaces, doing physical construction. It is not simply a matter of putting a dish on a building. We have a lot more physical labour involved in getting to those buildings.

2375 MR. McCALLUM: What is confusing is that at page 1 of your presentation this morning you say that you invested over $25 million in the construction of a fibre optic network, and then later in your presentation you talked about it being primarily an analog network.

2376 Then on page 4 you say:

" a result, millions of dollars of investment have been stranded."

2377 If I understand it correctly, there is $25 million in fibre optic. There is some other figure in analog network. The millions of dollars that you are referring to at page 4 must not be the 25 that you are referring to at page 1 but some bigger figure.

2378 Is that right?

2379 MR. GALE: No. I will make it a little clearer.

2380 What happens is we have invested to date, to get our business up and operational, including our two head-ends to provide our analog service, including our almost 400-kilometre fibre network, including the connection with all the electronics and the conduits and the pole rentals, and all the construction required to serve our 250-odd buildings we serve today -- the total investment VDN has made to be in business to provide broadcast distribution services to our customers in roughly 20,000 suites we are available in today was $25 million.

2381 MR. McCALLUM: I see. So, the $25 million is partly in fibre and partly analog upgrade, if you like?

2382 MR. GALE: No. Everything is brand new. We haven't upgraded our network yet, because we just started in business. To install the modulators, the satellite receivers, the satellite dishes, the combiners, the switchers, the transmitters, the fibre itself, all that stuff totalled for us to be able to provide our 100-channel analog service to our customers that we serve today, we have invested $25 million.

2383 MR. McCALLUM: Therefore, the millions of dollars that you are referring to at page 4 is the same $25 million at page 1.

2384 Is that right?

2385 MR. GALE: Yes. Let's say, for argument's sake, that there are 200 buildings that we cannot serve today because we are blocked by CQMI. If we take an average of between $30,000 and $50,000 and say it is $40,000, we just multiply the $40,000 times 200 and that is the stranded investment.

2386 MR. SHERMAN: I guess it is not entirely stranded, because for the moment we are still serving our customers. When we say we have invested $25 million, we say millions of the investment has been stranded. It is not the entire $25 million, but it is a significant portion of it.

2387 Just to clarify, our fibre optic network is used for providing analog services at the moment, and we will be upgrading to digital services very shortly. It is the same network. It is a fibre optic network which we use to provide analog services. There are no two different kinds of networks or two different kinds of investments.

2388 MR. McCALLUM: Thank you. In the public record, I think at page 472, VDN suggests that QMI will receive something like $115 million in revenues over ten years for an asset that cost $19.5 million at the outset.

2389 Could you explain how you calculated the $115 million?

2390 MR. SHERMAN: Calculating the $115 million, at page 472 -- I know I said $115 million at some point. Was it at page 472?

2391 MR. McCALLUM: There you have the figure of $86 million. Maybe you can explain that figure.

2392 MR. SHERMAN: Yes. Basically, it is paragraph 45.

2393 At $5.00 per month per suite, with an estimated 75 per cent rate of MDU suites using the inside wire to receive cable distribution services. That might include Vidéotron's percentage of penetration and our percentage of penetration. Vidéotron has provided different penetration figures, so they might come to a different figure.

2394 There would be lease rate income to CQMI of $17,238,960 per year: $5.00 times 12 months times -- I believe I used 75 per cent of the number of suites provided by Vidéotron at the time, which was 387,000. That is on page 448, or something in that area.

2395 If you multiply that by five years, you get $86 million, which was over five years.

2396 Maybe 75 per cent wasn't the rate. Maybe, as they say, it is 50 per cent. They provided us with 168,000 suites for themselves. That is the number of customers they have. There are additional other customers.

2397 Even if we take 200,000 and multiply that by $5.00, you get $1 million a month, $12 million a year to CQMI; and $12 million a year over ten years is $120 million of revenue from this lease scheme, if 200,000 MDU customers use CQMI wire.

2398 Over ten years, with 200,000 customers -- which is somewhere in the area of 60 per cent of the wire being used -- $5.00 times 200,000 is $1 million a month, $12 million per year, $120 million over ten years.

2399 MR. GALE: We must remember that we are all claiming that the life of the wire is 25 years. So if we multiply by 25 years, the numbers are astronomical.

2400 When you talk about the investment, I think it would not be difficult to get somebody to bid for the $19.2 million to buy that wire with those kinds of returns.

2401 MR. McCALLUM: I think the $115 million came from your intervention as opposed to the public record.

2402 When you calculated that, you used the same assumptions that you explained just now: the 75 per cent rate?

2403 I think it is paragraph 64 of your intervention, on page 12.

2404 MR. SHERMAN: Thank you, Mr. McCallum.

2405 I assume it is paragraph 64. Let's assume that Vidéotron has customers in 50 per cent of the 383,000 units in which the wire has been sold to CQMI. Again, we have that difference between the 383,000 versus 387,000, but we can ignore that.

2406 By agreeing to pay CQMI $5.00 per month per suite, in this paragraph we were basically discussing not how much CQMI will make but how much Vidéotron will actually pay to CQMI.

2407 Apparently, for Vidéotron's payments to CQMI, here we are indicating -- as they indicated, they have 168,000. So, you can use those figures. We were taking a 50 per cent rate of 383,000 and saying if we assume that, then they would be paying $957,500 per month to CQMI, $11.5 million every year.

2408 That is what Vidéotron should be paying to CQMI. If they say it is 168,000, that figure might go down a bit, but it is still going to be in the range of $10 million per year.

2409 MR. McCALLUM: You spoke this morning about your marketing plans. For example, on page 4 you talk about two hundred and fifty -- I'm sorry, that is the network cost.

2410 You talked about your marketing plans at several places in your intervention this morning.

2411 Could you explain what sort of marketing expenses, to market to new buildings, VDN was incurring before the 8 February 2002, and what plans it has since?

2412 MR. SHERMAN: I think we could probably provide you with more specific details, but I think you are really asking what do we do to promote ourselves in these buildings. In that case, I guess we could tell you that we organize leaflets; we send people to the building; we set up information sessions.

2413 We basically do quite a lot of publicity work at that building specifically for the purposes of making our presence known, getting our name out there, because we are a small company.

2414 A lot of the damage in this case is just to our reputation. We show up at these buildings. We tell them that we can provide them with service. We go to the meeting and tell them service will commence on the 12th of February. We sign them up. We tell them to be ready for it. Then the day comes and we can't provide. This was completely out of our control.

2415 Perhaps I could pause for a moment, Mr. McCallum.

2416 MR. GALE: Concerning the costs, if you would like us to undertake to get back to you with the information also on Friday, we could provide you with a brief description of what it costs and how we mark it.

2417 That is not the motherload of where our costs are. The motherload of our costs is all on the installation, the physical fibre, the plant, the $30,000-plus that we connect at every MDU. That is where the majority of our money gets spent.

2418 MR. McCALLUM: Yes, please. And, of course, you will serve a copy on Vidéotron.

2419 MR. GALE: Yes, we will.

--- Pause

2420 MR. McCALLUM: In the written intervention VDN stated that it has made virtually no new connections of new subscribers since 12th February 2002.

2421 Can you explain what you meant by "virtually no new connections"?

2422 MR. GALE: What happens is in apartment buildings you have a certain amount of churn. If we look at our subscriber base, what we had as of January 31st, February 28th, March 31st, our subscriber base has actually decreased.

2423 Why? As people move out, we are unable to go and connect up that person if they move into a different apartment in the same apartment building, because we don't have access to the CQM wire. At the very beginning when all this happened, either Vidéotron on CQMI had people following our technicians around, kind of like private investigators, spying on them. The moment we did a disconnection, they would come over and grab the wire and stick it back in their locked enclosure, and we wouldn't even have access to the wire that we were previously using.

2424 What we mean is that when on a daily basis we receive disconnection notices from people, just because they are moving -- it is normal churn in the business in apartment buildings; you have anywhere between 10 to 20 per cent churn on an annual basis -- we are unable to connect up a new customer.

2425 Where we say virtually, it is because we still serve some condominiums, et cetera, under bulk agreements. Some people would disconnect for the winter, and when they come back in the spring we would connect them back up.

2426 So, there are still a few new connections, but I am talking six new connections versus 100 disconnections over the last three months.

2427 MR. McCALLUM: Is that like a total number or a number per month?

2428 MR. GALE: That is a number per month.

2429 MR. McCALLUM: So six for February, let's say?

2430 MR. GALE: Basically, as of February we were starting to market the new properties, which was Le Sanctuaire. We were marketing to about 500 units there. We did not connect up one single customer.

2431 So in the month of February, when they went around and locked all the boxes up, in the CQMI-controlled buildings we did not add one single customer. That is north of 70 per cent of the customers that we serve.

2432 So, when we look at our subscriber base numbers, for the last three months I would say we had a net loss of roughly 100 customers per month in the last three months.

2433 MR. SHERMAN: Mr. McCallum, could you refer me to that paragraph in my intervention that you were referring to, about the virtual line? It was quite long. I apologize for the length of it.

--- Pause

2434 MR. GALE: There is another important point that I forgot to mention concerning what happened since February 12th.

2435 It is extremely important for us to reiterate that Vidéotron has been aggressively calling up a good portion of our customers, offering them a special. When they connect up and when we lose them as a customer, we are unable to go and market any new customers in new buildings with CQMI-controlled wire.

2436 So, we are basically at a loss position: losing customers to Vidéotron aggressively marketing our customers; losing customers in the normal churn of the apartment buildings, people moving in and moving out.

2437 MR. McCALLUM: At page 470 of the public record VDN says that Vidéotron in fact admitted they never even questioned CQMI's terms and conditions.

2438 Where is this admission?

2439 That is at paragraph 64.

2440 MR. SHERMAN: Yes, thank you.

2441 I think that would probably be an interpretation of Mr. Trépanier's comments that they were willing to accept whatever CQMI said was just and reasonable. They didn't seem to have any questions over it.

2442 Mr. Trépanier's letters to the Commission -- and again, his primary letter ---

2443 MR. McCALLUM: The one that starts at page 431?

2444 MR. SHERMAN: Yes, that's it. I think you quoted from it yesterday.

2445 There was a question specifically asked: How as the $5.00 rate arrived at? And their response was: "We can't answer the question. CQMI would be in the best position to respond to that."

2446 They didn't seem to have any available information as to how the $5.00 rate was arrived at.

2447 It seemed to me when they also said on the first page that "Vidéotron was reassured that it would be a just and reasonable rate", they didn't seem to be concerned with what the rate was.

2448 MR. McCALLUM: You are referring to the paragraph at R8(b) at page 426? Is that what you are referring to?

2449 MR. SHERMAN: I would say it is a combination of R8(b), as well as R1, which is where they basically said that Vidéotron was reassured that it would be "allez offrir". So, they didn't even know what it was. It would just be a reasonable rate. That is what they said in the future tense.

2450 MR. McCALLUM: Could you comment on a discussion that we engaged in yesterday with Vidéotron where we discussed the methodology for calculating the transfer cost of the inside wire to a company.

2451 Vidéotron and Câblage QMI stated that it was done on a depreciated replacement value. We put it to them that another methodology for the transfer would be historical cost.

2452 Would you comment on that, please.

2453 MR. SHERMAN: Unfortunately, Mr. McCallum, I don't think either of us is in a position to really comment on accounting methodologies. It would be inappropriate for us to say anything at this point.

2454 MR. McCALLUM: In terms of the remedies that the Commission might impose, you have addressed that in your written intervention today. You suggested that the Commission should issue some type of order.

2455 If the Commission were to issue an order, have you given any thought to what that order might say?

2456 I see you have something in the second paragraph on page 6 of your written intervention. Is that the extent of your thinking on that issue?

2457 MR. SHERMAN: We certainly hopes that the Commission takes all available opportunities, which is what we have suggested, all available options in its powers to obtain the result of getting access back for competitors in this industry.

2458 We have indicated in paragraph 6 that, at the very least, Vidéotron should be ordered to get the wire from CQMI. If Vidéotron has to pay $5.00 to CQMI for the wire and then turns around and charges the Commission-ordered rate, that would be a good start at least to get us to pay the correct rate and have the proper terms and conditions.

2459 As we said, there are a lot more terms and conditions than just the $5.00 rate. It was discussed here yesterday before the Commission that essentially CQMI has the power at will to disconnect your customers if there is a problem between the parties.

2460 If there is a dispute of any kind, they can pull the plug on all your customers. That is an unacceptable term. So, even Vidéotron's terms, transferred to us, would not be acceptable.

2461 What we want the Commission to do is take every available power to ensure compliance. If they fail to provide access, then there should be fines. We feel there should be fines imposed pursuant to the Broadcasting Act. Furthermore, if there continues to be no compliance, then we feel the Commission should take action to perhaps revoke or suspend Vidéotron's licence.

2462 The issue here is this is about inside wire. Inside wiring is an integral, an essential part of the broadcasting undertaking for all parties, an essential part of the delivery of services to customers. It has been stated before at the Commission and our materials have indicated that the Commission itself has indicated that inside wire has all the attributes of an essential service. It is clear the jurisdiction of the CRTC extends to the whole broadcasting undertaking, including the inside wire.

2463 For this purpose, access must be obtained at a just and reasonable rate. We feel that the Commission needs to use all of its powers to ensure that result if obtained.

--- Pause

2464 MR. McCALLUM: In your dealings with Câblage QMI, who have you dealt with?

2465 MR. SHERMAN: My dealings took place between myself and Mr. Doré, who was acting president of Câblage QMI. That wasn't indicated yesterday, but Mr. Doré was certainly the president of Câblage QMI when the letters were sent. Throughout the public file he is indicated as the president of Câblage QMI, at least up until the end of February. At some point after that we received the bill from Mr. François Garneau, who was the president. I have never had any conversations with Mr. Garneau, nor has he ever attempted to contact us.

2466 I have spoken to Mr. Doré on a number of occasions. That is all.

2467 At those times Mr. Doré was the president of QMI, but he was also identified by his assistant as a vice-president for Quebecor Média Inc. at that time. When I called his office, his secretary picked up and said "Quebecor Média Inc."; essentially that who was answering at the other end of the phone.

2468 MR. McCALLUM: You also stated in your intervention that the invoice it received for the number of units didn't correspond to the number of units VDN actually serves.

2469 How far off is that invoice?

2470 MR. SHERMAN: We can certainly say that it is off. We don't intend to provide CQMI with the correct figures, nor the correct apartment buildings. We don't really believe they own the wire in some of these buildings anyway, since they may not have properly transferred it from the owners. They may not have had the proper rights to even access the wire from these owners. There may be a lot of contracts from Vidéotron which don't permit the transfer of the inside wire to a third party.

2471 A number of the buildings on those CQMI invoices we don't even serve customers in those buildings. Yet they are billing us for it.

2472 The list is essentially completely improper, and it doesn't reflect reality at all. We can say that we are certainly using more numbers of customers than indicated there, but we don't plan to give them the exact number.

2473 MR. McCALLUM: Thank you, Madam Chair. I think that concludes my questions for the moment.

2474 THE CHAIRPERSON: Thank you, counsel.

2475 I would like clarification on one point.

2476 You described -- and it was described by the panel yesterday -- how transfers were made or how connections were handled before February 8th or the 12th. Of course, we have heard what is happening or not happening right now as a result of not having signed the agreement required.

2477 What is your understanding of what would happen if you had signed the agreement?

2478 It was described by the other parties yesterday as to what it is they expect, assuming you had signed the agreement as filed. What would happen?

2479 MR. SHERMAN: The agreement from CQMI indicated actually nothing regarding how we would actually be connected. There was no policy within that agreement whatsoever indicating how transfers would take place; whether wire would be extended; who would be extending the wire; how that would take place; how CQMI would have access to the Vidéotron box, which was locked at the time.

2480 The agreement was completely deficient on those terms.

2481 Again, we have been told by Vidéotron's panel yesterday, or CQMI by Mr. Doré, that there were a lot of other things that were not in the agreement that at least they had worked out with Vidéotron orally, or perhaps Vidéotron assumed that they would have the power to do that. The agreement didn't tell us whatsoever how the process would continue with CQMI.

2482 THE CHAIRPERSON: But it was described yesterday.

2483 MR. SHERMAN: Well, I actually still found that somewhat confusing, Madam Chair. There was an indication that there might be CQMI employees sent; that there might be Vidéotron employees sent. I am still confused as to how many people have to be involved.

2484 I am getting the impression, though, that we have to contact Vidéotron first to indicate that a customer is being disconnected. We also have to contact CQMI, obviously, to get their permission to use their service.

2485 It is not clear to me whether we would have to pay the $35 up front to CQMI. That is unclear, whether we would have to pay them right away.

2486 It is not clear to me whether CQMI will then tell Vidéotron to comply.

2487 I am still very confused as to how that procedure goes on. I will have to consult the transcripts, perhaps, to get a better clarification of that. I don't think it was all that clear.

2488 THE CHAIRPERSON: The position you are taking is that signing the agreement would not give you that clarity.

2489 MR. SHERMAN: That is correct, Madam Chair. Signing that agreement would not give us that clarity. Based on my readings of the agreement, there are a number of terms, such as we have to get written permission from CQMI to do any kind of connection. We have to replace the wire. We have indicated that is still a problem. There is no guarantee of anything in those agreements.

2490 I think CQMI has been extremely negligent on that point. The panel here was Vidéotron, more or less. I don't think they explained it. I don't they explained what the procedure would be.

2491 THE CHAIRPERSON: That completes our questions. Thank you very much, Mr. Gale.

2492 MR. GALE: Thank you.

2493 THE CHAIRPERSON: Thank you, Mr. Sherman.

2494 MR. SHERMAN: Thank you, Madam Chair.

2495 THE CHAIRPERSON: We will now take a 15 minute break and will return at 10:35.

2496 Nous prendrons une pose de 15 minutes.

--- Suspension à 1021 / Upon recessing at 1021

--- Reprise à 1035 / Upon resuming at 1035

2497 LA PRÉSIDENTE: Order please.

2498 Monsieur le secrétaire.

2499 M. LEBEL: Merci, madame la présidente.

2500 Next, we will hear from Bell ExpressVu Ltd. partnership and I will ask Mr. Chris Frank to represent his colleagues.


2501 MR. FRANK: Thank you.

2502 Good morning Madam Chair, Commissioners and, members of Commission staff.

2503 Thank you for inviting ExpressVu here today to speak to the matters raised in out complaint against Vidéotron.

2504 For the record, my name is Chris Frank, I am Vice President of Programming and Government Affairs at ExpressVu. With me today, on my left, is David Elder, our Regulatory Counsel; and to my right, Michael Beard, ExpressVu's Vice President of MDU and Commercial Operation; and to his right, Paul Armstrong, our Director of Government and Regulatory Affairs.

2505 As well, we have with us, in the audience, three additional people from ExpressVu that, depending on your questions, can provide more specificity to our responses to your questions. They are Alexander Du, Senior Legal Counsel, Sophie Lamontagne, Québec MDU Sales and, Serge Langlais, Québec MDU Operations.

2506 The issue before you today goes to the heart of developing dynamic competition in the BDU marketplace and providing customers with choice of distributors and, the benefits of competition.

2507 Since the mid-1990's, the Commission has consistently found that cable company ownership of inside wire represents a major barrier to BDU competition. The Commission established regulations in 1997, and later modified them in good faith with the cable industry, to prevent access to inside wire from becoming a barrier to BDU competition.

2508 In the case of Vidéotron, that good faith has been broken and actions is now required to restore the Commission's objective. The Commission and the industry have been discussing the appropriate terms for access to inside wire since 1996.

2509 After a lengthy and detailed process, the Commission has made a preliminary determination that 0.44 $ is a just and reasonable monthly lease rate for inside wire. If Vidéotron's action are condoned by the Commission, the other cable companies will inevitably follow suit. There will be no effective competition in MDU's across the country.

2510 Madam Chair, the facts in this case are clear and uncontested. Vidéotron, in consultation with its parent company Quebecor, planned and executed a strategy to sale MDU inside wire to a sister company in such a way as to bypass the regulations, which were set up to allow for the orderly introduction of competition.

2511 The record also confirms that the terms of the CQMI demands of new entrance were without regard to Vidéotron's prior commitments to the regulator, the Commission's policies, or the interests of the building owners and consumers. In our opinion, this has been done to thwart competitive entry and to prevent consumer choice.

2512 To place things in perspective, the $5.00 lease rate demanded by Vidéotron's sister company is more than 10 times the rate that the CRTC determined would be appropriate, and more than 50 times what the cable industry first thought appropriate when questioned by the Commission in the proceeding which led to the introduction of the new BDU regs.

2513 Michael.

2514 MR. BEARD: Madam Chair.

2515 Vidéotron's actions severely restricts ExpressVu's ability to offer choice to consumers that reside in the affected MDUs.

2516 First, in those buildings in which we have already built facilities, we are being denied access to any additional inside wire meaning that we cannot connect any new subscribers.

2517 If those residents want multi-channel television service, they have only one choice: Vidéotron.

2518 Second, we have been forced to halt expansion of our operations to other large MDUs in Vidéotron's territory. In those buildings, residents continue to have only one choice: Vidéotron.

2519 We estimate that Vidéotron has an exclusive presence in 85 per cent of the MDUs over 20 units in this territory.

2520 The vast majority of consumers in these MDUs, will not have a choice of service providers, madam Chair, under the terms demanded by CQMI.

2521 Let me take a moment to explain the economics of the MDU business.

2522 A large portion of the associated costs are fixed, which can only be diluted by acquiring a sufficient number of subscribers. This, coupled with the naturally high move-out rate in MDUs, leads to an economic model that is barely tolerable. Indeed, there are few, if any, MDU success stories amongst new entrants.

2523 At ExpressVu, we have had to make major changes to our policy on landlord payments, essentially reducing them to zero. We therefore have to walk away from many opportunities even at today's costs. The $5.00 per month rate per subscriber will render the business case unworkable, and we would be forced to vacate the market in such areas.

2524 The harm caused by Vidéotron goes beyond the short term. Each additional day that passes while the current situation is allowed to continue compounds the competitive advantage Vidéotron has garnered for itself and adds to the cost and effort we face to regain the confidence of building managers and consumers.

2525 David.

2526 MR. ELDER: Thank you, Michael.

2527 Madam Chair, the record demonstrates that Vidéotron has, through this transaction, given itself an undue preference, contrary to section 9 of the regulations, and effectively denied access to inside wire, contrary to section 10.

2528 Moreover, Vidéotron has, through a brazen and transparent transaction involving a newly created affiliate of its parent company, contrived to avoid its regulatory responsibilities as a licensee and violated its condition of licence respecting ongoing control of its undertaking.

2529 The regulatory obligations and requirements of the BDU are not dependent on whether the BDU owns a particular asset or performs a certain task or function itself as opposed to pursuing an outsourced solution. The obligation is tied to the licensee. This position is consistent with the Commission's own approach to regulation of BDUs and is based on sound legal principles and broadcasting policy.

2530 Access to, and control of, the inside wire used by BDUs to serve end-users is integral to the undertaking itself. Indeed, the Commission has determined that cable inside wire is an essential facility.

2531 While the Commission has afforded some flexibility to BDUs to allow for outsourcing, and since by eliminating the requirement that cable licensees own their head-end, amplifiers and subscriber drops, the Commission clearly did so on the understanding that licensees would continue to exert effective control over the undertaking -- as the CCTA and Vidéotron had assured.

2532 It is of fundamental importance that in pursuing outsourcing arrangements, a BDU continues to exercise control and meet its regulatory obligations.

2533 This only makes sense. If all that a licensee had to do to evade regulatory responsibility was to outsource part of its physical plant or operations, the current regulatory régime would all but collapse. If no action is taken against Vidéotron in the present case, what is to stop any other incumbent cable company from contracting out of its regulatory obligations, thereby eliminating competition in MDUs throughout Canada?

2534 That Vidéotron has given itself a preference or subjected competitors to a disadvantage is clear. The CQMI transaction, structured with complete disregard to CRTC requirements and objectives or impact on competitors, allows Vidéotron to operate normally, with Vidéotron stating that no increase to subscriber fees will be required to offset the new inside wire rates it purportedly pays to CQMI. This is because the rates "paid" by Vidéotron are only paper costs to Quebecor. Meanwhile, competitors are shut out of the market, because for them the trumped-up CQMI rates are real and prohibitive out-of-pocket costs.

2535 In the telecom context, the Commission has indicated that a preference will be considered undue where there is evidence that the establishment or continuance of a competitive market is being unduly impaired. Such is the case here.

2536 The exorbitant lease rate demanded by CQMI, to say nothing of the $35 transfer fee, is prima facie unreasonable and makes it simply uneconomic to serve MDU residents. In the result, CQMI's terms are so unjust and so unreasonable as to amount to an effective denial of access, contrary to section 10 of the regulations.

2537 In light of the foregoing, ExpressVu submits that a mandatory order should be issued against Vidéotron and its licensee affiliates, directing each of them, in detail, to comply with sections 9 and 10 of the regulations, the condition of licence requiring the undertaking to be operated by the licensee itself, and the additional customer transfer requirements set out in PN 2000-81.

2538 Further, given Vidéotron's bold and high-handed approach related to this transaction, and their apparent disregard for regulatory obligations and requirements, we would submit that immediately following the issuance of the mandatory order considered here, the Commission should file the order with the Federal Court of Canada, as contemplated by section 13 of the Broadcasting Act.

2539 Chris.

2540 MR. FRANK: Thank you, David.

2541 Before closing, Madam Chair, I note that during his presentation yesterday Mr. Péladeau raised a number of issues which are totally irrelevant to the proceeding here today. Some of the matters are the subject of complaints before the Commission, and I appreciate Commission counsel's comment that they are more properly dealt with outside the scope of this hearing. Others are simply unsubstantiated and irrelevant allegations.

2542 As the Commission will see in the responses we filed yesterday to the complaints, in no case has Bell ExpressVu or its affiliates breached any regulatory rules or requirements, unlike the situation you have here today.

2543 To sum up, Madam Chair, we wish to reiterate the gravity of the situation. What is at stake is consumer choice. The essential question is: Will residents of MDUs have the opportunity to choose from different multi-channel service providers? Or will they forever remain captive to the local cable company because of the ownership of inside wire?

2544 If Vidéotron is able to get away with this ruse to avoid their regulatory responsibilities, then every other cable company in Canada will quite likely follow suit.

2545 We urge the Commission to act quickly and issue a mandatory order to restore the possibility of consumer choice.

2546 Thank you. We would now be pleased to answer any questions which you may have of us.

2547 THE CHAIRPERSON: Thank you.

2548 Counsel, please.

2549 MR. McCALLUM: Thank you, Madam Chair.

2550 Could you please explain what was involved with the connection and disconnection of a subscriber in Vidéotron territory immediately before 8th February 2002 and what has occurred since.

2551 MR. FRANK: Thank you.

2552 Michael?

2553 MR. BEARD: Mr. McCallum, we had a pretty good working arrangement with Vidéotron, in that when we received notification that a customer wanted to take ExpressVu service in one of the buildings where we had a network, we would contact Vidéotron on a process that was essentially requested by Vidéotron, as well.

2554 That disconnection would take place, and the cable would be made available to us in the way that has already been described, in that a six-foot jumper would be added.

2555 We would then arrive at the site, make the connection to our equipment, typically on the same day because we have to be cognizant of the amount of time that somebody might be without television service. We would connect the customer to our service and authorize his set-top box.

2556 Where we stand today, we are not doing anything. There is nothing happening today.

2557 MR. McCALLUM: For example, at page 203 of the public record -- I think that is the letter from Bell ExpressVu, dated 18th February -- Bell said that Vidéotron would disconnect the subscriber on the due date but leave the end of the disconnected wire locked in a Vidéotron distribution panel box.

2558 Is that what is happening after the 8th of February?

2559 MR. BEARD: There was an interim period after the 8th of February to where we stand now where we were fulfilling customer requests to take our service due to our high level of consciousness of customer service in a competitive environment.

2560 Immediately after February 8th we were dealing with a situation where we were getting co-operation from Vidéotron in that they were disconnecting the customer, but we were greatly concerned that the customer now would be disconnected and the wire just left in the Vidéotron box because we had no arrangement with CQMI.

2561 What we would do is, wherever possible to fulfil the outstanding order book at that particular time, we would self-provision a connection to get the customer connected and prevent a situation where there would be a lack of customer service and extreme dissatisfaction.

2562 We are a very customer-focused organization, and doing that to customers is not where we think an important part of our business is. We need to respond to customer choice.

--- Pause

2563 MR. BEARD: Just to complete that, Mr. McCallum, in working through the customer backlog that we had, we continued to self-provision until a point in time where we had worked completely through the backlog. We sent after that point in time no more disconnection requests through to Vidéotron, because it was pointless. We had decided on our own to stop self-provisioning.

2564 Coincidentally, the very next day we were served with an injunction to stop doing that.

2565 MR. McCALLUM: How long did this interim period last, then?

2566 MR. BEARD: The injunction, I believe, was ---

2567 MR. McCALLUM: No, no, the interim period that you described in your answer where you said you self-provisioned.

2568 What I wanted to get at is how long did the interim period last, and what is the current situation now?

2569 MR. BEARD: I was just trying to get a scope of the time. We stopped doing that just before the injunction. I believe the injunction was the 12th of March.

2570 MR. McCALLUM: So, the interim period is from approximately the 8th of February to the 12th of March.

2571 MR. BEARD: To the 12th of March, yes.

2572 MR. McCALLUM: The status quo today is that you are not able to effect any connections or disconnections. Is that right?

2573 MR. BEARD: Correct, other than in buildings of less than 20 units where we are able to connect and obviously, from a Québec point of view, in areas where COGECO, for example, provides service.

2574 MR. McCALLUM: Are there any buildings where Bell ExpressVu has wired the buildings itself?

2575 MR. BEARD: No, not in Québec.

2576 MR. McCALLUM: Are there any buildings where Bell ExpressVu operates where it is not dependent upon Vidéotron in one way or another having access to the clients?

2577 MR. BEARD: I'm sorry, could you say that again, please.

2578 MR. McCALLUM: Are there any buildings within obviously Vidéotron serving area where Bell ExpressVu can serve the clients in the building without being dependent upon Vidéotron or Câblage QMI to get access to the clients?

2579 MR. BEARD: There are some circumstances where that might occur. Somebody living in an apartment with an ability to face the direction of the satellite might purchase a system from Radio Shack and install a dish on the balcony, if they are permitted to do so.

2580 That doesn't obviously utilize any of the Vidéotron or CQMI-owned wiring.

2581 MR. McCALLUM: Could you explain what you mean by "rare"? How rare is rare?

2582 MR. BEARD: It is not something that we really are able to track. If somebody walks into Radio Shack and purchases a system and installs it in an MDU, we might look at an address of where they are. But many people have different addresses, and they might send a bill to a different address.

2583 So, it is not exactly known how many of our subscribers who live in MDUs have actually achieved a situation where they are watching ExpressVu by not using the internal MDU wiring.

2584 MR. FRANK: Just for certainty, though, Mr. McCallum, that choice would be the consumers. He would have to be facing in the right direction. There would be no service to the building per se from Bell ExpressVu.

2585 MR. McCALLUM: Did you receive any indication or impression that the terms of the "contrat d'utilisation" were negotiable between Bell ExpressVu and Câblage QMI?

2586 MR. BEARD: In my impression, it was pretty much to the contrary. When we received the letter, which very definitely said "stop immediately, pay us immediately", we wrote back trying to inquire how negotiable this is. We attached a generic agreement that we thought would fit the situation, and the response to us was that this was not negotiable. Sign our contract.

2587 MR. McCALLUM: Is that correspondence reflected in the pages that were added recently to the public file, I think as attachments to the letter of Bell ExpressVu, dated February 18th?

2588 MR. ARMSTRONG: Perhaps you could quote a page. I am searching my recollection, and on the day that we received the notification from CQMI, which of course was a company that none of us had any knowledge of, I immediately called Mr. Trépanier and inquired to find out whether this was a legitimate letter.

2589 I recall him telling me that the circumstances which I outlined in my original complaint letter, under the Facts -- I can't recall whether it was a conversation with Mr. Trépanier directly or whether it was a subsequent conversation with Mr. Doré in which I asked if the terms were negotiable, and I was told no.

2590 MR. McCALLUM: For example, you may have received a copy of a letter, dated 18th April 2002, from Claude Doucet to Édouard Trépanier, in which Claude Doucet of the Commission states that the Commission has added pages 201(a) to 201(e) to the public exam file, which includes a copy of your letter, dated February 14, 2002.

2591 Is that what we are referring to?

--- Pause

2592 MR. ARMSTRONG: Page 201(d) is our letter of February 14th, which we dispatched almost immediately after we received the notification.

2593 I believe an attachment to that was the contract which my colleague referred to.

2594 MR. McCALLUM: Is that draft contract on the file?

2595 MR. ARMSTRONG: I don't believe we sent a copy of the contract to the Commission, because there was a confidentiality clause in the model contract. So, we didn't send a copy to the Commission.

2596 THE CHAIRPERSON: It is referred to in paragraph 10 of that letter.

2597 MR. ARMSTRONG: That is correct. It is paragraph 10. Thank you, Madam Chair.

2598 MR. McCALLUM: I believe you were here yesterday when there was discussion with representatives of Quebecor Média, Câblage QMI and Vidéotron about the methodology for the transfer. It was effected at depreciated replacement value and we put to them the alternative value of transfer, or methodology for the transfer of wiring at historical cost.

2599 Can you comment on the appropriate methodology for making such transfers?

2600 MR. FRANK: Counsel, we have made representations to the Commission in a separate proceeding on that. In fact, we filed yesterday with the Commission essentially saying that the 44 cents was satisfactory to us in the context of getting on with business, because business needs a certain degree of certainty and this issue has been going on for quite some time.

2601 So, the 44 cents would be fine with us, provided that everybody else concurred. If not, we would be making further representations in the second round of that proceeding. So, I would defer to that, if that is acceptable to you.

2602 MR. McCALLUM: What I was really hoping to get, though, was not really a comment on the quantum so much as the methodology to arrive at the quantum.

2603 Do you have any comments on that, because it is a serious question that was asked yesterday.

2604 MR. ARMSTRONG: I believe our comments on an accounting-based analysis, in fact our comments on the rate, are already on the record of the proceeding. It was our submission to the CISC. If I'm not mistaken, it starts at approximately page 104 through -- of course these number backwards -- through page 79. You will find our comments in respect of an accounting-based analysis are on page 84 through page 79.

2605 I don't think I can improve on the good work that went into this submission. Believe me, we put an awful lot of work into this submission. I don't think I can improve on that today based on the comments yesterday, so I will stand by what is here.

2606 But I would like to draw the Commission's attention to paragraph 30 on page 80, the last paragraph that talks about -- well, if I may quote:

"As we moved through the analysis it became clear to us that the data available would not permit an accurate assessment of the cost of MDU inside wire for the recovery. Further, a formulaic approach could not address the exceptional circumstances as yet undefined by the cable companies that the cable industry characterized as the only situation in which a lease rate would apply. These critical deficiencies are sufficient in and of themselves to conclude that a formulaic approach based on available accounting data would be inappropriate." (As read)

2607 We conclude on page 79, paragraph 31:

"More importantly, a formulaic approach could not address the commitments to a nominal rate made by the cable companies upon which the Commission based its decision on the inside wire regulation." (As read)

2608 MR. McCALLUM: So, I am not quite clear I understand. That is the methodology that wouldn't work. What is the methodology that would?

2609 MR. ARMSTRONG: I think Mr. Frank has already stated that we have reviewed the Commission's analysis in Public Notice 2002-13 and if all the other parties of the industry have a consensus on that as that is the idea behind a CISC, we are prepared to live with it.

2610 MR. FRANK: Just to be clear, sir, our starting point, both from a business perspective and from a regulatory perspective, was in the $15 that was originally raised by the Commission back in the proceeding leading to the new BDU regs.

2611 When the rules were changed to accommodate the cable industry, in good faith we simply took the $15 and amortized it over a reasonable period of time. So, we thought a reasonable starting point would be 8 cents per suite per month and, after much discussion, as we said earlier, the Commission has come up with a rate of 44 cents.

2612 We think it is time to get on with business and 44 cents would be acceptable to us if it was put in place on a permanent basis.

2613 MR. McCALLUM: What is the size of Bell ExpressVu's capital investment in Vidéotron territory in multiple unit dwelling buildings of over 20 residences?

2614 MR. FRANK: If you would indulge us for just a second, we are doing the arithmetic.

--- Pause

2615 MR. McCALLUM: I could ask a couple of questions that don't depend on the calculations. It might be addressed to Mr. Elder, so I could ask that series while you are doing the calculation.

2616 MR. FRANK: Please.

2617 MR. McCALLUM: In the part that Mr. Elder was referring to in paragraph 18 there was a suggestion that the mandatory order should be issued against Vidéotron and its licensed affiliates directing each one of them in detail to comply with sections 9 and 10 of the regulations.

2618 I wondered if you could expand on what it is that you would suggest or what it is that you would want

2619 MR. ELDER: Thank you, Mr. McCallum.

2620 I think what we want is some clarification of what a just and reasonable rate would be in some of those terms.

2621 So I think we would like to see an order that would require access on the basis of the Commission's preliminary view of the 44 cent rate.

2622 I think we would want access without the $35 transfer fee.

2623 We would like the requirement that Vidéotron maintain a CSG to protect the confidentiality of our customers and avoid win-back marketing activity.

2624 I think we would like it on terms where we, as the user of the wire, would only be required to provide reasonable sort of maintenance and repair.

2625 We would expect that the wire would be in working order.

2626 If it required a complete replacement of the facility, we wouldn't expect that as a lessee we would be required to do that and have ownership of that wire remain with CQMI.

2627 MR. BEARD: Mr. McCallum, I can respond to your question on the capital investment.

2628 Our capital investment is made up of two elements. One is the network and the building itself, the distribution network. The other is the hardware in the format of the set-top boxes.

2629 Currently our capital investment stands at about $3.5 million, and that excludes any items which would be expensed such as sales/installation costs, costs of promotions marketing, that type of activity which we would not capitalize.

2630 MR. FRANK: That does not include any reasonable allocation from the fixed part of our plant. The satellite we have in the sky now and the one about to come, plus our broadcast centre in Toronto, which of course provisions services to those facilities.

2631 MR. McCALLUM: So, the $3.5 million is basically capital investment installed in Vidéotron territory in over 20 MDUs. Is that right?

2632 MR. BEARD: Correct.

2633 MR. McCALLUM: Proceeding, then, to the size of those other expenses, particularly marketing expenses, what were the marketing expenses that Bell ExpressVu incurred in Vidéotron territory -- again in buildings over 20 residences -- before the 8th of February 2000 and what has happened to those marketing plans after that date?

2634 MR. BEARD: I am not trying to avoid the question, but I do just want to make a point that the MDU business that we have set up in Montreal is still pretty much in its infancy. Our first subscriber materialized about 20 months ago. So, to talk about snapshots in time can give a bit of a disproportionate sense of what is happening or where we might be going.

2635 I just wanted to be clear that if we are talking about numbers which today might seen quite small, previously those numbers were zero and they are building up and they would continue to build up and we are looking to the future of the impact of that as well.

2636 In terms of our marketing costs and sales costs, we would be spending approximately $130 to $140 marketing and sales costs per gross subscriber in the area.

2637 MR. McCALLUM: Can you explain that, please?

2638 MR. BEARD: Yes. VDN touched on this earlier on. There is a natural tendency for people to move out in MDUs, perhaps higher the SFUs, and that is what we call "churn". We find our churn to be in the order of 50 or 60 per cent of our database churns on an annual basis. Who we connect in a month less who we disconnect in a month gives us a net subscriber number.

2639 So we are basically paying sales and marketing on a gross subscriber basis rather than a net subscriber basis because for everybody who connects we still pay a sales and marketing fee.

2640 MR. McCALLUM: Did Bell ExpressVu have any marketing campaigns going on in, let's say, December 2001, January 2002 and the beginning of February 2002?

2641 MR. BEARD: All the time we have various marketing campaigns, some of them targeted, some of them broad brush.

2642 MR. McCALLUM: So, what ballpark figure would have been the monthly campaign amount spent in those months?

2643 MR. BEARD: Let's say in the month of February or January I can give you a pretty good estimate.

2644 We would have signed up in January, approximately 380 to 400 gross subscribers, each one of those costing, depending on how many took which particular package, anywhere between $120 to $140.

2645 MR. McCALLUM: Those are the marketing expenses related to the sign-up of those clients?

2646 MR. BEARD: Sales and marketing which is made up of the sales commission fee as well as the discount that we offer to a customer to take the service.

2647 MR. McCALLUM: Were there any marketing plans for the months of February, March or April? If there were, how are they affected by the CQMI transactions?

2648 MR. BEARD: We had some telemarketing plans in place that were in fact absolutely on the go at the time that this all happened that we had to cease.

2649 The marketing campaigns that we have, we have to be fairly nimble with them and we don't plan three months out for those. We generally handle that within the broad-brush marketing approach. If we find, for example, that we are losing -- there is too much churn in a particular area, we might address that by changing the marketing plan, but that is something that we can do very much on the fly and implement in a short space of time.

2650 But we would always have marketing plans and marketing efforts on the go. That includes going into buildings, putting up a kiosk in the foyer, talking to people as they walk through; telemarketing, as I said; mail drops. All that sort of activity is ongoing.

2651 MR. McCALLUM: What would have been roughly the size of the marketing plan that you would have had for, say, March 2000 that, according to you, had to be cancelled then?

2652 MR. BEARD: Are you looking for a dollar number?

2653 MR. McCALLUM: Ballpark.

2654 MR. BEARD: I would have to look at some detail to get a close enough number there in my mind.

2655 MR. FRANK: Could we get back to you on that within 24 hours?

2656 MR. McCALLUM: If you could get back to us. Obviously serve a copy on Vidéotron of that.

2657 MR. FRANK: Certainly.

2658 I think it bears repeating -- the point was raised yesterday -- 30 to 33 per cent of Canadians live in MDUs and this is the next big battleground for competition between the new entrants and the cable industry.

2659 THE COURT REPORTER: Excuse me. We have no power.

--- Technical difficulties / Difficultés techniques

2660 MR. BEARD:  -- inroads in these apartment buildings. So, penetration of MDUs is very much in our business mind and in our business plans and will, I think, dictate to a large extent, in the fullness of time, whether we are successful or not.

2661 MR. McCALLUM: I assume the Bell ExpressVu received an invoice from Câblage QMI in March 2002?

2662 MR. ARMSTRONG: We have received two invoices, if I am not mistaken, to date from Câblage QMI. Their one employee has been very busy typing.

2663 We have one the first of March and just the other day I received another one for the first of April.

2664 MR. McCALLUM: Could you file copies of those for the record, please?

2665 MR. ARMSTRONG: I would be pleased to.

2666 MR. McCALLUM: Did you respond in writing to the letter?

2667 MR. ARMSTRONG: We haven't responded to the request for billing. There is a lot of -- well, no we have not.

2668 MR. McCALLUM: I take it, from both the answers that were given yesterday and from what VDN said, that a lawsuit has now been taken to recover the amount of that invoice. Is that correct?

2669 MR. ARMSTRONG: That is correct. We received notification just the other day.

2670 MR. McCALLUM: I think in Mr. Elder's remarks at paragraph 19 Mr. Elder suggested that the Commission should, immediately following the issuance of a mandatory order, file the order with the Federal Court of Canada. I wish to have clarification as to why that suggestion is made.

2671 MR. ELDER: I guess our concern would be that looking at the behaviour thus far of Vidéotron/CQMI, and the attitude shown to the Commission in the process, I guess we are not completely faithful that even if a mandatory order is issued it would be immediately obeyed or complied with.

2672 As I think we have been trying to point out, and VDN has been pointing out and I'm sure Look will point out as well, time is of the essence here. We are shut out of this market and I guess we would prefer to have that in place anyway and not have to come back and go through some additional process to have that registered as an order of the Court.

2673 If it is Vidéotron's intention to comply with the mandatory order that the Commission issues, I don't see that there is a down side to them that it is also sitting with the Federal Court. But having it done immediately I think would give us that added element of speed if we wanted to move forward and try to enforce things through that forum.

2674 MR. McCALLUM: Has there been any impact on Bell ExpressVu's operations as a result of these transfers of inside wire that occurred on the 8th of February?

2675 MR. BEARD: Given the impact is Quebec only, I wonder if -- for example, VDN said that it has had layoffs. Have you suffered a similar situation?

2676 MR. BEARD: We have not laid off any of the people that we have in our offices in Quebec. We have five agents or subcontractors who work for us who are today pretty concerned about the situation. A number of them are mostly dependent on business from us and the situation is not going to be able to stay like it is for too long before they are going to have to go and find income from some other sources, because while they are sitting around doing nothing they are just not getting paid.

2677 MR. McCALLUM: If Bell ExpressVu had known that the inside wire would be available for purchase, would Bell ExpressVu have had an interest in purchasing the inside wire?

2678 MR. BEARD: Financially it looks like a wonderful deal, but typically in purchasing some sort of a -- let's call it a going concern, a fair amount of due diligence would take place. We would find, I think, that since this issue is with the CRTC at the time for that particular going concern, we would be very concerned about its future viability so wouldn't have bid on it knowing that there is doubt in the market as to the ongoing definition of where jurisdiction and ownership lies.

2679 MR. FRANK: Just to be clear, we have participated in all of the proceedings involved in inside wire and have faith in the process and trust in the regulations and in the law and we are hoping that in very short order this facility will be made available to us so we can get on with business.

2680 MR. McCALLUM: Thank you very much.

2681 I think that concludes my questions, Madam Chair.

2682 MR. ARMSTRONG: Could I just return to the matter of the billing statements, just for further clarification.

2683 I would be remiss if I didn't point out that one of the problems we have with the billing statements is that they have a very high inaccuracy rate or high error rate, if you will. Approximately 40 per cent of the buildings identified on the bill, we don't even have contracts with that building owner. So we would have to go through each of the list in the multiple pages of the exact suites. We haven't done a complete audit of them, but our view is they are highly inaccurate.

2684 You asked VDN a question -- you asked, I believe it was Quebecor a question yesterday, the panel, regarding whether or not they had billed for the $100 fine and the $35. Our invoice of April 1 you will see indicates that they have invoiced us for some of that.

2685 MR. McCALLUM: Thank you.

2686 MR. FRANK: Just before we step down, Madam Chair, yesterday Quebecor took a number of undertakings and indicated that there would be a number of confidentiality requests which may be accompanied with abridged evidence. Could we request, please, that in light of the relatively small number of participants in this proceeding, the applicant serve us, as well as the other parties to the proceeding, with all of those documents?

2687 THE CHAIRPERSON: Yes, Mr. Frank.

2688 MR. McCALLUM: Yes, we would ask that they serve the request for confidentiality and an abridged version of any documents on the three complainants that are appearing before the Commission.

2689 MR. FRANK: And the undertakings, would we receive copies of those as well?

2690 MR. McCALLUM: We would request that they serve copies of the responses to the undertakings on the parties as well.

2691 MR. FRANK: Thank you very much.

2692 THE CHAIRPERSON: My understanding is an opportunity will be given for comments on the material received.

2693 MR. McCALLUM: Would you be wanting to have an opportunity to comment on those materials, realizing that obviously that is the case we will have to set out a process for that.

2694 MR. FRANK: Speed is of the essence here. We wouldn't want to contradict ourselves.

2695 THE CHAIRPERSON: We will give you a short time.

2696 MR. ELDER: I guess it depends on what we get. I think depending on the material that is submitted we may want an opportunity, but certainly we could comment quickly.

2697 MR. McCALLUM: If you do wish to comment, you would have to sort of request that almost immediately and suggest a process and a suggested timeframe for the process.

2698 MR. ELDER: Which we would do at that time I would think, Mr. McCallum. Thanks.

2699 THE CHAIRPERSON: Thank you very much.

2700 MR. FRANK: Thank you.

2701 THE CHAIRPERSON: It will probably provide a better opportunity to change panels if we took a 10-minute break. We will be back in 10 minutes.

2702 Nous reprendrons dans dix minutes.

--- Upon recessing at 1122 / Suspension à 1122

--- Reprise à 1136 \ Upon resuming at 1136

2703 LA PRÉSIDENTE: Â l'ordre.

--- Difficultés techniques / difficultés techniques

--- Suspension à 1140 / Recess at 1140

--- Reprise à 1145 / Resumed at 1145

2704 LE SECRÉTAIRE: Nous entendrons, monsieur Paul Lamontagne, de Bell ExpressVu Ltée.

2705 LA PRÉSIDENTE: Nous avons le service maintenant, alors, allez-y!

2706 M. LAMONTAGNE: Madame la présidente, madame la conseillère, monsieur le conseiller. Mon nom est Paul Lamontagne, je suis président et chef de la direction de Look Communications. Je suis accompagné, aujourd'hui, de mon collègue, Stéphane Lemay, notre vice-président, Affaires juridiques et corporatives.

2707 J'aimerais, en tout premier lieu, vous remercier, vous, la Commission, de l'action rapide dans ce dossier, ainsi que de votre invitation à témoigner devant vous aujourd'hui.

2708 Le secteur de la télédistribution au Québec est en crise suite aux actions anti-

compétitives et prédatrices de Vidéotron et de son actionnaire principal Quebecor, qui tentent d'instituer, à nouveau, un monopole dans le marché

des Immeubles à logements multiples ou  ILM .

2709 La conduite de Vidéotron et de Québécor, dans le présent dossier, est tout à

fait abusive et défie tout entendement. Ainsi, on a créé une coquille -- ou compagnie tablette, si vous le voulez -- appelée Câblage QMI, qui est une filiale de Quebecor et une compagnie affiliée à Vidéotron, dans l'unique but de soustraire Vidéotron à ses obligations réglementaires relative au câblage intérieur des ILM. L'objectif ultime de cette machination -- pour le moins évidente -- est de conférer un avantage indu à Vidéotron à l'égard de ses compétiteurs et de tenter de facturer des prix exorbitants et abusifs à la compétition pour l'accès au câblage intérieur.

2710 Vidéotron et Quebecor tentent ainsi d'éliminer la concurrence dans le marché de la télédistribution et, par conséquent de priver les consommateurs de la possibilité d'avoir accès au fournisseur de services de leur choix.

2711 Dès lors, c'est l'ensemble du cadre compétitif qui a été mis en place et encouragé par le CRTC, qui est en péril à l'heure actuelle.

2712 Un mot, si vous me le permettez, madame la présidente, sur les activités courantes de Look.

2713 Depuis décembre 2000, vous savez que Look a procédé à une restructuration majeure de ses opérations. Nous avons considérablement réduit nos effectifs, amélioré notre structure de coûts et augmenté notre productivité.

2714 Notre nouvelle stratégie d'affaire est maintenant plus clairement ciblée, puisque nous déployons une stratégie de niche dans les segments de marché où nous avons déjà pris pied, et qui représentent de solides opportunités de croissance, dont le marché des ILM, qui est tout à fait stratégique pour Look.

Nous avons d'ailleurs investi des sommes très importantes dans ce secteur. L'équipement de Look est notamment installé dans plus de 5 000 ILM comprenant plus de 200 000 logements.

2715 Aujourd'hui, malgré une période de plus de 15 mois sans activité de ventes ou de marketing, Look compte quand même presque 60 000 abonnés à son service de télédistribution numérique.

2716 Depuis le 11 février dernier, la date de la fin de notre période de restructuration, Look est passée dans un mode offensif en: ajoutant des nouvelles chaînes numériques, en investissant des sommes importantes dans notre réseau et en relançant nos activités de ventes et marketing, en particulier dans les ILM.

2717 Depuis le début de toute cette affaire, qui a commencé -- encore une fois sûrement par simple coïncidence -- le jour même où nous relancions nos activités dans les ILM au Québec, soit le 12 février dernier, Look a transmis et continue de transmettre à Vidéotron l'avis de 24 heures prévu à la réglementation, de façon à aviser Vidéotron des installations qui seront faites par Look.

2718 Â ce jour, Look a été empêché par Vidéotron de procéder à l'installation de plus d'une vingtaine de clients, compte tenu de la présence de cadenas empêchant l'accès aux cabinets de service...

--- Difficultés techniques / Technical difficulties

2719 LA PRÉSIDENTE: Alors, nous reprenons. Apparemment, la connexion a été changée. Alors, nous espérons que tout va bien aller! Nous sommes désolés!

2720 Allez-y.

2721 M. LAMONTAGNE: Merci, madame la présidente, madame la conseillère, monsieur le conseiller.

2722 Si vous me permettez, je vais juste reprendre au début du paragraphe de la page en question parce que c'est le point terriblement important.

2723 LA PRÉSIDENTE: Oui, allez-y! Un moment s'il vous plaît.

2724 Madame, vous avez tout, jusqu'à maintenant?


2726 LA PRÉSIDENTE: Oui, il n'y pas de problème. Allez-y.

2727 M. LAMONTAGNE: Alors, à ce jour, je vous disais, madame la présidente, que Look a été empêchée par Vidéotron de procéder à l'installation de plus d'une vingtaine de nos clients, compte tenu de la présence de cadenas empêchant l'accès aux cabinets de service qui ont été récemment installés par Vidéotron dans plusieurs ILM.

2728 Vidéotron nous force maintenant à nous adresser à QMI pour obtenir l'accès. La vingtaine de clients que nous n'avons pu brancher à notre réseau se sont par conséquent retrouvés sans service et pris en otage par Vidéotron, et sont fort mécontents de cette situation.

2729 De plus en plus, Vidéotron nous limite l'accès au câblage intérieur des ILM par la mise en place de nouveaux cadenas. On peut facilement comprendre que la situation ira en s'aggravant si le CRTC n'intervient pas rapidement pour forcer Vidéotron à se conformer à ses, obligations.

2730 Les agissements de Vidéotron et de Quebecor, au cours des derniers mois, démontrent par ailleurs un profond mépris des consommateurs, du CRTC et de Look.

2731 J'ai pensé qu'il était important que je vous fasse part de certains incidents qui sont survenus depuis le 12 février dernier, qui illustrent très bien à quel point Vidéotron, et ses compagnies affiliées, prennent tous les moyens pour intimider leurs compétiteurs et leurs clients, et qui sont représentatifs du genre de situations auxquelles on fait face dans le quotidien.

2732 Premier incident: Le 2 avril dernier. Nous apprenions qu'une plainte avait été déposée par Vidéotron auprès du Service de poIice de Longueuil contre un employé d'un sous-traitant de Look chargé de nos installations techniques pour nos abonnés.

2733 Cette plainte, de Vidéotron, visait une installation complétée le 15 février à Longueuil, Vidéotron alléguant que l'employé en question s'était illégalement approprié le câblage intérieur d'un ILM.

2734 Suite à cette plainte, le service de police a convoqué le technicien qui avait procédé à l'installation à une rencontre qui a eu lieu, effectivement, le 28 mars dernier.

2735 Cela a évidemment eu pour effet important d'intimider ce technicien et son employeur.

2736 Nous avons par la suite de ces événements, communiqué avec le détective en question, responsable du dossier, pour lui expliquer la situation, et nous lui avons subséquemment fait suivre des documents décrivant la nature du problème. Le fait que ce dossier faisait l'objet d'une audience publique devant le CRTC et l'utilisation abusive par Vidéotron des forces de l'ordre, pour tenter d'en arriver à ses fins.

2737 Nous avons eu confirmation, le 18 avril dernier, que le Service de police de Longueuil avait mis fin à son enquête et fermait le dossier.

2738 Deuxième incident: Le 22 mars dernier, nous avons été informés que Vidéotron avait

illégalement, sans préavis et sans autorisation, coupé des fils reliant son cabinet à celui de Look, ce qui provoqua ainsi une interruption complète de service auprès d'abonnés de Look domiciliés sur le boulevard de Maisonneuve Ouest, à Montréal.

2739 Nous avons alors immédiatement mandaté nos procureurs externes pour mettre Vidéotron en demeure de cesser de telles pratiques et de nous permettre de procéder à la remise en service de nos abonnés.

2740 Le jour ouvrable suivant, et suite à la réception de cette lettre de nos procureurs par Vidéotron, un de nos techniciens recevait un appel d'un représentant de Vidéotron l'informant que Look pourrait avoir de nouveau accès au câblage intérieur pour nous permettre de procéder à la remise en service de nos clients.

2741 Malheureusement, nous avons perdu un de ces clients qui n'a pas toléré la situation et n'a pas voulu attendre que le dossier se règle.

2742 Malgré que Vidéotron nous ait laissé l'accès requis pour procéder à la remise en service de nos clients suite à la lettre de nos procureurs, Vidéotron niait subséquemment la véracité des allégations faites par nos procureurs dans leur lettre du 22 mars.

2743 Troisième incident: Le 9 avril dernier, les concierges et l'administratrice d'un ILM situé au boulevard Gouin, à Pierrefonds, nous informaient que trois représentants de Vidéotron s'étaient présentés à l'immeuble en question en indiquant qu'ils voulaient avoir accès au toit et au cabinet de service afin de procéder au débranchement des 46 abonnés de Look.

2744 Ils ont alors allégué que Vidéotron avait précédemment obtenu une injonction leur permettant apparemment de procéder à ces débranchements.

2745 L'administratrice de l'immeuble a ensuite demandé aux employés de Vidéotron de lui montrer les documents d'injonction, mais ces derniers ont alors indiqué qu'ils ne les avaient pas en leur possession.

2746 Elle a alors refusé l'accès, mais les représentants de Vidéotron ont insisté en indiquant qu'ils seraient de retour le lendemain avec des  gens de sécurité .

2747 L'administratrice a alors informé les employés de Vidéotron qu'elle ne permettrait aucun accès à l'immeuble si les documents d'injonction ne lui étaient pas montrés et si un huissier n'était pas présent au même moment.

2748 Le lendemain, un agent de sécurité de Vidéotron s'est rendu sur place, mais tout accès lui a été refusé compte tenu du fait qu'il n'avait en sa possession aucun document d'injonction.

2749 Vous comprendrez donc qu'il s'agissait d'une astuce maladroite de Vidéotron, et qu'aucune injonction n'avait été obtenue contre Look. Bien que Vidéotron et ses procureurs nient maintenant ces faits, nous sommes en mesure de démontrer à la Commission, qu'ils se sont bel et bien produits.

2750 Quatrième et, dernier incident que j'aimerais soulever.

2751 Nous avons reçu signification -- comme les deux présentations précédentes, vendredi dernier -- d'une action intentée par Câblage QMI contre Look, en Cour supérieure de Montréal, en vertu de laquelle QMI réclame de Look des montants reliés à son utilisation du câblage intérieur dans les ILM et une ordonnance de la Cour pour forcer Look à signer la convention de concession du droit d'utilisation du câblage intérieur.

2752 QMI demande ainsi à la Cour d'ordonner à Look de ne pas utiliser le câblage intérieur que QMI prétend posséder ou d'enjoindre Look de débrancher tous ses clients.

2753 En conclusion, la situation est très sérieuse, à la fois pour Look, le CRTC, l'industrie de la télédistribution et les consommateurs.

2754 Look demande, par conséquent, une intervention urgente du CRTC afin qu'il émette une ordonnance exécutoire pour forcer Vidéotron à se conformer à ses obligations réglementaires afin de permettre l'accès au câblage intérieur des ILM de 20 logements et plus et ce, à un prix juste et raisonnable.

2755 Madame la présidente, madame la conseillère et monsieur le conseiller, je vous remercie encore une fois de votre invitation et de votre attention.

2756 J'espère que nous pourrons mettre fin à cette mascarade dans les plus brefs délais, afin d'offrir à nouveau aux consommateurs la possibilité d'avoir accès au fournisseur de services de leur choix.

2757 En terminant, madame la présidente, nous avons des documents à l'appui de nos prétentions, y inclus une lettre de cette administratrice courageuse qui a tenu tête à Vidéotron... que nous voudrions déposer auprès de votre secrétaire, pour le dossier public, si vous n'y voyez, évidemment, aucun inconvénient.

2758 Je vous remercie et nous sommes disposé à répondre à vos questions.

2759 LA PRÉSIDENTE: Monsieur le conseiller juridique.

2760 Me McCALLUM: Donc, vous avez copie des documents. Est-ce que vous avez une autre copie pour signifier aux représentants de Vidéotron?

2761 M. LEMAY: Nous avons, effectivement, plusieurs copies que nous pourrons remettre, à la fois au secrétaire et à Vidéotron.

2762 Me McCALLUM: Et, ceci se rapporte à ce que vous avez mentionné à la page 7 de votre intervention?

2763 M. LEMAY: En fait, il y a un document qui concerne l'incident pour le débranchement des 46 abonnés qui est en fait une lettre de l'administratrice confirmant que l'incidence s'est produite, dans un premier temps.

2764 Dans un deuxième temps, nous avons une dizaine de document qui ne sont pas au dossier public mais qui sont à la connaissance, à la fois, de QMI, de Vidéotron, de Quebecor et la Commission.

2765 Alors, nous voulions simplement formaliser le dépôt de ces documents-là, aujourd'hui, en remettant des copies donc au CRTC.

2766 Me McCALLUM: Je n'ai pas saisi de quoi il s'agit, dans cette liasse de documents!

2767 M. LEMAY: Est-ce que vous voulez que je vous donne la liste? Ce sont en fait soit, des lettres provenants de QMI et nos réponses ou, des lettres de nos procureurs et, également l'action qui a été intentée vendredi dernier par QMI contre Look.

2768 Donc, il n'y a pas de surprise dans ces documents seulement, nous voulions s'assurer qu'ils soient bel et bien au dossier public.

2769 Me McCALLUM: Donc, dans la liasse de document, vous dites que tout est à la connaissance de QMI ou de Vidéotron?

2770 M. LEMAY: Tout à fait.

2771 Me McCALLUM: Ou Quebecor, en effet?

2772 M. LEMAY: Tout à fait.

2773 Me McCALLUM: Donc, il n'a rien qui vient par surprise, dans la liasse?

2774 M. LEMAY: Non. Je peux vous le confirmer.

2775 Me McCALLUM: La seule chose qu'ils n'auraient pas jusqu'à date c'est la lettre de la concierge?

2776 M. LEMAY: Tout à fait, de l'administratrice de l'immeuble en question.

2777 Me McCALLUM: Et ça, c'est pour appuyer ce que vous dites à la page 6 et 7 de votre intervention écrite?

2778 M. LEMAY: Effectivement.

2779 Me McCALLUM: Et, vous avez des copies de ça pour les représentants de Vidéotron?

2780 M. LEMAY: Tout à fait.

2781 Me McCALLUM: Donc, avec la permission du panel, on permettra le dépôt de ces documents, évidemment une copie laissée à Vidéotron pour qu'ils puissent prendre connaissance et répondre à ça en temps et lieu.

PIÈCE No LOOK-1: Diverses lettres (en liasse)

2782 Me McCALLUM: Est-ce que vous pouvez décrire ce qu'était un branchement dans le territoire de Vidéotron avant les transactions du 8 février de cette année?

2783 M. LAMONTAGNE: Maître McCallum, nous avons eu plusieurs régime ou plusieurs mode opérationnel avec Vidéotron au Québec depuis l'inception de notre service. Je me permets de passer un petit peu au travers, pour les conseillers, cet historique.

2784 Au début du lancement de notre service, Vidéotron insistait à ce qu'un de leurs techniciens se présente sur le site pour débrancher un abonné de Vidéotron lorsqu'il passait de Vidéotron à Look.

2785 Évidemment, ce n'était pas un système extrêmement efficace, qui nécessitait à ce moment-là, une certaine coordination entre le technicien de Vidéotron qui faisait le débranchement et un technicien de Look, qui était là pour faire le branchement.

2786 Me McCALLUM: On parle de quelle période, cette période initiale?

2787 M. LAMONTAGNE: C'est au début du lancement des services de Look, qui s'est effectuée au début des années 1999.

2788 Peu après, j'estime en voyant la complexité de ce modus opérationnel, l'équipe technique de Vidéotron a permis à Look d'utiliser ses clefs pour ouvrir les boîtiers de Vidéotron qui étaient, justement, barrés.

2789 En contrepartie, nous avons toujours considéré que pour faciliter un mode opérationnel d'un client de Look -- qui irait chez, soit le câblodistributeur ou un autre concurrent -- qu'on laisserait notre boîtier ouvert. Donc, il est fermé mais un autre technicien d'une autre entreprise peut y avoir accès.

2790 Peu après la période de restructuration de Look Communication -- dont je mentionnais dans ma présentation -- c'est-à-dire l'automne de l'an 2001, Vidéotron a voulu retourner à l'ancien régime, c'est-à-dire un de leurs techniciens pour effectuer le débranchement et par la suite, une visite d'un de nos techniciens pour effectuer le branchement à Look.

2791 Dans ce cas-ci, dans cette instance, nous avons permis à Vidéotron -- dans le cas d'un passage relativement exceptionnel comme vous pouvez vous imaginer, de Look à Vidéotron -- que Vidéotron pourrait avoir accès à notre cabinet.

2792 Depuis le 12 février, répondant spécifiquement à votre question, le client -- nous procédons encore une fois à l'envoi de la notification de 24 heures à l'avance à Vidéotron pour signifier le débranchement d'un client de Vidéotron et son passage chez Look -- le fil est déconnecté par un technicien de Vidéotron mais est laissé à l'extérieur du cabinet.

2793 Je pense qu'on vous expliquait que l'ancien régime c'était le fil pendait à l'extérieur. Depuis le 12 février, l'abonné est déconnecté mais le fil demeure à l'intérieur du cabinet de Vidéotron. Alors, lorsque le technicien de Look se présente dans la mesure qu'on peut connecter ou brancher cet abonné, on essaie de le faire pour ne pas qu'il soit sans service, évidemment.

2794 Dans certains cas, les cabinets sont carrément ouverts. Alors, très facile. Dans certains cas, à ce moment-là, nous avons toujours l'usage des clefs, encore une fois, aucun problème.

2795 Mais, de plus en plus, on constate sur le terrain, une campagne de la part de Vidéotron de cadenasser, justement, l'équipement qui nous empêche de pouvoir brancher les clients et qui résulte -- comme j'ai expliqué dans ma présentation -- dans, de plus en plus d'abonnés qui sont sans services parce qu'ils sont déconnectés de Vidéotron et nous avons aucun moyen de pouvoir les brancher à notre réseau.

2796 Me McCALLUM: Est-ce que vous savez à peu près combien de nouveaux abonnés vous avez pu brancher depuis le 8 février?

2797 M. LAMONTAGNE: Maître McCallum, la situation évolue, comme vous pouvez vous l'imaginer, à une rapidité extraordinaire. Je peux vous dire, les premières semaines, on réussissait à brancher une très forte majorité des nouveaux abonnés qu'on avait.

2798 Mais, de plus en plus, on nous limite l'accès. Dans les dernières semaines, de plus en plus, nous recevons message de nos équipes techniques qui n'ont plus accès à tel ou tel immeuble.

2799 J'ai le bénéfice, évidemment, de passer en troisième. Donc, j'ai voulu être bien préparé pour répondre aux questions de cette Commission et j'ai placé un appel à notre équipe technique, pour leur demander: Â votre avis, aujourd'hui -- parce que je n'ai pas un éventail détaillé -- quel est le pourcentage de ILM dans lequel nous avons un équipement Look auquel on n'aurait plus accès? Parce que ça affecte, évidemment, notre capacité de brancher un client et ça affecte, évidemment, la gestion de déception.

2800 Il va sans dire que si on sait qu'il y a un cadenas, à l'heure qu'on se parle, on n'est pas en mesure d'aller faire une mise en marché et, d'être obligé de gérer une déception, de dire à un client:  Venez chez Look, voici l'offre de service.  et ne pas pouvoir les brancher en fin de journée ou, le lendemain.

2801 L'équipe technique m'a répondu, qu'à leur avis, à peu près 50 p. cent des ILM -- dans lequel Look a son infrastructure, son réseau disponible au client -- ne sont plus disponibles à cause de la présence de ces cadenas.

2802 Me McCALLUM: Et, selon vous, l'autre 50 p. cent diminue de jour à jour lorsqu'il ajoute les nouveaux cadenas?

2803 M. LAMONTAGNE: Effectivement. Il ne sans dire qu'on met la puce à l'oreille en envoyant le fax parce qu'on maintient notre obligation réglementaire, de notifier -- il va sans dire, notre concurrent -- à chaque fois qu'on débranche un abonné.

2804 Donc, si on a un très haut taux de succès, évidemment, ça permet à notre concurrent de pouvoir déterminer potentiellement où il va cadenasser son équipement.

2805 Me McCALLUM: Avez-vous une idée générale combien d'abonnés vous avez pu brancher dans la première semaine que vous avez mentionné tout à l'heure et, combien par la suite?

2806 M. LAMONTAGNE: Je vous dirais que depuis le 12 février, je pense qu'il serait raisonnable de dire qu'on a réussit à brancher, environ, 500 nouveaux abonnés dans les ILM dans la région Est, c'est-à-dire le Québec et la région de la Capitale nationale.

2807 À peu près 500. Et, je vous dirais qu'on a eu beaucoup plus de succès en terme quantitatif au début de la période et beaucoup moins, aujourd'hui.

2808 Comme je vous expliquais, avec la présence de plus en plus de cadenas, je dois réduire mes effectifs de vente et cibler les immeubles, les édifices qui nous sont toujours ouverts.

2809 Donc, le parc d'immeubles dans lequel on peut commercialiser nos services est réduit de semaine en semaine avec ces activités agressives de Vidéotron.

2810 Me McCALLUM: Le 500 dont vous parlez, c'est un chiffre global. Ça inclus tous les ILM dans tout le Québec ou tous les ILM de plus de 20 résidences?

2811 M. LAMONTAGNE: Maître McCallum, nous ne faisons pas strictement la distinction de 20 logements ou plus parce qu'il y a une particularité au Québec. Le marché du Québec étant un câblodistributeur par voix SDM au Québec et en Ontario, on voit la réalité des deux marchés. Je pense que les conseillers savent, connaissent l'aspect démographique qu'il y a, en général, des ILM de très forte taille, en plus forte quantité en Ontario qu'au Québec.

2812 On a, au Québec, le phénomène de quatre et douze logements, qu'on considère, nous aussi, étant un ILM ou un mini ILM. Donc, les chiffres que je vous donne, sont des chiffres qui incluent et les ILM et les mini ILM.

2813 LA PRÉSIDENTE: Excusez-moi, ces chiffres incluent aussi les immeubles qui sont dans le territoire en Ontario ou, vous ne parlez que du territoire québécois que vous desservez? Je crois que c'est sous la même licence.

2814 M. LAMONTAGNE: Les chiffres que je vous donne sont des chiffres pour le Québec, pour la région est qui représente la licence que vous nous avez accordée pour le Québec, plus la région de la Capitale nationale.

2815 Donc, encore une fois, je ne suis pas capable de faire la distinction pour les appartements qui seraient dans le territoire ontarien.

2816 LA PRÉSIDENTE: Avez-vous une idée du ratio? Parce qu'il ne s'agirait que de la région ici, parce que vous avez une autre licence à côté d'ici, en allant vers l'Est de l'Ontario.

2817 M. LAMONTAGNE: Je pense que, madame la présidente, je n'aurais pas tort si je vous disais que dans les chiffres, qu'on peut compter que 90 p. cent serait sur le territoire strictement québécois.

2818 Et, je n'aurais pas tort non plus, à vous dire que dans l'interprétation des chiffres ILM, que 85 p. cent de ces chiffres-là serait, justement, les logements de 20 et plus.

2819 D'ailleurs, je peux attirer votre attention, madame la présidente, madame les conseillères et monsieur les conseillers, monsieur McCallum à notre lettre du 26 février 2002, à la page 485 du document public où, Stéphane tente de vous donner, en date du 30 septembre -- c'est-à-dire à la fin de notre troisième trimestre -- donc, au moment où Stéphane vous écrivait cette lettre, en réponse à des questions, c'étaient des chiffres qu'on avait, publics, qui donnent à la réponse 2 et, je vais lire:

 Of the 74,000 digital television subscribers that Look has as of the 30th of September, 2001, approximately 25,000 subscribers resided in Multiple Dwelling Units. Of these 25,000, approximately 22,000 subscribers resided in Multiple Dwelling Units with more than 20 subscribers. 

2820 Donc, j'applique dans les chiffres, à peu près le ratio de 85 p. cent qui semble être le chiffre que Stéphane utilisait à l'époque.

2821 Encore une fois...

2822 LA PRÉSIDENTE: Le 85 p. cent, ce serait des immeubles qui sont dans le territoire de Vidéotron?

2823 M. LAMONTAGNE: C'est-à-dire que peut-être -- ce que je pourrais, pour faciliter les chiffres, revenir pour les fins maintenant, que j'ai les chiffres du dernier trimestre, c'est-à-dire du quatrième trimestre de 2001, peut-être revenir sur ces chiffres pour les mettre dans le domaine public et de tenter d'extrapoler les chiffres purement québécois.

2824 LA PRÉSIDENTE: Votre plainte ne s'adresse qu'au territoire de Vidéotron?

2825 M. LAMONTAGNE: Absolument.

2826 Alors, si je recommencais à la réponse 1, à l'époque, Stéphane avait indiqué qu'on avait 74,000 abonnés numériques en Ontario et au Québec.

2827 Aujourd'hui, ce chiffre, à la fin de l'année 2001, se situe aux environs de 60,000.

2828 De ce 60,000, Stéphane a répondu qu'approximativement 25,000, à l'époque, seraient dans des ILM.

2829 Encore une fois, c'est plus 20,000, à ce moment-là. Si j'applique le même ratio de 85 p. cent, se seraient des ILM de 20 unités ou plus, à ce moment-là, on tombe à 17,000 en question.

2830 Et, compte tenu du fait, madame la présidente, comme vous le savez, que la licence de Look en Ontario a été accordé légèrement avant la licence de Look sur le territoire du Québec -- à peu près une année entre neuf mois, le lancement des deux et, compte tenu de l'aspect démographique de la présence de plus d'ILM dans la marché ontarien qu'au Québec -- je vous dirais qu'à peu près 40 p. cent de nos abonnés -- que le ratio qu'on pourrait appliquer au 17,000, serait à peu près 40 p. cent.

2831 Alors, 40 p. cent du 17,000, serait le nombre d'abonnés de Look sur le territoire du Québec.

2832 Me McCALLUM: Et, même de ce 40 p. cent, est-ce qu'il y a un pourcentage dans les territoires, autre que les territoires de Vidéotron, d'autres titulaires par exemple, COGECO?

2833 M. LAMONTAGNE: Effectivement, maître McCallum, il y a d'autres marchés, il y a des marchés dans lequel nous opérons où le câblodistributeur n'est pas Vidéotron et effectivement, COGECO, par exemple.

2834 Je vous dirais, cependant, que la très forte majorité des ILM, dans lequel Look a une infrastructure et des clients se trouvent dans les marchés comme Montréal, marché comme Québec où Vidéotron est notre concurrent.

2835 Mais, je n'ai pas les chiffres aujourd'hui, avec moi et, je ne sais pas si je pourrais vous donner le détail que vous nécessitez sur les autres marchés.

2836 Encore une fois, on est une jeune entreprise, qui a passé au travers d'une période difficile au cours des derniers mois et, nous traitons avec une nouvelle base de données.

2837 Il y a eu des transferts d'une base de données à une autre. Alors, évidemment, j'essaie de vous donner les meilleurs chiffres possible, pour les fins de cette enquête.

2838 Je ne pense pas que je pourrais vous en donner des certitudes plus que je vous donne aujourd'hui, maître McCallum.

2839 Me McCALLUM: Est-ce que le panel désire prendre une pause tout de suite ou, est-ce que le panel désire continuer avec mes questions, pour quelques minutes?

2840 THE CHAIRPERSON: We will take a ten minute break. It may be wiser to take a lunch break and, we will complete the questions to Look after lunch, and then, have maybe a 15-20 break before Reply.

2841 Alors, nous reprendrons à 14h00.

2842 We will back at 2:00.

--- Suspension à 1213 / Upon recessing at 1213

--- Reprise à 1401 / Upon resuming at 1401

2843 LA PRÉSIDENTE: Â l'ordre, s'il vous plaît.

2844 Welcome back to the hearing. Bienvenue à tous.

2845 Conseiller juridique.

2846 Me McCALLUM: Merci, madame la présidente.

2847 Vous n'avez rien à ajouter suite à la dernière échange? C'était concernant les chiffres?

2848 M. LAMONTAGNE: Non, maître McCallum.

2849 Me McCALLUM: Est-ce que vous pourriez nous dire, à peu près, combien vaut vos investissements dans les immeubles, dans votre système de distribution dans les immeubles à plus de 20 résidences dans le territoire de Vidéotron, ce que ça représente?

2850 M. LAMONTAGNE: Approximativement, 10 millions de dollars.

2851 Me McCALLUM: Est-ce que vous pouvez juste ventiler ce chiffre un peu pour nous donner une idée de ce que ça représente?

2852 M. LAMONTAGNE: Tout à fait, maître McCallum.

2853 Je diviserais les investissements en trois catégories. La première représenterait l'équipement nécessaire à l'intérieur de ILM, c'est-à-dire l'antenne, le câblage -- évidemment, on a une antenne sur le toit -- donc, le câblage qui relie notre antenne à notre boîtier, le boîtier et tout son équipement, le  patch panel  pour utiliser un anglicisme, amplificateur source d'électricité représenteraient plus que 50 p. cent de ces investissements.

2854 Évidemment, il y a le parc de nos récepteurs numériques. Disons que jusqu'à récemment, les récepteurs numériques de Look Communications étaient à location. Donc, je compte, à ce moment-là, dans ces blocs appartements, les récepteurs numériques chez nos abonnés et, dernièrement, évidemment, le coût d'acquisition, c'est-à-dire le coût de marketing investi pour démarrer nos opérations et d'aller chercher nos premiers clients.

2855 Me McCALLUM: Et, ce chiffre est uniquement pour le territoire de Vidéotron?

2856 M. LAMONTAGNE: Oui.

2857 Me McCALLUM: Est-ce qu'il a eu des incidences de la vente d'actif à Câblage QMI sur les activités de Look? Par exemple, est-ce qu'il y a eu des mises à pied?

2858 M. LAMONTAGNE: Oui, il y a eu des incidents évidemment, extrêmement graves.

2859 Premièrement, mon confrère, Stéphane Lemay, consacre une grande majorité de son temps à traiter tout le papier qui nous est envoyé de la part de QMI.

2860 Et, je vous assure qu'une entreprise jeune, dynamique comme la nôtre, on préférerait utiliser nos meilleures ressources sur l'acquisition de nouveaux clients.

2861 Il va sans dire -- comme je vous expliquais au début -- nous sommes de plus en plus restreints dans le parc d'immeubles duquel nous avons accès, voulant dire que je dois limiter les vendeurs à un certain nombre de bâtisses et, c'est clair que je ne pourrai pas tenir ces gens-là.

2862 Nous utilisons, madame la présidente, un partenaire, qui nous aide justement, dans l'acquisition de clients, sur le terrain. Une entreprise spécialisée, justement, dans la vente et le  marketing  dans les ILM et, l'entente que nous avons avec lui, évidemment, était justement de lui donner accès à notre parc complet.

2863 Nous sommes, aujourd'hui, de plus en plus limité alors, maître McCallum, je suis inquiet de notre capacité de garder ces vendeurs motivés et au travail.

2864 Encore une fois, nous utilisons un sous-traitant, un partenaire pour faire nos installations. Ce partenaire m'a invité à son bureau la semaine dernière pour rencontrer les techniciens.

2865 Je peux vous dire que ce n'est pas une rencontre facile quand les techniciens me demandent quand on pouvoir leur donner plus de travail parce que ces gens-là m'expliquent qu'ils sont payés quand ils travaillent.

2866 Alors, je suis inquiet de notre capacité de garder nos techniciens. Ceux qui ne travaillent pas aujourd'hui, chez ce sous-contractant, en réserve -- qui pourrait endommager, il va sans dire, notre capacité dans le futur. Si on n'a pas des installateurs formés et que je puisse les garder, lorsque vous allez nous aider à résoudre ce problème, ces gens-là ne seront peut-être pas toujours en attente.

2867 Donc, je vais être obligé de passer avec ce sous-traitant dans un mode de recrutement et de formation de nouveaux techniciens.

2868 J'ai tenté, par cette réponse, de vous montrer un petit peu les différentes conséquences à notre organisation. Il va sans dire que nous commençons maintenant, la relance de nos activités.

2869 Et, la relance de nos activités en télédistribution au Québec va passer par notre succès dans le secteur des ILM. Alors, c'est un secteur tout à fait stratégique pour nous. On en a parlé dans notre rapport annuel, j'en parle publiquement. Et donc, si nous n'avons pas accès au secteur des ILM au Québec, c'est certain que ça va nous occasionner un certain retard sur notre plan d'affaire, cette année.

2870 Me McCALLUM: Merci.

2871 Est-ce que vous avez des commentaires sur la question de si les conditions de contrat d'utilisation avec Câblage QMI sont négociables?

2872 M. LAMONTAGNE: Je laisserais peut-être Stéphane répondre à cette question, maître McCallum.

2873 M. LEMAY: En fait, on n'a jamais eu de conversation avec QMI. Nous avons reçu le contrat le 15, nous avons déposé une plainte par la suite, avions déjà le bénéfice d'avoir vu ou d'avoir su que VDN avait déposer une plainte et avons considérer, immédiatement, QMI comme étant une compagnie tablette -- d'ailleurs maître Sasseville l'a dit avant hier -- donc, tout simplement, nous sommes abstenus d'avoir des conversations avec eux sur ce sujet-là.

2874 Me McCALLUM: Si vous avez su que le câblage intérieur était à vendre, qu'aurait été votre réaction?

2875 M. LAMONTAGNE: Est-ce que vous me demandez, maître McCallum, si on se serait porté acquéreur potentiellement du câblage?

2876 Me McCALLUM: Oui.

2877 M. LAMONTAGNE: La réponse est non.

2878 Me McCALLUM: Et, pourquoi pas?

2879 M. LAMONTAGNE: Probablement, la raison la plus facile c'est que l'entreprise, au début du mois de février, sortait de sa période restructuration financière.

2880 Nous avons les ressources financières nécessaires pour relancer les activités de l'entreprise cette année et, c'est là que je veux concentrer les fonds de l'entreprise, justement, à la croissance de notre base d'abonné.

2881 Me McCALLUM: Je n'ai pas saisi!

2882 Est-ce que c'est parce que ce n'est pas un actif stratégique ou, c'est parce que ça aurait été trop dispendieux ou, ce n'est pas une activité sur lequel vous vouliez vous concentrer?

2883 Je ne suis pas sur de quel, c'est le cas.

2884 M. LAMONTAGNE: Laissez-moi vous répondre en vous disant que le câblage intérieur d'un ILM est tout à fait stratégique à notre entreprise parce que c'est ce qui permet de relier notre réseau avec nos abonnés.

2885 Malheureusement, avec les ressources financières que nous avons, on n'aurait pas eu les moyens de participer dans un encan pour la disposition de cet actif.

2886 Évidemment, si on est ici aujourd'hui, c'est pour s'assurer qu'on puisse avoir une utilisation juste et équitable à des prix raisonnables de ce câblage intérieur pour nous permettre, justement, d'amener la compétition dans ce secteur.

2887 Me McCALLUM: Quel serait l'impact sur le plan d'affaire si Look, ou des autres compétiteurs, devrait refaire le câblage intérieur dans tous les immeubles où Câblage QMI est devenu propriétaire du câblage intérieur?

2888 M. LAMONTAGNE: Est-ce que vous me demandez, maître McCallum, que serait l'impact sur mon plan d'affaire si je devais remettre en place une infrastructure similaire dans tous ces ILM ou, si je devais payer cinq dollars par suite, ce qui est proposé dans le contrat de la compagnie tablette?

2889 Me McCALLUM: Peut-être une réponse dans les deux possibilités serait utile.

2890 M. LAMONTAGNE: J'ai pensé à notre réponse, évidemment, parce qu'elle a été posée précédemment aux deux autres.

2891 Je pense que la façon la plus facile de vous répondre c'est que l'objectif de notre entreprise cette année, c'est de maintenir un profit opérationnel. Ce qui est un objectif très important pour une entreprise comme la notre, qui vient de finir une restructuration financière complète.

2892 L'entreprise, l'année dernière en 2001, a rapporté un bénéfice opérationnel de 78,000 $ pour son année 2001. Si on avait à payer cinq dollars par suite, il va sans dire qu'on aurait généré une perte.

2893 L'objectif de l'entreprise est, et doit, demeuré un profit opérationnel. Cinq dollars la porte, enlève la marge qu'on peut générer par abonné.

2894 L'obligation d'être obligé de reconstruire une infrastructure similaire à celle qui existe dans les milliers d'ILM, dans une telle année, occasionnerait, évidemment, des dépenses en capitaux extrêmement importants.

2895 L'entreprise ne serait pas en mesure, à l'heure qu'on se parle, de dupliquer, à court terme, l'infrastructure qui existe par ses propres moyens.

2896 Me McCALLUM: Quand vous dites  des sommes très importantes , est-ce que vous parlez des dizaines de millions ou des centaines de millions?

2897 M. LAMONTAGNE: Vous me posez la question en terme de ce que ça coûterait en terme d'investissement pour rebâtir le réseau?

2898 Ça coûterait plusieurs millions. Malheureusement, maître McCallum, je n'ai pas les chiffres devant moi. D'autres ont suggéré certains chiffres. Je ne suis pas en mesure, aujourd'hui, d'avancer un chiffre.

2899 Me McCALLUM: Je pense que vous avez entendu, tout à l'heure, la discussion sur la méthodologie appropriée pour le transfert de câblage intérieur et, on a eu une discussion sur ce que Câblage QMI et Vidéotron ont fait. Ils ont utilisé la valeur de remplacement dépréciée et, l'autre méthode, c'est le coût historique.

2900 Est-ce que vous avez des commentaires sur la méthodologie appropriée?

2901 M. LAMONTAGNE: Comme vous le savez, cette discussion de méthodologie sur l'évaluation de ces infrastructures et, quel serait le prix demandé à un fournisseur de service, ont faits l'objet, au cours des dernières années, de longues discussions de gens beaucoup plus compétents que Stéphane ou moi.

2902 Je pense que vous le savez, également, maître McCallum, que j'ai été absent du secteur de la télédistribution pendant un certain temps entre le lancement des activités de Look et mon retour à la présidence au mois de septembre.

2903 Et, je n'ai pas participé à ces discussions d'industries et, Stéphane est dans la même situation que moi. Donc, je pense que la réponse la plus facile pour moi, c'est de dire que nous ne sommes pas en mesure de vous répondre à la question.

2904 Ce qui est clair pour moi, c'est qu'on a besoin d'avoir un accès juste et équitable à l'infrastructure pour pouvoir demeurer en affaire et croître notre clientèle.

2905 Nous avons, évidemment, répondu au processus public hier, à la Commission, dans le cadre de la demande de commentaires sur le prix payé par suite, par abonnée et, je peux peut-être demander à Stéphane de commenter à cet effet.

2906 M. LEMAY: Je n'ai pas non plus entré dans l'autre dossier. Effectivement, nous avons déposé hier des commentaires sur l'avis du CRTC et, avons indiqué que nous serions prêt à vivre avec le 0.44 $.

2907 Me McCALLUM: Donc, ça veut dire que vous êtes content avec la méthodologie sous-jacente qui mène à 0.44 $, en effet?

2908 M. LAMONTAGNE: C'est-à-dire, maître McCallum, le temps joue contre nous tous, aujourd'hui.

2909 Ce qui est important, comme certains ont mentionné avant nous, c'est une rapidité d'action puis un règlement de vite démasquer cette mascarade et, de mettre en place un régime avec lequel nous pouvons tous vivre.

2910 Donc, nous avons dit dans notre réponse que, malgré le fait qu'on voudrait toujours payer moins cher que le maximum auquel nous serions payés, à s'assujettir, était 0.44$ l'unité.

2911 Alors, dans la mesure où qu'on peut mettre en place ce régime vite, à ce moment-là, nous cherchons un règlement de ce dossier pour qu'on puisse se concentrer, justement, sur les choses importantes, c'est-à-dire d'amener une vive concurrence et un meilleur service à la clientèle, à nos clients.

2912 Me McCALLUM: Je crois vous avoir vu lire, qu'après que votre plan d'arrangement était approuvé par les créditeurs ou les créanciers, que vous avez commencé à engager les dépenses au chapitre de  marketing?


2914 Me McCALLUM: Donc, quand est-ce que vous avez commencé à faire ces dépenses et où avez-vous dépensé ces argents?

2915 M. LAMONTAGNE: La stratégie de marketing de l'entreprise est une stratégie qui va être extrêmement ciblée cette année. Nous allons identifier clairement les endroits, les instruments que nous allons utiliser justement pour maximiser les dollars en marketing que nous allons dépenser.

2916 En d'autres mots, on va aller dépenser l'argent pour acquérir le client. Dans le secteur des ILM, nous procédons comme d'autres, également, ont indiqué avant moi, par un marketing très ciblé, du porte à porte, l'organisation d'activités, de présentations.

2917 Nous avons, évidemment, un support papier qui explique nos produits et services et la programmation. Alors, si vous me demandez combien nous avons dépensé? Je vous dirais des sommes qui se limitent à certainement que moins de 100,000 $ dans ce secteur, sensiblement moins que 100,000 $.

2918 Me McCALLUM: Donc, ça c'est 100,000 $ entre quand et quand et, est-ce que c'est au Québec, uniquement?

2919 M. LAMONTAGNE: La période serait évidemment qui relate ces procédures, c'est-à-dire après le 12 février qui coïncide, évidemment avec le lendemain de la fin de notre période de réorganisation, je vous dirais qu'il y a deux composantes aux dépenses marketing. La première, c'est nous payons une commission à nos représentants qui vendent dans l'ILM. Donc, je peux faire le calcul mathématique pour déterminer quelle a été la commission payée pour l'acquisition de ces clients.

2920 En plus, on a dû actualiser nos informations en terme du produit de télédistribution parce que nous avons lancé des nouveaux services. Donc, on a des nouveaux forfaits qu'on vient d'introduire.

2921 Donc, ça nécessite un investissement initial d'un parc de documents de marketing avec lequel on peut équiper les représentants. Je pense que je n'aurais pas tort de vous dire que c'est un chiffre qui se situe, pour le Québec, à un petit peu moins que 100,000 $. Et, si vous le souhaitez, je pourrais tenter de documenter et de vous donner plus d'information.

2922 Me McCALLUM: Ce qui m'intéresse, c'est juste d'avoir une idée. Le 100,000 $, est-ce que c'est e budget pour l'année?

2923 M. LAMONTAGNE: Non, absolument pas! Ce qu'on a essayé de faire en terme de notre plan d'affaire, c'est de rendre variable, le plus possible. Alors, si je mets une annonce dans le journal -- qui peut coûter plusieurs dizaine de millier de dollars -- j'attends pour voir si je suis capable de générer des abonnés.

2924 Si je paie une commission à mes représentants, à chaque vente, bien à ce moment-là, c'est variable. Il est variable et payable lorsque j'installe un nouvel abonné.

2925 Alors, quand je vous dis moins de 100,000 $, ce serait la commission de vente payée pour les représentants plus, payer pour ce qui a été imprimé récemment en terme de documentation qui, effectivement, va me servir dans les prochains mois parce qu'il va de soi qu'on imprime des quantités quand même substantielles pour durer une certaine période.

2926 Me McCALLUM: Quel effet est-ce que la vente d'actifs à Câblage QMI a eu sur vos prévisions et vos budgets du plan marketing et promotion?

2927 M. LAMONTAGNE: C'est clair qu'on est en arrière de nos prévisions dans le secteur des ILM aujourd'hui -- qui est très inquiétant -- et, la raison pour laquelle on est ici aujourd'hui.

2928 Et, à chaque mois que la situation persiste, on va de plus en plus derrière l'objectif du plan d'affaire et donc, on doit palier à ça par d'autres actions.

2929 Mais, compte tenu du fait que la stratégie d'entreprise est axée vers la télédistribution, les ILM en 2002, s'est extrêmement important d'avoir une résolution le plus vite possible.

2930 Me McCALLUM: Est-ce que vous pourriez donner une idée de combien vous êtes en arrière?

2931 M. LAMONTAGNE: Comte tenu du fait que tous mes concurrents sont dans la salle, maître McCallum, je préférerais ne pas vous fournir ces informations.

2932 Comme compagnie publique, vous comprendrez qu'il y a des choses qu'on peut dire et pas dire. Alors, vu que tous les témoignages aujourd'hui et, qui dansera dans le domaine public, j'aurais de la difficulté à vous donner plus de précision.

2933 Si vous en voulez plus, évidemment, demandant la confidentialité, je pourrais, dans le futur, vous les fournir, ces informations.

2934 Me McCALLUM: Je pense, pour nos fins, ça suffit, ce que vous avez dit.

2935 Je vous remercie. Merci beaucoup, madame la présidente.

2936 LA PRÉSIDENTE: Merci, monsieur Lamontagne.

2937 Nous allons maintenant accorder une pause de 20 minutes avant d'entendre les compagnies, en Réplique.

2938 Oui?

2939 LE SECRÉTAIRE: Madame la présidente, avant que vous appeliez la cause, j'aimerais indiquer pour le dossier public, que Look Communications a déposé l'ensemble des documents qu'ils ont promis lors de leur présentation ainsi qu'une copie de la lettre de l'administratrice de l'édifice en question, ainsi que -- Bell ExpressVu has filed copies of the invoices they have received from Câblage QMI. Thank you.

2940 LA PRÉSIDENTE: Merci, messieurs. Merci, monsieur le secrétaire.

2941 Nous allons donc accorder 20 minutes aux compagnies avant qu'elles nous présentent leur Réplique.

2942 We will take a 20 minute break before hearing Replies.

2943 Can I have some indication as to whether this is satisfactory? Yes? 20 minutes.

2944 Alors, nous reprendrons dans 20 minutes.

--- Suspension à 1422 / Upon recessing at 1422

--- Reprise à 1444 / Upon resuming at 1444

2945 LA PRÉSIDENTE: Â l'ordre, s'il vous plaît. Order please.

2946 Nous sommes maintenant prêts à procéder à la Phase III de l'audience.

2947 We will now proceed with Phase III of the hearing. Mr. Secretary, please.

2948 LE SECRÉTAIRE: Merci, madame la présidente.

2949 Nous demanderons maintenant à Vidéotron de répondre aux commentaires qui ont été soumis. Merci.

2950 M. TRÉPANIER: Bonjour, madame la présidente, membre du Conseil et le personnel.

2951 Vous avez autour de la table, en grande partie, ceux qui étaient là lors de la première Phase excepté qu'avec nous, pour lire la Réplique cette après-midi, nous avons le vice président exécutif, Affaires corporatives de Quebecor Inc, monsieur Luc Lavoie.

2952 M. LAVOIE: Merci, Édouard. Madame la présidente, madame Noël, monsieur Demers, mesdames et messieurs.

2953 Dans sa déclaration d'ouverture, hier, monsieur Péladeau a clairement exposé les raisons qui ont forcé Vidéotron à revoir en profondeur son plan et ses processus d'affaire.

2954 Je n'ai donc pas l'intention de revenir là-dessus, sinon que pour mentionner que la concurrence est maintenant une réalité incontournable dans le marché de la télédistribution et, que dans certain cas, le concurrent a le comportement d'un prédateur qui n'a aucun scrupule à utiliser tous les moyens, y compris certaines pratiques commerciales -- que nous contestons devant vous dans un autre dossier -- pour attraper sa proie.

2955 Dans un contexte réglementaire qui défavorise nettement nos concurrents dont Bell ExpressVu, jouissaient, sans notre consentement, de notre appui financier puisqu'ils utilisaient sans frais les infrastructures de câblage intérieur bâties et entretenues par Vidéotron pour livrer leur produit à la clientèle.

2956 Alors que Vidéotron doit consentir des efforts colossaux pour faire migrer sa clientèle du système analogique au système numérique, on ne peut pas lui demander de le faire en agissant aussi comme soutien financier pour ses concurrents.

2957 C'est l'équivalent de faire entrer le loup dans la bergerie. C'est aussi condamner Vidéotron à une marginalisation graduelle.

2958 Je vous demande de regarder la réalité en face. Si les câblodistributeurs ne reçoivent pas une compensation juste et réaliste pour l'investissement qu'ils font lorsqu'ils construisent des câblages intérieurs des immeubles à logement multiples, ils cesseront de le faire.

2959 Â titre d'illustration de mon propos, je vous invite à prendre le 0.44 $ par mois que vous proposez comme compensation juste et équitable et, de voir où cela nous conduit. Donc, 0.44 $ par mois pendant 12 mois avec un taux de pénétration d'environ 50 p. cent pendant 25 ans. C'est très simple, cet investissement de 200 $ n'aura au bout de 25 ans, rapporté que 66 $ et ce, sans prendre en compte aucun autre coût d'opération ou de financement.

2960 Je n'ai pu m'empêcher de sourire, ce matin lorsque j'ai entendu les représentants de Bell ExpressVu déclarer qu'ils acceptaient le montant suggéré par le Conseil. Si j'avais utilisé le montant de compensation proposé à l'origine par Bell ExpressVu, c'est-à-dire 0.08 $, c'est 12 $ que j'aurais récupéré au bout de 25 ans.

2961 Il est clair que Vidéotron n'a aucun intérêt à investir 200 $ pour récupérer une somme aussi dérisoire au bout de 25 ans.

2962 Vous avez entendu nos concurrents vous dire que notre câblage intérieur est vieillissant et qu'il aurait besoin d'être modernisé.

2963 Nous sommes tout à fait d'accord et c'est pourquoi Câblage QMI a besoin de générer les revenus nécessaires à ses travaux de modernisation.

2964 Câblage QMI n'est pas une oeuvre philanthropique mais une entreprise qui doit développer un plan d'affaire réaliste, qui prévoit un rendement acceptable pour ses actionnaires.

2965 Les propriétaires d'immeubles feront donc eux-même l'installation du câblage intérieur et, comme les propriétaires d'immeubles qui l'ont déjà fait jusqu'à maintenant, ils décideront, sans interférence de votre part, de la façon d'utiliser ses infrastructures et du prix à payer par les télédistributeurs pour y avoir accès.

2966 Dans ces conditions, les locataires n'auront plus le choix de leur distributeur. Avec tout le respect que je vous dois, je ne vois pas par quel raisonnement intellectuel ou réglementaire, le CRTC peut traiter différemment les propriétaires d'immeubles, des autres propriétaires de câblage intérieur.

2967 Vous reconnaissez de facto, le droit des propriétaires d'immeubles, de louer l'utilisation du câblage intérieur à un prix qu'eux jugent juste et raisonnable et, c'est très bien ainsi.

2968 Nous ne voyons pas en quoi la position juridique de Câblage QMI diffère de celle du propriétaire d'immeubles.

2969 C'est ce qui nous amène à la conclusion que le CRTC ayant reconnu de facto qu'il n'a pas de juridiction sur les propriétaires d'immeubles, il ne peut pas, du même souffle, prétendre avoir juridiction sur Câblage QMI.

2970 Nous sommes d'avis que la construction, l'entretien et la commercialisation du câblage intérieur ne font pas d'avantage parti du  core business  -- excusez l'anglicisme -- d'un détenteur de licence de câblodistribution, que des services d'installation ou, les services informatiques.

2971 Nos concurrents ont aussi beaucoup parlé d'obstacles à la concurrence. Ils ont omis de vous dire, qu'à ce chapitre, nous n'avons pas de leçon à recevoir d'eux. Je vous soumets un cas précis: celui d'un nouvel édifice à appartement, le Club Marin Trois situé sur l'Ile des Soeurs.

2972 Le câblage intérieur de cette édifice a été construit par VDN. Lorsque Vidéotron a voulu vendre ses produits aux résidents du Club Marin Trois, elle s'est fait répondre par la direction que cela n'était pas permis puisque l'édifice était lié par un contrat d'exclusivité avec VDN.

2973 Câblage QMI n'a jamais tenté de bloquer l'accès à quiconque. Elle souhaite seulement recevoir une compensation juste et raisonnable pour l'utilisation de ses actifs.

2974 Â l'heure actuelle, VDN offre à sa clientèle un forfait de 73 chaînes pour 28 $ par mois. Vidéotron offre un forfait de 54 chaînes pour 34 $ par mois.

2975 Comment VDN parvient-elle à offrir un prix aussi avantageux? C'est simple, elle n'a pas presque pas de coût d'immobilisation. En un mot, elle était subventionnée par Vidéotron. D'ailleurs, pour conclure sur l'exemple des forfaits concurrents, je vous soumets qu'en refilant pleinement sa clientèle, le cinq dollars exigé par Câblage QMI, VDN offrait toujours 73 canaux à un dollars de moins que le forfait de 54 canaux offert par Vidéotron.

2976 En quoi cela constitue-t-il un obstacle à la concurrence ou à une préférence indue?

2977 Si par ailleurs, le CRTC veut imposer aux câblodistributeurs l'obligation de posséder directement toutes les infrastructures nécessaires à la livraison du service, nous vous soumettons humblement que par souci d'équité, vous devrez aussi obliger les télédistributeurs par satellite, à se porter acquéreur des satellites de communications qui transportent les signaux chez les clients.

2978 Selon nous, il s'agit là de l'essence même du dossier. Nous sommes convaincus de notre bon droit et nous nous en remettons à votre sagesse pour l'examiner dans un esprit ouvert.

2979 Je vous remercie.

2980 LA PRÉSIDENTE: Monsieur le conseiller juridique, s'il vous plaît.

2981 Me McCALLUM: Le problème que soulève Vidéotron et Quebecor, est vraiment avec Bell ExpressVu.

2982 Vous avez porté plainte dans un autre dossier donc, votre problème est vraiment cette compagnie, n'est-ce pas?

2983 M. LAVOIE: Non, je ne suis pas d'accord. Notre problème, est le problème de l'utilisation de câblage intérieur à des coûts dérisoires.

2984 Bell ExpressVu est un problème particulier, vous avez raison, dans un autre dossier.

2985 Me McCALLUM: Même à ça, vous subissez des pertes et, vous pensez que c'est Bell ExpressVu -- c'était la présentation qui a été faite hier -- c'est la concurrence déloyale de Bell ExpressVu.

2986 M. LAVOIE: C'est le plus prédateur des prédateurs, oui.

2987 Me McCALLUM: Donc, qu'est-ce que vous pensez d'une idée d'imposer le régime avec Câblage QMI seulement sur Bell parce qu'ils sont les seuls qui ont la possibilité d'avoir les subventions, sans dire qu'il y a des subventions?

2988 M. LAVOIE: C'est tellement hypothétique que je ne vois pas comment je pourrais répondre à ça, autrement quand vous disant que j'ai peine à voir la logique de cela.

2989 Me McCALLUM: Ça semble être consistant avec ce que vous avez soulevé?

2990 M. LAVOIE: Non, pas vraiment. Ce que nous avons soulevé c'est le fait que le câblage intérieur que nous avons bâti et qui nous coûte 200 $ par unité à continuer à bâtir et, que nous devons entretenir, nous devons donc recevoir -- Câblage QMI -- une compensation raisonnable et non pas dérisoire pour son utilisation.

2991 Me McCALLUM: Dans la partie Réplique, j'aimerais entendre les commentaires de Vidéotron, Câblage QMI et Quebecor sur les remèdes et, notamment sur les remèdes demandés par les intervenants qui ont comparus.

2992 M. LAVOIE: Est-ce que vous pouvez être plus spécifique, maître McCallum?

2993 Me McCALLUM: Oui. Commentez sur les remèdes possibles. Les intervenants ont demandé au Conseil d'imposer un remède.

2994 Si vous prenez, par exemple, l'intervention de VDN à la page 6, deuxième paragraphe, par exemple, il propose des solutions au Conseil et, j'aimerais vos commentaires sur les solutions proposées.

2995 M. TRÉPANIER: Pourriez-vous nous donner la référence, encore, maître McCallum, s'il vous plaît?

2996 Me McCALLUM: L'intervention de VDN présentée ce matin, à la page 6, deuxième paragraphe. Il y a aussi un commentaire des remèdes dans la soumission de Bell ExpressVu, page 4, paragraphe 18.

2997 M. TRÉPANIER: Nous n'avons pas avec nous les présentations faites ce matin, maître McCallum.

2998 LA PRÉSIDENTE: Vous étiez présent?

2999 M. TRÉPANIER: Oui. Mais, on nous demande de commenter un texte, ici, alors, ça nous prend le texte.

3000 Alors, vous dites pour Câble VDN, maître McCallum? La conclusion?

3001 Me McCALLUM: Oui, il y a un titre  Remedies sought  et, par exemple, au deuxième paragraphe. Mais, il y aussi, en posant la question, j'inclus toute la discussion des remèdes qui a eu lieu avec tous les intervenants ce matin.

3002 M. TRÉPANIER: Je ne crois pas que nous ayons -- pour ce qui est de ce paragraphe-là -- autre chose à ajouter à ce que nous avons dit mais, je vais demander à maître Buchan de répéter, en sommaire, notre position sur ce qui est demandé à titre de remède.

3003 MR. BUCHAN: Mr. McCallum, all I can do, by way of responding to the general question about the remedies requested by the three complainants -- and, there have been a number of remedies requested of various forms -- but, they have all asked the mandatary order to be issued to Vidéotron. And, in one case, I think it was Bell ExpressVu that asked that the mandatory order not only be issued but, that it would also be registered immediately with the Federal Court of Canada.

3004 Then, there are some variations beyond that, in terms of whether the order would be issued only to Vidéotron or, would it also be issued to CQMI.

3005 I guess, if I could take it from that first issue, CQMI, it is the position of Vidéotron and the licensee, that CQMI is not a broadcasting undertaking -- more specifically, is not a distribution undertaking.

3006 And, as such, is not subject to the jurisdiction of the CRTC. Vidéotron clearly is subject to jurisdiction of the CRTC but, as we stated in the opening remarks and, I as stated -- I do not think you probably have a copy of the opening remarks -- but they were at pages 5 and 6 of my prepared text. I do not think it would serve anyone to read it back into the Record but, Vidéotron believes that it is operating its license undertakings pursuant to the Broadcasting Act and the BDU Regulations and, does not believe it would be appropriate for a mandatory order to be issued.

3007 I cannot go beyond that because I think to go into the specifics of whether the order should be registered immediately with the federal Court or, at a later date with the Federal Court -- or, whether it should be registered at all with the Federal Court -- ultimately is a matter, if such a matter were to be issued, whether it would be registered, is within the discretion of the Commission. I have no comment to make on that. Vidéotron believes it is not necessary to issue a mandatory order.

3008 That is all I can say.

3009 Me McCALLUM: Thank you, for your comments.

--- Pause

3010 Me McCALLUM: Madame la présidente, ça complète mes questions.

3011 LA PRÉSIDENTE: Merci, maître McCallum. Voilà donc la fin de la Phase III. Monsieur le secrétaire -- pardon!

3012 Me McCALLUM: Merci, madame la présidente. Si je peux suggérer un échéancier pour la production des documents, si le panel est d'accord avec ce que je veux proposer.

3013 Je vais proposer que tous les documents par les intervenants soient déposés -- pour répondre aux engagements -- soient déposés pour vendredi, le 26 avril et signifiés à Vidéotron.

3014 For all outstanding undertakings by the interveners, they should be served to Vidéotron and filed with the Commission by Friday, 26th of April, 2002.

3015 It goes without saying that all these documents are to be actually received, not merely mailed by the dates specified.

3016 Les documents à être déposés par Vidéotron, Câblage QMI, Quebecor Media, pour mercredi, le 1er mai 2002. Signifiés aux trois plaignantes qui ont comparus. S'il y a une demande de confidentialité des documents, il faut deux choses: premièrement, expliquer pourquoi il y a une demande de confidentialité pour le dossier public et, deuxièmement, fournir une version abrégée pour le dossier public, pour mercredi le 1er mai, 2002.

3017 Les commentaires sur les documents fournis en réponse aux engagements, venant des trois intervenants qui ont comparus, doivent être signifés et produits au Conseil, lundi, le 6 mai, 2002. Signifiés sur Vidéotron.

3018 Any comments from interveners on the documents that have been served and filed by Vidéotron, are to be served on Vidéotron by the intervening parties by Monday, the 6th of May, 2002.

3019 Les répliques finales de Vidéotron, Câblage QMI et Quebecor Media, doivent être signifiées et livrées au Conseil pour jeudi, le 9 mai, 2002.

3020 Final reply comments from Vidéotron, Câblage QMI and Quebecor Media, to be served and filed by the 9th of May, 2002.

3021 C'est d'accord avec vous autres?

3022 M. TRÉPANIER: Oui, maître McCallum.

3023 Me McCALLUM: Je comprends, madame la présidente, de façon informelle, que les parties intervenantes sont d'accord avec ce que j'ai proposé.

3024 LA PRÉSIDENTE: Et, nous sommes d'accord avec cet échéancier.

3025 We agree with that time table, as well.

3026 Avant d'ajourner, je tiens à remercier tous les participants pour leur coopération.

3027 Je remercie, aussi, mes collègues et notre personnel surtout d'avoir accepté de travailler très tard, hier soir, pour faciliter le déroulement de l'audience.

3028 Nos remerciements aussi, aux interprètes et au service de sténographie.

3029 Before adjourning, I want to thank all parties for their cooperation throughout the hearing.

3030 My thanks, of course, to my colleagues and to our loyal staff, who accepted to work very late last night, to accommodate our time-table.

3031 Our thanks, also, to the translators and to the court reporters.

3032 Cette audience est maintenant ajournée.

3033 This hearing is now adjourned.

--- L'audience se termine à 1502 / Whereupon the

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