ARCHIVED -  Transcript / Transcription - Gatineau, Quebec - 2003-06-02

TRANSCRIPT OF PROCEEDINGS

FOR THE CANADIAN RADIO-TELEVISION AND

TELECOMMUNICATIONS COMMISSION

TRANSCRIPTION DES AUDIENCES DU

CONSEIL DE LA RADIODIFFUSION

ET DES TÉLÉCOMMUNICATIONS CANADIENNES

SUBJECT / SUJET:

APPLICATIONS FOR TELEVISION LICENCE RENEWALS

DEMANDES DE RENOUVELLEMENT DE LICENCES DE TÉLÉVISION

HELD AT: TENUE À:

Conference Centre Centre de Conférences

Portage IV Portage IV

Outaouais Room Salle Outaouais

Gatineau, Quebec Gatineau (Québec)

June 2, 2003 Le 2 juin 2003

Volume 6

Transcripts

In order to meet the requirements of the Official Languages

Act, transcripts of proceedings before the Commission will be

bilingual as to their covers, the listing of the CRTC members

and staff attending the public hearings, and the Table of

Contents.

However, the aforementioned publication is the recorded

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

either of the official languages, depending on the language

spoken by the participant at the public hearing.

Transcription

Afin de rencontrer les exigences de la Loi sur les langues

officielles, les procès-verbaux pour le Conseil seront

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

membres et du personnel du CRTC participant à l'audience

publique ainsi que la table des matières.

Toutefois, la publication susmentionnée est un compte rendu

textuel des délibérations et, en tant que tel, est enregistrée

et transcrite dans l'une ou l'autre des deux langues

officielles, compte tenu de la langue utilisée par le

participant à l'audience publique.

Canadian Radio-television and

Telecommunications Commission

Conseil de la radiodiffusion et des

télécommunications canadiennes

Transcript / Transcription

APPLICATIONS FOR TELEVISION LICENCE RENEWALS

DEMANDES DE RENOUVELLEMENT DE LICENCES DE TÉLÉVISION

BEFORE / DEVANT:

Charles Dalfen Chairperson / Président

Andrée Wylie Commissioner / Conseillère

Joan Pennefather Commissioner / Conseiller

David Colville Commissioner / Conseiller

Cindy Grauer Commissioner / Conseillère

ALSO PRESENT / AUSSI PRÉSENTS:

James Wilson Legal Counsel /

Sylvie Jones Conseillers juridiques

Tandy Greer-Yull Hearing Coordinator /

Coordonnateur de l'audience

Pierre LeBel Secretary / Secrétaire

HELD AT: TENUE À:

Conference Centre Centre de Conférences

Portage IV Portage IV

Outaouais Room Salle Outaouais

Gatineau, Quebec Gatineau (Québec)

June 2, 2003 Le 2 juin 2003

Volume 6

TABLE OF CONTENTS / TABLE DES MATIÈRES

PAGE

PHASE II

INTERVENTION BY AMOS AND ALFONS ADETUYI 1441 / 10014

INTERVENTION PAR AMOS AND ALFONS ADETUYI

INTERVENTIONS BY CANADIAN BASEBALL LEAGUE, 1454 / 10062

ONTARIO UNIVERSITY ATHLETICS, CANADIAN

INTERUNIVERSITY SPORT AND RUGBY CANADA

INTERVENTIONS PAR CANADIAN BASEBALL LEAGUE,

ONTARIO UNIVERSITY ATHLETICS, CANADIAN

INTERUNIVERSITY SPORT ET RUGBY CANADA

INTERVENTIONS BY ROMAN DANYLO, GREG LAWRENCE, 1491 / 10255

ANDY NULMAN AND CAROLINE MARIA

INTERVENTIONS PAR ROMAN DANYLO, GREG LAWRENCE,

ANDY NULMAN ET CAROLINE MARIA

INTERVENTIONS BY PEACE POINT ENTERTAINMENT 1538 / 10432

GROUP, BOB FALKENBERG, PAUL GRAHAM,

WYNDHAM STUDIOS ENTERTAINMENT AND FISHING

WITH SHELLY & COURTNEY

INTERVENTIONS PAR PEACE POINT ENTERTAINMENT

GROUP, BOB FALKENBERG, PAUL GRAHAM,

WYNDHAM STUDIOS ENTERTAINMENT ET FISHING

WITH SHELLY & COURTNEY

INTERVENTIONS BY LIONEL LUMB, PETER DONOLO, 1560 / 10510

FREDERICK KETCHEN, RITA DEVERELL AND

ANNE CURRAN

INTERVENTIONS PAR LIONEL LUMB, PETER DONOLO,

FREDERICK KETCHEN, RITA DEVERELL ET

ANNE CURRAN

INTERVENTION BY KEVAN PIPE AND TRAVIS FORMOSA 1590 / 10639

INTERVENTION PAR KEVAN PIPE ET TRAVIS FORMOSA

INTERVENTION BY CANADIAN JOURNALISTS' AND 1605 / 10710

WRITERS' CLUB, MIRRA MANESH, PAULINE TONG,

CHINESE CULTURAL CENTRE OF OTTAWA AND

BILL YANCOFF

INTERVENTION PAR CANADIAN JOURNALISTS' AND

WRITERS' CLUB, MIRRA MANESH, PAULINE TONG,

CHINESE CULTURAL CENTRE OF OTTAWA ET

BILL YANCOFF

TABLE OF CONTENTS / TABLE DES MATIÈRES

PAGE

INTERVENTION BY GEOFF EDEN AND CHRIS STARK 1637 / 10835

INTERVENTION PAR GEOFF EDEN ET CHRIS STARK

INTERVENTION BY FRIENDS OF CANADIAN BROADCASTING 1647 / 10891

INTERVENTION PAR FRIENDS OF CANADIAN BROADCASTING

INTERVENTION BY DIRECTORS GUILD OF CANADA, 1660 / 10960

ALLIANCE OF CANADIAN CINEMA, TELEVISION AND

RADIO ARTISTS, WRITERS GUILD OF CANADA AND

COMMUNICATIONS, ENERGY AND PAPERWORKERS

UNION OF CANADA

INTERVENTION PAR DIRECTORS GUILD OF CANADA,

ALLIANCE OF CANADIAN CINEMA, TELEVISION AND

RADIO ARTISTS, WRITERS GUILD OF CANADA ET

COMMUNICATIONS, ENERGY AND PAPERWORKERS

UNION OF CANADA

INTERVENTION PAR L'UNION DES ARTISTES ET 1700 / 11159

SOCIÉTÉ DES AUTEURS DE RADIO, TÉLÉVISION ET

CINÉMA

INTERVENTION BY L'UNION DES ARTISTES ET

SOCIÉTÉ DES AUTEURS DE RADIO, TÉLÉVISION ET

CINÉMA

INTERVENTION PAR SOCIÉTÉ RADIO-CANADA 1733 / 11303

INTERVENTION BY SOCIÉTÉ RADIO-CANADA

INTERVENTION PAR COGECO CÂBLE INC. ET 1739 / 11343

QUEBECOR MEDIA

INTERVENTION BY COGECO CÂBLE INC. AND

QUEBECOR MEDIA

INTERVENTION BY VisionTV 1799 / 11616

INTERVENTION PAR VisionTV

INTERVENTION BY STORNOWAY COMMUNICATIONS LIMITED 1809 / 11661

INTERVENTION PAR STORNOWAY COMMUNICATIONS LIMITED

Gatineau, Quebec / Gatineau (Quebec)

--- Upon resuming on Monday, June 2, 2003 at 0930 /

L'audience reprend le lundi 2 juin a 0930

10011 THE CHAIRPERSON: Good morning.

10012 Monsieur le secrétaire.

10013 MR. LEBEL: Thank you, Mr. Chairman. This morning we will continue hearing the appearing interventions and, for the record, I would like to indicate now that number two on our revised list and number 47 have chosen not to appear. Those interventions will remain on record as non-appearing interventions. First up this morning will be Messrs. Amos and Alfons Adetuyi. Gentlemen, you have 10 minutes to make your presentation. Could you please switch your microphone on.

INTERVENTION

10014 MR. AMOS ADETUYI: I don't know that we need 10 minutes, but lets see the kind of issues we'd like to bring to the table and what we want to talk about. I am a producer by trade, so the idea of getting involved in this kind of political milieu is something new for me, not for my bother who is a founding member of the Black Film Video Network in Toronto. But there comes a time when you want to speak out about things that you see happening in the industry you are working in and that is why I have chosen to be here now.

10015 Year after year, the Canadian Broadcasting industry has been producing an increasing amount of distinctly Canadian programming - it was a common goal that has become an achievement we can build upon. A key reason we have accomplished this goal is the millions of taxpayer dollars that have been spent each year on subsidizing our broadcasting industry. In turn, broadcasters have agreed to dedicate the majority of their prime time to subsidize Canadian content. For over 20 years the Canadian content system, regulated by the CRTC and CAVCO, is a system we have come to know very well. In fact, it seems odd to recall there was a time when the system wasn't in place.

10016 When we consider the thousands of hours of prime time Canadian content that have been produced within the system, on the surface, it appears that it has been relatively successful. However, when we look at the lack of Canadian diversity reflected within that Canadian content, either in front of or behind the camera, we see that a key part of the system is fundamentally flawed and has failed.

10017 Approximately 15 per cent of Canadian taxpayers are people of colour, yet this rainbow of diversity has yet to be fully expressed and represented in our industry and why is that? Is there a lack of experienced producers, writers, directors, actors, etc. within the diverse segment of the production community? Well perhaps at one time that was true, but not now. The level of creativity, expertise and experience attained by people of colour within the industry is evident. Canadians of colour have produced several millions of dollars of production, have created numerous hours of prime time programming and have consistently received critical acclaim and awards.

10018 But now the development of diversity content is at a crossroads, essentially the same crossroads we faced with Canadian content, or lack of, some 20 years ago. Back then we knew that developing Canadian content was a right thing to do. And today, we know that diversity content, the celebration and expression of the fullness of our larger Canadian community is the right thing to do. Despite our intentions and our past efforts, this is a goal we have yet to achieve. The regulatory system we've put in place 20 years ago has ensured the development of the Canadian production community and of Canadian content itself.

10019 We are suggesting that this same system can be used to ensure the ongoing development of the diverse segment of the Canadian production community and of diversity content.

10020 MR. ALFONS ADETUYI: The premise upon which we base our suggestion is fundamental. There should be no taxation without representation. Today, fifteen percent of Canadian taxpayers are subsidizing our broadcasting industry without being appropriately represented.

10021 If our current system were to recognize the 15 per cent of Canadians who are people of colour, the Canadian broadcasting industry would have an opportunity to create diversity, content and truly reflect the diversity of our national community. In order to achieve this goal, we are suggesting that the following protocol for diversity content be established in harmony with the Canadian content system and with CAVCO and CRTC, which currently measures, regulates and administers the system.

10022 What we are suggesting is: 1) Broadcasters would be required by the CRTC to air 15 per cent of diversity content within their Canadian content requirements; 2) Fifteen per cent of government subsidized financing, which is mainly CTF and Telefilm, would be allocated for diversity content; 3) Diversity content projects would require the approval of CAVCO under a point system identical to that used to certify a Canadian production. For example, a producer, director, actor, etc. of colour would each provide a point or points with a minimum of six out of 10 points required. Note, the definition of a person of colour would be the same as that used by Statistics Canada.

10023 Based on systems already in place, this parallel diversity content system would not be difficult to institute and administer. It is time for the broadcasting industry to get back on track with the issue, moreover the reality, of Canadian diversity. We need to genuinely review and subsequently revise the broadcasting mechanisms and systems of measurement currently in place.

10024 THE CHAIRPERSON: Thank you very much. Commissioner Pennefather.

10025 COMMISSIONER PENNEFATHER: Thank you, Mr. Chairman. Good morning, gentlemen, and thank you very much for joining us and bringing your intervention to our attention. We have, of course, your written intervention which is also on file. And, in fact, my first question was exactly what you presented today, some more specifics on what you meant by the broadcasting mechanisms and systems of measurement.

10026 But first, let me ask you, your company has been in business since 1987?

10027 MR. AMOS ADETUYI: Right.

10028 COMMISSIONER PENNEFATHER: And I gather from what you have here that you have been producing lifestyle programming, any other kinds of programming?

10029 MR. ALFONS ADETUYI: Yes, we have done a dramatic television series for the CBC, it was a 13 one hour dramatic series.

10030 COMMISSIONER PENNEFATHER: What was that series?

10031 MR. ALFONS ADETUYI: It was called Ekaya, A Family Chronicle.

10032 COMMISSIONER PENNEFATHER: Right.

10033 MR. ALFONS ADETUYI: It was on CBC.

10034 COMMISSIONER PENNEFATHER: So you have been in the business a while and bring a wealth of experience as producers, but also in terms of your proposal for diversity content. This is why I wanted to ask you a little bit more about what you mean by that term, diversity content. Could you just elaborate for us what specifically you mean? Is it just your point three or is there more to the concept than that? What do you mean by diversity content?

10035 MR. AMOS ADETUYI: Well, I think it is similar to the concept of Canadian content. The idea that, as Canadians, we tell Canadian stories to ourselves and to our community at large, while in a similar way we are suggesting that if you have people of colour, people from the diverse community are producers, directors, writers, actors, etc. similar to the way the CAVCO system is set up, that those stories will reflect that part of our community.

10036 COMMISSIONER PENNEFATHER: Okay, I see that the use of the term "diversity content" is similar to the regulatory use of the term "Canadian content"?

10037 MR. AMOS ADETUYI: Exactly.

10038 COMMISSIONER PENNEFATHER: Okay.

10039 MR. AMOS ADETUYI: There's no difference, yes.

10040 COMMISSIONER PENNEFATHER: Because when I first read it I saw more of a creative component to it as to how you would determine that in terms of let say drama or news, whatever.

10041 MR. AMOS ADETUYI: No, it would be across the board.

10042 COMMISSIONER PENNEFATHER: Across the board. So, all categories of programming you would suggest have these three points apply to them?

10043 MR. AMOS ADETUYI: Yes, going back to the premise if the funding is there from within the diverse community that's part of that funding base.

10044 COMMISSIONER PENNEFATHER: And when you look at this are you looking at -- if we look at the CRTC's approach to Canadian content we could go through a number of points, but I assume you are looking at applying it to all programming. Do you have any comment on how this would apply in terms of the day parts, what time of the schedule or do you see it going into that kind of detail?

10045 MR. AMOS ADETUYI: No. Again, I think it would be right in line with whatever the CRTC had set up in terms of content regulations for the different broadcasters and we'd fit within that portion, whether it's 60 per cent prime time, so much off prime time, it would be the 15 per cent portion of that regulation.

10046 COMMISSIONER PENNEFATHER: Now, this hearing is addressing the renewals of licenses of a variety specialty services that offer a variety of different kinds of programming. Do you have any comment on how one can approach your proposal when it comes to the variety of programming and services that we have in front of us? Does it make any difference, should we approach it on a case by case basis? How do you see your proposal in light of the very different kinds of services we have that we are looking at now?

10047 MR. AMOS ADETUYI: Well, again, I think it's a broader type of an approach. Just as they all have to deal with Canadian content, we're suggesting that diversity content is something that each of the broadcasters -- it would be something that we would want to look at.

10048 COMMISSIONER PENNEFATHER: So, you are looking at this as a broad issue as opposed to each -- Do you have any comment on how your proposal would affect the specific services are before us?

10049 MR. ALFONS ADETUYI: I think it would enhance those services. I think those services are doing very well as far as market share and the development of many of these services, they are very successful and I think they are actually looking for ways to include all of Canada's diversity in their programming. It makes sense because they want to access that market and so I think it goes hand in hand. I just think for a while that nobody has really understood what mechanism could be in place and I think, as we're pointing out, it is right in front of us. It is the same way we have approached the Canadian content in general.

10050 COMMISSIONER PENNEFATHER: You have obviously read all the applications then and looked at their comments on their approach to cultural diversity, several have corporate plans or reference to best practices. Do you have any comment for us in addition to the approach you have here, what is the value of those kind of plans to cover a number of other aspects that hopefully will lead to greater cultural diversity on our screens? What's the place of those kind of corporate plans, in your view, in accomplishing the goals that you say are going to be achieved by your approach? Do you see any value to these corporate plans or not?

10051 MR. AMOS ADETUYI: Certainly, I see those plans working in tandem with this approach. There is a lot of value in that sensitivity, that when you read their plans and what they have done, both on the screen and off the screen, and particularly some of the broadcasters are really making a decided effort and making change happen and we see that ourselves because we have a factual side of the company. With one series that we have done that actually won an gemini award, the broadcasters talked about the diversity content within that program. So, we are happy to hear those things as we have those discussions with them and tell them here's the kind of stories with 65 episodes, which is this particular story that we did, how much of that was diversity. They were interested in that, they wanted to know that and that was encouraging and I think that's the kind of thing that, that dialogue back and forth, will help get this diversity content established.

10052 MR. ALFONS ADETUYI: I just wanted to add that I think that the reason -- I know it's a quota similar to what we have in Canadian content and that's a dirty word or has been, but I think because of that word as far as Canadian content we have allowed ourselves to be leaders in television production in the world because of that. So, I don't think it has hurt us in any way, but it really kick-started things and I think if we had not initiated that quota then we would still be talking about it today and people would be doing their best efforts and all of that, but I think it was, as we can see now, it was very necessary to move it ahead. So, it is sometimes painful to do these kinds of things, it's not the easiest way at the beginning and I think it is the same with this.

10053 COMMISSIONER PENNEFATHER: So, you have understood what I was driving at too and as creative and business in this area the word quota comes up and you mentioned it, it is not an approach which we have looked at in terms of, as you described, going to a broadcaster and the broadcaster asks you what's the content in terms of quotas. The creative community can sometimes react to that in a way that it doesn't quite fit with the creative exercise and the freedom to create as you wish. So, in your experience, that is now becoming more "acceptable", that it may not quite have the resistance that one might suspect with quotas. So, in your experience that is changing out there, there's less of a reaction in that sense?

10054 MR. ALFONS ADETUYI: My experience is that Canadian producers keep wanting to up the quota constantly with Canadian content and for good reason, because it gives them the exposure that they need. But, yes, I think people are open to reflecting the reality that's out there as far as market share.

10055 COMMISSIONER PENNEFATHER: One last question, in your experience, what's the value of training programs and how are they best set up so that persons of colour can have more access to screen time, both in front of the camera and behind the camera?

10056 MR. ALFONS ADETUYI: I guess we have been hearing about training programs for about 20 years, so somebody must be trained by now, I would assume and I think it is just time to get on with doing the job. We have a policy in our company for the last at least 10, 15 years. Well, since the beginning, but certainly with doing major projects to hire people of colour and women basically in our company and I think that it is a natural tendency to hire people that you know and people that you have worked with, I mean, I don't think there is anything wrong with that. So, I think the more producers, production companies that we have that are owned or partnered by people of colour, the more natural tendency is to bring people into the industry that way, not necessarily through training. Because a lot of people are trained, you know, we have huge amounts of resumes coming in. There has been excellent training incentives provided by anywhere from the NFB to Telefilm, OFDC, Black Film Video Network and other post-screen, other groups, there has been all kinds. In Ottawa there is actually one going on as we speak. People of colour can go out to any film school and that training has been going on for decades really. Now, I think it is the time just to allow them to participate fully in the industry.

10057 COMMISSIONER PENNEFATHER: Thank you. I think that point was also made in your presentation today when you talked about these several million dollars of production and numerous hours already created of programming, we're just not getting to see it. This is I guess what your point is today and this is the approach. Thank you very much for responding to my questions and for your presentation this morning, I appreciate it.

10058 MR. ALFONS ADETUYI: Thank you.

10059 THE CHAIRPERSON: Thank you very much, gentlemen.

10060 MR. LEBEL: Thank you, Mr. Chairman. We will now hear from interveners three to six on the list and those will be the Canadian Baseball League, the Ontario University Athletics, the Canadian Interuniversity of Sport and Rugby Canada.

10061 Good morning, gentlemen, you have a total of 40 minutes to make your presentation and please identify yourself as you speak. Thank you.

INTERVENTION

10062 MR. RICK AMOS: Good morning and thank you for the opportunity to speak with you this morning. My name is Rick Amos and I am the Vice-President of Operations for the Canadian Baseball League. The CBL is a fledgling organization, we are often running in eight Canadian cities across the country from Trois Rivières to Saskatoon to Victoria. We have created 400 new jobs, including numerous radio and broadcasting jobs and employed 200 baseball players.

10063 We are trying to create a sports organization to which young baseball players in Canada will aspire to play. We feel that it is an important hearing for organizations such as The Score and the CBL. As a brand new sporting event we need as much help as possible to develop a fan base. The Score is the only venue in Canada that can provide us with that opportunity. The other main sports broadcasters have their plates full with other higher profile sports and leagues, they do not have room for us.

10064 The Score will be broadcasting 18 regular season games from across Canada, our all-star games and the Jenkins Cup, this is a huge commitment for a fledgling organization such as ourselves. It was The Score that came to the plate, so to speak, and The Score, because of its experience with Major League Baseball, it knows how to promote baseball nationally.

10065 The Score has been a great partner, and they have gone well beyond what was called for in their contract to make us a success, from production support to personnel support, to sales support, and most importantly promotion of our league.

10066 They even put our scores on their sports ticker constantly to give our fans across Canada updates.

10067 The more opportunities that Canadians have to access the CBL and see it for the great game that it is, the better chance we have of becoming a success. Then we could create more teams and more jobs. Television is the forum we need to promote the CBL. We will only get there with the continued support of The Score.

10068 It is our fear that if The Score is not given the rate increase that it is seeking, then it will have to cut back on its programming initiative and coverage of leagues such as ours. They certainly could not be as supportive as they have been, especially to a new league.

10069 The Score has delivered for us, and we believe that it will continue to deliver for us if it can be made financially sound. The Score has informed us that it would like to air even more CBL games and give us continued support. We are counting on this continued support.

10070 The Score with its national audience and a younger demographic is a great home for the CBL, and we hope that this will continue.

10071 Accordingly, let me finish by strongly stating the CBL's support for The Score. We need them as a strong partner. They need your help. We hope that you will support The Score's licence renewal on the basis submitted.

10072 This will allow The Score to be a strong and financially viable broadcaster, thereby supporting the CBL and other smaller sports organizations in the country.

10073 We believe that this is in the best interests of the Canadian viewer and the broadcasting system.

10074 Thank you for your time this morning. I would be pleased to answer any questions that you may have.

10075 MR. BROWN: Good morning, and thank you for allowing me to appear this morning. My name is Graham Brown, and I am the Chief Operating Officer for Rugby Canada, a national sport governing body in Canada.

10076 We have approximately 45,000 members representing ten provinces. We organize and co-ordinate local clubs, leagues and events across Canada, as well as organizing the international teams, both male and female, that represent Canada abroad.

10077 We are one of the fringe sports, so to speak, in Canada yet we are currently ranked eleventh in the world in men's rugby and fourth in the world in women's rugby out of 98 countries.

10078 We feel that it is an important hearing for organizations such as The Score and Rugby Canada. Both of us here are small organizations, and both of us have struggled financially. We both have to stretch our resources, and we are both on the upswing in popularity and on a similar growth track.

10079 It is symbolic of our relationship at the moment.

10080 The Score is an important media company for an organization such as Rugby Canada. We struggle to receive ongoing and consistent national coverage for our sport and the people who participate in rugby. The Score has provided us with significantly more exposure than what we normally would have received.

10081 The Score helps us reach our members on a national basis, but more importantly The Score provides us with a forum to try and connect with new rugby fans across Canada.

10082 Rugby Canada and our athletes have been frequent guests on The Score's international show "Sports World", and Rugby Canada requires consistent national exposure that The Score can bring to our sport.

10083 The more opportunities that Canadians have to access our sport and see it for the great sport it is, the better chance we have of converting them to fans.

10084 When the CFL tried local blackouts, attendance dwindled. They needed the forum of television. Now with fewer blackouts, attendance is growing.

10085 Television is the best forum to promote our sport. In our case, a picture is worth a thousand words. We are hopeful of the day when thousands of people will attend a live sporting rugby event in Canada, similar to what happens in other countries such as Australia, New Zealand and England.

10086 We will only get there with the continued support of organizations such as The Score.

10087 It is our fear that if The Score is not given the rate increase it is seeking, it will have to cut back on its programming initiatives and the coverage of sports such as rugby.

10088 Canada is becoming more diverse, and we need media such as The Score to continue to broadcast a diverse range of sports to Canadians.

10089 The Score has delivered opportunities for rugby, and we believe that it will continue to deliver opportunities for our sport if it can be made financially sound.

10090 The Score has informed us that it will launch a new show called "Score International" that will provide additional coverage of the fringe sports such as rugby, soccer and cricket, if it receives this rate increase. This is in addition to The Score's "Sports World" show that continues to support our sport of rugby.

10091 The Score with its national audience and younger demographic provides a great promotional arena for rugby in Canada, and we hope that this will continue.

10092 Accordingly, let me, by reiterating Rugby Canada's support for The Score, say that we hope that you will support The Score's licence renewal and application for a rate increase. By renewing The Score's licence on the basis submitted, you will be supporting Rugby Canada and the smaller sports across Canada.

10093 Thank you for your time this morning. I would be pleased to answer any questions if you have them.

10094 MR. METUZALS: Good morning. My name is Peter Metuzals, and I am the Director of Marketing for Canadian Interuniversity Sport.

10095 The CIS is the national governing body for all sport activities and events related to university sports. We are the largest multi-sport governing body in this country. We have 50 member institutions. Members include universities such as Queen's, McGill, Western, UBC, Université de Montréal, just to mention a few.

10096 We are also responsible for over 10,000 student athletes, student athletes who have decided to continue their education in Canada and student athletes who determined to pursue an athletic career in Canada.

10097 I am appearing before you today because I sincerely believe that Canadian university sport deserve and needs more television exposure and broadcasts.

10098 While the CIS has had some success in obtaining coverage of our events, it is getting more difficult, not easier, to continue to find and attract broadcasters who incur substantial costs to provide the proper exposure and high quality of programming to broadcast events within Canadian universities and of our student athletes.

10099 I wonder why that is so difficult.

10100 The CIS oversees over 3,000 events from coast to coast. Our events are very exciting with many different types of sports being broadcast, all very extremely competitive, all seen by many fans: competitions between our student athletes who compete against one another all with the intention of being the Canadian champion.

10101 This is a true amateur setting. There is no money involved. They are students first. Academics is a priority. Obtaining an education at one of the fine Canadian institutions is absolutely required. In addition, they are also student athletes, athletes who want to compete and student athletes who want to excel.

10102 Is this not an appropriate time to showcase our student athletes and our Canadian universities to the youth of today, to the Canadian viewers? Is this not an opportune time to encourage our young people to stay in Canada, to pursue both an academic and athletic career?

10103 The showcasing and promotion of original Canadian university competitive sporting events will help meet this objective.

10104 The CIS does have positive relationships with several of the networks. The Score's coverage of university sports has been excellent, and we certainly hope it will continue to expand.

10105 Over the past three years The Score has aired over 49 hours of live CIS event coverage, events such as men's and women's hockey, volleyball and basketball, at a cost of $342,000. However, as noted, there are significant production costs involved in producing consistent quality broadcasts.

10106 My understanding of the situation is as follows. The Score's current financial position does not allow it to fully support the CIS' efforts to provide exposure for university sports for our student athletes and therefore be given an opportunity to provide our universities with the exposure that they so much deserve.

10107 Due to a lack of resources and increase in costs, The Score was not able to broadcast any CIS events this year. Without consistent exposure for our product, it not only becomes difficult to attract sponsorship to the CIS, but also, and more important, our member universities and our student athletes are not receiving the visibility and exposure that they deserve.

10108 The Score has informed the CIS that if it receives the requested rate increase, more CIS events will be broadcast and more dollars will be made available to Canadian university sports. Items such as "Game of the Week" would help elevate the profile of our student athletes.

10109 Within the requested fee increase, it has been proposed that the CIS will receive an incremental of 126 hours per year at an estimated cost of $1.78 million.

10110 This will most certainly provide the consistent time slot needed for CIS programming. It will enable us to grow our brand, our identity. It will develop more awareness of our student athletes, of their programs and of their universities. It will continue that theme of staying in Canada to get an education and to pursue an athletic career.

10111 Our understanding is also that without the rate increase, The Score will not be able to provide the same level of coverage over the next licence term. In fact, the CIS has been informed that all CIS event broadcasts will be cut from programming. This, as you can well imagine, will be a major setback to all those involved.

10112 The Score with a national audience and a younger demographic group is a good fit for university sport programming. We not only hope but we need this enhanced coverage.

10113 In conclusion, I would like to reiterate the CIS' strong support for The Score. We need broadcasters such as The Score. In our opinion, original Canadian content can best be demonstrated with the broadcast of university sports. What better message can we present to the youth of today, an opportunity where we are exhibiting our student athletes in an academic environment while showcasing our universities.

10114 The Score will help us. They have committed to support university sport if given the requested resources. We believe this is in the best interests of Canadians, of the broadcast system and of course for the youth watching.

10115 Thank you. I as well, if you have any questions, would be willing to answer them.

10116 MR. DILSE: Good morning. Thank you for giving us this opportunity.

10117 My name is Ward Dilse. I am the Executive Director of Ontario University Athletics.

10118 The OUA is the governing body of university sport in Ontario, with over 18 schools and 90,000 participating student athletes.

10119 This is an important hearing for The Score and the OUA. The OUA needs a financial, strong broadcast partner to assist in providing live coverage of our sporting events.

10120 Our television property is our primary source for sponsorship revenue, and without The Score's assistance in this past year we would have suffered financial difficulties without a television agreement.

10121 The Score was the only national venue in Canada that was willing to put us on television this past year. The other main broadcasters had their plates full with higher profile leagues and sports. They are unable to provide us with a consistent schedule, Saturday time slots and were only interested in a reduced schedule.

10122 This past September "University Rush" on The Score was launched, providing live coverage of OUA football, men's and women's basketball and men's hockey.

10123 The Score developed a very effective branding campaign for us and provided national exposure for our student athletes. It was a great show with very high quality production values. It provided us with additional promotional opportunities and increased opportunities for viewer interaction.

10124 The Score provided over 30 hours of OUA programming. For us it was something that was beyond what we had expected; again, an outstanding production.

10125 The Score also produced a weekly feature, "The Score and the CIS", that profiled university athletes, including our OUA student athletes.

10126 The Score has informed us that the rate increase will be able to expand coverage of OUA sports and increase the promotion of "University Rush". It intends to expand coverage to include schools from across Canada, outstanding university programming to the CIS rather than just our OUA schools.

10127 This is the next evolution of university programming that will provide an incremental 126 hours of university sports programming at a significant cost. This will be a very positive for us, from a financial and exposure perspective.

10128 As you know, universities are struggling to find new sources of funding, and The Score's plans would be of assistance in that regard.

10129 The "University Rush" raises the profile of university sport in Canada. This assists in keeping our best and brightest in Canada.

10130 Our understanding is that without the rate increase, The Score will not be able to provide the same level of coverage next year that they gave us this past. In fact, The Score has informed us that all university sports programming will be cut.

10131 Obviously this would be a huge loss to our organization.

10132 The Score with its national audience and younger demographic is a great home for the OUA, and we hope that will continue.

10133 Let me finish by stating the OUA's strong support for The Score. We need them as a strong partner. With your support, The Score can be a strong and financially viable broadcaster, thereby supporting the OUA and other small sport organizations across this country.

10134 We believe this is the best interest by the Canadian viewer and the broadcast system. Thank you again for this opportunity. Again, I am pleased to be here to support The Score's application.

10135 If you have any questions, I would be happy to answer them.

10136 THE CHAIRPERSON: Vice-Chair Wylie.

10137 COMMISSIONER WYLIE: Good morning.

10138 The dilemma, of course, when you say that we have to make The Score strong is that in order to have a venue or an outlet, a window, for the type of programming that you represent, it appears it may be necessary for The Score to bid for very expensive properties to support the service.

10139 MR. BROWN: I will speak to that first.

10140 I don't think it is about expensive properties. The properties that you were presented here today, it is not necessarily about the expense for The Score to have the rights to those properties.

10141 COMMISSIONER WYLIE: No. My question was because those are not properties that may bring in as much revenue, it may be necessary to have marquee properties that are very expensive to bid for, considering the competitiveness that has grown into the system. Of course, for us it becomes a question of: Do we increase the rate to allow for the purchase of such properties in order for you to be more or less subsidized on the system, I guess?

10142 Have you thought about this dilemma and how one is to address it?

10143 MR. METUZALS: Maybe I can address that in another way.

10144 There is an aspect of rights fees and there is an aspect of production fees. If you have an expensive property and you pay the rights fees, that is a lot of money.

10145 Within the properties that we represent, the production fees are quite much because all the events are being produced within Canada. To produce one event is a significant cost, to not only us but also to the system. As a result, I don't want to use the words "fringe sports", but amateur sports do not get covered. They get put aside so to speak, because to produce an event of either university sport or a rugby event is more expensive than producing an NHL hockey or a CFL football game. The theory is more people might watch it, or you buy inexpensive programming that you just have to tape and you put into the machine and you really don't have to pay for.

10146 What we are saying is that with a rate increase, the program and production costs will be offset and there is no need to pay rights fees for other events which will help that.

10147 I think there is demand for the sports that we represent. From the university side certainly our television numbers for the past five years have demonstrated that. They are solid. But the Canadian viewer doesn't get to see that all the time because of the costs involved.

10148 If we don't show these events, how do we know that people actually want to see them? We have to encourage people, because this is original Canadian content, to continue to push and continue to show the fringe sports, the sports that we think people want to see but we don't really know because the opportunity hasn't been afforded, the whole opportunity.

10149 Does that answer your question?

10150 COMMISSIONER WYLIE: So you are suggesting that paying rights for marquee fees is not that much more expensive than producing the type of sports you represent because of the production costs, and that one way or the other a rate increase or a high enough tariff charged to all subscribers that are on the tier where The Score is is necessary for it to be a viable proposition.

10151 MR. METUZALS: I can't say that categorically, because the rights fees, first, differ. Two, I am not sure what all the rights fees are.

10152 I think if we start bottom line at production fees as the basis, which many events are, yes, that is something we have to address. If our fringe sports are not able to meet the production costs, then our sports will not be broadcast.

10153 COMMISSIONER WYLIE: What is ;your view as to the ability to sell air time in marquee sports as opposed to the sports you represent?

10154 MR. METUZALS: What is our ability to sell air time?

10155 COMMISSIONER WYLIE: What is the ability of The Score to have advertising in the type of sports you represent as opposed to marquee sports, the rights of which are very expensive, as you mentioned?

10156 MR. AMOS: Again, the rights to air some of those marquee sports is very costly. To us, that is why they are charging a lot more for advertising.

10157 On The Score, again it is a balance between if they do not have the same types of rights fees that they are paying out to some of our sports, obviously they have the ability to offer up advertising at a more reasonable rate.

10158 Yes, that is an opportunity for us to generate revenues for our leagues, and also an opportunity to offset production costs.

10159 COMMISSIONER WYLIE: Your colleague seemed to suggest that the production costs of the non-marquee sports are quite expensive as well, if you compare them let's say to the rights costs of marquee sports.

10160 MR. AMOS: Yes, but it still is a revenue stream for us.

10161 It is all in degrees, obviously. The marquee sports, the higher the rights fees to air those events, the higher the advertising. The less production, the less that we have in terms of rights fees, the less the advertising to offset that and therefore an opportunity for us to also generate revenues to support our sports. It is not solely on that.

10162 MR. DILSE: As well, when it comes to production costs, one of the issues with amateur sport in this country, and with all four of us sitting across here, is the need to have high quality productions costs to elevate the look of our sports.

10163 Clearly we have talented athletes, but we need the production quality to be at that level.

10164 When that is provided -- and that is what The Score did this year with the OUA and "University Rush". It raised the bar. It raised the level of fan interest. It raised the level of corporate sponsorship interest.

10165 Those production costs that they incurred this year were significant, and they were no different than a marquee sport and what kinds of costs there were for production.

10166 COMMISSIONER WYLIE: So high costs and less ability to sell air time at the same level.

10167 Would it be fair to say that you are before us saying give them the full rate increase they are asking for, because it is in the public interest to have a venue for the type of sports that you represent?

10168 MR. AMOS: Absolutely. It is a balance. We want to grow on all fronts, if we can, but obviously this would be a big help in terms of our productions. The higher the production, the more we can attract corporate sponsorship for each of our leagues.

10169 So it is a chicken and an egg scenario where we are hoping for a balance between growing fee increases to help the production and at the same time attract more corporate sponsors for our sports and therefore grow together. It is a balance between all of those.

10170 MR. BROWN: On Rugby Canada's perspective, we are asking that a viable opportunity be given to the network to allow sports to increase their exposure. Regardless of what that rate increase is, I believe that is your panel's role here, to identify that and to make it a viable opportunity.

10171 But certainly as an amateur sport governing body we look to The Score and to other networks to provide promotional opportunities for this, not just production costs, but the promotion of our sports nationally.

10172 COMMISSIONER WYLIE: Have any of you found a window of opportunity in either Sportsnet or TSN at any time?

10173 MR. AMOS: We have approached all the other networks and The Score were the only ones that were willing to give us this opportunity. We found with the other networks that their programming agendas were full and obviously we were not given the opportunity to place our sport there.

10174 MR. BROWN: Rugby Canada has a very good relationship with Sportsnet. Sportsnet does air our rugby matches, international and domestic, but once again we need as much promotion and promotional opportunities as possible.

10175 Mr. METUZALS: The CIS does have a relationship with TSN, primarily with TSN, and has had one for over ten years. They do provide coverage of our national championship events and they have done a very good job, but as well they pay for production costs of all of our events and they do an incredible job of covering it. We have a small relationship with TSN where they cover one or two events per year.

10176 MR. DILSE: The OUA had the OUA Game of the Week on CHCH for 43 years. When they were no longer interested in that, we took our property out to Sportsnet and to TSN along with The Score.

10177 Unfortunately, there was no other viable solution other than The Score because there was just not the programming window to broadcast our games live which is vital, I think, for our growth and success.

10178 COMMISSIONER WYLIE: I would be remiss if I didn't ask whether any of you represent women's sports as well.

10179 MR. METUZALS: The Canadian University Sports organization, as you may know, our system is very equitable. All events have to have a 50 per cent share of both men and women. All events covered are both 50/50. We have men's championships and women's championships and we are not permitted in any way, shape or form to be not equitable.

10180 MR. DILSE: As a conference of the CIS, I guess I can say ditto from the OUA's perspective but, yes, we are an equitable organization and want to strive to get that in television as well.

10181 MR. BROWN: Rugby Canada also represents both male and female athletes across Canada at the international and domestic level.

10182 MR. AMOS: The CBL is a men's baseball league, but we do hire women in various administrative roles and, unfortunately, we do not have women on our field, but there may be opportunity for that down the road.

10183 COMMISSIONER WYLIE: And the attempt to get a window, a broadcast window, would cover both men and women sports.

10184 MR. DILSE: Absolutely. We do it with the "University Rush", broadcast our women's basketball championship. We would like to see that expand, particularly in the sport of basketball. As well, one of the programs that assist us on The Score is Sport Access which is dedicated to women in sport and we have had our university athletes profiled on that show in the past. That would continue with this new rate increase.

10185 MR. METUZALS: Once again, certainly for Canadian University Sports to have women's programming as part of this is instrumental. We have actually found past history has demonstrated that some of our women's sports events outdraw in terms of viewing audiences some of the men's sports. It's more entertaining. It's a little more fun. The games are a little more competitive and just so happens that the viewers like it.

10186 COMMISSIONER WYLIE: Thank you very much, gentlemen, and thank you for appearing together. I don't think I have ever seen such a disciplined panel. You never talk one on top of the other. You are always -- you are used to discipline.

--- Laughter / Rires

10187 THE CHAIRMAN: Gentlemen, I wonder whether I could -- we are not through yet.

10188 I wonder whether I could poll you. One of the two you mentioned the amounts that you thought would flow from The Score to your organization, assuming they got the rate increase. I gather you have certain expectations as to what those numbers could be.

10189 Could you each of you tell me what you think would flow into your organizations in terms of licence fees over the next seven years from The Score if their rate increase were approved?

10190 MR. AMOS: To be honest, we haven't put a number on it, but it's obviously something that we would be counting on, again, the balance between our licence fees to The Score as well as production increases. Because we are at this stage in our first season having played just two weeks, our focus right now is to enhance the product to attract viewers to that product and so all our goals for the next couple of years is really to become established and by becoming established with a high-quality presentation.

10191 So where we see The Score helping us primarily is in the broadcast itself, and also looking at a rate increase, not that that is set aside. We are certainly in the business of making money, but at the same time we are pouring a lot of those fees into the production because, again, that's our best message right now to attract people to follow our sport.

10192 THE CHAIRMAN: Have you read their application?

10193 MR. AMOS: Yes, I have thumbed through it.

10194 THE CHAIRMAN: Did you notice the cost of new initiatives they listed? Did you notice what that was?

10195 MR. AMOS: Off the top of my head, no.

10196 THE CHAIRMAN: Let me see if I can get it for you.

--- Pause

10197 THE CHAIRMAN: Costs of the new initiatives proposed in total -- including the last item which is an increase in live event programming such as "University Rush" -- across the Canadian Baseball League and Score International, the sum total of all of those is $13 million.

10198 MR. AMOS: It sounds familiar, yes.

10199 THE CHAIRMAN: So that's one of the initiatives. It includes all of your activities over the seven-year period.

10200 MR. AMOS: Right.

10201 THE CHAIRMAN: So whatever division one does, the numbers that would go to your organization would be relatively modest overall, would they not?

10202 MR. AMOS: Directly or indirectly if it's The Score that is responsible for the production and if that's equipment that they will be using for all our sports, then obviously that is something that we will all benefit from. So again, if they can increase their production costs and increase it by new equipment and adding to the ability to get out in the community and to broadcast our sports, then we will all benefit from that. So it's not necessary divided in my mind one for each of us. It will be equally shared amongst all the productions that they will be involved in.

10203 THE CHAIRMAN: I guess we should clarify that to them, but I was wondering whether in discussions you had had any expectations that entitled you to do a ballpark calculation. Your answer is basically no.

10204 MR. AMOS: Correct.

10205 THE CHAIRMAN: Promotions, has that been discussed with you? I know this came up in discussions with Vice-Chair Wylie. Have you discussed how your products would be promoted and whose responsibility that would be?

10206 MR. AMOS: Yes. Again, we look at it as a shared responsibility in terms of promoting our sport on-air, obviously, with the ability to do certain things within the broadcast but also within other broadcast times, the ability to run the ticker, promoting our sport, features, things of that nature, that will constantly be telling fans about what is going on within our sport, who are the features again that are promoting us. Beyond that anything outside of the television network, yes, we would expect some sort of a promotional partnership on some of those things that we are doing as well.

10207 So again, to the degree that you are looking for, we have not got to that at this stage, but we certainly are depending on them for that partnership down the road.

10208 THE CHAIRMAN: Mr. Brown?

10209 MR. BROWN: There have been no discussion on anything that Rugby Canada would receive. Rugby Canada is in a position that we need to identify promotional opportunities. We believe that a more viable Score would increase their Sports World programming. They did talk that they would implement a new program called Score International that would focus on one of the three core sports being rugby and that is the value that we see back.

10210 The costs associated with production, and what not, that would be on their end and we would see some of those funds going to actually produce the segment. Ours would be the content.

10211 MR. METUZALS: We have discussed, and we have discussed for a lengthy period of time prior to this presentation that The Score would broadcast one event per week of university sports starting at the beginning of the academic year and finishing at the end of the academic year. This totals to approximately 126 hours of coverage at an estimated cost and then primarily the cost would be close to $1.78 million dollars, which I believe is outlined in the submission.

10212 This is something that our organization needs to build up to the championships, to build up to the championships, to build up on a regular basis.

10213 To follow up on your question with regards to promotion, promotion is and has been done by The Score in a very positive and very well-documented basis. They promote our scores, they promote our athletes. It only makes sense that they continue to do so in the future because that helps promote their event.

10214 MR. DILSE: Adding to the side of promotion, with the launch of the "University Rush" this past year The Score did a tremendous job outside of the window with over 30 spots per week promoting it on the upcoming live telecast each Saturday. We, as partners, have ensured that we have reached out through our corporate sponsors to promote our telecasts as well.

10215 With the additional funding, this would allow us to focus those resources and to expand our coverage outside of the medium of television, and get more viewers know where the "University Rush" is on TV.

10216 THE CHAIRMAN: But you don't have a number that you can give me.

10217 MR. DILSE: Sorry, no, I don't have the number.

10218 THE CHAIRMAN: Commissioner Colville.

10219 COMMISSIONER COLVILLE: Thank you, Mr. Chairman.

10220 Mr. Amos, the Canadian Baseball League, is that professional or amateur?

10221 MR. AMOS: It's a professional league, again providing opportunities for Canadians to participate. It's basically a place where kids can aspire to play and remain in Canada.

10222 COMMISSIONER COLVILLE: How would you draw the distinction between amateur and professional?

10223 MR. AMOS: It's a good question. I was debating that the other day. Our athletes are paid so they are professionals. They still have to do supplement their income with other jobs, so I guess if there was a distinction it would probably fall between whether this is their main source of income or whether it's a supplemental. Given our situation, most of these athletes do need to supplement their income.

10224 COMMISSIONER COLVILLE: So would the baseball be the main source? Would it be more than half their income typically?

10225 MR. AMOS: I would say at this stage no. We have ballplayers who just want to play the baseball games because they love the sport. This is part of the livelihood, but it's not their sole source of income, or their main source of income.

10226 COMMISSIONER COLVILLE: So it would be considered professional, but they wouldn't be dependent on it for their livelihood.

10227 MR. AMOS: Correct.

10228 COMMISSIONER COLVILLE: Mr. Brown, would you have any comment on those questions? How would that apply in your case with the rugby.

10229 MR. BROWN: Rugby Canada represents a broad spectrum of athletes from the young children who play locally in schools to the clubs, all the way to our international athletes, who the majority of our national men's team in particular are professional athletes in Europe, but when they come back home to represent Canada at any of the levels they are not compensated in any form, other than those athletes that receive Sport Canada carding which is our national carding system for elite-level athletes.

10230 So the impact from a professional standpoint we do not pay any of our players at all.

10231 COMMISSIONER COLVILLE: Just going back to you for a second then, Mr. Amos, how would you define professional then?

10232 MR. AMOS: Again, professional -- and I know this is hotly debated issue currently, but obviously our athletes are being paid. In the sense of being a professional, I guess that's what we describe professional as, someone who is paid for doing a job, but again there are so many different ways that you can pay an athlete these days that we do get into some other issues such as endorsements, which in some cases can also be construed as even a higher source of income from the actual sport itself.

10233 So a professional baseball player who receives direct payment for his services is, in my mind, a professional.

10234 COMMISSIONER COLVILLE: And I suppose -- do the two university representatives have any help in terms of the definition of amateur, not professional?

10235 MR. METUZALS: I think everyone's personal definition of what amateur is may differ completely. From our side, from our professional side as a professional staff person, our university athletes are considered, whatever the loosely definition of amateur is, as true amateurs because, as I indicated over and over, I tried to indicate, they are students first. They have to maintain a certain academic integrity. They have to go to school. They have to remain academically eligible in order to play.

10236 The best thing that our student athletes within Canada is some scholarship funding, and sometimes the scholarship funding comes about as a result of doing very well academically. There is a small move in the last two and half years that our students have been for now receiving scholarship money which is called "awards" to help offset some of their costs for education, but that is happening across the board.

10237 They don't play for money. They receive medals. They play for the integrity of being a Canadian champion, and eventually, once they graduate from school, they become whatever they can. They can pursue a career as a professional. But I think if you ask me what a professional or amateur is, or what the status is, I am not sure there really is a good answer.

10238 What is an amateur athlete? What is a professional athlete? Is the person who gets $100 to appear at an event does that all of a sudden make that person a professional? Does the person who gets $50 to attend an event to help offset their gas cost or their hotel accommodation, does that make him a professional? I don't think so. If you look at the IOC and the IOC Charter of the Olympics Federation they allow up to $1,000 a day of what an athlete is allowed to receive. Does that make them amateur or professional? I don't know.

10239 If in order to be a highly successful athlete, an athlete who wants to win, an athlete who wants to achieve all the standards that they have set out to be, if costs a lot of money and the money that is available right now -- and to not be able to accept anything makes it very difficult to achieve those goals. And I think my colleagues here would agree with me on that.

10240 COMMISSIONER COLVILLE: Mr. Dilse, do you have anything to add?

10241 MR. DILSE: The definition is difficult. At the university level we have eligibility rules and regs that do not allow someone to come back from professional sports to play in university sports at the CIS level. We don't have a definition that is clear cut that can be broadbased across our multitude of sports. What we have done is we have had to identify what those leagues are. So we have identified what sports from men's hockey, what are deemed of being professional and what can't you factor in.

10242 We have done this and it varies from sport to sport because, again, that challenge of what constitutes professional is very difficult to divide.

10243 COMMISSIONER COLVILLE: So for each of the sports that is within your organization, you define what is professional. So if they have gone there and come back they can't --

10244 MR. DILSE: Yes. We have identified right now rules and regs for specifically those leagues that are deemed professional.

10245 COMMISSIONER COLVILLE: Mr. Brown?

10246 MR. BROWN: I think one thing when you go through the challenge of definition of amateur and professional, it's not necessarily the athlete themselves. It's the environment that they participate, ie. is the league that they are involved in, the professional league, is it a for-profit? Because I know in our case our top athletes are professionals overseas. They play rugby for the top clubs in Europe in the southern hemisphere, but when they come back here they are amateurs. The environment they participate with Rugby Canada is amateur. They represent Canada at the international level as amateurs.

10247 But I believe the league structure is very important to consider when you are making that definition of professional or amateur.

10248 COMMISSIONER COLVILLE: It's probably a good point. I would imagine some of the lower-level players, for example, on the PGA tour wouldn't earn enough money to be able to make a living off of. Thank you, gentlemen.

10249 Mr. Dilse, I think no matter how well you do, St. Mary's is still going to win the Vanier Cup this year.

--- Laughter / Rires

10250 MR. DILSE: You could be right, but I will be cheering against you.

10251 THE CHAIRMAN: Thank you very much. Thanks, gentlemen.

10252 Mr. Secretary.

10253 MR. LEBEL: Thank you, Mr. Chairman.

10254 Again, we will hear as a panel the following intervenors. Mr. Roman Danylo, Mr. Greg Lawrence, Mr. Andy Nulman and Ms Caroline Maria. For the record, I would like to indicate that Elvira Kurt cannot be here this morning. Her intervention will remain on record as a non-appearing intervention.

INTERVENTION

10255 MR. DANYLO: Hi there, my name is Roman Danylo and I am a comedian. It is a bit strange for me to be here so I thought I would just treat this like any other show if that's okay. Okay, so how about a big round of applause for everybody that spoke before me, weren't they great, they were something else huh, very funny. Anybody from out of town, anybody celebrating anything tonight? Okay, hearings, tough crowd, who would have thought.

10256 Anyways, attending this kind of thing is perfect for a comedian because actually I am just going to go home and make a sketch out of it and it will be great, you will be in it definitely and that guy over there and you'll be in as the pretty one and you'll be in it as the serious one who scares me a little, but -- I did prepare a whole bunch more jokes here before I get started, but I didn't get my CTF funding. So, ladies and gentlemen, mesdames et messieurs, I have been involved in comedy for the past 16 years, which just makes you think that I would be a lot better at it by now, but I have had the pleasure of doing a number of projects for the Comedy Network across the country, Slighty Bent TV in Vancouver, and AMP in Halifax, Just for Laughs Improv Championships out of Montreal and in Toronto Improv Heaven in "Comedy Now" and "The Holmes Show" and now they have been kind enough to give me my own show called "Comedy Inc." starting this fall.

10257 I remember when the Comedy Network was getting started, I thought to myself woo-hoo scramble, everyone gets a show, but it didn't quite work out like that. It seemed like they were looking for TV track records, show bibles, budgets, weird things like that. So, because of the Comedy Network, a lot of us were forced to learn a lot about TV production. Since then, I have definitely enjoyed watching the Comedy Network develop over the years, I have seen a commitment to a diversity of programs and I watched them spread the shows around the country as best they could to represent different parts. They also make a commitment to come out and see shows and develop personal relationships with comedians and producers.

10258 What does this mean for Canadian comics? Well, it gives us an immediate and realistic and plausible opportunity to get projects to air. Before the Comedy Network comedians had to either move to the States, get lucky with one of the two big networks here or forced to play out their Canadian careers in crappy one-nighters or bar gigs, the kind of bar gigs where they turn up the heat lamp from the buffet for your lighting or where you get like a hex put on you by an audience member, both of which have happened to me by the way. I believe shows like "Open Mike with Mike Bullard" and "Comedy Now" -- the Comedy Network has already started the ball rolling on creating a star system in this country. It has raised the profile of Canadians to the general public.

10259 If there is one area where the Comedy Network suffers it is from a lack of sufficient budgets to make the kind of quality shows that the material and talent deserves. We as comedians and producers are restricted when developing new concepts to the kind of formats that could be done given these low budgets. If the Canadian content hours were reduced then the Network would have higher budgets for a select number of shows. We need this opportunity to take Canadian comedy to the next level. Our talent and abilities are clearly there and, with larger budgets, our shows could compete in the international market.

10260 I have recently, myself, spent some time working in Los Angeles and in Hollywood it is widely acknowledged that Canadian comedians are a valuable commodity. I have been tempted, like so many other Canadian artists, to just move down there and focus on the opportunities available in a U.S. career. But I was very pleased, some would even say giddy as a schoolgirl, when I heard that the Comedy Network and CTV had given me a show in Canada. It meant that I could come back here and stay in the country the country that I love and have the type of fulfilling career that I wanted without ever having to leave home.

10261 Lastly, I would just like to say in conclusion that I have met most everyone working at the Comedy Network and they are mostly very nice. So, that's it, so don't forget to tip your waiters and wait staff and have a good night.

10262 MR. LAWRENCE: I knew I should have opened. My name is Greg Lawrence. Foremost, thank you for giving us the opportunity to speak to the panel, it is vitally important I think if producers from across the country are given this venue. I am based out of Ottawa here, I run a production company called Austin Productions, the company is 10 years old. Our primary benefactor out of the gate was the Comedy Network, prior to that I had been a writer and freelance director. Instead of producing when the Comedy Network came up, we were one of the first producers to have a series through the Comedy Network.

10263 Over the last six years we have done 10 full seasons of series production and the company got its footing based on the work we got out of CTV and the Comedy Network. Now we deal with several other broadcasters and we still continue to do work for the Comedy Network. Had I been asked to appear at this panel probably three or four years ago I probably would have turned it down, been scared off by the idea that any reduction in Canadian content was somehow bad for our industry. The knowledge I have gained in the last 10 years, now that we deal with broadcasters both domestically and internationally, Canada is at a cross-roads in production. I was one of the few producers that actually agreed with the removal of the $25 million from the CTF fund provided it gets allocated elsewhere.

10264 Canada, I think, has used up to the best of its ability what we can do with the funds and the broadcasting landscape has shifted so dramatically in the last few years and there is so many different channels and so much opportunity to get programming on the air that the reality is it is very difficult now to produce a show in Canada that has what the industry calls legs, that has the potential to be sold somewhere else. Where we find ourselves, from my standpoint as a producer and I think every producer in Canada, it is nearly impossible to create a show that's an indigenous Canadian show that can become economically self-sustaining. What that means is, every year we have to go back to the fund and hope that we get enough money to create another show or a season, two or three of the shows we're doing.

10265 But very rarely does that show get made to a level where it can be sold somewhere else. So, from a business standpoint, as an economic principle it is not a solid foundation for growth, we have nothing to build it on. Occasional shows will break out where their content will somehow marry with the budget and it will be a success story outside of Canada. It is very rare, we haven't really had a Kids In The Hall in 20 years, a show that played here, played in the U.S., played in the UK and I don't think we can have that show given the current economic situation. So, I think it is vitally important. We did a series a couple of years ago where I saw the benefits of what a show like The Simpsons, which was our lead-in for our show, what that did for the economic growth of our show. The Simpsons brought probably three times the amount of viewers than any other show would have brought to the Comedy Network and they were our lead-in. I know our show gained popularity because those people were already tuned into the Network.

10266 The other cross-roads we face is our company has grown almost to the point where we can't take the next step and the next step for us would be what I think the goal of the funding agencies and what I think the goal of CAVCO and -- has always been in -- was to allow companies like my company to come along, become financial stable, become proficient at their craft, and then begin to make shows that are self-sustaining and no longer need to go to the funds and then the funds can move onto another producer and help them to get up to that point.

10267 In order for us to take that next step I have to produce a show that doesn't get the critical review of "it looks Canadian" and it looks Canadian is what we fight. And the sentiment that we have all heard that if it looks Canadian -- I can tell it is a Canadian TV show, it has nothing to do with the creativity of the writers or the cast, it has nothing to do with our ability to create great stories, because we are doing it in other countries quite successfully. It has to do with the fact that I simply don't have the time and the money to create a show that visually competes with the landscape of international programming.

10268 Until we have that, we are going to continually go on this cycle of making shows that draw a moderate audience, break even, but don't really propel from a business standpoint any economic growth. The reduction in Canadian content in prime time is very important. It may mean my work dries up with the Comedy Network, I'm fine with that because I think, as I look ahead to the next 30 years of my career, the reality is the funds I don't think are going to be there in five or 10 years, certainly not in the shape they are. Unless we find another model to finance production and the end of that model being to create a show that we can sell to other marketplaces, then we are just going to continually fight to break even and there is no growth. It is a shame that Canada hasn't had its equivalent of The Crying Game, its equivalent of that TV series that takes off. Every other country in the world has had it, but not Canada and it's because I know where to put the camera, I know how to tell my actors to act, I know how to write a script. I can't afford the expensive camera that makes it look good, so the person sitting at home isn't going to take their first glance and say well, it's a Canadian production, I don't want to watch it. Until I have the ability to make something that is going to make the viewer pause as they go through these 500 channels, then I can't sell my shows outside of Canada.

10269 The worst review I get is it looked great, it is one of the best looking Canadian shows I have seen. I want the ability to make a show that people watch and are entertained by it, but I can sell somewhere else. The reduction of 60 per cent will then allow the Comedy Network to allocate greater amounts of funds to a smaller number of shows, but then they can make shows that give us the ability to get the proper cameras, to get the light package, to not have to shoot eight pages of script a day, to let our actors work and to act and not be forced to get from point A to point B in 14 hours because we have to get that page count done, then we will start producing shows that will draw an audience, that draws ad revenue. The percentage of contribution in prime time then becomes -- we've set up a model that is economically beneficial to producers. Fewer number of shows, but they create greater number of revenue and more opportunity for growth.

10270 As it stands right now, to fulfil what would be the 72 per cent, it just means the smaller amounts of funds that stations have because advertising dollars are getting split and leveraged over so many broadcasters that they have to spread the money so thin. We don't have the ability to make a show that doesn't look Canadian. Thank you.

10271 MR. NULMAN: Hello, my name is Andy Nulman, I am the President of a company called Airborne Entertainment. Airborne Entertainment does wireless entertainment, it is entertainment on cell phones and I have perhaps the least to gain out of anybody at this table here today. So why am I here? Obviously, not for the decor, I'm here because seven years ago I was part of a team, the original team, that pitched the Comedy Network concept right here, in fact at this very table -- a little bit wilder dressed then, but I have gotten more conservative in my old age -- back then there was a general goal and the goal was here to convince you guys that the Comedy Network had a right to exist, but more importantly also to convince you guys that the team that I was with was the best team to put it on the air. After five years with some great success I have to say, quite -- perhaps unabashedly, I think you made the right decision.

10272 Today the goal is a little bit more specific and it is to try and convince you guys that this team that won your approval five years ago or seven years ago I guess, to convince you that this team knows what is best to put on the air and how much of it. So, I am really here to address two very specific issues and the first has to deal with the allocation of funding. I have got to be honest in saying even when I was -- Oh, incidentally, I used to be CEO of the Just for Laughs Comedy Festival, which is why I have perhaps a tad of credibility in the comedic field. But in the television production field, over my career, I produced over 150 television shows, some which were even watched and many of them in Canada obviously, CBC, CTV, Comedy Network, but a lot of them, I would say most of them, in the United States and around the world.

10273 Despite that, despite producing over 150 shows, I know very little about the matters of CRTC, about numbers and figures, to be very frank I always had people who knew better than I and let them do that. But I know that a little bit about business and business in general and sometimes in business less is more. Especially in this case, because Greg made a very valid point, sometimes given less people more money means doing more shows. Lets give everyone the same "fair chance", lets give everyone the same thing and the same fair chance may work in school yards, but believe me it doesn't work in the television business. I have seen over the past two years the Comedy Network nurture Canadian talent on screen, people like Mike Bullard, as Greg mentioned, people like Tom Green, but now what it needs to do is the same type of nurturing off screen of producers and I think this is where they are going with this less is more concept.

10274 When the Comedy Network hit the airwaves five years ago at that point in time it was just good enough to say lets just get something on the air, lets just put something on the air, some Canadian content, we'll import some shows, lets get the Network up and running. But today as one of Canada's most successful and popular cable networks period and I don't know the statistics, but I know it is up there with TSN and all, as one of the most popular and successful networks, the Comedy Network mandate I would say is much different, there is a much greater responsibility. Now it is more than lets just get shows on the air, now its lets get the right shows on the air, shows that will be self-perpetuating and help build an industry.

10275 I was hearing Greg speak and listening to other people who helped prepare me to get to this seat today, Canadian producers have a similar goal. I remember when I was producing shows over at Just for Laughs, early on it is good enough just to have a show, you don't care what it is, you don't care how much money you are getting, all you wanted is that holy grail to get your program on the air. But as companies evolve they have a responsibility, a responsibility for their employees, a responsibility to their shareholders, their owner and most importantly a responsibility to the public to produce quality shows with a lifespan of more than just one year and a lifespan of potential market of more than just Canada. That is what I have seen in the past and I have seen friends suffer that agony and ecstasy or perhaps the other way around the ecstasy and agony. The ecstasy of wow, I got a show and I have a limited run of six and next year, whoops, my funding ran out and you are basically, perhaps in the worst place than you were before because of the fact you have had a taste of that success and no where to follow-up with. There is where less is more comes into play.

10276 In the math of television production from the production standpoint, four producers doing 12 shows is way better than 12 producers doing four shows. There is less dilution and, if I may, I would say the product is not going to be as half-assed as you would get when diluting, spreading it out so far and so thin.

10277 This reallocation -- I guess I can call it the reallocation of funding -- may hurt some producers, it may force some producers to go out of business and that is life and that is the law of the jungle. But more importantly, what it will do is it will help build other producers and help build an industry, an industry that needs to show growth and producers that need to grow an audience both here and abroad.

10278 Now, the second issue I would like to address relates closely obviously to the first and that is the slight reduction. I looked a little bit at what these numbers are and, again, I don't have it in front of me, but they have a teeny, tiny -- this is not a slashing, this is a slight reduction of Canadian content in prime time. A slight reduction of Canadian content in prime time. Honestly, a few years ago I would have been against this, I would have said this is insane and this is not right and it is treating the Americans and the Brits and the others better than us, whatever. But frankly I have to say, knowing what I know about the television business these days, prime time these days is almost irrelevant. What is prime time?

10279 I will give you two examples. First of all, I look at Saturday Night Live, because in comedy what is prime time? Saturday Night Live built not just -- it was given the dead zone, it was given a waste slot. Saturday night television late night, it was a wasteland, it was John Carson reruns, but it built an audience. Not too many people were looking, but it slowly and surely built an audience to today. It is not just a popular show, it is more than just an industry, it is an icon. It found its audience, it took its time slot and made it. Comedy shows have that power that most other shows really don't. Secondly, being in prime time may actually be a detriment for Canadian shows. Because, I don't know about you guys, but I remember when I was producing shows the thing that worried me the most was being up against must see TV, wow we gave you Thursday night at 9:00, I'm saying oh geez that is wonderful, I'm up against I think it was Seinfeld and Hillstreet Blues perhaps (that shows my age) at the time. But I didn't want to be up against the American juggernaut and I knew I was going to get killed because given ER versus whatever I was producing, ER would win. So prime time isn't necessarily as relevant as it once was.

10280 These days, even more so -- Lets put that aside, lets put the American juggernaut aside, with time shifting, with Bell ExpressVu, with TIVO, with different time zones with the upcoming VOD, video on demand, prime time really is anytime.

10281 Location is location is location may work in retail, but in television it is not as important.

10282 To me, it is more of a field of dreams: if you build it, they will come. If you build the right show, people will find you somehow, someway. Word of mouth will get it to them, and they will come to the show or they will tape the show. They will time-shift the show.

10283 The goal here is for Canadian producers to build quality shows that will find an audience both here and abroad at whatever time is given.

10284 Basically, if I conclude all this diatribe in a very, very brief summary statement, all I can say is I support The Comedy Network's goal of less is more whenever.

10285 I thank you.

10286 MS MARIA: My name is Caroline Maria. I am the President of Cinemaria Productions based in Montreal.

10287 Mr. Chairman, Commissioners, I really appreciate the opportunity. I think it is a privilege to be able to come here today and express myself on behalf of independent producers and share my experience with The Comedy Network over the years.

10288 I came into this business sort of sideways. I was a practising attorney in Montreal for a number of years and a writer and journalist and became interested in pleading my own cases as opposed to other people's cases in a more creative and fun world.

10289 I took some time to travel after I practised law, to think about what I wanted to do, and came back from my travels with some ideas about producing television shows. I thought I will try this. What can happen? The worst thing is I can go back to practising law.

10290 I started producing shows, cooking shows. I always loved animation, "Bugs Bunny", and so on, so I thought I would try this. And lo and behold a number of producers said: Well, you know, there is a certain ability here, plus she has a background in law. This could be useful.

10291 So I started to learn about animation, some CINAR, some NELVANA and some CinéGroupe and other production companies, and then decided along the way -- I went to NATP and MIP and learned that you actually presell shows. Sometimes you find international partners and they bring something to the table. And lo and behold, if you sign a Canadian broadcaster who is insane enough to buy these things, then you might just get lucky and produce the show.

10292 I had met Ed Robinson at one of the markets, and I came up with a property I had picked up from a British illustrator called "The Many Deaths of Norman Spittal", which was basically 156 ways to kill a man in 20 seconds.

10293 Ed Robinson said: Yeah, let's put this on the air. I have entered another world here. There's a lunatic running a mad house. I started meeting other producers that had the chutzpa to get out there to the international market to see if we could get presales.

10294 Because animation is so expensive and because it takes a long time to produce, you really have to find the right production partners internationally and particularly the right home for it here.

10295 From there I continued producing more animation and then started getting into things like puppets and combining puppets with animation and finding that there was still a home at The Comedy Network for these different types of programming.

10296 Just recently we produced a program that fell into kind of a hybrid category. It was part animation. It was part puppet. It was part live action. And we ran up against some category problems. We realize naively that there were these categories under which certain programs could fall that, even though they were hilarious, were not considered proper programming for The Comedy Network because of the classification of programs.

10297 This point addresses the request by The Comedy Network to include Category 7(g) among the categories that they are applying to expand their broadcasting to be able to -- first and foremost, is it funny? Is it designed as a comedy program?

10298 If it is designed essentially as a comedy program, The Comedy Network would seem the natural home for all types of programming, so long as they are funny.

10299 I strongly, strongly urge the Commission to accept The Comedy Network's request to include 7(g) in their new categories so that we don't fall into difficult situations where we can sell our shows to Comedy Central in the U.S. or to The Comedy Channel in Australia or the U.K. Somehow The Comedy Network can buy it but it doesn't get the same privileges that other comedy programs may get that are under the proper categories.

10300 That is my point on 7(g), which I think is an important one.

10301 On the question of international market and on the question of being able to reduce the Canadian programming in the prime time category, although I agree with Andy on the point that prime time is maybe less important in a lot of ways than it used to be because of the fierce competition that we are up against.

10302 However, I do think that by decreasing the number of original Canadian comedy shows that will air in the prime time block, I do think that it will provide more funds for those shows that are retained for broadcast in the prime time category.

10303 That is because our viewing habits as Canadians are known. We like U.S. programming. We like to see the texture of shows like "Will and Grace" and "My Wife and Kids", those shows that are comedy shows that are on film, 35 millimetres.

10304 For instance, "Will and Grace" is shot with three 35-millimetre cameras. There are very few Canadian shows that can afford to do that. In fact, there aren't any yet.

10305 I think that it is time for us to grow up as comedy producers and hit the big leagues. I think we have the talent. I think we are beginning to have the solid international relationships to create co-productions that have their own legs and that can live on multiple seasons. I think that if we produce fewer shows but of a greater quality, we will increase our reputation as producers of shows for the American market.

10306 I don't think the objective is only to produce for ourselves. We are a tiny market. We have great potential, but if we can build a show that is Canadian and has the potential of airing in the U.S. prime time, I think we will really reach our full potential.

10307 I don't think we should say that it is impossible to make a Canadian sitcom. When I see the quality of talent and acting and our ability to mix some of the American humour, some of the British with our own brand, I find it is a shame that we even laugh at our own industry about our inability to produce a funny Canadian dramatic -- a single camera, as we call it, like "Malcolm in the Middle" or a sitcom.

10308 Why can't we do it? It is not lack of talent. It is lack of funds. It is lack of ability of our broadcasters to be able to invest the funds in a few good shows.

10309 I would prefer to be in the company of the best and fewer producers of the best programming than to be in the company of a number of producers who do fair shows.

10310 I think the way we can distinguish ourselves as producers of the best comedy in the world is really to play in the big leagues. I believe strongly that Ed Robinson and his gang of lunatics are the best people to judge and to help guide us as producers towards that.

10311 I do not believe that there is any ulterior motive. I don't believe that the use of ad revenues and increased ad revenues is not going to be invested. I do believe it will be. And if they don't, in a few years when they come back for a licence renewal, then slam them. But we have to give them the opportunity to give us the chance to shine. I believe that increasing their investments in prime time in the few selected shows is the way to do it.

10312 That also allows us to do other types of programming daytime, where they are going to increase their comedy programming for Canadian content.

10313 Stuff like short format that we still do, stuff like other types of programming that doesn't belong in prime time, it is still going to have a home. That is a breeding ground for a longer format, which will eventually end up in prime time.

10314 I thank you, and I urge you to approve the licence as designated in this year's application.

10315 THE CHAIRPERSON: Thank you.

10316 Mr. Lawrence, I would like to go over that "Simpsons" example that you presented.

10317 What time of day was that scheduled in your programming?

10318 MR. LAWRENCE: "The Simpsons" airs at 9 o'clock. We did a series called "The Endless Grind". It was well received and nominated for Geminis and Canadian Comedy Awards. Prior to that we had done three seasons of a series called "Butch Patterson", which was a live action comedy as well.

10319 What I noticed very profoundly was the impact having a show like "The Simpsons" on directly before "The Endless Grind" had. When The Comedy Network started to air "The Simpsons", from the minute they aired that first episode it became their biggest drawing show.

10320 THE CHAIRPERSON: On that point, what is interesting is that even in an age of surfing where people search out the programs they want and presumably in an age of personal video recorders where a computer will do the searching for them, you are still thinking that placement in the schedule after a high drawing show will have a spillover effect.

10321 MR. LAWRENCE: It has a profound effect. Not only did it have a profound effect -- you know with a show like "The Simpsons", you know with a show like "ER", which obviously doesn't apply, if you have a known commodity like that that you can stick in your slot, you know that it is going to draw an audience.

10322 The show before it gets a bit of bleed if people tune in early. The show after it reaps a huge benefit from people who are still tuned to the channel.

10323 The tangential benefit is also that gives The Comedy Network the opportunity, during the commercial breaks, to promo other shows and create awareness of programs that viewers might not have been aware of.

10324 All these little components add up to increased viewership.

10325 THE CHAIRPERSON: How important was the prime time scheduling, 9:00 p.m. and following, to the spillover effect?

10326 MR. LAWRENCE: I suspect that our numbers were up about 30 per cent from what they would have been otherwise with any other lead.

10327 THE CHAIRPERSON: You have two panellists who are saying prime time isn't important, and I am gathering from what you are saying that prime time is important.

10328 MR. LAWRENCE: I think prime time for that show was very important, because it was a bit off the beaten path. It was a short story based show. It was an anthology show. So it wasn't the type of show that was modelled like a conventional sitcom, like a conventional one-hour dramedy. It needed to find its niche audience. So the more we could create an awareness, the more people who saw even snippets of it or promos for it.

10329 I agree a little bit with what Andy said. I think a show like "Tom Green" proved it. We do a show called "Kevin Spencer" which airs at 11 o'clock at night on a Sunday night. It draws big numbers. We are going into season six, so it has been a bit of a slow build.

10330 There are shows that by nature of their content an audience will seek out.

10331 For some of the other shows that we do, which are perhaps less contentious and don't have that shock value, that is going to draw an initial viewer to your show. I still think you need that time slot.

10332 The reality is if I am doing a show that is a comedy, I need to get it on air before people are going to bed. If I am playing on a Tuesday night, my audience is 18 to 34-year-olds. These people have jobs or school. They are not going to be up at midnight or 1:00 in the morning. So if we are relegated to that time slot, if we are relegated to 3:00 in the afternoon, we are not going to draw any audience. There is going to be no benefit to our show. There is going to be no value to our show.

10333 I find a lead like that helps. People come to watch it.

10334 But there are other shows where they don't need it.

10335 THE CHAIRPERSON: Thank you.

10336 Commissioner Grauer.

10337 COMMISSIONER GRAUER: I know a number of you referred to the lack of sufficient budgets to make the kind of programs that you think you need to move to the next level of production. I know we heard on Friday from the Producers Association that they said licence fees were down.

10338 Is it your impression that comedy and perhaps some of the other services don't have the budgets and that in fact if we were to reduce the Cancon requirements, this would make more money available?

10339 The reason I say that is that in fact many of the services that we are renewing here, their actual profits and revenues greatly exceeded what they projected at the original licensing.

10340 If we are going to allow them to lower their Canadian content, should we increase the amount they are required to spend on Canadian programs?

10341 I wonder if you had thought about that at all.

10342 MR. DANYLO: That would be great. It would.

10343 I think the intention here is all about having bigger budgets for fewer shows, and we need to up the quality. If that is the way to do it, by reducing the Canadian content, then that's what we have to do.

10344 The way it is right now, where it is spread over such a number of shows, it is just the quality has diminished when you spread it out like that.

10345 MR. LAWRENCE: I think it is a bit of a misnomer to keep saying fewer shows. I think that is true out of the gate, but I think it sets up the foundation for what down the line will be more shows.

10346 In conjunction with the equation of lowering from 72 to 60 per cent, that doesn't mandate them lowering the percentage of revenue generated within that slot back to indigenous production. What that means is if the revenues are increased and their percentage of what they have to contribute of those revenues to their prime time slate remains the same, that sets up an economic formula where shows have a fighting chance to be successful and actually generate revenues. If they generate revenue, then advertisers want to attach to the show, like they did with "Tom Green", like they do with "Gavin Crawford", like they do with "Mike Bullard".

10347 Then it becomes something that is economically beneficial to the network to say: You know what? We can make Canadian shows that an audience will watch if they are funded at a level where visually and technically they can compete; where the audio doesn't sound tinny; where it is shot on 35 mil.

10348 These are the things we need, especially as funding agencies scale back and the landscape of broadcasters becomes so diversified.

10349 If you are not making a show that the audience technically buys into, they are going to flip the channel. We need that ability to create something that has potential for growth. Right now we don't have that ability.

10350 It is a bit misleading to say fewer shows. I think it is fewer shows, but we are talking about a renewal of a licence for seven years. I think by year seven it will be more shows.

10351 COMMISSIONER GRAUER: I understand what you were getting at.

10352 It strikes me that we have become a bit trapped in this country in not believing that if we invest the money in the program, we will create the kind of program that will generate the audiences and the revenues.

10353 I am not talking about any specific service here. I am just saying overall.

10354 When we set a Canadian program expenditure level, there is a tendency not to spend more than that amount, and it is seen as a ceiling as opposed to a floor. So even if the profits are exceeding and the revenues are exceeding projections, that additional investment into programming isn't maybe being made.

10355 I just wonder if they are coming down a bit on the Canadian content, if we might bump them up a bit on expenditures; that it is a trade-off.

10356 MS MARIA: What I think about that is I don't think we can regulate how much, I don't think we should regulate how much the broadcasters should spend per minute on a Canadian program. I don't think that is the solution.

10357 I think great shows will draw ad revenues. Ultimately, it would be great as an objective to treat Canadian comedy on the same footing as American comedy. I don't think we should savour one more than the other, other than provide the opportunity, which these regulations attempt to do.

10358 Personally, I think it should be lower than 60 per cent. I think that if they had applied for 50 plus 1 per cent, I already would have found that terrific; that we have a broadcaster that provides that platform for Canadian original programming.

10359 72 per cent? I don't know.

10360 I just think that if you allow the time slot and if you create an opportunity for greater ad revenue, as Greg mentioned, I think 41 per cent of the ad revenue is committed to original programming.

10361 If you are drawing more eyeballs by having some American or other foreign programming on prime time, you are increasing your ad revenues and therefore you are increasing your available pool to reinvest into fewer higher quality Canadian shows.

10362 COMMISSIONER GRAUER: Thank you.

10363 THE CHAIPERSON: Thank you.

10364 Vice-Chair Wylie.

10365 COMMISSIONER WYLIE: Ms Maria, if you don't know where this number came from, it came from the applicant in the competitive process.

10366 As Mr. Nulman likes to refer to us as "you guys", "us guys" were impressed by the percentage of Canadian content in prime time. I hear you that perhaps more money would go into fewer shows if it were reduced. But is i a little contradictory, isn't it, with the comment that the benefit of being in prime time and on the shoulder of popular American shows is very important to success of Canadian content.

10367 How do you resolve this contradiction that you support a reduction of Canadian shows in prime time but yet appear to believe that Canadian shows aired in prime time benefit from the popular American shows that may be there and drawing audiences?

10368 MR. NULMAN: If I may address irrespective, guys, the Commission. I guess the best way to put it is I am so sorry, I have been out for a couple of years.

10369 COMMISSIONER WYLIE: I don't mind being referred to as a guy at all, I confess.

10370 MR. NULMAN: Okay, chuck up one for us, I guess.

10371 I don't want to contradict anybody here on the panel, but I tell you all I can talk about is my experiences in prime time, and I will tell you to me what was always more important was the lead in versus the time slot. I can give you months of figures, and I saw this happening. No matter where you were, the stronger lead in kept people, and a weaker lead in, it was an uphill battle.

10372 So I think I would like to perhaps propose an experiment, but I would suspect that "The Simpsons" at ten o'clock, at four in the afternoon as a lead in is more beneficial than "The Trouble with Tracy", for a lack of a better show, but "The Trouble with Tracy" at four or ten o'clock.

10373 We have seen it time and time again with other shows that we produced for CBC and others, that what we used to gun for, we used to pray for -- I remember Showtime, "Please give me a big movie, please give me a big movie before my show". It didn't matter the time as much as what is bringing people to the screen.

10374 When I was mentioning "The Simpsons", that was very specific to our show in terms of the prime time and I think it was important because we were doing such a hard to define show, that was sort of outside the bean path of conventional comedy, that I don't think had we had a lead in like "The Simpsons" I don't think we would have drawn the audience and gotten the critical acclaim that we had because I don't know if people would have given it the chance.

10375 I don't see that as a contradiction to what Andy said because some shows like "Tom Green", it was the only one out there. So if they put that on at midnight his core audience would tune in. If you want to watch stand-up comedy or you want to watch one of the galas that Andy produced, you will find that on the slate, but for shows that are launching more in the sitcom format, that aren't sort of tailored specific to a niche, that are in the grand mix of half-hour comedies that get launched every year, of which there are very few in Canada. Most of them in the States are made by Canadians, but in Canada it's very difficult to get an audience to buy into, for lack of a better word, a sitcom format.

10376 It's because we don't have the money to duplicate the model. Sitcoms have a certain and a certain style and they are multi-camera shoots. That's the expectation an audience brings to half-hour comedy. So when they watch a Canadian show it tends to be single camera, but then shot on at best 16 mml. They don't look or sound as polished despite the fact that the actors and the director and the writers very often have returned from doing successful American sitcoms.

10377 The reality is that a 16 mml camera doesn't look at nice as a 35 mml camera. If I have to spend three days in post-production as opposed to five, my final product isn't going to be as nice and it's not a reflection on the talent or the creativity. It's the difference between driving my beat-up car and a new Mercedes-Benz. They are both cars. I can only afford by beat-up used car. So I will steal a Mercedes.

--- Laughter / Rires

10378 COMMISSIONER WYLIE: Is scheduling, in your view, as important on the specialty channels which are more niche services or closer to appointment television, knowing what kind of channel, as opposed to conventional television, or is it as important to have this scheduling --

10379 MR. LAWRENCE: I think for --

10380 COMMISSIONER WYLIE: Except for like the "Tom Green Show".

10381 MR. LAWRENCE: I think for the type of programming I do, with the exception of "Kevin Spencer", that it's very important because the programs we are developing and working on tend to be comedy/drama, half-hour, single-camera productions. So they don't have that hook that may drive some like a reality show or something like "Tom Green". You could put Tom on any time of day. He is literally the only guy in the world doing his content. So his audience that wanted to see that was going to go to him.

10382 If you are doing Andy's galas special, if you have Jerry Seinfeld doing a gal there is nothing else, if you air it at midnight, there is nothing else. It doesn't matter what time of day you air that. If someone wants to see Jerry Seinfeld doing stand up, or see the pinnacle of stand up, there is no real competitor to that. When you are doing half-hour comedy, which is primarily what we do, dramatic based, we have a lot of competitors out there. So time slot is important to us for over the course of the year until we get established and to have that lead in.

10383 "The Simpsons", a show like that makes a profound difference to the type of content I am doing. Everyone on this panel does a different type of content. So they exist under different conditions and maybe what my needs are in terms of trying to find an audience.

10384 COMMISSIONER WYLIE: Would it be fair to say that the Seinfelds of the world or ERs have actually made themselves in prime time on a particular time slot? The original.

10385 MS MARIA: I would say so.

10386 MR. LAWRENCE: Yes, but the reality is also Seinfeld made himself because he was launched from a network that produces 40 sitcoms a year, six of which may go to air, one of which may get picked up. In Canada, if you shoot it, it goes to air. That's the reality. So we don't have the luxury of the money into the development system.

10387 COMMISSIONER WYLIE: My question as more it may not have made it if it had been on at nine o'clock Saturday night.

10388 MR. LAWRENCE: Yes, and Seinfeld had it been made in Canada woudln't have made it because they wouldn't have been able to sustain eight episodes of no ratings to stick with the show I don't think.

10389 COMMISSIONER WYLIE: It may not have made it as popular a show as it was if it had been aired on Saturday nights at nine o'clock.

10390 MR. LAWRENCE: Certainly, but it's also what they did with Seinfeld was back it on to their most successful sitcoms.

10391 COMMISSIONER WYLIE: But when that age group audience may have been out to the bar instead or --

10392 MS MARIA: If I may on that, from my point of view, we produce a comedy show called "Life's a Bitch" in collaboration with The Comedy Network and Oxygen Media. Oxygen Media is a broadcasting group from Oprah Winfrey, Carsey Werner and Geraldine Laybourne, and through that work I have been able to work with some people at Carsey Werner who have been fantastic in showing me the ropes really on writing for comedy for a prime time audience.

10393 So, yes, it's important to us that we have slots available for prime time broadcast because it allows us in a sense to create shows that are calling cards for Canada and for our comedy community to be able to show the potential for us to have great quality programs in prime time.

10394 I mean, The Comedy Network, like any other channel, is basically a three-ring circus. You have your daytime, you have your evening and you have your nighttime and the main show, the big show, the centre ring is really prime time. Even if you are up against giants, I would rather be up against giants than up against small people that don't necessarily make me better as a producer. I would rather be sandwiched in between two giants and learn from that and show our calling card. Being able to hold our own in between two American shows followed by another great Canadian show, and an American show right after will keep the audience fixated on our shows.

10395 If we don't have a prime time block, we don't have the opportunity to create the comedy and the writing to show the talent that we need to. So prime time is crucial. It's not that it's unimportant. It's just that sometimes when you are up against another channel showing really popular shows, you are going to lose some audience. But if your comedy network is allowed by virtue of the change to air more of those great shows that draw the eyeballs to prime time, then again we have a greater chance of being seen. So the next time we go pitch another show to NBC or to CBS or Fox, or some of the American cables, they will say: "Oh, yes, that's the one that aired in between these two great American shows". We are in the big league and that is really, I believe, the intent of The Comedy Network's change, is to allow us to reach that next level, reach that full potential that we think strongly that we have already in this country. We just need the money to do it.

10396 COMMISSIONER WYLIE: I guess if you are 22 and you are watching TV alone on Saturday night, life is indeed a bitch.

--- Laughter / Rires

10397 MS MARIA: Yes, that's pretty much it.

10398 MR. NULMAN: If I may add one thing to these prime time discussions, just to clarify -- I hope I am getting this right, but we are not talking about eliminating Canadian programming from prime time on The Comedy Network. We are talking about a slight reduction. Correct? That is an important point because I think it was getting to the point of perhaps the perception is cutting off of prime time. I don't think that's the case at all.

10399 THE CHAIRMAN: Commissioner Pennefather.

10400 COMMISSIONER PENNEFATHER: Very quickly, just to complete on that point and something Mr. Lawrence was talking about.

10401 We talked about a number of different kinds of shows from animation to stand-up to sitcoms. Just let me just ask you. Mr. Lawrence, you said the sitcom format -- you started to focus in on that prime time. The thesis is less content, more money to go to fewer shows.

10402 In terms of money then in sitcom format, half-hour, what is the differential? What is spent now? What do you think should be spent to achieve the goal that you are all talking about on average?

10403 MR. LAWRENCE: I do single-camera work, so it's not conventional studio four-camera sitcom. I haven't done that before, so I don't really want to speak on behalf of that.

10404 We do shows that are shot stylistically similar to the importance a show like "Malcolm in the Middle" would take, "Mind of a Married Man", "Curb your Enthusiasm", single-camera film style, but half-hour comedy. The difference for me between making a show that is the equivalent of what we have made and what can sell is the ability to shoot on 35 mml cameras and the and the ability to post it and get the music right and stuff like that. I need about 40 per cent more budget than what I currently work with.

10405 So it's an increase in licence fee from The Comedy Network, but that also then gives me the ability not only to bump up by 20 per cent let's say from LFP and then overall my aggregate becomes higher, but it also gives me the ability when I go to market. One of the first things people ask me: "What are you shooting on?". If I say "60 mml" or if I say "digital video" or if I say "HD", their question is never "Let's do this", their question is always, "Show it to me when it's done and we may acquire it then".

10406 It's virtually impossible to get a big market prefill if you are not shooting 35 mml.

10407 COMMISSIONER PENNEFATHER: I understand. I got that thesis. It was just a question of when you come down to it, if everybody is to have the same point and says "I need 40 per cent more", at what point do we start really shrinking the number of producers being able to appear because there is another side to increase in quality.

10408 You have done what you have done partly because it's what you want creatively, but also because of what's possible to do financially. So it's not only you, but others in the same kind of format will start trying to jack it up a little bit. That's the thesis. How far can that go?

10409 MR. LAWRENCE: To me there is only so far you need to go technically. The next big equation is: Do you have enough money to secure a profile actor that is going to draw an audience. That is a whole other can of worms. To me it's a very difficult thing to do in Canada and I think there are very few actors that are going to draw an audience in Canada. There are very few Canadian actors where people say, "I am going to watch their new show". There is only a handful of them.

10410 So producers in Canada tend to be more story-driven than perhaps, "We have Ted Danson, let's build a show around him". There is no equivalent to Ted Danson in Canada. There is no equivalent to that for comedy in Canada, to get that.

10411 So we have to, I think, approach it like what Ken Finkelman did with "The Newsroom", where it becomes a very successful show, but it wasn't a show that was, "Let's get a star and build a show around them". That's very much an American model. The Canadian model of comedy tends to be, "Let's get a funny show and find good actors we can put in that show" and hopefully over the course of time these good actors, like a lot of the people in Ken's show who have moved on to "Made in Canada". They are people that Canadians recognize now as indigenous, funny Canadians who are good actors, but we can't approach the model the way the Americans do in terms of talent.

10412 COMMISSIONER PENNEFATHER: Thank you.

10413 MS MARIA: I would add just one thing to that, if I may. I don't think all producers are good at everything. I think some producers are best at certain types of programming and I think that by allowing the opportunity to perhaps -- I mean, we are talking about five half-hours per week, as I understand it, a reduction in Canadian content during prime time.

10414 If we allow a slight reduction in a number of producers vying for those slots, I believe that the market will let the best rise to the top. There is no advantage in constantly saying, you know, let's try everybody. Some people are better at comedy. Some people are much better at drama and others are better at sports. I mean, it's just the reality of our business and we can't artificially create opportunity for those that aren't best at that particular job.

10415 While I completely agree that we have to encourage Canadian content by setting a minimum, and as I mentioned before I think the minimum at 50 plus one for me would be enough to make the best rise. If you go to American television, there are a few producers that come back year after year who are the best at what they do. They are very few new ones that come into the prime time comedy category.

10416 It's just so difficult. It's so specialized, and I think by reducing the number slightly of producers that can provide that kind of programming we are really going to boost the availability to produce the best comedy in prime time in this country, as well as for exports to show -- I think ultimately it will have a positive impact on our industry because if we produce any award-winning shows, not only Gemini winning, but if we are after Emmys we need to do this and we are after Emmys because we need the market, we need the money to be able to finance these larger budgets.

10417 We can't do it entirely out of Canada and produce the kinds of shows that we need to produce to be able to sell worldwide and sell on the U.S. market and draw the eyes in Canada to our own shows, not to the show after it.

10418 COMMISSIONER PENNEFATHER: Thank you very much.

10419 THE CHAIRMAN: Commissioner Wylie.

10420 COMMISSIONER WYLIE: You talk about production values, et cetera, but in your view was "Seinfeld", for example, with its great success as a comedy a very expensive show? I am not an expert but you never saw anything outside except if it's out of a store. It almost had a Canadian look, but for the production --

10421 MR. LAWRENCE: An episode of "Seinfeld" --

10422 COMMISSIONER WYLIE: The quality of the writing and the actors who performed it, but the rest was pretty --

10423 MR. LAWRENCE: As a frame of reference I will use "Seinfeld"'s first four seasons of production before they became a huge success and actors were getting one million dollars an episode. The first full season of production, to shoot one episode of "Seinfeld" cost more money than I shot my entire last series for. The casting budget on "Fraser" is bigger than my per-episode cost for my Gemini-nominated series. That's the reality of producing in Canada and it's not a complaint. I could move down to the States. I am not complaining about that.

10424 The reality is they shoot in huge sound stages. They are four-camera shoots. The economics involved in those shows are huge, but excluding the talent costs, which is always what drives American shows up, the technical mechanics of shooting the show is about eight or nine times what the average per Canadian budget is. That is typical for any American sitcom compared to a half-hour of Canadian comedy that is drama or sitcom-based.

10425 COMMISSIONER WYLIE: I would have thought that the factor of having to, as you put it, put everything on there that you could use is more important perhaps. In other words, even if it doesn't really click you have to keep it on because you can't try 25 things and find that two of them are going to have to capture the interest of a certain demographic despite the fact that it may not have elaborate outdoor shoots.

10426 MR. LAWRENCE: I mean, the percentage has to go to air, so The Comedy Network at 72 per cent with X amount of dollars allocated to produce shows. In order for them to fulfil their prime time mandate of whatever percentage the shows have to go to air.

10427 It is very rare a show gets made in Canada that doesn't go to air. The Americans will shoot -- but they have a lot more money -- they will shoot 10 shows to come up with one.

10428 MS MARIA: We are extremely resourceful in this country. We are extremely resourceful, with what we have available to produce we do amazing things and that will continue, it is just a question of doing an incredible amount of work with just a little bit more money. I think everybody here at the table realizes that a license fee increase from $2,000 to $6,000 per minute or even $5,000 per minutes makes a huge difference at the end of the day and gives a different calibre of product that we are proud to show internationally.

10429 THE CHAIRPERSON: Thank you. Thank you very much for your appearance, it has been very helpful. I will now break for 15 minutes.

--- Upon recessing at 1135 / Suspension à 1135

--- Upon resuming at 1151 / Reprise à 1151

10430 THE CHAIRPERSON: Monsieur le secrétaire.

10431 MR. LEBEL: Thank you, Mr. Chairman. The following interveners will also be heard as a group. First Mr. Les Tomlin of the Peace Point Entertainment Group, Mr. Bob Falkenberg, Mr. Paul Graham, Susan White on behalf of Wyndham Studios Entertainment, and Shelley Todd on behalf of Fishing with Shelley and Courtney. Please introduce yourself before you speak. Thank you.

INTERVENTION

10432 MR. TOMLIN: Good morning, Mr. Chairman, Members of the Commission, thank you for the opportunity to appear before the CRTC to my comments heard. My name is Les Tomlin and I'm the Founder, President and Executive Producer of the Mississauga-based independent production company Peace Point Entertainment Group.

10433 Further to my written submission, I am here to speak in support of the renewal of Outdoor Life Network or OLN's specialty license and potential impact to their requested changes to the condition of license laid out therein. In preparing this presentation I have reviewed the hearing notice contained on the CRTC's website 2002-0897-7 in which OLN seeks to broaden their programming offering to include new genres of programming. I would like to specifically address the positive impact of these requested changes, if implemented, would have on the Canadian independent production community of which I am a proud member.

10434 First, I would like to give you a brief overview of Peace Point Entertainment Group. Peace Point Entertainment Group was founded seven years ago in May, 1996 under the predecessor company named Taste Television Inc. The initial goal of the company was to produce high quality Canadian content television in the lifestyle and recreational genres for both domestic and international consumption. Our first project, Taste of Life, was a convergence property and this is convergence before it was spelled with a capital C and before it became a dirty word. The first 13 episodes were self-funded by myself and a partner and before any deal with a broadcaster was actually negotiated. This series was subsequently licensed to Prime TV and the series Taste of Life went to air the first day Prime turned on in Canada.

10435 Taste of Life enjoyed a nice run, we produced 108 episodes of the series, both here in Canada and in destinations abroad. An interactive website that supported the show was launched in 1997 and both the series and the website survive today. The series has been licensed in over 18 international territories and is translated into several foreign languages.

10436 Taste of Life provided me with a foundation upon which to grow my company and I soon realized that having diversification in the programming that I offered was going to be the key to the long-term success of my company. It was for this reason that we developed and pitched an outdoor reality series called Drifters the Water Wars to OLN in January of 2001. The project was immediately green lit, went into production in June of 2001 and premiered on OLN in September 2001 to much success. Shot on location in numerous locals in Ontario, with al all-Canadian crew of 35, Drifters on OLN set Peace Point on a solid new and diversified path.

10437 And diversified we have, to date Peace Point has produced over 200 episodes of quality Canadian content programming representing an excess of over 100 hours. Genre diverse projects ranging from a 13 part series on OLN entitled Camping Out, which covers Canada's camping hot spots from coast to coast to Tan Lines, a 26 part show featuring great Canadian beach destinations also on OLN. Our goals soon produced the world's first travel series for the gay and lesbian market, a 26 part series called Bump which airs on Pride Vision.

10438 My goals are to continue to grow Peace Point Entertainment Group by offering my broadcast partners what they want, quality, new to Canadian content that caters to the increasingly diverse and fragmented television audiences. And important to note, every series I produce, whether shot here or abroad, is firmly routed within the Canadian production landscape. We have utilized exclusively the talents of cinematographers, audio engineers, producers and support staff who are Canadian and have completed all their post-production here in Canada. Suffice it to say, I am fiercely Canadian.

10439 Now, I would like to address briefly the need for and my support of OLN's request to include additional genres of programming under the condition of license. First and foremost, OLN has always been a welcoming partner to present new and innovative Canadian television concepts to. From Canada's first outdoor adventure reality series, Drifters, which I have already mentioned, to fuse and give amateur sport athletes a voice in Canadian television, a series called SWEAT, sport with edge and attitude, currently airing on OLN. They have always been willing to try new formats and genres of programming. Working together over the past three years we have developed and launched five new television series and OLN today is Peace Point's largest single source of revenue.

10440 I am in support of OLN's request to further broaden its audience with the addition of the dramatic 7(a) category. I believe that OLN is in unique position to create dramatic programming that can differ significantly from other dramatic programming currently on the air. I would love the opportunity to develop such a property with OLN. As we accomplish success with Drifters and Tan Lines, I truly believe that OLN will be successful in creating drama in the great outdoor.

10441 Having also produced a 13 part amateur sport and youth lifestyle series entitled SWEAT (sport with edge and attitude) for OLN, I have already seen first hand the need for international outlet but for secondary underexposed sports such as pro volleyball and tri-athletes. For this reason, I also fully support the addition of underexposed sport, category 6(a) in the programming for OLN's schedule.

10442 The need to encourage and promote outdoor sport to an increase in the sedentary use is a well documented current media favourite. Just this past weekend if you picked up any newspaper there were some major articles about the fact that sedentary use will become a large problem as our youths of today are become the adults of tomorrow. So, promoting an active lifestyle to television programming targeting this audience will have positive social impact in the long-term and I fully support it.

10443 In closing, I would like to summarize my comments as follows. OLN has been instrumental in establishing my company, Peace Point Entertainment Group, as a creative genre diversified and financially solid independent producer in Canada. To continue to grow, the success of my company is co-dependant on the growth of specialty television networks such as OLN and offering diverse programming that meets the need of Canadians as a diverse television viewing audience is the key and success of independent producers such as myself.

10444 OLN will be able to continue to grow with audience numbers and revenue to the addition of new genres of programming, new categories of programming and therefore be able to invest additional dollars in quality Canadian content of which I'm a producer. The stronger and more successful OLN becomes and the stronger the independent television production community will be, the stronger my company becomes.

10445 Thank you, Mr. Chairman and Members of the Committee, I'm open to any questions you may have.

10446 MR. FALKENBERG: Good morning, Commissioner, I am here to speak in the support of OLN license renewal. My name is Bob Falkenberg and I am the General Manager of the Canadian Professional Rodeo Association.

10447 The CPRA was established in 1942 and has a membership of 1,400. Rodeo in Canada entertains over 650,000 fans at 60 rodeo events throughout Western Canada annually. The sport of rodeo represents and displays our western heritage and tradition to an ever increasing fan base. CPRA events is comprised of saddle bronc riding, bareback riding, bull riding, tie-down roping, steer wrestling and ladies bell racing. The Canadian Pro Tour visits small and large communities across Western Canada, including Regina, Saskatchewan; Calgary, Alberta; Cloverdale, B.C.; Innisville, Wainwright; Panoka, Alberta; Williams Lake, B.C.; Strathmore, Alberta; Armstrong, B.C. and Morris, Manitoba.

10448 Typically, these are the largest annual events for these communities and which are entirely staffed by volunteers. Rodeo is more than just an event-based sport, it is about community and tradition. Many of the competitors have followed in the footsteps of their father and grandfathers. It is quite common to see fathers compete against sons, mothers compete against daughters. Our most celebrated competitors such as Cliff Williamson, Mark Roy, Dwayne Dains, Roddy Hay, are top athletes on the rodeo circuit and deserved to be recognized as great Canadian athletes.

10449 Although we are a professional association, almost no competitors earn a living from the rodeo circuit. Competitors pay for their own travel, entry fees and other expenses. Most of these athletes do not earn enough to break even over the course of the season. These athletes compete for the life of the lifestyle and for the love of the sport.

10450 OLN's proposed increased commitment to the sport of rodeo is of great interest to the CPRA. Currently, there is a limited national television exposure in Canada of these Canadian events. The only event that is televised is the Canadian Rodeo Championship, which is broadcast by SportsNet. However, there is no television coverage of events leading up to this final.

10451 We believe that the extended coverage is needed to satisfy the appetite of rodeo fans across the country. The opportunity to establish professional rodeo on OLN will have a major impact on our sport, as we now have limited media exposure. Rodeo is an important part of western heritage and reflects our western lifestyle. This is an opportunity to share our western culture with the rest of Canada. We would ask the CRTC to make this possible. Thank you.

10452 MR. GRAHAM: Members of the Commission, thank you for allowing me to speak to you today in support of the OLN license renewal. My name is Paul Graham and for the last 20 years I have been involved in Canadian television production with an emphasis on live sports coverage and have been fortunate enough to produce live sporting events for TSN, CTV, Rogers SportsNet, Global and CBC. For the last five years I was contracted as the senior producer of Hockey Night in Canada and recently returned to independent production.

10453 My occupation has allowed me to travel to hundreds of towns and cities across this country and to witness first hand the impact of television and sports to the community. Of course, the majority of televised events feature major league sports from major league Canadian cities. The National Hockey League, Canadian Football League, National Basketball Association, and Major League Baseball all receive several hundred hours of coverage, both national and regional. This group caters, however, exclusively to the professional athlete, the guys with the nice salaries, the true professional whose standard of living reflects their incomes.

10454 But the core athlete in this country, the true amateur or the part-time professional or tournament player suffer from underexposure on television, due in large part to the network's unwillingness to cover underexposed sports. Allowing OLN to broadcast secondary events showcases Canada's diversity to a national audience, basically its grassroots to centre stage.

10455 A common theme I hear from athletes and participants involved in secondary sports is what about my sport, how come I can't see it on TV? Well if special interest to me is OLN's application to allow the network to nationally broadcast underexposed sports, I see this as an opportunity for the lesser known or secondary sports to receive much needed coverage. The athlete gains a wider range in audience in which to display his or her talents, the sport receives the additional exposure leading to participation growth and the event host city or community is able to showcase its civic pride.

10456 Two under-served sports that qualify under the OLN mandate immediately come to mind: rodeo, as Bob has just spoken about, and beach volleyball. Rodeo has a huge following, particularly in Western Canada. Most Canadians know about the Calgary Stampede, OLN and CBC both have coverage of that event. But Western Canadians play host to over 60 rodeo competitions a year from all over Penticton and Dawson Creek in B.C. to Leduc and Camrose in Alberta to Estevan, Swift Current and Shaunavon in Saskatchewan and rodeo is a big deal to many Canadians. But, unless you are in those local communities or part of a travelling group, you really have no chance to see some of Canada's best athletes, make that some of the world's top rodeo stars in action.

10457 Allowing OLN to cover live rodeo in an expanded format would give this exciting sport a much needed boost.

10458 Now, beach volleyball is another sport aiming for a higher profile. Thousands of fan enthusiasts in Canada are involved in recreational and/or competitive volleyball on a weekly basis. This country has been blessed with several fine athletes of world calibre in beach volleyball. John Child and Mark Heise from Toronto captured the bronze medal at the 1996 Olympics in Atlanta, the tandem of Conrad Linamen and Jody Holden hoisted gold at the 1999 PanAm Games in Winnipeg.

10459 These special athletes practice all winter and in the summer play in a world tour and at various low profile events in Canada. If it wasn't for the profile of the Olympics or the PanAm Games Canadians would never even know their special skill. But these underexposed sports face a dilemma regarding the classification. The series the athletes compete in are termed professional, but this branding really only applies to their capabilities, certainly not their bank accounts. The term professional gives their sport a certain status and a credibility with their fans. But the average beach volleyball player might collect a few hundred dollars for a tournament win, barely enough to cover his or her travel.

10460 The average pro rodeo participant averages about $10,000 to $15,000 per year, they all have other jobs unlike the professional counterparts in the big leagues. These athletes do it for the love of the game and deserve coverage of their moments in time.

10461 As a live event producer, I have noticed that the vast majority of OLN programming is of a taped or magazine format variety. Live or taped delayed event coverage takes programming to a whole new level. Live coverage gives secondary sports, such as rodeo or beach volleyball, an urgency to it. In today's world the sporting fan wants to know the score of the game as it happens and they want to know it right now. This type of coverage gives the sport a legitimacy.

10462 If it is important enough to televise live, then it is important enough to watch. Too often, programmers position sporting events in an extended tape delay basis, thus eliminating any hope of labelling the program as a must watch. Live coverage brings credibility.

10463 Not every sporting property is a high profile, but with increased exposure and the commitment of a network like OLN, they could be. The amendments would permit significant opportunities for independent production and would enhance the overall quality of programming for the television viewers in Canada. Fans and participants of secondary sports can finally ask their friends, hey did you see us on TV? Thank you.

10464 MS WHITE: Good afternoon and thank you for allowing me to speak today in support of OLN's license renewal. My name is Susan White and I am the Vice-President of Wyndham Studios Entertainment. Our team consists of three Canadian independent producers who came together to form and incorporate Wyndham Studios upon the commission of 26 episodes of All-Strength Challenge by OLN back in 1999.

10465 We are now entering our fourth season of production on this series and have encountered a situation concerning the appropriate categorization of our property and I would like the opportunity now to describe the All-Strength Challenge so that you can see why we consider this to be amateur sport.

10466 In our first year of producing the series All-Strength Challenge was a combination of Highland game heavy events and strong men events, which are derived from the traditional Highland competition. Examples of these events would be a caber toss or hurling heavy stone.

10467 We have now eliminated the traditional Highland events and have only what are deemed to be the modern version of Highland, which are called strong man and these would involve bench presses, dead lifts and pulling trucks.

10468 Our contests are open to all athletes who either already compete in some form of strength competition, whether it is Highland Games or power lifting, but we are also open to any athlete who weight trains and thinks himself capable of pulling a truck, they need only show-up at our event and sign a waiver.

10469 Certainly, our finished episodes tend to awe people, but in fact even on location the most unaccomplished athlete will keep a crowd gaping simply by fumbling attempt to pull a 40,000 pound truck. The reason for that is that a lot of these athletes are well over 6'5" and well over 350 pounds and are attempting to do the impossible.

10470 Our episodes only really highlight the top four to six finishers of a field of 30 or so competitors who come to our competitions. Because, in fact, only about a fifth of the total competitors who come and compete can finish any or all of the events. We don't charge any fees for the athletes to participate, although we do offer a modest amount of prize money.

10471 In the first year we travelled to over 14 to 16 locations across Canada, but as the popularity of the strong man sport has grown through the airing of these episodes on OLN we are now in the position to set up our event anywhere we wish to and know that the athletes will travel at their own expense to get to our competition. Why they go to the extent of travelling from Vancouver to a competition that we host in Halifax, I'm not really sure, but I do have over 100 strength athletes in my database just from Canada.

10472 I know from knowing them personally that they compete because of the camaraderie of the sport and the element of tradition, where egos clash over who can carry 500 pounds farther than the other guy.

10473 Wyndham Studios Entertainment continues to branch out in the area of producing niche sports and due to the experience we have gained by organizing strength competitions, we have been able to secure one-off contracts on TSN and Rogers Sportsnet in the past two years. However, in order for us to continue to grow and promote these types of sports we rely heavily on the "All Strengths Challenge" property continuing to air on OLN and to jeopardize the airing of this property would most certainly jeopardize the survival of our small company.

10474 We hope to continue nurturing the growth of Canadian amateur sport events. We want to continue to have a strong partnership with OLN in doing so.

10475 I would like to thank you for the opportunity to show my support for their licence renewal.

10476 MS TODD: Good afternoon, Mr. Chairman and Commissioners. First, I would like to say that I appreciate this opportunity to speak on behalf of our program "Fishing with Shelley & Courtney".

10477 My name is Shelley Todd, and I am a host and producer of a program. I support the OLN's current application. I would like to offer some background on our programs and hope that this will help explain our support of OLN's desire to expand their coverage and licence.

10478 "Fishing with Shelley & Courtney" is an independent Canadian-produced program that has been in production for approximately eight years on OLN.

10479 My co-host Courtney Hatfield and I are the only two women hosting fishing shows in Canada and of just a handful of hosts fishing throughout North America.

10480 Our half-hour program is intended to encourage participation and activity in the outdoors in a responsible manner. Each episode includes technical, travel and interesting information on fishing, the environment and the particular places we visit.

10481 Both of us are outdoor enthusiasts, participants in conservation activities. Courtney continues to work for the Pacific Salmon Foundation, a conservation and fund-raising group that funds restoration and sustainability projects on the Pacific coast.

10482 We work hard to convey the message that the outdoor environment is fun and healthy for everyone and should not be taken for granted.

10483 Each episode of our program takes place in locations that range from the local to remote fly-in lodges. Our base is western Canada. However, we shoot throughout Canada, from the Queen Charlotte Islands in British to Gaspé, Québec, to Algonquin Park in Ontario, and we even visit other countries such as Patagonia Chile and Lower Cayman Islands.

10484 We work in co-operation with tourism agencies, lodges, airlines and independent operators. The fishing may vary from place to place, but the message we try to convey remains consistent: get out and enjoy the environment.

10485 We believe that angling is a fantastic way to do that. This activity that has captured both Courtney and my attention is an ideal way to spend time with family, educate youth and to learn more about the outdoor environment.

10486 Canada has, as likely all of you know, a virtually limitless wilderness and variety of national settings to explore. The more individuals and companies that we can involve and encourage to participate, the better our chances are to sustain natural resources.

10487 We work hard to appeal to a broad audience. Our show varies from the usual outdoor program, which we generally have an expert guest and occasionally host celebrity guests from all walks of life. On popular demand, we continue to devote a portion of our show to a cooking segment, where noted chefs cook recipes from anywhere from their home to an outdoor setting.

10488 Away from the Canadian television media we have been honoured with a few distinctions. Courtney and I were designated as two of the 30 most important people in the past 30 years in the fishing, hunting and outdoors world in Canada, and in the U.S. we have been recognized on two separate occasions as viewer favourites on stations that carry over 60 fishing programs.

10489 I think it is important to say that our show has continued to gain popularity. Ratings have continued to show us this from year to year. We are currently one of OLN's top rated shows.

10490 Also, we have consistently maintained a very high Canadian certification rating, always being registered as 100 per cent, according to the CRTC. We are Canadian and we are proud of it.

10491 I mention all these details because I feel that they are a large part of the result of our lengthy and important relationship with OLN. Outdoor Life Network has carried our program since its launch in 1997. We have always had a strong relationship within that work and have been both encouraged and nurtured by the suggestions, ideas and assistance along the way.

10492 OLN's national exposure has been a key to our longevity and popularity. It also has been a key factor in allowing to make contact with different locations throughout the country and appeal to companies as potential revenue generators.

10493 As an independent Canadian production, we rely on exposure and a consistent place in a natural coverage setting to help generate revenues. Without OLN we would have great difficulty approaching national advertisers.

10494 "Fishing with Shelley and Courtney" support this application for many reasons. OLN's program lineup now is good and relevant to our aims, but the proposed additions will be a stronger, broader and more substantial schedule for us to be a part of; a continued commitment to Canadian content; a variety of outdoor adventure sports and live events.

10495 To be in a schedule that includes this kind of variety of content will undoubtedly strengthen our position in the national setting.

10496 We are excited to think of the prospect of having programming that is a little more substantial and relevant than ever before. We feel that this application will bring more diverse viewers to OLN and will expose them to our program as well.

10497 We believe this application will enable OLN to work with independent producers in a more active way as a result and may also help OLN to generate additional revenues for independent producers, in turn bringing more to Canadian viewers.

10498 In closing, as mentioned, we have been in production for eight years. Over the time we have filmed over 150 episodes. We have a strong and diverse program and varied audiences from all across Canada.

10499 "Fishing With Shelley and Courtney" has had a great benefit from the relationship with OLN in its present state and through its national coverage. We are very keen to maintain our ties, to continue working with this exciting network. We feel that this application would be a great benefit to us, its viewers and OLN.

10500 The relationship Outdoor Life Network shares with "Fishing With Shelley and Courtney" has an important impact on attitudes and perceptions about our natural environment. We believe that the more people who view a well-produced and varied portrayals of nature, the better our chances of maintaining the great outdoors.

10501 I believe that this expanded renewal can only be positive for everyone involved: OLN, "Fishing With Shelley and Courtney", the viewers of Canada and independent producers.

10502 On behalf of our program "Fishing With Shelley and Courtney", I thank you again for your time.

10503 THE CHAIRPERSON: Thank you very much, ladies and gentlemen. The fact that we don't ask you questions should not be taken as a reflection on the merits of your position.

10504 I think we understand both your written and oral positions. Thank you very kindly.

10505 Mr. Secretary.

10506 MR. LEBEL: Thank you, Mr. Chairman.

10507 The next panel of intervenors will comprise Mr. Lionel Lumb, Mr. Peter Donolo, Frederick Ketchen, Rita Deverell and Anne Curran instead of Atif Kubursi.

--- Pause

10508 THE CHAIRPERSON: I assume you will have an order in which you will speak?

10509 Why don't you go from right to left.

INTERVENTION

10510 MR. LUMB: Honourable Chair, Commissioners, thank you for this opportunity.

10511 I am Lionel Lumb from Carleton University, and I am here to offer my unequivocal support for CTV Newsnet's application for renewal and cable rate increase.

10512 As someone who has worked as a news and current affairs producer for all three major Canadian broadcasters -- CBC, CTV and Global -- and who now teaches journalism at Carleton, let me start by saying that in general Canadians are well served by our television news services. There is a complementary feel to the variety of programs offered, and I believe this reflects a serious commitment on the part of the networks, both private and public.

10513 It is however important for Canadians who wish to be properly informed about Canada and the world that this mix is nurtured. The separate national news programs have their linchpin role in each network schedule. CBC Newsworld's blend of news and current affairs and documentaries offers a wide range of information programs. But just as valuable in a unique way is CTV Newsnet's headline operation that stays on top of breaking events.

10514 In a world where one hour can see profound changes in the lives of people, just think of how the WHO advisory against travel to Toronto affected markets and business there almost instantly. It is vital that Canadians have a news service that offers them a reality check several times within each hour.

10515 As a regular Newsnet viewer, this is what I see: Consistently responsible coverage of major developments delivered through experienced reporters and correspondents, some of whom are graduates of Carleton, I am happy to say; Canadian regional news from CTV's 21 member stations; succinct commentary and analysis when required to bolster the news; and all of this delivered from a Canadian viewpoint.

10516 This is very important in a broadcasting system increasingly dominated by American networks and news channels.

10517 The recent war against Iraq is a case in point. At a time when the Government of Canada chose to take a stance that differed from Washington's, it was absolutely crucial that a Canadian news outlet would provide news and context that reflected Canada's point of view, hour by hour, or even every 15 minutes.

10518 Canadians who shared the government's view about non-participation in the war could turn from the cowboy histrionics of CNN's reporters to the measured and thoughtful blend of reportage at Newsnet. The war itself may have been one-sided, but at least Canadians were offered the chance to see a more balanced version of its progress.

10519 We also know through letters that there were even many Americans who could see and appreciate this more even-handed reportage.

10520 Again in the more recent blanket coverage of the SARS story, responsible reporting of the real situation in Toronto is crucial. It is a story too big to play down but also far too easy to hype. Sadly, as with the war in Iraq, CNN most often chose the latter route. Even sadder, it is CNN's version most of the world sees.

10521 I know this from my sister-in-law in Australia and my son in Japan, who may not be able to come for his wedding here at the end of June and go back again without being quarantined; things like that.

10522 At least within Canada we are better informed. We know people aren't walking the streets of Toronto wearing masks. We know the facts are painful, but at least we get the facts. We can see city officials forthrightly tell the story as it is.

10523 Newsnet makes a solid contribution to the ungarnished dissemination of what looks like an ever-ending story.

10524 In both of these examples of major breaking stories, it is painful to imagine how poorly informed Canadians would be if they had to depend on receiving the bulk of their news from American news networks. In this context Newsnet's desired fee increase to 90.5 cents a month seems like a bargain compared to the 25 cents a month Canadians pay for CNN.

10525 In addition to covering mega events, Newsnet also serves Canadians by breaking away from lengthy live coverage, such as "Washington Press Briefing", to enable Canadians to catch up with many important events that would otherwise be swamped. In fact, Newsnet viewers can check the pulse of the country and the world whenever they choose.

10526 When I say the pulse of the country, I do not mean Toronto and Ottawa. I mean all the stories that belong in the second tier below the hot stuff, but which often tell viewers more about the state of the nation than the stately performances on King Street or Parliament Hill.

10527 Recent examples would include coverage of the crab dispute in New Brunswick, the fishery crisis in Newfoundland, and Toronto viewers were given the golden opportunity of applauding a real hockey team deep into the playoffs.

10528 That news coverage of the Ottawa Senators aired around the nation courtesy of the local CTV station CJOH.

10529 This is where those 21 member stations of CTV make their contribution. These are stations proudly rooted in their communities. They may belong to CTV the network, but their first allegiance is to their local viewers. In serving them, in finding the stories that enlighten their own community, they also serve all Canadians who find that what affects the people in Saskatchewan or the Maritimes may also resonate with the folks in Montreal or Fredericton.

10530 Permit me to get personal for a moment.

10531 I came to Ottawa in 1984 to run the regional news station of the CBC. It was a time of hope and a time of expansion. At that time CBC Ottawa had a dozen reporters, another dozen current affairs reporters and producers, two regional current affairs programs and strong production teams.

10532 Now, slashed and slashed through the fat, through the muscle into the bone, including more layoffs of reporters just last week, that newsroom is down to three desk editors and five or six reporters.

10533 It simply cannot do the job it once did. That is a sad pattern you will find amongst CBC newsrooms in almost every region. It is in that context of a fading grassroots CBC that the continuing strength of the news operations at CTV's regional stations becomes vital.

10534 CTV Newsnet needs strong regional newsrooms to continue its policy of expansion, continue its commitment to reduce repetition of stories and increase the number of feeds.

10535 The fee increase it seeks would help that process and also enable it to move to a live anchor format instead of a pretaped system. The more stories it brings in, the more it refreshes it news packs, the better Canadians are served with news about our country as it happens -- that headline thing again.

10536 A strong regional voice means a strong national voice and a valuable alternative voice through the public CBC Newsworld, for instance. Canada needs both these networks to be strong.

10537 Among many other reasons to hope Newsnet is here to stay, there is one more I would like to emphasize. Commissioners here will be familiar with the fact that I have come before the Commission on several occasions to urge that Canadian media be prodded to reflect Canada's cultural diversity better, in staffing as well as in story selection and choice of experts and other players within news reports and commentary.

10538 I am very happy to say that Newsnet makes a solid contribution in this area. No fewer than three out of half a dozen main anchors on Newsnet are visible minorities: Ravi Baichwal, Scott Laurie and Marci Ien and regular viewers must surely be charmed by the vivacious presence and delightful New Zealand accent of Wendy Petrie.

10539 And adding her to the anchor team of the long-serving Dan Matheson and Kate Wheeler; overall, a terrific balance.

10540 The CTV network has made a serious commitment to diversity, one with which I am well familiar through my work with the Pearson Shoyama Institute, and it is with that institute that CTV has been working to foster better diversity in media.

10541 It has a permanent Director of Diversity, Connie Nation, whom I met at the university conference that Madam Wylie was at -- was it only last week or the week before in Toronto? It has now developed a so-called rainbow roladex of alternative experts on minority groups. It has an ongoing series of training programs at both the national and regional levels. The diversity training is working not only in the Toronto HQ of CTV but also in regional newsrooms. A team was recently at CJOH.

10542 It is a pleasant change for me to come here and change my usual bleat to an upbeat "yeah". CTV Newsnet has earned it. Thank you.

10543 MR. DONOLO: Mr. Chairman, my name is Peter Donolo, and I would like to begin by thanking the panel for allowing me to provide this oral intervention to complement my April 15th letter to the CRTC in support of the licence renewal application by CTV Newsnet.

10544 Let me, first of all, tell me something of myself and my professional interest in Canadian news media.

10545 For most the past 15 years news media has been central to my professional responsibility as a communicator and communications strategist. Of particular note to you may be my experience in the national political and government level, first as Director of Communications in the offices of the Leader of the Opposition from 1991 to 1993 and in the even more challenging, but more rewarding capacity, as Director of Communications in the Prime Minister's Office for six years, from 1993 to 1999.

10546 I am currently Executive Vice-President of the Strategic Council in Toronto where I lead the strategic communications practice providing advice to clients in areas such as understanding the media and media relations and strategy.

10547 I also, I should note to the Panel, appear from time to time as a political commentator on both the CTV Mainline and Newsnet networks.

10548 As you might expect, I am an intense consumer of news media. Indeed, I have come to hold the very firm view that alternative news sources are essential to ensuring balanced and comprehensive national, regional and international news coverage in Canada.

10549 It is for this reason, above all, that I am a strong supporter of CTV Newsnet's licence renewal and of its request for a wholesale fee increase.

10550 I want to point out that I believe that CBC Newsworld also provides a high quality and essential Canadian news service. CNN, CNN Headline News and MSNBC also provide an important view of news and current affairs from a distinctly American vantage point.

10551 I would note that this point of view will be further augmented with the likely additions that Canadian cable and satellite service have unmistakably American news networks such as "Fox News" in the months and years to come.

10552 For this reason, the presence of an alternate, and I would add privately owned, Canadian coast-to-coast television news network is essential.

10553 First of all, CTV Newsnet allows Canadians to follow Canadian news, news that touches their life, that affects them, that matters to them, national news, regional news and international news from a Canadian perspective.

10554 Secondly, CTV Newsnet provides the unique breaking news headline format. As such it is the only Canadian English-language network to provide this particular approach.

10555 I noted earlier the presence of CBC Newsworld and it's own excellent programming, and indeed I believe that the presence of another English-language Canadian news network and its competitive impact only further ensures and guarantees a high quality of programming from CBC Newsworld. Of course, I believe the same is true in terms of Newsworld's impact on CTV Newsnet.

10556 I also mentioned earlier that I also support CTV's Newsnet application for an 11-cent wholesale fee increase. Clearly, the fee currently charged, 8.5 cents, is very, very low. I understand that it has also ensured that CTV Newsnet has not operated a profit since this establishment.

10557 I would submit that it is not in the interest of the long-term sustainability of Canadian news programming and of the vital important need for an alternative news source to continue to confront CTV Newsnet to an ongoing future of losses.

10558 There is another reason I support a wholesale fee increase for CTV Newsnet. I believe that it could benefit from an investment that would enable it to update and refresh its news coverage more frequently. CNN Headline News eliminated, I understand, its rotation newscast two years ago.

10559 I would feel, I would hope, that a further investment on the part of CTV could help it effectively eliminate whatever unnecessary repetitive elements, such as rotational newscasts, existing in the current CTV Newsnet format.

10560 Mr. Chairman, the next 12 to 18 months will be a time of significant change in Canada. We will experience elections in at least half of our provinces. The political party and national office will select a new leader and prime minister; a national election will follow. At the same time, the international scene will continue to evolve at breakneck speed.

10561 We know how American media, especially American cable news, covers these events. It is all the more important that we are assured of another credible and frankly Canadian option to help us understand the world around us.

10562 For these reasons, and for all those outlined in the submission, I urge you to approve the renewal of the CTV Newsnet licence, an approval of its increased wholesale fee application.

10563 MS DEVERELL: Mr. Chair and Commissioners. Thank you very much for this opportunity to speak in support of CTV Newsnet's licence renewal.

10564 I am Rita Deverell, head of news and information programming at APTN, Aboriginal People's Television Network, and I want to tell you just a little bit about the relationship between CTV, the news system, and APTN, Aboriginal People's Television Network.

10565 By way of background when I retired from VisionTV, about a year ago, I did not anticipate that my retirement would last the civic holiday weekend and that I would be heading to Winnipeg to head news and current affairs programming at APTN.

10566 But that wasn't actually a three-day wonder. I have held the conviction for a long time that Aboriginal issues and the information about Aboriginal issues is highly significant in Canadian broadcasting.

10567 The earliest illustration is about 26 years ago when I was working on the CBC supper-hour show in Regina, "24 Hours", I said to our news director, "Aboriginal people are 30 per cent of the population of Regina and you would never know that from looking at our supper-hour show. Maybe I can make that my beat" and I stuck with that commitment 26 years ago.

10568 While at Vision, I proposed that we do a significant amount of programming on the issue of Indian residential schools and this was something that we approached know colleagues at APTN about -- and the Commission has heard a fair amount about this project -- and indeed we did do five hours of programming -- CBC Newsworld, APTN, and VisionTV -- on this very important subject.

10569 Now, the point I want to make about that is that for mainline, let us say, news outlets, the residential schools story is about churches going bankrupt and it's about how much will the government have to pay, and it's about who did what to whom first.

10570 For Aboriginal peoples this is a crucial and central issue that explains many things that have happened in the last 50 to 100 years. So news hits are not enough.

10571 This brings me to CTV, the news system, and APTN. Several years ago around the time that APTN was licensed, the Commission approved of a significant benefit from the CTV news system to news and current affairs at APTN and the guidelines were rather flexible that this would enable APTN to set up six news bureaus across the country to cover Aboriginal issues.

10572 We are now into the third year of this significant benefit and it's working marvellously well. I am pleased to report that there are six bureaus of APTN national news in Halifax, in Ottawa, in Toronto, world headquarters in Winnipeg, Yellowknife and Vancouver. These bureaus are aided and abetted in very significant ways by the CTV system.

10573 Most importantly, this past October we launched a daily news show -- and everybody present knows that daily separates from the women. We launched APTN National News Monday to Friday at 7:30 eastern and we are on the air 52 weeks of the year and none of this would be possible without the support of the CTV news system.

10574 We have shared their system of distributing material, a wonderful system called Gateway, and this is used by all of APTN's bureaus. At the end of this summer, a seventh bureau will come into being which will be in Quebec and so for the first time we will add to our newscast the significant Aboriginal francophone communities in our news coverage.

10575 All of this is very important and would not be possible without the backing and support of the CTV news system.

10576 Speaking of elections, one thing that is coming up immediately is simply a First Nations election in the middle of July. This is here again highly significant in the Aboriginal's news and current world and to all of Canada.

10577 We will be swapping material on this one. CTV Newsnet will have "newsers" from our reporters on a daily basis, on a live basis as this election proceeds and we will become an active participant in the meetings of CTV affiliates and bureaus and of Newsnet which happen around the time of the meeting of Radio and Television News Directors of Canada. So this is an ongoing and growing relationship.

10578 I too, like my colleagues have expressed, think that it is important that there are news and current affairs outlets that have a diversity of perspective and I think that is what the CTV Newsnet application is indeed all about.

10579 In the case of APTN, maybe this difference is obvious and this support has indeed increased the diversity in the system. Our news outlets do not all come from the same place and that is right and appropriate, and I think the Commission has been right and appropriate in supporting a diversity of outlets. With APTN we frequently have a different definition of who are the central characters in a story, where it is happening. We have different access to who and to where.

10580 We certainly have a variety of perspectives on why. We have a variety of Aboriginal perspective on why.

10581 I would just like to conclude by saying that I am very much in support of CTV Newsnet's renewal application and that I think looking back over the last few years we will all find, the Commission, CTV, the news system and APTN, that this relationship makes a tremendous contribution to the diversity of information that is available to the Canadian people, and it is perhaps some of the most crucial information that can be available at this time. So I am in support of the application.

10582 Thank you.

10583 MS CURRAN: Mr. Chairman, ladies and gentlemen of the Commission. My name is Anne Curran and thank you very much for letting me taking the time to describe to you why I support the application for renewal for CTV Newsnet, particularly the much needed rate increase.

10584 I come to you actually wearing three hats. I know we all wear many hats through life, but predominantly the three that I wear is as the President of my own company, which is Curran Corporate Advisors Inc., the President of a non-profit organization that serves this community at large and as a Canadian a mother of young children.

10585 The first being my business which I have run for over 15 years, Curran Corporate Advisors is an international marketing business development and a government relations firm and it's very important for me to supply my clients with very timely, up-to-date information and it's very important for me to know what is going on, not only in our nation, but internationally at any given point.

10586 I look to many different sources for that information. I look at many different news media as well as broadcast materials, et cetera.

10587 As the President of a non-profit organization I am very honoured to be the Centennial President of the Empire Club of Canada. This is Canada's oldest speaking club of record and it represents freedom of speech, it represents diversity of views, and it represents the opportunities for leaders and specialists in their field to be able to talk to Canadians at large about what is happening not only in Canada, but internationally.

10588 As a Canadian and a mother of young children, the quality and integrity of content in programming that enters into my home is very, very important. The content being Canadian and the viewpoint being Canadian is also very important.

10589 As you can probably imagine, wearing those three hats life for me is rather hectic and I find that although I would love to be able to sit down at any particular given time during the day to watch the news I can't and I grab opportunities of snippets where I can.

10590 I think yesterday is actually a prime example, if I had to use any kind of example. We had guests this weekend, I have a business to run and I had a speech to write for our upcoming speakers' event this coming week. There was lots going on and children running around. So needless to say the morning was very hectic for me on Sunday. I needed some information very quickly, everything from what the weather was going to be up in Ottawa right through to what went on last night because obviously there was a convention in Toronto and having an interest in politics I couldn't really quite follow it.

10591 So I turned on CTV Newsnet and I have to tell you within seconds I knew not only what the weather was going to be like up here, I knew exactly how many votes Peter McKay had won by and I knew what the reaction of the public was at large. I can tell you within a five-minute snippet I was very happy.

10592 So my day progressed. I had to go to the airport and lo and behold who is standing behind me as I am waiting for a cab at the Ottawa Airport but Peter McKay. Now, I would have looked really stupid if I had turned and went, "So what happened last night?". I didn't have to do that. I turned to him, extended a hand, said "Congratulations on winning and my goodness, it must have been very refreshing for you to know that you came in with over 1,500 votes". I could not have said that to him if I had not turned on the news for that five-minute period of time.

10593 So I think that kinds of puts in a nutshell a perspective as to when someone has a very hectic day and they want a great deal of information, going to something like CTV Newsnet gives them that opportunity -- headline news, weather, reports, et cetera.

10594 Now, as far as the rates are concerned I know that it must be very difficult as Commissioners to sit here and hear from so many different worthy organizations all wanting more money. I mean, who doesn't want more money? But the reality is you have to sort of sit down and realize what the value of that is. As I said, being someone who consumes a great deal of information and knowledge and using many different outlets, I tremendously enjoyed CBC Prime Time and CBC Newsworld. I get analyses and I get in-depth discussions through that but, as I said, I look for precise and quick and timely information through CNN and through CTV Newsnet.

10595 So I am looking for diversity and different types of clips and different types of perceptions out there, but at the same time I realize that the quality of programming that is available to CTV Newsnet is very limited under the very limited budgets that they have. If they want to keep up with very timely information in an entertaining and interesting manner, they are going to have to be competitive. If CNN is currently receiving 25 cents and they are only receiving 8.5 cents, it's ridiculous to try to compare apples to oranges in that regard.

10596 As I mentioned, I watch CBC on a regular basis as well and Newsworld, highly credible, very, very interesting, but they have almost three times the budget that CTV Newsnet has and I think it's very important to realize that if we want to be fair and as a Canadian looking for news and Canadian content, I have to be sure that I am able to watch something knowing that it's properly funded and is available to me.

10597 I think if CTV Newsnet does not get the proper funding, I might be limited to the type of programming I can watch because let's face it, a private company cannot afford to work at a deficit. I know I couldn't run my company at a deficit.

10598 So these are the kinds of things that I think are very important and I just wanted to share my views. I know there are lots of other interesting aspects I wanted to bring to you today, but I think they have been very well covered by the other panellists.

10599 Thank you very much for giving me the opportunity to share my views with you today.

10600 MR. KETCHEN: Mr. Chairman, Members of the Panel. I too am very pleased to have this opportunity to come and speak on behalf of CTV Newsnet.

10601 My name is Fred Ketchen. I am the Managing Director of equity trading at ScotiaMcLeod, the full-service investment firm that used to be known as McLeod, Young, Weir that is now since 1988 owned by the Bank of Nova Scotia. I am a former Chairman of the Toronto Stock Exchange and I have for the last six years been the Chairman of the Investor Learning Centre of Canada.

10602 As I pointed out in my letter to the Commission, I do have a relationship with CTV Newsnet to the extent that I show up every morning for the last three years certainly with Larry Stout and more recently with Linda Simms, to give an opening comment, an update on the economic situation, the market situation, bond markets and stock markets, and I am quite anxious to point out that because I do have that relationship with CTV Newsnet it does not involve any kind of a conflict of interest because this is done without financial reward.

10603 I have done basically the same thing many years ago, starting in 1988 with Global Television Network; went through to 1991. In 1993 to 1998 with CBC Newsworld on a program called "Business World" and then subsequently, as I say, for the last three and a half years with CTV Newsnet.

10604 I have some sympathy and some understanding of the gentleman who sat in this chair just a few moments ago and was talking about getting some rodeos on television because, you see, rodeos you ride those bulls and in my business we deal with bulls and try and chase away the bears. So there is this relationship that goes on.

10605 I must tell you that my relationship with CTV Newsnet has been a particularly enjoyable one. I am very, very much impressed by the professionalism of all of the people that I have met, whether those who are behind the camera or those who are in front of the camera.

10606 I am impressed by the way that they go about their programming. I discovered a long, long time ago that news doesn't happen just before the 12 o'clock noon news or the six o'clock evening news or the 11 o'clock late evening news. News happens when it happens. When news happens, it affects a lot of things.

10607 The introduction of television sets to trading rooms and investment houses really occurred back in 1991 with the first Gulf War and it had a huge impact on what we were able to do and how we were able to reacte to the events of the war because that war and the events that took place had an immediate impact upon stock markets and bond markets and certainly upon the price of commodities such as crude oil and gold.

10608 You need to know when you need to know. As a result, the kind of service that CTV Newsnet offers is a service basically of immediate news. In our business we need immediate news. We need to know the news when it happens. It needs to be reported in the concise and professional manner, accurate -- certainly that is very, very important.

10609 As we go through these processes day by day, it is the kinds of things that impact our lives.

10610 Throughout a period of a year I will have the opportunity perhaps maybe 100 to 120 times to go out across this country and meet with audiences in various places. That's part of my job. I go out and I tell them what's going on in our economy and how we can react.

10611 More importantly, I try to tell them how they should be trying to save money and invest money and go through the process of wealth generation. I have to tell you that I have done this for a long time.

10612 Over the last three years I have never, ever in my life experienced the kind of reaction that I am getting from people in those audiences who will come up and say hello, who will come up and say "We enjoy what it is that you are doing on CTV Newsnet. We listen and watch the CTV Newsnet on a regular basis because it keeps us informed on an ongoing basis".

10613 The only thing I worry about sometimes perhaps is that we may be creating a world of news junkies, but there could be worse things to create. I think that we need to know what's going on.

10614 I am particularly impressed by the fact that I know that when I tune on to CTV Newsnet I am getting the voice of an independent broadcaster, I am getting the voice of people who will provide me with news of the world, news of North America and news of Canada, all with a Canadian aspect.

10615 I think it is extremely important that we have that Canadian aspect to our news. I am a proud Canadian. I will tell anybody I am a proud Canadian. I want to know how Canadians think. I don't always agree with the way all Canadians think, but often times I do.

10616 I like to know that there is that diversity of thought, there is a diversity of presentation, there is a huge diversity of employees and their attitudes and CTV Neswsnet that I find to be extremely helpful.

10617 I must tell you that a number of years ago a lady from CNN called up and wanted to know whether or not she could do an interview with me on the old trading floor of the Toronto Stock Exchange.

10618 I couldn't see any reason why I shouldn't do that, so I said "Sure, when will you be here?" Well, she told me when she was going to be here. Her name was Eleanor Newsbaum. Don't ask me why I remember her name, but I do remember her name.

10619 We did that interview and had a short discussion about what was going on here in our market, what was going on here in Canada.

10620 After it was over, I said to her "Do you realize that CNN has a huge viewing audience here in Canada and that Canadians are big travellers? We are big traders, but we are also big travellers. When Canadians travel, they like to go ahead and turn on CNN. They would like to think that maybe we might be able to get a little bit of Canadian news, even when you are talking about the Dow-Jones and Nazdec, Standard & Poors. Maybe once in a while you could throw in a TSX or a TSE 300 index".

10621 She thought that was a good idea too. I don't have to tell you that nothing came out of it. I don't expect that anything probably ever will. That is why we really need to have a well financed, active organization such as CTV Newsnet that can provide us on an ongoing basis what it is we need to know.

10622 I carry around a RIM pager because sometimes when I am out I need to know what's going on in the market. I can use my little RIM pager and people in the office will send me an e-mail and I will be updated.

10623 When I'm in a hotel, it's far more pleasant to be able to turn on the television, find CTV Newsnet and know within five minutes what the market is doing, know in five minutes what the world is doing, know in five minutes whether we have a future or whether we haven't. I find that to be extremely, extremely helpful.

10624 I would like to tell you that because of that, certainly some of the arguments, and only some of them, why I believe that CTV Newsnet deserves a renewal of its licence.

10625 Let me speak for a moment or two about the C structure. As I explained in my letter to the Commission, I have read these numbers, that CBC Newsworld gets sixty-three cents, CNN gets 25 cents and CTV Newsnet gets eight and a half cents. I thought there perhaps had been some kind of a misprint, but I found out that it was indeed true.

10626 I don't pretend to know, as I explained in my letter, how it is you arrive at the way that you allot rates throughout the various broadcasters in this country, but somehow that just seemed to be way out of place and somehow unfair in my own mind.

10627 I think that if you have a private broadcaster who continually broadcasts, at the end of the year when they count all their beans find that they are in a deficit position, somewhere down the way something eventually has to happen to that company that never, ever makes a profit.

10628 Privately owned, it could go out of business. If it's part of a conglomerate, and I know what happens in the business world when you have got one arm of a conglomerate that is a non-performer when it comes to the financial aspect, you are generally or eventually going to have to deal with the prospect of siphoning it off, selling it off, closing it down, whatever it may be.

10629 I wouldn't want to think that that would be the case with CTV Newsnet, as important as it is. Eight and a half cents per subscriber when you look at it in a comparative basis just sounds to me like somehow in my mind as a viewer, as an appreciator of what it is that I see and hear and get from CTV Newsnet -- you know, I remember a long time ago my parents telling me "You get what you pay for".

10630 Well, it that be the case, I'm going to tell you that Canadian television viewers have got far more than their money's worth on this one and I think that perhaps it's time that we recognized the value of this company, the value of their professionalism, the value of their excellence and realized that we need to have CTV Newsnet with us.

10631 The only way perhaps that that's going to happen is with an increase in its wholesale rates.

10632 Thank you very much.

10633 THE CHAIRPERSON: Thank you very much, ladies and gentlemen. We don't have any questions for you.

10634 We will resume at 2:30. Nous reprendrons à 14 h 30.

--- Upon recessing at 1249 / Suspension à 1249

--- Upon resuming at 1432 / Reprise à 1432

10635 LE PRÉSIDENT: A l'ordre, s'il vous plaît. Order, please.

10636 Mr. Secretary.

10637 MR. LEBEL: Thank you, Mr. Chairman.

10638 The next two intervenors will appear as a panel. It's Mr. Kevan Pipe and Mr. Travis Formosa.

INTERVENTION

10639 MR. PIPE: Thank you very much. It's a pleasure to be here. My name is Kevan Pipe. I am the Chief Operating Officer at Canadian Soccer Association. I am here speaking in support of Sportsnet, Rogers Sportsnet application for a rate increase.

10640 I believe you are in possession of a copy of my letter that I sent earlier this spring which documents some of the reasons why we are in fact in support.

10641 Today what I would like to do is to share a few facts with you and to maybe tell a bit of a story behind the story in other words.

10642 In November 1998, shortly after in fact Rogers Sportsnet was formed, we were proud to sign an eight year contract with Sportsnet which runs until the end of 2006.

10643 Our agreement with Rogers Sportsnet has in fact over the last four and half years of the contract in essence more than doubled the amount of coverage that we have seen as a result of Canadian soccer being broadcast across Canada, broadcasting in fact and promoting young Canadians competing internationally in what is clearly the world's most popular game, in fact what many people refer to as a beautiful game.

10644 While our agreement in fact dictates that there is on average about eight games that should be broadcast every year during the course of our contract, in fact Sportsnet have basically doubled the amount of coverage that they have given to Canadian soccer throughout the term of the agreement so far and certainly the discussions that are ongoing right now, that continues to occur in the years to come.

10645 In fact, just yesterday Sportsnet broadcast our men's national team playing in Germany. I wish I had better news to report, but we lost 4-1 so that's not a topic for discussion today.

10646 Ten days ago here in this city in fact our national women's team, we played England in front of 17,000 people over at Frank Clair Stadium and once again Sportsnet broadcast our national women's team playing at Frank Clair Stadium in that event.

10647 Rogers Sportsnet has telecast many of our friendly games, exhibition games played by our senior men's and national women's national teams over the past four years.

10648 Interestingly enough, Sportsnet has also broadcast many of our youth internationals, so it's not just being a fact of our national senior men's team, our national senior women's team, but in fact is seeing some of the young Canadians, some of the teenage players that we have in our system that are playing in continental championships and world championships that in fact are partnershipped with Sportsnet and have resulted in young Canadians being promoted all across the country.

10649 In effect, we see Rogers Sportsnet as being a partner in fact with Canadian soccer. That is how we are viewing our relationship. I would like to see the same thing happening from their side of the desk as well, a partner in developing Canadian soccer and in promoting Canadian soccer.

10650 Over the past four years we have seen almost all of our continental championships being telecast. You will see more of them in fact next month when our continental championship all across the United States and in fact Mexico is broadcast with our men's national team.

10651 This follows up what happened in November with our women's national team competing in the continental championship that we held in Victoria, Seattle and then Los Angeles.

10652 Back in 1999 one of the first in fact major events that Sportsnet in fact partnered with us on was in fact the telecasting of all 32 matches of the women's World Cup FIFA, being our international soccer's governing body.

10653 Once again this year we are in discussions right now and hopefully once the right issues are sorted out by our international body hopefully we will see the same thing taking place with blanket coverage of the 2003 women's World Cup taking place with Canada having truly a world class team. Canadians will see the results of that this coming September-October.

10654 Likewise, we have an under 20 men's championship taking place in November-December. We will see coverage from the United Emirates. It was supposed to take place in March, but events in that region, as we all know, caused the postponement of that event until November.

10655 One of the other events -- one of the other ways that we have been able to manifest our relationship to promote our relationship was that in partnership with Sportsnet we have been producing, co-producing with Sportsnet a weekly newsmagazine show called "Soccer Sensual".

10656 It's on Saturdays at lunch time at 12 noon eastern -- of course the times vary across the country -- immediately following the conclusion of the English Premier League match, often featuring some team called Manchester United. I don't really follow that team, so I don't really know, but they are quite well known.

10657 In fact, the interesting thing to that is that this newsmagazine show which talks almost exclusively about young Canadians, about men and women, boys and girls competing in all aspects of the game, that show often outdraws the English Premier League featuring some of the world's biggest stars.

10658 To think that young Canadians competing in this sport can outdraw the David Beckams and so on of the world, despite his hair style, is really quite remarkable, so we are really pleased with the way this newsmagazine show continues to evolve regarding our partnership with Sportsnet.

10659 There's another story. As I say, there's a unique angle to this. As I was pondering in fact over the weekend what I would be passing on to you, it really has been about the way in which women's soccer has changed with Canadian soccer, the women's segment of the game has changed with Canadian soccer as a result of our partnership with Sportsnet.

10660 Rogers Sportsnet and CSA jointly targeted this area of our membership as a very special opportunity concerning ongoing coverage. The coverage of our women's international program has had a profound impact on the demographics of Canadian soccer.

10661 We have seen over the last four years ongoing regular coverage of our national women's team and as a result we have seen our demographics within soccer change dramatically. In 1998 we had just over half a million players and probably less than 25 per cent or approximately 25 per cent of those players were female. Just five years later in 2003 we now have 800,000 players, far and away the largest number in all of Canadian sport. I think hockey is second with 540,000 registered players.

10662 One of the interesting shifts in those numbers is that that 25 per cent of our membership which was previously female has now shifted this year to where we are forecasting that the final number when we do bring it together in October-November will probably be 45 per cent, even more than last year's 42 per cent.

10663 That has happened because of the ongoing coverage that we have seen with our women's program. Some of you may recall that last year we hosted a world championship called the FIFA under 19 women's world championship that was held in Edmonton, in Vancouver and Victoria, a hugely successful event.

10664 We went to a couple of other networks and there was basically no interest. "What? Teenage girls? Who's going to watch teenage girls playing soccer in Canada?"

10665 Our partner with Sportsnet in fact stepped up to the plate, if I can use a baseball expression, and in fact partnered with us to in fact put that event on.

10666 As a result, our young girls really performed well, in fact made it to the final against the United States and in front of 49,000 paying spectators at Commonwealth Stadium in Edmonton on Sunday of Labour Day weekend, we ultimately ended up losing to the Americans 1-0 in sudden death overtime, a tragic conclusion to an otherwise unique event.

10667 These girls were heroines across the country. If you pick up the September 2 edition of the Globe and Mail or the National Post, you will see a front page picture of all of these newspapers talking about the young heroines of Canada.

10668 That also translated into interest across the country as well. 914,000 viewers on Sportsnet watched that telecast which I believe still is a record that Sportsnet's viewing audience still has today. I think the previous record was a Stanley Cup semi-final playoff game which had 677,000 viewers.

10669 We smashed that record by almost 50 per cent to watch young teenage amateur players, girls, playing international soccer.

10670 That has been a unique story behind the partnership that we have had with Sportsnet. We hope that it will continue on. We think that there will be more opportunities that we are putting forward on a day by day basis.

10671 Certainly if I have one message that I would like to leave with you today, it is that that could not -- the way in which soccer is evolving, the fact that we are able to put in 17,000 people at Frank Claim Stadium last week to watch young women playing soccer here in this city.

10672 We just announced today that we will be playing even more games at Molson Stadium in Montreal. Many of these games will be telecast in the future. That could only have happened to the point whereby we had ongoing coverage of our programs promoting our players, some of whom are really becoming Canadian superstars in that sport mosaic right now.

10673 The future for soccer in Canada is extremely bright. One of the significant reasons for that is in fact our partnership with Sportsnet.

10674 Thank you.

10675 MR. FORMOSA: Good afternoon. My name is Travis Formosa, a recent Ryerson graduate, about a month ago actually, radio and television arts, so I am now officially into the work force and here I am today.

10676 I had the opportunity back in September to work with Sportsnet and Ryerson to create a show. I was the Executive Producer. It was called "Varsity Canada". Basically what the show was about was young university athletes across our country.

10677 We covered all sports. Basically our idea was to showcase some Canadian university sports on Sportsnet.

10678 Back in September myself and six peers at Ryerson decided to picture show ideas to Sportsnet and to Ryerson. After we got it approved by both, we were able to go ahead with it.

10679 Basically what we decided to create was three one hour shows. The first show would focus on athletes, so all athletes, six athletes in total. The second show is essentially about coaches in programs in the CIS, outstanding programs like the Alberta Golden Bears, St. Mary's football, stuff like that.

10680 The third show focused on basically the state of the CIS, past, present and future kind of look, what the CIS is all about and kind of give Canadians a, you know, a taste of -- not many people knew what the CICU stood for, people in my age group and younger I would say.

10681 This is what our show is targeted toward, a younger audience. So we came up with the three ideas for the show, the three one hour episodes, and we proceeded to create it.

10682 Now, myself and my six peers had never done anything like this before obviously. We had three years of training at Ryerson, but to actually create an actual television show that was going to go to air in large March, early April was pretty daunting.

10683 We were pretty nervous, but for some reason we were confident in our ability and confident that Ryerson had given us a good footing for us to go ahead and create the show.

10684 We went ahead with it. We started calling people, athletes, people that worked for the CIS and asked if we could do interviews with them. They were more than willing to help us out.

10685 We drove around, basically myself and my six other peers drove around southern Ontario, basically the only areas we could drive to because we didn't have the budget to fly anywhere.

10686 We contacted schools out west and out east and they were more than willing to help us out, so we had students from other universities, such as BCIT and NAIT out west to produce features on students and athletes for us.

10687 They would send it to us and based on the quality of the feature, we would either touch it up a little bit, in most cases we had to, but overall the features they sent us were great. They were almost broadcast ready as well.

10688 Through their contributions and through our own work we were able to produce roughly six or seven features, above five to six minutes in length for each show, and we also did little spots like campus questions a week. Basically we did streeters, just entertaining stuff, you know, stuff we thought would be pleasing for young people who were hopefully interested in university sports.

10689 Through September on, basically all the way through until February, we were involved in production, myself and my six peers from Ryerson. We drove around southern Ontario and Quebec and did the interviews. We would come back every so often, you know, however often, to complete the work, come back to Sportsnet.

10690 Sportsnet basically provided us with everything. They provided us in terms of technical aspects a camera that was donated to us through Sony, editing time whenever we needed it. We just booked it through Sportsnet. We had people like editors at Sportsnet, associate producers, directors, who were more than willing to help us out, especially when we had questions. We did have a lot of questions.

10691 We weren't exactly 100 per cent sure about what we were doing, but somehow we managed to get it all done. Of course without Sportsnet's help we would never have come to completion.

10692 Basically what we used at Sportsnet was, like I said before, editing time. That was basically the key component to our show. Without their editing time, Ryerson didn't have the facilities. Although they do have some editing suites, they don't have nearly close to what we needed in terms of length, in terms of equipment.

10693 Like I said, we used our camera as well from Sportsnet. That was donated through Sony. Another big part of it was the studio time because we decided -- although it was three one hour shows, we tried to make it like a magazine style show, so we used their studio. We used their full crew and directors. We had associate producers helping us out, giving us tips, basically telling us, you know, how it works.

10694 We took it step by step. Through all the aspects that Sportsnet provided us, it was outstanding. For myself and my six friends that were able to complete the show, it was probably the most rewarding and fun time I have ever had, not just in university, but so far in my young life.

10695 I can say that I learned more in the eight months that I was able to work on the show with Sportsnet directly than I can probably say I learned in my entire three years of school before that. That's not a knock against Ryerson.

10696 I learned a lot at Ryerson, but you learn a lot more when you are actually doing it. Hands-on experience, I can't even explain how much I learned. If I didn't do the show and I didn't have the opportunity that Sportsnet provided me with, I don't think I would be sitting here right now. I don't think I would know as much as I do now, even though I don't know that much. I'm just starting.

10697 I know more now about the industry and a little bit about how television works I think. Little things that we learned -- where I really learned a lot about television, what I would say is how time sensitive television can be.

10698 When problems arise that are unexpected and you have to solve them in two or three days, but you have editing time booked and there's no other time left and no other options. Somehow we managed to solve our problems. I learned that you kind of have to learn to roll with the punches a little bit.

10699 Sportsnet, like I say, was more than accommodating. Through all the problems we experienced, we managed to create I would say three pretty good episodes. We are pretty happy with the outcome.

10700 It went to air in late March and early April, the three shows. They are being rebroadcast throughout the summer. It's a pretty rewarding experience to see eight months of hard work on television.

10701 You can flip it on whatever, you know, three or four in the morning. Just because it's not at a non-prime time spot on television, it's still pretty rewarding to see your own work on television.

10702 Like I said before, it was one of the most rewarding experiences of my life. I am more than grateful to Sportsnet for providing me the opportunity to learn a little bit about television and have an opportunity to research Canadian athletics.

10703 I learned a lot more about Canadian athletics at university than I ever thought I would as well. Both two assets combined made it a very interesting and, like I said, rewarding experience.

10704 THE CHAIRPERSON: Thank you very much, gentlemen.

10705 Mr. Secretary.

10706 MR. LEBEL: Thank you, Mr. Chairman.

10707 The next appearing intervention will be presented by Mr. Terry Hubbard.

--- Pause

10708 MR. LEBEL: Not seeing Mr. Hubbard, Mr. Chairman, we will now take the panel formed by the following intervenors: the Canadian Journalists' and Writers' Club, Mirra Manesh, Pauline Tong, the Chinese Cultural Centre of Ottawa and Mr. Bill Yancoff.

10709 THE CHAIRPERSON: Whenever you are ready. Have you got an order that you have sorted out amongst yourselves?

INTERVENTION

10710 MR. YANCOFF: Mr. Chair, Vice-Chair and Commissioners, my name is Bill Yancoff.

10711 It's a great honour to address the CRTC once again, this time in Gatineau, Quebec.

10712 As an independent producer of "The Macedonian Heritage Hour", I would like to discuss the need for OMNI.2 to be broadcast in Ottawa and London. Our program airs on OMNI.1 and I must say that OMNI television has enabled thousands of Canadians of Macedonian origin to view over-the-air programming in their first language, Macedonian.

10713 OMNI.2 enables thousands of Canadians of various origins, including the South Asian and Chinese communities, to view over-the-air programming in their language of choice.

10714 Our show airs in Ottawa and London. I must say that the response from these smaller Macedonian communities has been very surprising. Our program is their lifeline to their heritage.

10715 It is imperative that the large South Asian communities and Chinese communities and others living in London and Ottawa are able to watch programming in their first language, thus the need for OMNI to build transmitters in these communities to make free over-the-air service accessible to those who want to enjoy this quality programming.

10716 I would like to share with you some of my experiences as an independent producer.

10717 For 12 years I produced a half hour program "Macedonian Heritage" which aired on the then CFMT TV. As of September last year, OMNI has enabled our Macedonian community throughout Ontario to enjoy third language programming in an expanded format and in a great time slot, Saturdays from 5:00 to 6:00 p.m.

10718 Due to the increase in air time, I have been able to present more reports from the various Macedonian communities across Canada, including one on the small Macedonian enclave in Montreal and their trials and tribulations in attempting to organize a Macedonian community for the very first time.

10719 OMNI has assisted our program in many ways, not the least of which is production grants to assist our program. Just this past September, to help launch our new one hour program, OMNI television gave us a substantial grant which has significantly enhanced the technical quality of the program.

10720 It has been able to do on-location reports such as the one I mentioned in Montreal and assisted us in many other ways.

10721 OMNI also helps independent producers on a regular basis with regard to our news content. All of the independent producers at OMNI.1 and OMNI.2 regularly participate in editorial board meeting with prominent Canadians from a variety of vocations, including politics and the media.

10722 In addition, we regularly receive news footage from the news department for our programs. One example I can pass on to you was there was a great soccer game between Macedonia and England in which England surprised all the soccer fans around the world to a 1-1 tie and we were able to get that footage just that week to get it on the show, so that's been a tremendous help to the program.

10723 OMNI's multi-million documentary fund is also a great opportunity for someone like myself, an independent producer, to tell my story in a third language. I plan on submitting a proposal very soon and am looking forward to the opportunity of creating my own peace of Canadiana, but in the Macedonian language.

10724 This unprecedented opportunity has already been taken advantage of by several independent producers, thanks to OMNI television.

10725 OMNI television has also recently launched a successful "OMNI Culture" program. This enables all Canadians to enjoy some of the very best of OMNI.1 and OMNI.2. Thanks to "OMNI Culture", Canadians now have a better understanding of various cultures and how they interact within our society.

10726 One of our reports, which aired recently on "OMNI Culture", featured a concert at the University of Toronto which was a fusion of South Asian and Macedonian music. Thousands of Canadian were able to view a cross-cultural event which in my view exemplifies what this country is all about, benefiting from the richness of all of our communities while at the same time contributing to Canadian society at large.

10727 I can't say enough about the fine programming that OMNI.1 and OMNI.2 have to offer. The reason I felt the need to address you here today was that thousands of Canadians in the London and Ottawa communities are missing out on this opportunity to watch programming in their first language.

10728 Why can a Canadian Italian, all Canadian Italians or all Canadian Macedonians in Ottawa, for example, watch programming in their first language while someone from Ottawa who speaks Mandarin or Urdu is denied this right?

10729 It's urgent that you accept OMNI's application to provide thousands of Canadians in Ottawa and London the opportunity to watch OMNI.2. Please allow these Canadians their right to this important link to their heritage.

10730 Thank you.

10731 MS TONG: Good afternoon, ladies and gentlemen. This is a joint presentation of both myself and my daughter, Tara Ing, who is a university student at UBC. I am the President of Yee Hong Community Awareness Foundation which raises funds for the Yee Hong Centre for Directed Care, a leader in the long term care field which distinguishes itself since 1994 by providing high quality culturally and increasingly appropriate services for seniors from the very frail to the very healthy.

10732 I think since I talked to you two years ago I am happy to report now at present we have two centres serving a few thousand seniors each day and two more will be completed in the next year.

10733 Serving seniors from the Chinese, South Asian, Filipino and Japanese communities as well as those from the general population. Our aim is to build four caring communities serving close to 10,000 seniors and their families.

10734 I appeal to you to grant OMNI television to provide OMNI.2 as a free broadcasting service in Ottawa and London. CFMT, then, was instrumental in the initial fundraising efforts of Yee Hong and later our expansion.

10735 In the recent capital campaign in which we raised $33 million in four years, it has helped us to share with the community our aspirations and our plans. It has provided consistent support in Yee Hong's fundraising efforts.

10736 OMNI has been a major media sponsor of the Dragon Ball, our annual gala which raised an average of $1 million net each year in the past five years.

10737 At Dragon Ball 2003, OMNI is being honoured with the Yee Hong Corporate Community Champion Award. In 2002, it provided us with air time and production support for our telethon, raising funds for an Alzheimer's unit.

10738 OMNI is our media sponsor for the Yee Hong Walk and Roll, a walking and cycling fundraising event in which OMNI will provide us with its talents and possibly its station manager to participate in our 24 hour walk and roll around the clock relay.

10739 I will try my best to convince Madeline Ziniak to walk along the deserted streets at 2:00 a.m. in the morning. I think Leslie Sole should be there accompanying her, if I can get a promise right now.

10740 OMNI is helping us in full force. In the grand opening ceremony of our new Markham Centre, in the production of a video, so that we can share with everyone the new facilities, but most importantly, what Yee Hong means to 200 seniors, which includes Chinese, South Asian and those from the general population, a home they can call their own.

10741 In addition, volunteers of Yee Hong worked with CFMT on many disaster relief fundraising initiatives in the past ten years. One of the most recent being the India earthquakes disaster relief.

10742 I'm proud to say that we have inspired numerous other community groups who have seen us in action and are seeking the able assistance of OMNI to share their concerns and raise funds for causes dear to their hearts.

10743 Thus, it is absolutely vital that the Chinese community and other ethnic groups being served by OMNI, especially those who do not speak English, to find programs in their own languages where they are available for information, for integration as well as for aspiration to contribute to Canada, the country they have called their own.

10744 At this point I would like to draw a parallel. Why is Yee Hong so successful? Why does Yee Hong have a waiting list which is in the thousands? Simply because we are serving them in their language and in their culture.

10745 OMNI is much needed here because for 10 to 12 per cent of the population in Ottawa and London, OMNI.2 probably is the only primary channel of information that is a way that they can get in touch with their country to feel that they belong, to feel that they are part of Canada, where they can find their own image and voice, easily accessible on television is very important.

10746 How important? Both my daughter and I would like to share a personal experiences. As a Cantonese-speaking immigrant to Canada since 1975, I often thought that I didn't belong here in many ways. Strangely enough, the sense of seclusion stems from what I saw and largely what I didn't see on television in the mid-seventies.

10747 Thankfully, the presence of CFMT television in Toronto has been a symbol for me and others of inclusion, dignity, and respect. On that channel in a very special way I felt I had actually arrived.

10748 The following part is especially dear to my daughter's heart. In particular, she has found its validity in her political science and human study course. She calls it shifting representation. Some people may say that we live in the poorest places in Canada. Certainly, things have gotten a lot better for immigrants and minorities, but we still see so much room for progress, so let's start with television, the most popular medium which connects or is supposed to connect us all.

10749 In many ways racism occurs when representation does not recognize differences and many times it occurs on levels beyond our basic conscious understanding.

10750 So, we not only consciously mimic those fads on television, we also unconsciously adopt television's racial images.

10751 Logically then, its diversity is not echoed on our air waves. Then it becomes normalized. We start to internalize these standardized, one-dimensional images.

10752 In these instances, racism, however blatant or subtle, will never be far behind. What can we make of this? We would say that the easiest way to counteract and prefarably defeat racism is to shift those images, give them additional dimensions, give them depth, instill them with variations.

10753 Of course, there are many other fruitful anti-racist strategies, but shifting representation is the critical step. Now, these are all my daughter's writing.

10754 These are not empty words, though, for we speak from our personal experiences. As a mother I witnessed, through my daughter, how these images affected just a young child.

10755 Carol was born and raised in Canada, a child whose black hair and brown eyes were a scarce token attribute on television. There was a time in her life when she experienced a period of self-loathing, a genuine shame of her Chinese heritage and identity.

10756 She used to want blonde hair eyes so she could, and I quote her now, "be beautiful like those girls at school, like those girls on television."

10757 At that time I was so saddened by the statement that I could only react with a characteristic parental response: You are a very special person, you are unique, be happy with who you are.

10758 It was well intentioned, but not nearly enough to relieve her insecurities, not remotely enough, in fact. In hindsight I understand more and more her dilemma. How could she be happy with herself when such a powerful medium failed to recognize her very own existence.

10759 Why wouldn't she want blonde hair and blue eyes? Studies show again and again that in order for someone to feel that they matter in the world, they desperately need that recognition, that positive reinforcement. We know this.

10760 So now looking back, I understand what my ten year old daughter, who was too young to articulate, quite simply she did not feel as if she signified those images, not even a little, and the emotional pain of hurt still today resonates as my pain as well.

10761 That unmistakable feeling that wounds many of us is the feeling of invisibility. It makes us feel as if we are not amongst the counted. It makes us feel that we are not entitled to achieve certain things or even enunciate our presence among our fellow beings and, ironically enough, this feeling of invisibility occurs among certain groups still today in the television universe that has the capacity to house a wide range of channels but yet, for some odd reason, still lacks the willingness to accommodate a wide range of voices and faces.

10762 Even now, after the founding of a highly touted multiculturalism policy in Canada, after we as Canadians have praised ourselves for being so tolerant of differences, there are still certain aspects of our society which do not speak to these differences.

10763 As people coming from different nationalities, speaking different languages, engaging in different cultural activities and tastes, it is our profound hope that as Canadians, as citizens of both emerging and fractured global communities, we continue to direct targets, directly target those gaps head-on, and legitimize those differences.

10764 We urge all of you to challenge those images and sounds coming from that box in our livingroom. It isn't as intimidating a task as it may seem. The lovely thing about this particular situation is that the images and sounds of the media are not only shaping us. We too make have the capacity to shape them, giving them profound new meanings.

10765 The relationship could be quite wonderfully a two-way street. I find it especially gratifying that I am here once again to express my feelings about this powerful medium and I should even venture to say that both my daughter and myself can make a difference as you are paying attention to our presentation.

10766 We must constantly remind ourselves that racism is not some intrinsic human mechanism. Rather, it is a socially produced phenomenon which, given our efforts, can be disengaged, hopefully altogether erased.

10767 I did this presentation in part because I think I owe my little girl, who is not little any more, a better response to the statements she pronounced ten years ago on this most basic level.

10768 What do you do when those images do not acknowledge your differences? Should we simply accept them and assume there's something fundamentally wrong with us like my daughter did or do you recreate them and make new images?

10769 Ladies and gentlemen, it is my honour to speak to you today and a pleasure to relate our experiences to OMNI television's initiative.

10770 Taking a day off my work is a major undertaking, although I enjoy the Ottawa scenery. I am glad I rode up the Rideau Canal in a boat; it's great. I did it yesterday.

10771 I would do this again and again. I hope that you don't get tired of me. If only I can prove my point. I'm not just asking you to grant OMNI a free over-the-air broadcasting service in Ottawa and London, if I have my way, if my daughter has her way, we hope that OMNI is a channel accessible to all Canadians free, easy to find, just like CTV and Global, across the land, so that people can learn about diversity right in the comfort of their own homes.

10772 Yet, it is within your power to help me to achieve a less ambitious goal, that ten-year-old Chinese children in Ottawa and London will find their images and languages regularly and easily on television. Having black hair and brown eyes are fine.

10773 Last night I was in a hotel flipping channels. Well, I didn't find channel 79, not even in hotels, but it was a pleasant surprise to find Senator Vivienne Poy being interviewed by Sher Singh.

10774 She talked about being asked by the Prime Minister to serve in the Senate. She talked about completing her PhD program. This helps me to prove two points.

10775 First, it is great to see a Chinese senator being interviewed by a prominent South Asian personality in English. OMNI has done what it promised to do, English cross-cultural programming, but it is equally important, if not more, for the Chinese children and their elderly to see Senator Poy speaking Cantonese on an easily accessible over-the-air channel here in Ottawa and London.

10776 MR. LEBEL: Excuse me, Madam Tong, your time is up.

10777 MS TONG: It's only the last sentence.

10778 On behalf of my daughter and myself, we challenge all of you to create a more linguistically, culturally, ethnically, racially diverse Canadian television schematic. We hope that everyone of us will belong.

10779 Thank you.

10780 MR. VICCARI: Mr. Chair, Madam Vice-Chair, Commissioners, thank you for this opportunity to speak in support of the application to extend over-the-air service to OMNI.2 for the Ottawa and London areas.

10781 My name is Ben Viccari and I am a free lance journalist and television commentator, but I appear here as President of the Canadian Ethnic Journalists' and Writers' Club, now celebrating its 25th anniversary year.

10782 The club was established in 1978 because its founders believed the existing but now defunct journalists' group was a press organization and excluded broadcast journalists. In the spirit of the diversity that we Canadians honour, the club is characterized by its inclusiveness and membership is open to editors, reporters, writers, producers and directors and not just newspaper publishers.

10783 We are an independent organization which seeks no funding from government for its activities and speaks to the right of free journalistic expression in a democratic state.

10784 My own connection with ethnic journalism goes back a long way and includes a 15 year stint as the last managing editor of Canadian Scene, a non-profit organization which for 49 years published a free multi-lingual news and information service for Canada's ethnic media. Our purpose was to interpret Canada and the benefits, privities and responsibilities of citizenship in this country.

10785 I have continued to operate the Canadian Scene website, unilingually unfortunately, as a non-profit magazine, CanScene, Canada's multi-cultural scene. The responsibility of our ethnic media in providing information to both newcomers and those who are already citizens is a demanding one. And, as long as there is a continuing influx of newcomers, ethnic journalism will continue to respond to this need. Naturally, my colleagues and I welcomed the CRTC's establishment of ethnic broadcasting policies, which paved the way for increased opportunities for journalists in radio and television.

10786 Therefore, the establishment of the television service which had undertaken to provide programming for more than 40 language and cultural groups and which in less than a year achieved this goal, has not only justified the Commission's decision to enable Rogers Media to establish OMNI1 and OMNI2, it has opened the windows of information to new communities and has strengthened the image of Canadian ethnic journalism as a strong force in our society.

10787 My own experience of the OMNI operation and its predecessors, CFMT TV, is not confined to viewing. As well as the station's interstitial commentators, I feel that OMNI is permitting us to make a contribution to cross-cultural relations and to stress in our communities the importance of inter-cultural understanding and acceptance. Key words which should replace the hackneyed expression tolerance.

10788 Some of the subjects I have commented on in recent weeks are the parliamentary tradition of presenting budgets in legislative premises. The achievement of the Honourable James K. Bartleman, Ontario's first aboriginal Lieutenant Governor, racial profiling, SARS, and closet racism. A low-cost pocket size guide to common expressions in 60 different languages and the part diversity plays in our Canadian identity. In particular, examining the need for over the air services for OMNI2 in Ottawa and London one has only to look at the patterns of immigrant growth in those areas as defined by the 2001 national census figures.

10789 The following examples over a 10 year period, 1991 to 2001 and relate to communities served by OMNI2. In Ottawa the Bengali population grew from 650 to 2,515 and the Tamil population from 670 to 2,470. These communities were part of an overall salvation population that grew from 13,275 to 23,935 and continues to grow. Chinese from 13,180 to 27,920; Vietnamese from 4,825 to 7,095; Arabic from 18,000 to 31,685. The total growth for OMNI2 communities in Ottawa was from just under 65,000 in 1991 to 138,015 in 2001, more than double. And, the growth in London was not quite so marked with the increase being just over 15,000, but all the same nearly double the 1991 figure.

10790 It is, I think, safe to assume that growth of these ethnic cultural communities in the London area will increase and perhaps accelerate in the years to come.

10791 Now, given all the statistics which have emerged from the sensus and all the studies, we note that the medium earnings of visible minorities are on the low end of the scale. I think it follows therefore that there is a substantial number of visible minority newcomers who can't afford more than the barest expenses on television, perhaps easy payments on small screen sets. It seems only just that given the power of television as an important informational medium, the many visible minorities in Ottawa and London addressed by OMNI2 should have the advantage of over the air service.

10792 Germane to the whole idea of ethnic television is the ability to convey ideas and it is this theme that I turn as a final reason for asking the Commissioner to consider granting this application. There are millions of Canadians who value their citizenship and believe the convergence with our neighbours to the south of the border is neither inevitable nor desirable. They include newcomers and not so new Canadians how have come to this country in hope and although the going may have been tough, have not been disappointed. It is this spirit that OMNI and other ethnic broadcasters must convey to their viewers and listeners.

10793 In a recent book, Fire and Ice, Michael Adams, President of the Public Opinion Research Company and Veronics Canada, argues that more than ever today Canadians think of themselves as a nation and not a body of 31 million people drifting into union with the United States.

10794 In his introduction to the book, which is based on his own research, Adams says "On a personal level Canadians sense that although Americans may make the more impressive living, we Canadians have better gotten the hang of how to live for all without pressing our noses up against the glass so the American prosperity and achievement, we cherish our separateness, our unassuming stability" and that, I believe is a quality worth preserving, one which OMNI can help newcomers appreciate and understand. Thank you for this privilege.

10795 MS SHAW: Good afternoon, ladies and gentlemen. My name is YQ Shaw, President of Chinese Cultural Centre of Ottawa. Thank you for the opportunity to present our case, requesting for free Chinese TV programs, OMNI2, for Ottawa residents, particularly for the Chinese community.

10796 To provide you with some perspective of our views, I would like to first introduce to you briefly about the Chinese Cultural Centre of Ottawa. The Centre is a registered non-profit organization with a mission to breach the cultures between the east and the west. To fulfil the mission, one of our main objectives is to facilitate culture communication and adaptations through workshops, seminars and the other various cultural and educational activities.

10797 According to Statistics Canada, there are nearly 30,000 Chinese in Ottawa, the third largest after the English and the French. In the past five or 10 years the majority of Chinese immigrants has changed primarily from places like Hong Kong and Taiwan to primarily from mainland China. For example, in 2001 over 8,000 Chinese immigrants from the mainland China, there were under 600 from Hong Kong. To meet increasing demand of the Mandarin-speaking Chinese immigrants, the Centre was established following a survey conducted by Trans-Pacific Consulting.

10798 According to the survey, nearly 90 per cent of the Mandarin Chinese viewed the kind of social and cultural programs as poor, particularly among the seniors who have very little English skills. A TV program in its own language, ie. Mandarin, could mean the lifeline of a livelihood to the seniors. A TV program which they could understand is the only channel which connects them with Canada where they now call home and to the community where they now live.

10799 There were approximately 1,000 people going through the program our Centre provided last year, such as Tai Chi, calligraphy, art, Mandarin reading circle, concert, cultural seminars and others. Based on our programs in the community outreach we found that many Chinese do not have access to the Mandarin or Chinese TV programs, either because they do not have a cable or they only have the basic cable, which means they could view channels under 30, not allowing them to view the Mandarin program, which is channel 79 in Ottawa.

10800 To many new immigrants the basic cable is what they could afford. For example, my mother who does not receive pension subsidies in Canada will not likely spend money on things other than the basic of living and my mother is very greatful to me, who bought her the channel as a gift. My mother's case is an example of the Chinese new immigrants population and the Chinese population in Ottawa has more than doubled in the past five years, mostly the Mandarin Chinese.

10801 We have an increasing number of complaints from the Chinese community that why the Chinese TV program is not available to them, while other ethnic TV programs such as the Latino and other programs could be viewed under 30. The Chinese would like to see a fair representation in the access to the Chinese TV programming.

10802 I would like now to spend a few minutes to talk about an importance to the Chinese TV channel -- to the Chinese and surprisingly to the men Chinese as well. I mentioned earlier that it was important for the Mandarin seniors to have access to the Mandarin Chinese programs because that is the only way they could understand the world around them, locally, nationally and globally.

10803 I also mentioned earlier that I bought my mother the Chinese TV channel because she cannot afford things beyond basic living. I would like to tell you how happy she is now since she has the access to the Mandarin TV programming. She's not isolated as before, she gets out of her apartment more and participates in social activities more. A Mandarin channel is important not just to the seniors, many Chinese parents want their children to keep their heritage by keeping their Chinese language and the TV programming is a more interesting way to get their Chinese children interested in learning the language.

10804 To my surprise, the Chinese professionals also tell me that they need a Mandarin Chinese channel because they find it insufficient in the language to grasp the news. Most of their English skills are limited to their own field. This reminds me of my own experience about 20 years ago, when I first came to Canada. I could speak English at that time, but I found it hard to understand everything said in classes at the University of Toronto, because I had a very limited knowledge about Canada, the social, cultural, political, business or other aspects of things, all of which help a new immigrant to understand the meanings behind the words or understand what is going on around you.

10805 A Mandarin channel is important, not just to the old, the young or the age in between, we hear a lot with Canadians who studied Chinese tell me that it is very important to have a Mandarin channel.

10806 In summary, many Chinese do not have access to a Chinese TV channel, though OMNI2 did a great job to cover some of the local news or events. Second, we would like to see a fair representation in the availability of a free Chinese TV to the population which is the third largest after the English and French. Thirdly, I illustrated importance of free Chinese and Mandarin programs to the seniors, the children, the professionals and the growing interests in the Canadian population in learning a Mandarin language.

10807 To the seniors, a free Chinese TV channel could mean the livelihood -- the only way to help them connect with Canada and thus encourage social participation and reduced social isolation. A free Chinese TV program is also viewed by the Chinese professionals, necessary for them to fully understand the world around them and the local community they live in. To the young, a great way to keep the language and heritage alive. The anxious speakers, a great tool to learn the language.

10808 Having a free Chinese channel is indeed a privilege to a Canadian who lives in a multicultural society like Canada and its benefits are endless, particularly for the learning opportunities, cultural communication adaptation and it significant social impact. Thank you.

10809 MS MANESH: Good afternoon Commissioner, ladies and gentlemen. My name is Mitra Manesh and my day job is I'm and executive coach and corporate consultant and change management consultant. I am also involved in Media, I am a TV host and commentator at OMNI.

10810 I do not have my speech in writing, so please bear with me if I go a little over the map, but I am here today as all I am, I am here as an immigrant woman, I'm here as a woman, I'm here as a business woman, I'm here as a media personality and I'm also here as a Canadian.

10811 My involvement with OMNI is basically, as far as hosting a TV show is concerned, as a multicultural presents studio C program that my friend just referred to, basically it was the stories of successful Canadians who were not born here. There were two purposes failed by this program. One was the cross-cultural education between cultures, when exactly as it was said before, a South Asian business person, lawyer, interviews a Chinese person and what happens within their inside communities when such a thing happens on TV on Sunday night, a very interesting time when everybody's at home. Number two was role modelling for each community, where they see the success stories and success was not necessarily business success or political success, but we had a broader definition of success.

10812 Number three was breaking the stereotypes that exist within our communities, within our heads and sometimes we are politically aware of it and we don't express it, but nevertheless a lot of our decisions are made based on them. We brought an Egyptian female model, we brought a Japanese artist, so that -- we wanted to show to the audience not all Japanese people are good in math, I mean, some of them are gifted in some other areas. And, I think to a large extent the purpose of this program is fulfilled by just mere reaction of what I hear and what I see when people see me, when they tell me it was so wonderful I had no idea and you can fill out the dot, dot, dot.

10813 There were 26 individuals that they interviewed and they all came from different background, different gender, different talents and different countries and religious backgrounds and it was very interesting to see the dynamics that happened. How influential a program like that can be in the society, in the community.

10814 The area that I am involved in at OMNI is I do kinds of various commentaries, it is very interesting. I also have an office in L.A., I forgot to tell you. At times I take my tapes to just show off to my family because they think I do nothing here and they are very surprised why I don't live in Los Angeles with all these grand lifestyles that Ben was explaining.

10815 Before I get to the commentary program, let me tell you why I do not call L.A. home, although legally I can stay there, I have family there and I have a very very growing business there. It is because of what Canada gives me and it is because of the feeling I get when I come back here. It is the understanding that exists within communities and it is this feeling of belonging that I have. And I know you have heard this before, but I think I'm a very good example, sitting in front of you, where I am telling you I have the green card, I have the access, I have the office on Century Blvd., which is the best place to be, I do have family there, yes, this is home for me.

10816 Getting back to commentary, that is not sponsored by any particular company, nobody has sponsored it and, as a result people, like Ben Viccari and myself feel free to express our very non-traditional views in a very non-threatening way because nobody is telling us and monitoring us saying you can't say that about Coke-a-Cola and God forbid if you said that about this and that. So, it is a very important fact in a democracy that we live, that people here, not necessary agree, but hear non-traditional view, non-censored view every day. It is only two minutes, but again, you would be amazed how many comments I personally receive on it. So, that is my involvement with OMNI.

10817 We are here today to talk about the over the air programming. I suppose we are talking about accessibility. Commissioner Wylie, you were the speaker at a university conference about a week ago and I don't know if you remember what you went on to the stage to speak and the podium was so high that they could hardly see you and you definitely could not see us. Do you remember? I suppose that is issue of accessibility. The reason is that our old hotels are geared towards tall North American men, they do not accommodate you and I. That was a very short experience and I hope that was the only experience that you had about impediment to accessibility.

10818 But I think, for that moment, you felt how a lot of people feel when they are sitting in their home, they flip the channels, they see the reflection of all the other mainstream stories and problems and issues, but if they want to hear it, if they want to hear their own stories, they have to pay. And yes, Ben is right, that it is hard to make a living when you first come to any country, when you go through a change it is difficult and maybe so many dollars per month is an obstacle to access the information that will give you that extra comfort.

10819 So I suppose the question today is not whether or not you should approve this application, but I think it is about how can you make sure that no cities beyond London and Ottawa -- London being a university city, a business centre and definitely a growing city as far as the diverse population is concerned. How can you make sure that this goes beyond these two cities?

10820 I think that should be the question.

10821 I don't know if you noticed, but I just rushed it. I was speaking at the Retail Council of Canada Conference in Toronto. Interestingly enough, they were also talking about diversity and the changing face of their customers.

10822 You would be amazed how behind you they are, and they are supposed to be the business people. They are still talking about what diversity, what are we talking about? And these were big retailers. These were the retailers that you and I probably know very well.

10823 The story I gave them was the story of the Eaton Centre and the Eaton's stores, the great Canadian institution led and founded by a great Canadian, Timothy Eaton, who was a very progressive man, who was beyond his time. Who would have thought returning goods was a good idea? That would have probably been silly at that time, but he was progressive enough to say: Whatever you don't like, bring it back and we will refund your money. It probably didn't make sense then.

10824 This great institution did not, could not, deal with changes coming their way.

10825 I don't know if you ever looked at their board of directors. They were 16 wonderful men, and that did not reflect the diversity of the customers that they were serving. I rest my case.

10826 I thank you for your time.

10827 THE CHAIRPERSON: Thank you very much, ladies and gentlemen.

10828 Mr. Secretary.

10829 MR. LEBEL: Thank you, Mr. Chairman.

10830 The next appearing intervention will be presented by Dr. Daniel and Ewan Sparks.

--- Pause

10831 MR. LEBEL: Not seeing anybody, Mr. Chairman, we will call the next appearing intervenor, Mr. Joe Clark.

--- Pause

10832 MR. LEBEL: Not seeing anybody, Mr. Chairman, we will now call on Mr. Geoff Eden to present his appearing intervention.

10833 Mr. Eden will be appearing with Mr. Chris Stark.

--- Pause

10834 THE CHAIRPERSON: Please go ahead whenever you are ready.

INTERVENTION

10835 MR. EDEN: Thank you very much, Mr. Chairman and Commissioners, for allowing us the opportunity to comment on what we are calling audio description, and that is the opportunity in the licence applications of the specialty channels to look at the option of ensuring that text on the screen is enunciated.

10836 I am a blind person. I can't see a thing, not a thing. Not total blackness. It is basically like a very dark night for me.

10837 It means that the print part of the world doesn't really enter into my life significantly in any way. It would be very nice if I could bring you a nice Powerpoint presentation, something fancy to try and describe that to you, but I can't do that. I am here to represent the community of people for whom printed material that flies by doesn't make much sense to.

10838 We are talking about people with learning disabilities. We are talking about people who have any kind of vision limitation, and we are often talking about people who don't have their glasses handy when looking at the television and looking at the print that is on the screen. You don't need much of a drop in your visual acuity to miss that print. I am told that it can move quickly, and the size can vary and its visibility can also be inconsistent.

10839 Speaking to people around me when the opportunity and my notion to do something about it came up, I discovered that there are many people who sit back in their chairs and let it get by them. They see the images on the screen. They can see well enough to see what is going on on the screen, but they basically would like to be able to read some of that material. But it is there.

10840 For me it is a little bit different.

10841 One of the things that might be enlightening to you that happened to me is I was not aware that there was material on the screen until somebody brought it up. I simply wasn't aware that there was messaging on the screen. When I became aware of it, I began to ask more questions and I was astonished, utterly astonished to find out that there are storm reports; there are weather reports; there are sports scores, all kinds of thing that turn up there that I completely had no knowledge of.

10842 One of the things that occurred to me is that it would be nice if we folks who had limited vision and we blind folks could be prepared for storms too. To me that seems like an essential function to deliver information to us about emergency areas that might be light bearing to us.

10843 The other really essential material that gets away from a person such as myself -- and I think this is one of the ones that provokes me the most -- are phone numbers and URLs to Net sites.

10844 Constantly material appears on the screens as "phone the number on your screen". Well, maybe I would like to order Video Professor or maybe I would like to order a Craftmatic bed. Why shouldn't I. I sleep too.

10845 There are a number of things that are there that completely get on by me when there may be nobody around to read the phone number, and I can't impose on members of my family or my friends to constantly be checking the television text. I assure you that doesn't do much for a cozy continuing relationship to be bugging your partner to say, "Can you read that to me", or "Can you watch out for me for this". That is not the way life works when you are relaxing watching television.

10846 I feel very beholden to people when I have to do that.

10847 Also, if there is continuous text people generally can't read it aloud and respeak it quickly enough to make sense of it. Of course, if they are enjoying something on the television and the message comes by, they are not very anxious to interrupt their own pleasure to report something that is on the screen.

10848 Here is an interesting one. It came up and I felt I just had to tell you about this one.

10849 There was a commercial that went by me recently. It was talking about methods of teaching yourself not to smoke and getting advice and assistance. If you go to the phone number on your screen, the information to help you quit smoking will be right there.

10850 That was all passed by as text on the screen. In the commercial there was time to say "brought to you by the Government of Canada".

10851 Thank you very much. I am a taxpayer too. I have worked very hard to be able to pay my share and yet I have been denied my share. I, too, might want to quit smoking. I might want to join in some other health program or other federal program or other taxpayer offered service, but it is offered on the screen.

10852 So I really felt very seriously cheated by that, really upset and cheated.

10853 The one event that actually provoked me to dive into this whole process was watching the History Channel and a program about the war in Eastern Europe one day, when all of a sudden the program switched to translation. There were people speaking German, Russian and Polish, speaking on the television, and there was text on the bottom of the screen that was the translation.

10854 It happens to be an area of interest of mine. I think that was one of the great battle areas of the entire century, in eastern Europe, and I wanted to know about it. I just couldn't get any of that. It was so incredibly frustrating that I looked around the next day to see what I could do.

10855 My proposition is really quite clear, and that is to suggest that the Commission -- really strongly urge the Commission to look at the issue of regulating that screen text be enunciated.

10856 I am going to acknowledge that not all of it should, but that is an issue that will have to be dealt with later. I think that in order to work in accord with the laws of this country, which we have all agreed to offer each other equitable treatment -- and there is a significant range of laws about that -- we now have a system where it is essentially institutionalized that it is permitted that there be screen text without a second path.

10857 My path is audio, as is the path of so many other people. The text is useless. It is entirely lost for me for matters of health, for matters of safety, and even in some instances entertainment and pure information, if it be sports scores, or temperatures or whatever, whether it is the weather for tomorrow. I need to know that too.

10858 Right now I am denied that, and it is really an issue of regulating it to happen and then looking at ways in which it can happen.

10859 Of course, something like Pulse 24, it wouldn't make any sense to try and articulate all the material on that screen. But I think those are issues for some exception discussions later on. I still think that it has to be a matter of regulation, pure and simple, that the channels whose licences are renewed, it is an obligation to put screen text in the audio channel.

10860 That is not me -- I may be more of a neophyte than I recognize, but I have had a long career involvement with electronics and a long hobby involvement with electronics and technical things. To me, people would have to stay up a long, long time and do an awful lot of talking to prove to me that that is really quite costly, the issue of putting the text writing, the screen writing device, perhaps in picking up a microphone instead. The equipment is there. It is a case of how it is used and the routines that apply to it.

10861 Again, I appeal to you to look at the option of creating a regulation that makes it incumbent upon your new licensees to enunciate screen text.

10862 I want you to understand that I am not going to let this go. If it goes untouched, I will be back. I think I would be forsaking the community I represent if I don't stick to this. To me, it is very important. I think it is an issue of my personal rights. I think it is an issue of discriminating against me and others like me. I won't let it go, and I will be back.

10863 Perhaps my colleague has some words.

10864 MR. STARK: Thank you, Mr. Commissioner and other Commissioners that are here.

10865 I just want to say that I was pleased and privileged to be given the opportunity by Mr. Eden to support his submission to you, both for the applicants and the applications before you, and also for the broader and more global picture of access to the printed information on the television screen in the same way as the colour commentator provides visual information to all on the radio.

10866 I think it is crucial. I think it is important. I think it goes to our quality of life.

10867 I hope that the Commission will redouble its efforts to make this inclusion include people who are blind, as well, when we watch television.

10868 If the time permits, a very short story.

10869 I went out for my wife and bought a couple of frying pans a week or so ago, and I went with a volunteer. She was watching some print advertisements about four days later and said, "Oh, your frying pans are on sale." She called up and she told me. I had been watching the same program. So I got my wife to dig out the receipt with the braille markings on it "frying pans", and I marched over to the local store and they gave me $55 back.

10870 So this is an example of how it can increase our purchasing power as well; to know what that information is on the screen, to have the same choice as everybody else.

10871 We have been here today listening to a lot of needs expressed to you. This need is a very compelling one from a disadvantaged group in the community, and we would be happy to answer any questions that you may have.

10872 I would like to say that I am thankful to Mr. Eden for taking the time to come before you, taking a day off work, coming from southwestern Ontario, spending a night in a hotel, to make a point that is important to him, his family and his quality of life.

10873 I hope you will respond to it. Thank you.

10874 THE CHAIRPERSON: Thank you very much, gentlemen.

10875 Commissioner Pennefather.

10876 COMMISSIONER PENNEFATHER: Thank you, Mr. Chairman. Good afternoon, Mr. Eden and Mr. Stark. Welcome back.

10877 I am Joan Pennefather. I am sitting at the far end of the Commission table, slightly to your left.

10878 I just want to clarify. You focused on audio description this afternoon. I assume you are still interested in video description as well, video described programming.

10879 MR. EDEN: Yes. They are related but they have a distinctness. Video description is when you are describing activities on the screen, describing what could essentially be entertainment material.

10880 Audio description is when we get down to the text screen, the kinds of messages that Mr. Stark described, that says that there is a sale on at the store and you can get your money back; or weather warnings.

10881 Does that make sense to you?

10882 COMMISSIONER PENNEFATHER: I understand the difference. I noted your focus on the audio description and just wanted to be sure, as I read your intervention, that you were still also pursuing the described video programming as important as well.

10883 MR. EDEN: Goodness, yes. The television has a screen and a speaker, and I would like to be able to make full use of the television service via the speaker, if I might, both to entertain myself by hearing video descriptions and having audio descriptions to improve my quality of life.

10884 COMMISSIONER PENNEFATHER: Thank you very much.

10885 MR. EDEN: They are complementary.

10886 COMMISSIONER PENNEFATHER: Thank you, Mr. Chairman.

10887 THE CHAIRMAN: Thank you very much, gentlemen.

10888 Mr. Secretary.

10889 MR. LEBEL: Thank you, Mr. Chairman.

10890 The next appearing intervention will be presented by the Friends of Canadian Broadcasting, Mr. Ian Morrison.

INTERVENTION

10891 MR. MORRISON: Mr. Chair and Members of the Commission, thanks very much for inviting Friends of Canadian Broadcasting to appear today.

10892 As you know, we wish to discuss the reasons for our opposition to the rate increases proposed in the renewal applications of Rogers Sportsnet and The Score. We also want to support the rate increase proposed by VoicePrint.

10893 In essence, the positions taken by Rogers and The Score are that they deserve an increase in their wholesale rate to level the playing field with their principal competitor TSN, which currently has an approved wholesale rate of $1.07.

10894 The most recent statistics available from the Commission reveal that, as of August 31st of last year, Sportsnet, The Score and TSN enjoy wide distribution of seven, five and eight million households, respectively.

10895 This wide distribution enjoyed by these three English-language analog sports services reflects the fact that they are typically distributed as part of the basic or extended basic tiers.

10896 Effectively, English-language viewers have no choice but to subscribe to all three services. There is no opting out of basic, and in practice extended basic has become the de facto basic service.

10897 It is instructive to compare what English-language subscribers must pay for sports services compared to what French-language subscribers must pay.

10898 While there are three English-language sports specialty services, there is just one French-language service, Réseau des Sports, RDS.

10899 Table 1 in our submission demonstrates that the three analog English-language services receive wholesale revenues averaging just over $24 per year per subscriber. Taking the distributor's mark-ups into account, this means that an individual subscriber, on average, pays $48.24 per year for the three services.

10900 By comparison, Réseau des Sports receives wholesale revenues averaging $16.23 per subscriber per year. The average subscriber is therefore paying something in the range of $32.50 for RDS.

10901 We note that the English-language subscribers are already forced to pay 50 per cent more than the French-speaking subscribers for specialty sports services, while French-speaking subscribers pay for a single service two-thirds of what English-speaking subscribers pay for the three.

10902 In both cases, sports services already represent a significant percentage of monthly cable spending by Canadian viewers.

10903 The proposed monthly increased wholesale rates for Sportsnet and The Score tell only half the story in terms of the impact on Canadian viewers.

10904 As I have noted, broadcasting distribution undertakings typically double the approved wholesale rate to arrive at the retail rate charged to subscribers.

10905 As you can see from Table 3 of our submissions, this means that if the proposed rate increases were to be approved Canadians would typically be paying over $5 per month or $61 per year to receive these three sport services whether or not they want to receive those sport services.

10906 Friends seriously questions how it is in the interest of Canadians to be required to spend $61 annually to receive these three analog English-language sports services.

10907 It is interesting to compare the amount Canadians spend to receive English-language analog news and information specialty services to the amount we pay for the three analog English-language sports services.

10908 Table 4 reveals that analog news-oriented specialty services received an annual average of $10.42 in revenues per subscriber. Given that CP 24 is a regional service restricted to Ontario, that average, the Canadian average is just over $10.

10909 Based on the typical 100 per cent mark-up charged by distributors, English-speaking Canadians paid on average just less than $21 per year for English-language news and information services. This is considerably less than half the $48 that they are already paying for the three analog specialty sports services.

10910 As news services are, in our judgment, more important public services than sports services, Friends questions this disparity and suggests that it would not be in the public interest to allow it to grow further through approval of the proposed rate increases.

10911 Friends questions why the approved wholesale rates should increase by even one cent for analog English-language sports specialty services. These services occupy coveted analog channels and enjoy high existing wholesale rates. The Commission has done more than its share to assure the success of these services. One would think that the rest should be up to their owners. We also noted with interest your questioning of these applicants wherein you appeared to share our concern that a substantial purpose of these rate increase proposals is to burnish the applicants' bottom lines.

10912 While Friends believes that sports programming reflects a valuable contribution to Canadian culture, surely there can be no argument that drama programming makes a far greater contribution to Canadian culture than sports programming.

10913 Yet, while sports services are already well funded through subscriber revenues and advertising, drama remains woefully underfunded in Canada. As you have recently stated yourself, Mr. Chair, there is a paucity of drama programming aired on English Canadian television, and lack of funding is obviously the key obstacle to the production and broadcast of Canadian drama programs.

10914 Should the Commission determine that it is acceptable in principle to increase the charges to subscribers by more than $80 million per annum, which is the combined Rogers and The Score request, Friends suggests that it would be preferable to mandate the distributors to collect those funds from subscribers and pass them along to the Canadian Television Fund, rather than pass them along to Rogers and The Score.

10915 If the Commission were to accept the notion that it is in the public interest to level the playing field amongst the three services, we submit that you should consider reducing the wholesale rate enjoyed by TSN rather than increasing those for Rogers and The Score.

10916 In the alternative, Friends suggests that the Commission could require all three analog English-language sports services to surrender their analog status and to be distributed exclusively on a digital basis. This would allow subscribers the freedom to choose whether to subscribe to such services.

10917 Sports services are commonly referred to as tier drivers. If the Commission were to require a move to digital by the three English-language sports services, that decision could have the beneficial effect of enticing more Canadians to subscribe to digital channels and might increase digital take-up rates which in turn would help bolster the fortunes of the struggling Category 1 and Category 2 digital specialty services.

10918 Friends recognizes and acknowledges the valuable contribution to the Canadian broadcasting system made by VoicePrint. This not-for-profit charity provides a critical lifeline service to some 2.8 million blind, low-vision and print-restricted Canadians.

10919 We are supporting the renewal initiatives proposed by VoicePrint, including the proposed monthly pass-through fee of four cents per subscriber. Friends urges the Commission to approve VoicePrint's renewal application as filed. We contend that approval of the VoicePrint renewal application, including its proposed rate increase, is in the public interest.

10920 Finally, in reviewing the comments of the Canadian Cable Television Association on these three applications, we note that the CCTA opposes the rate increases proposed by The Score and VoicePrint, but, and I am quoting, "does not support" Rogers SportsNet's request for a rate increase. After attempting to plumb the essence of this distinction, we began to realize that membership has its privileges.

10921 To sum up, these three renewal applications afford the Commission with an opportunity to make changes that could: help secure the future of the CTF; bolster the fortunes of the digital tier; and assure the long-term viability of a vital underfunded service, namely VoicePrint.

10922 To conclude, respectful of your wish to save minutes here, I just want to thank you for this opportunity to share our views on these public policy matters, Mr. Chair.

10923 THE CHAIRPERSON: Thank you, Mr. Morrison. Just one or two questions that arise from your intervention, most of which I think you have reiterated.

10924 You make the assumption in your calculations, Table 1 in your original brief I believe, the same Table 1 here in the oral presentation today, that the mark-up on the wholesale rate is simply 100 per cent and you are just doing the calculation on that basis.

10925 MR. MORRISON: Yes. If we are in error we would be happy to stand corrected.

10926 THE CHAIRPERSON: Table 4 in your submission in writing, you listed the news services including CTV NewsNet. Now, you plug them in at the current rate I assume and that is how you got your $1.04 total for them as their average wholesale revenue.

10927 As you know, they are applying for a rate increase in this proceeding. Your brief is silent on that. Does this imply that -- I'm not sure what this implies if you plugged in the --

10928 MR. MORRISON: A desire to focus. We have a history with that service. It was once called, as I recall, CTV NewsNet, and we decided that it was more important to focus on sports. As you know, we took a run at CTV some years ago when they wanted to retain SportsNet and TSN and we just decided that we would focus on the items that we thought were the highest priority today.

10929 THE CHAIRPERSON: I see.

10930 MR. MORRISON: I should add, Mr. Chair, I think the arguments apply to them as well, in general.

10931 THE CHAIRPERSON: The arguments in favour of VoicePrint or the arguments against the sports services?

10932 MR. MORRISON: I would have a lot of trouble coming in here and supporting the application of CTV NewsNet. I don't have a brief to do that today.

10933 THE CHAIRPERSON: No. So you just plugged the existing figure in without comment. Thank you.

10934 Just finally, have you read Rogers SportsNet's reply to your intervention?

10935 MR. MORRISON: Yes, I have.

10936 THE CHAIRPERSON: I wonder whether you have any comments on paragraphs 5 through 7 of that reply. I can summarize them for you if you don't have them before you, put the questions to you that way, or whether you simply want to comment --

10937 MR. MORRISON: If you wish to summarize them, I will comment on them. I don't have it at hand.

10938 THE CHAIRPERSON: Okay. They quote you as saying that you acknowledge that sports specialty services are among the leading drivers of the penetration of the analog tier. Their point is that these are popular with subscribers, that they help combat illegal satellite services by offering high quality sports services to Canadians, that they support the growth of other specialty services by being tier drivers, as you point out. They argue that they would not be economically viable at the current low rate and that there would be severe consequences for other specialty services, given the fact that they were a driver of the services, if they were placed on a digital tier.

10939 So those are the three points I wondered whether you had comments on.

10940 MR. MORRISON: I guess the focus of my comment would be, as they noted elsewhere, we are not opposing the renewal of their licence, we are just opposing the grab out of the pockets of millions of Canadians to finance an expansion of their resources, but they are popular services. There is no doubt about that.

10941 I am reminded that the colleague on your immediate left was chairing a hearing here a few years ago when the Aboriginal People's Television Network came before your Commission asking for a licence. I recall Commissioner Wylie asking the representatives of the cable industry if anyone had polled her about whether she wanted to spend 78 cents a month on that service.

10942 While the services are popular, you have already factored that into your decision that they are important and they get quite substantial amounts of money. The thrust of our intervention is sceptical as to their justification for their wish for yet more money because there is only one cable or satellite subscriber's pocket and we think there are higher priorities and you should be very stingy in responding to requests of that nature.

10943 COMMISSIONER WYLIE: Mr. Morrison, good afternoon.

10944 I can't help but show you, I'm still on my toes, that at page 8 of your intervention you say that the CCTA "does not support" Rogers SportsNet's request for a rate increase rather than opposes it. But if you look at paragraph 22 of their intervention you will see that it says that CCTA opposes SportsNet's request for a rate increase.

10945 MR. MORRISON: It took them 16 more paragraphs to get around to telling you that.

10946 COMMISSIONER WYLIE: But they got there. Maybe you didn't.

10947 THE CHAIRPERSON: Thank you very much.

10948 Mr. Secretary.

10949 MR. LEBEL: Thank you, Mr. Chairman.

10950 The next appearing intervention will be presented by the Centre for Research-Action on Race Relations, Mr. Fo Niemi.

10951 Not seeing Mr. Niemi, Mr. Chairman, we will now see the next appearing intervention, which will be a panel consisting of Directors Guild of Canada --

10952 THE CHAIRPERSON: Excuse me, Mr. Secretary, that panel, since we are near a break, I think we will hold off until after the break.

10953 MR. LEBEL: Okay.

10954 THE CHAIRPERSON: We will resume in 15 minutes. Nous reprendrons dans 15 minutes.

--- Upon recessing at 1605 / Suspension à 1605

--- Upon resuming at 1620/ Reprise à 1620

10955 THE CHAIRPERSON: Order please. A l'ordre, s'il vous plaît.

10956 Mr. Secretary.

10957 MR. LEBEL: Thank you, Mr. Chairman.

10958 The next panel is comprised of the Directors Guild of Canada, the Alliance of Canadian Cinema, Television and Radio Artists, the Writers Guild of Canada, and Communications, Energy and Paperworkers Union of Canada.

10959 You have 30 minutes to make your presentation.

INTERVENTION

10960 MR. LESLIE: Good afternoon, Mr. Chairman and Members of the Commission.

10961 My name is Ross Leslie. I will be replacing Mr. Peter Murdoch from the Communications, Energy and Paperworkers Union. He sends his regrets but was unable to attend.

10962 I am the business manager for NABET. NABET is the National Association of Broadcast Employees and Technicians. It is a division of the Communications, Energy and Paperworkers Union of Canada.

10963 We are appearing here today with three other audio-visual unions, namely: the Alliance of Canadian Cinema, Television and Radio Artists, ACTRA; the DGC, the Directors Guild of Canada; and the WGC, the Writers Guild of Canada.

10964 The four unions represented today are members of a larger group, the CCAU, the Canadian Coalition of Audio-Visual Unions, which has been actively involved in trying to address the current crisis in English-language Canadian drama.

10965 The CCAU issued an extensive report on the crisis in mid-March. A copy of that report is attached to the DGC intervention which was filed in this proceeding.

10966 As CCAU members, we share the same concerns and have asked for the opportunity to address you today as a joint panel. We will speak about the problems in Canadian drama in general, then focus on the particular role that the specialty services and their owners can and should play in addressing these problems.

10967 We also acknowledge the release on May 23rd of three reports commissioned by the CRTC on the state of drama, by Trina McQueen, Guy Fournier and Barry Kiefl. We will be not commenting on the specifics of these reports except to make a few general observations and then talk about moving the process forward.

10968 But before going on to discuss these matters, let me introduce the rest of the panel.

10969 First, representing ACTRA, we have Stephen Waddell, its National Executive Director.

10970 From the Directors Guild we have Alan Goluboff, the President, and Pamela Brand, National Executive Director.

10971 Representing the Writers Guild we have Maureen Parker, Executive Director, and Director of Policy, Gail Martiri.

10972 Finally, we have been joined by Peter Grant, a senior partner in the law firm of McCarthy Tétrault. Peter assisted us in the research and writing of the CCAU report.

10973 I would like now to turnover to Stephen Waddell from ACTRA.

10974 MR. WADDELL: Thank you, Ross

10975 By the summer of 2002, Mr. Chairman, the audio-visual unions in Canada had received a rude awakening. After all the promises and heightened expectations from the television industry during the 1999 Television Review and the 2001 conventional renewal hearings, it was clear that Canadian English-language drama, instead of thriving, was descending into a deep crisis.

10976 This was clear from a number of signs.

10977 First and most important, there was a significant drop in the production of Canadian drama. That showed up in 2001, got worse in 2002, and declined still further in 2003.

10978 Second, the exhibition of Canadian drama, particularly original episodes of 10 point productions, on conventional television has declined. This was evident in the CRTC's 2002 Broadcasting Policy Monitoring Report which showed that the exhibit of dramas qualifying for the 150 per cent time credit dropped significantly between 2000 and 2002, particularly on the Global stations.

10979 Our own research on drama exhibition has confirmed that this trend has continued into the 2003 broadcast year. There are now relatively few hours of Canadian dramatic programs broadcast in the peak viewing period by Canada's major English-language private broadcasters. An increasing portion of priority programming is made up of programming other than drama, or of older reruns instead of originals.

10980 Third, as to expenditures, the private conventional English-language broadcasters have been spending less, not more, on Canadian drama. In 2001, private TV broadcasters in English Canada spent $60.5 million on Canadian drama. However, this amount was reduced to only $54.7 million in 2002, a decline of almost 10 per cent.

10981 These reductions have contributed to the shortfall in Canadian drama. It is of particular concern that private TV broadcasters outside Quebec reduced their Canadian drama expenditures by almost 10 per cent in the last year while increasing expenditures on U.S. programming by almost 15 per cent in just two years.

10982 To these concerns must be added the funding problems at the CTF. As you know, the CTF budget was cut by $25 million in the February budget. So a number of drama projects had to be turned away that might otherwise have been funded. Needless to say, we are still pressing to see that funding restored.

10983 The CCAU research on this topic and the points I have just made have all been confirmed in the Trina McQueen report, so there is a real consensus that we are in a crisis.

10984 That being said, we are pleased to see that for the first time in three years there are more applications for 10 point drama projects presented for approval by CTF than dollars to support them. In previous years, the drama envelope had actually been under-subscribed. In addition, despite the funding cutbacks, more Canadian drama projects were approved for funding by CFT than before. In CTV's case, the number of 10 point drama productions approved by CTF as of last week was close to 50 hours, an increase from last year's 40 hours. However, Global's number of 10 point dramas approved by CTF stayed at only 13 hours.

10985 Still, further adding to the problem for the audio-visual sector in Canada is the fact that foreign production activity has declined in the last few months. That of course has nothing to do with our policies on Canadian productions. It is caused by other factors including the SARS crisis and the rising value of the Canadian dollar. But it has led to a situation which may remind us of "The Perfect Storm". All the events seem to be conspiring to worsen the problem for creative workers in the drama sector in Canada.

10986 All of which is to say that your decision last fall, Mr. Chairman, to commission some studies on the state of Canadian drama and to put this high on the Commission agenda was extraordinarily prescient.

10987 At the same time, we realize that this is a problem with many moving parts and the CRTC can only affect a few of them.

10988 We realize that at this hearing we are only talking about the role of the specialty services, so that further limits the area of focus.

10989 Before we talk specifically about the specialty services, I will ask Maureen Parker to talk further about the overall picture and where we go from here.

10990 Maureen.

10991 MS PARKER: Thank you, Stephen.

10992 As my colleague Steve Waddell has noted, the crisis in Canadian drama is a problem with many moving parts and the CRTC can only affect a few of them.

10993 Canadian drama does have difficulty in attracting audience, but that is understandable for the following reasons.

10994 First, we commission fewer new episodes and use more repeats. We cannot afford to do much testing with pilots, there are fewer vehicles for promotion, there is less scheduling predictability because of the dominance of U.S. simulcasts, and scheduling of Canadian drama is all too often relegated to off-peak periods.

10995 The export market has also deteriorated, in part because of the increased success of local drama in overseas markets where Canada used to sell its programs. It is also true that revenue for Canadian conventional television has been relatively static in the last three years, in the face of 9/11 and other factors. And of course the government cutbacks at CTF have come at the worst possible time.

10996 But we have a lot going for us. We have an extraordinary talent pool. Our costs for local drama are a fraction of the comparable U.S. costs, and when all of the factors come together we do have some success stories.

10997 We think the Commission is right to focus on Canadian drama and how it can be saved. In that context, we think the release on May 23rd of the three reports to the CRTC has moved the debate along in a useful way.

10998 We agree with a number of key recommendations in the Trina McQueen report, many of which were among our own proposals. These include: strengthening of the CTF through additional federal money; maintaining, not lessening; BDU contributions to the CTF; requiring more drama from the CBC; introducing some scheduling incentives to private conventional broadcasters to air 10 point Canadian drama; and giving permission for specialty services to include new original Canadian drama in their mandate.

10999 All of these were CCAU recommendations and we are pleased to see them endorsed by Ms McQueen.

11000 Ms McQueen disagreed with some of our suggestions. She was particularly opposed to any increased regulation of private broadcasters. Her report focused on financial incentives, not on regulatory obligations. We take issue with her on this point. We think regulation has to be part of the solution, particularly in the longer term.

11001 But that being said, the real question before us is: where do we go from here? On that point we were gratified to see her recommend a CRTC public process to get the views of all players on how to address the problem.

11002 We strongly recommended that the Commission initiate a public proceeding later this year to investigate the various ways in which the presence and production of Canadian dramatic programs may be strengthened. To be effective, this process has to look at all of the moving parts. We know that the crisis arrives from many factors, not just one. Therefore, the participants in this process should include all of the stakeholders, not just the public and private broadcasters that you regulate.

11003 No option should be ruled out in advance. We should all be looking for some new ideas.

11004 The unions at this table would be most pleased to participate in a review of Canadian drama.

11005 MR. GOLUBOFF: Maureen, thank you.

11006 Let me turn now to the role of the specialty services.

11007 We recognize that in many cases specialty services may be seen as too small to solve the crisis in Canadian drama by themselves. However, we think there are some useful contributions that they can make to the overall solution.

11008 Many of the specialty services are owned by large corporate broadcasting groups. In numerous cases that strong ownership is a key element not only in winning licences but in operating the services profitably, and those services can also be part of the solution to the crisis in Canadian drama.

11009 In its Notice of Public Hearing, the Commission stated that it:

11010 The class of '96 is an important group within the category of specialty services generally. When the services were first licensed in 1996, there was a great uncertainty with respect to digital capacity, the future of the licensed-but-as-yet-unlaunched DTH services, the take-up rate of the new specialty services, the packaging and launch intentions of the BDUs and many other factors.

11011 Now most of the class of '96 are doing very well indeed.

11012 In deficiency questions to applicants, the Commission noted that the average Canadian Programming Expenditure, the CPE, requirement of all specialty services licensed in 1996 was approximately 50 per cent of total revenues. While the Commission has routinely set the expenditure requirements on a case-by-case basis for each service, the average for all specialities is in the 43 per cent of revenue range and the average of the class of '96 in the 50 per cent range.

11013 In our written intervention we asked the Commission to closely scrutinize the financial projections of the applicants and where appropriate hold their feet to the fire in terms of CPE over the next licence term.

11014 We were very pleased therefore to hear that the Commission did follow up on this and has pushed a number of licensees for increased CPE levels, particularly where their recent financial performance was above average but their CPE levels were low.

11015 We have not reviewed the responses from the licensees and we acknowledge that the right level for each service will depend on their financial projections and other factors. However, the act calls on each broadcasting undertaking to make the greatest practicable use of Canadian creative and other resources in the creation and presentation of programming. So we ask the Commission to review the numbers closely to try to get the CPE number as high as is practicable in the circumstances of the service.

11016 MS MARTIRI: Alan Goluboff has focused on the expenditure requirements of specialty licensees. There are also exhibition requirements. We believe that both continue to be essential.

11017 The Commission has noted in deficiency questions that the average evening Canadian content exhibition requirement for analog English-language specialty services, excluding news, weather and music video services) is over 50 per cent. This is an important number. The evening viewing period is when homes using television are at their peak.

11018 We therefore are very pleased that the Commission last week pressed certain services that had lower than normal Canadian scheduling requirements in evening hours to increase those levels.

11019 Again, the right number for each service will depend on its own circumstances. However, we applaud you for seeking higher levels were practicable.

11020 MS BRAND: We have argued for a number of years that it is inappropriate for broadcasters to claim so-called licence top-up money received by producers from the CTF as if that money had actually been expended by the broadcaster. This credit mechanism, in our view, permitted broadcasters to overstate what they really spent on drama. When the CRTC eliminated the expenditure rule for conventional television broadcasters in 1999, the issue became moot as far as the latter were concerned.

11021 However, the issue remains important as far as specialty broadcasters are concerned. By permitting specialty broadcasters to claim the CTF top-up credit, the Commission is allowing specialty broadcasters to reduce their spending commitments by a commensurate amount.

11022 We believe that the continued ability of specialty broadcasters to apply CTF top-up credits to satisfy their spending obligations undermines the integrity of the reporting system. To remedy this, we urge the CRTC to indicate to specialty licensees that the CTF licence fee top-up will no longer count as a credit toward spending by any broadcaster. In particular, the renewal decisions should indicate that eligible expenditures in the renewal term do not include CTF credits.

11023 Broadcasters have defended the use of the top-up credit as an incentive to get them to licence more 10 point Canadian productions and to provide higher licence fees for those productions. However, we believe there are already very significant incentives for broadcasters to licence CTF-supported productions, since with CTF support these productions can be better funded and will be of higher quality. If more incentives are needed, we think they should be through scheduling incentives, not by allowing broadcasters to reduce their total dollar expenditures on Canadian content.

11024 MR. GOLUBOFF: We also urge the CRTC to allow the specialty licensees to air original Canadian drama even if their current licenses do not allow it or place restrictions on it. For example, at this hearing, one finds Teletoon, the Comedy Network and Treehouse that show Canadian drama within certain limitations. But other specialty services at this hearing are prohibited from airing any new Canadian drama and these include all of the news and sports channels as well as services like HGTV, Prime TV and Outdoor Life. While they are all required to make expenditures on Canadian content, the programming cannot include original Canadian drama.

11025 This limitation does not make sense. With new Canadian drama being so difficult to produce and finance at the best of times, why limit the number of licensees that can contribute to the pool? And the corresponding increase in the number of green lights will also serve to increase the potential for innovative new ideas.

11026 We do not pretend that this suggestion would provide a complete answer to the Canadian drama conundrum. If the limitations on Canadian drama were removed on all the non-news English-language analog specialty programming services that have limitations, and if one assumed that 5 per cent of those budgets were directed toward new Canadian drama, the total amount involved would only be about $11 million per year. But that is better than nothing, and it would also open the door to possible co-operation between a specialty licensee and a conventional licensee, especially where they were jointly owned.

11027 Therefore, we support the application of HGTV Canada to add Canadian drama to its list of program categories. It will not change the nature of service of the licensee since the subject of the drama would still be related to homes and gardens, yet it provides a small window that might allow for the creation and presentation of original Canadian drama.

11028 Of course we recognize that even if specialty licensees are granted this flexibility they may not choose to use it. However, we urge the CRTC to amend each of the specialty licences before it at this hearing to permit the use of original Canadian drama, whether or not they have applied for such an amendment. The Commission has the full ability to make such amendments of its own motion.

11029 MR. LESLIE: Finally, we urge the Commission to provide performance reports for the specialty services that break out expenditures of each licensee by program category, the same way that it does for conventional broadcasters, to facilitate monitoring, analysis and comparison.

11030 For example, at present it is not possible to tell how much the specialty services spend on Canadian drama or on any program category. By contrast, drama expenditures can be monitored for conventional television stations. If we want specialty services to play an increased role in the support of Canadian drama, it is essential that timely information be reported in this regard.

11031 In the Trina McQueen report, Ms McQueen recommends that drama stakeholders could form a drama caucus and issue a yearly report card assessing the performance of all involved. We fully support this idea. However, to make it work the Commission will need to make some of this information available through its own statistical reporting.

11032 Thank you, Mr. Chairman. That concludes our presentation. We invite your questions.

11033 THE CHAIRPERSON: Thank you.

11034 Commissioner Grauer.

11035 COMMISSIONER GRAUER: Thank you. Welcome.

11036 Given we have a fair amount of territory to cover, and a number of submissions, I will refer the questions to you, shall I, Mr. Leslie, and then you can refer them on?

11037 What I would like to do is limit ourselves to the specialty services and particularly those under renewal. There may be some general questions but I think that would be helpful.

11038 Let me start with your recommendation that the specialty services be permitted to air new drama. One of the things that struck me is that it seems to me a big part of the problem that we are having is around financing. You know, it raises concerns with me that if we were to increase the amount of pressure and demand on the funds we don't solve the problem, we maybe create more of one.

11039 I wonder if that is something you have given some thought to and if you could comment on that?

11040 MR. LESLIE: Maureen, do you want to take this?

11041 MS PARKER: Yes, we have given that some thought. Without a doubt there is a lot of pressure on CTF in particular. However, I think it's important to remind ourselves that for the last few years prior to this that fund was actually under-subscribed for drama.

11042 Currently, as the regulations stand, there is no requirement for the conventional broadcasters to actually produce and air original 10 point drama so at any year at any point in the system they may choose not to do that. That is what we believe happened in the two preceding years.

11043 This year it looks like we are in a healthier situation. There is some demand on the fund. In fact, it is over-subscribed. But we believe that to be a healthy environment for producers, creators, directors, performers, writers. It creates competitive challenge, it brings forward new and innovative ideas, and we think that any broadcaster who is creating Canadian content, particularly original 10 out of 10 drama, should have access to CTF.

11044 Our job is perhaps to put more pressure on the size of that envelope but not to determine who has access to that envelope.

11045 COMMISSIONER GRAUER: Would you agree with me, though, that there now exists an expectation in the community of producers/broadcasters that in fact everything that is applied for should be funded? This is really a serious question. I think one could argue that the Canadian taxpayers and subscribers have been enormously supportive of the Canadian broadcasting system, whether it is through the subscribers' contributions to the fund which is through the BDUs, through the guaranteed access, the guaranteed cash flow. I mean, there has been a lot of support and I wonder if we keep saying, well, let's just keep creating more and more demand, I don't know that the public funds are unlimited.

11046 MS PARKER: Absolutely public funds are not unlimited and we understand that. As you know, the CCAU has been putting forward a number of arguments as to broadcasters putting more into the system in terms of a financial commitment. So we do recognize that the answers to this problem are manyfold, but I guess what we are asking at this particular juncture is that you not limit the licenses to specialty channels

11047 If they want to produce and air original 10 point drama, that they be able to do so if they want to put in an application to CTF. I think it is up to CTF to determine how those monies will be divided and allocated.

11048 Without a doubt there is work to be done at CTF. The allocation process is in a muddled state and we expect that that will be worked out. But again, I think it is important to allow these licensees to at least be entitled or able to produce drama and air drama if they choose to.

11049 COMMISSIONER GRAUER: Would you go ahead with that even if the ability to -- if we didn't amend their ability to deduct the CTF contributions from CPE?

11050 MS PARKER: I don't think we have given that particular thought, but we could certainly consider that and get back to you.

11051 COMMISSIONER GRAUER: Okay.

11052 One of the other aspects of this is that we have been hearing from a number of producers who have been here all week that one of the big challenges is that licence fees are getting smaller, budgets are getting smaller and that they don't have the budget to produce the kind of programs that they feel need to be produced to attract viewers. I know that you have touched on, I guess it is probably the Writers Guild, the fact that many of the scripts aren't ready, that there is a real problem with the script and concept development money, which I suppose is part of the whole overall budget really, isn't it, to bring something to screen.

11053 Again, it is in the same context of allowing them to do drama if we really want to increase the demand if the money isn't there for a proper budget.

11054 MS PARKER: You know, there are so many challenges in the system with respect to producing dramatic content, original 10 out of 10 dramatic content. Yes, there is a problem with development, absolutely.

11055 In fact, Ms McQueen's report actually cites the creation of the $30 million fund and during the first year of that fund she would like to see the money allocated specifically to development.

11056 Certainly there is not enough money in the system for development. But I think what we are talking about today is a very limited application. Even at its best, in the best case scenario, I think we are looking at $11 million in production value for these specialty channels.

11057 For example, the average episode of "Blue Murder" is $1 million an episode so 13 episodes of one hour prime time drama is $13 million. What we are asking for today from this hearing is actually just a very small ability to tell a limited -- you know, make a limited number of productions and broadcast those, again, if the specialty channel chooses to.

11058 COMMISSIONER GRAUER: Should it be contingent on providing development money in their budget?

11059 MS PARKER: Again, we have not given that specific consideration, but that is something that, you know, we can get back to you on.

11060 COMMISSIONER GRAUER: Thank you.

11061 MS PARKER: Thank you.

11062 COMMISSIONER GRAUER: What I would like to do is get on to providing updated or additional information on station performance. I wonder if you could elaborate on -- we have some reporting that is done by the conventionals. I think you have referenced the information that was provided prior to the CTV and Global renewals. I wonder if you could elaborate a bit. You have made a few suggestions here, but some other -- there have been other suggestions that we should maybe be requiring payments, exchanges, between affiliates of the broadcasters and what kind of -- have you given any thought to these things?

11063 MR. LESLIE: I will let Peter Grant answer that one.

11064 MR. GRANT: Thank you, Mr. Leslie.

11065 There is much more specifics on that at page 37 through 39 of the CCAU report which was filed as part of the DGC intervention. Basically, the point of course that was made in the oral today focused primarily on the difficulty of knowing how much on each program category is spent by the specialties. That is a problem right now that could be readily solved by just amending the reporting requirements for specialty to kind of match the conventional.

11066 There is merit in having a report by station group as to expenditures. That would be probably a useful exercise if you followed the family of services theory. You could certainly look at the performance of each of the major station groups in that area, but it would make sense obviously to break out specialties, pay and conventional, within that.

11067 Finally, I guess a key issue in providing transparency in the system is to adjust so that it is clear under all circumstances whether CTF top-up is in or out one way or the other.

11068 COMMISSIONER GRAUER: Thank you.

11069 Do you have any comment on -- the CFTPA on Friday I believe -- one of the things they are concerned about of course is the ability to exploit rights, first window, second window, third window. Is this an area which is of concern to you? In the current structure is there enough transparency?

11070 MS PARKER: We are particularly concerned about the production and exhibition of original 10 point drama not really providing opportunities for second window and we want to see them doing it and not just rerunning it.

11071 COMMISSIONER GRAUER: Thank you.

11072 I am just going through my list.

11073 You made reference to, still the Directors Guild, concerns about the repeat of the TSN renewal. I have also read the response that OLN made and I guess what it suggests to me is that the whole area of projections and going forward for a licence term have -- everybody seems to have some difficulty with accurate projections, whether it's the environment, whether it was in the original licensing, new licensing.

11074 I wonder if you have any ideas for us about how we might deal with this. You certainly raise it as a concern.

11075 MR. LESLIE: Pamela, would you take that one?

11076 MS BRAND: Well, you know, it is an area that we haven't -- we are not experts in that area, and we believe that the Commission staff -- you have experts who can actually do that kind of analysis and provide you with very good, solid information on, and we would be happy to participate in that with them.

11077 COMMISSIONER GRAUER: So with respect to the specific concerns with TSN, you are not concerned about that with any of these going forward?

11078 MR. GRANT: I guess the position of the unions is that in terms of analyzing the specific financial projections of the particular applications it wasn't within their area of expertise and they felt that this was something that they would defer to the Commission and its staff.

11079 COMMISSIONER GRAUER: So you just wanted to flag it as something that...

11080 I would also like to talk to you about -- I mean we talked a bit about it in the context of the expenditure requirements, but that is the exhibition requirements. Again, it goes back to my question about demand, supply and demand.

11081 If one assumes there is a limited amount of money in the system and what we want to be doing is -- even if we were to go with, accept, your recommendation to allow licensees to broadcast original drama, how do you respond to the idea that if we increase the CPE and allow them to do this, where we put more money into fewer projects, but if we increase the exhibition requirements at the same time we may run the risk of diluting the money that is there to do quality productions, do the R&D, do the script and concept development?

11082 Do you have any --

11083 MS PARKER: Are you referring to the CTF?

11084 COMMISSIONER GRAUER: No. Just in general.

11085 MS PARKER: Just in general, there is just limited money in the system?

11086 COMMISSIONER GRAUER: Yes. That's part of the question, yes. There is not unlimited money in the system and doing 10 point drama is expensive, original drama is expensive.

11087 MS PARKER: It depends on really what type of original 10 point. Certainly, you know, there is million dollar per episode but there are far less expensive types of drama to do as well and some of the specialty channels already know how to do that.

11088 I guess it really is -- one of the things the CCAU has been most concerned about is putting out enough volume of Canadian drama and allowing audiences a choice with respect to dramatic programming. Our report specifically shows, for example, a dramatic decline in the production and exhibition of Canadian drama.

11089 So I guess the point that we are trying to make by being here today is that if there is a will to actually produce original 10 point drama, we don't think it should be discouraged. Yes, there are market forces that play, money may be limited, but the cream will rise to the top. You know, if something is going to get made it will get made.

11090 Perhaps it will also lead, as I was saying earlier, to new, innovative and original ideas, different ways of making dramatic production.

11091 COMMISSIONER GRAUER: One of the other areas with respect to exhibition requirements is in terms of many moving parts, which you have certainly pointed out in your presentation here today, and there are many, one is that we need to be allowing our Canadian services to be airing the best of the U.S. and/or international programming. I say that because we need to keep Canadians inside the Canadian system. Signal theft is a big issue. There is always a lot of pressure for more choice.

11092 So again, this is a balancing act if we need to keep -- you know, the pressure in the system to be alleviated by allowing that foreign programming in. Have you given any thought to that at all?

11093 MS PARKER: We still think there is -- sorry, if anyone else wants to jump in -- we still think that there is -- I guess just the way the current system is unfolding, there is absolutely, it appears, very little room for Canadian drama, which isn't the right way to proceed, in our opinion, at all.

11094 We understand that there are simulcast pressures and those seem to be well looked after. We have all read in the paper in the last week or so about the buying frenzy down in LA for American programs, but yet the expenditure on Canadian programs continues to decrease.

11095 So what we are looking for is a healthy mix where Canadians do get the opportunity to see stories about themselves during prime time, not in shoulder, off peak periods or during the summer but during prime time in February when we are all stuck to the couch.

11096 COMMISSIONER GRAUER: I think we all want that. In terms of the mix there are a lot of moving parts, certainly grey and black market issues are big and we have to be mindful of them and so it is, you know, keeping all these in hand.

11097 MS PARKER: You have a tough job.

11098 COMMISSIONER GRAUER: That's why we get the big bucks.

11099 Where am I now? I have moved on to ACTA.

11100 You refer to the research showing that broadcasters are spending less on Canadian drama, and you say "private TV broadcasters in English Canada". Are you referring to conventional there?

11101 MR. WADDELL: Yes, we are.

11102 COMMISSIONER GRAUER: Yes. So we don't know on specialties. You don't have any evidence about that?

11103 MR. WADDELL: No.

11104 COMMISSIONER GRAUER: Thank you.

11105 The only other point I wanted to make is -- no, sorry.

11106 On another matter, on the CTF contributions, you have referred to 35 per cent provided by BDUs. I would like to remind people that it is subscribers, an involuntary contribution by the subscribers.

11107 It is really all public funding. So you are saying there be no further dilution of the requirements by BDUs to the CTF. What do you mean by that?

11108 MS PARKER: We want to ensure that there is a consistent and stable level of funding into CTF. We know that there have been various applications to see money directed to different channels, i.e. community network channels, et cetera. We believe that it is essential that that money be directed towards the types of programs that are funded by CTF, a moratorium on that sort of divergence of funds.

11109 COMMISSIONER GRAUER: You also talk about the promotion of Canadian programming, more promotion. Do you have any suggestions on how, especially with the specialties, we can do that? I mean is it day programming that maybe doesn't get credit? Are there any thoughts you have on what we might do?

11110 MS PARKER: One of the things that we have considered, and we look to the states for particular models, are magazine type entertainment shows that specifically promote Canadian stars including of course our lead performers and directors and screenwriters. You know, obviously we would be open to some form of communication with respect to incentives, but there appears to be a great need for cross-promotion at different levels.

11111 COMMISSIONER GRAUER: You have nothing more than that?

--- Pause

11112 COMMISSIONER GRAUER: We talked a bit about the writing aspect of this and scripts not being ready, we touched on it earlier but I wonder if you could just elaborate for me, give me some examples and what does that mean with a show?

11113 MS PARKER: Well, we will take a current example. Going into the production season right now, because the financing announcements were so late in the season everything was greatly delayed, and of course in Canada you have to shoot during particular periods when we have good weather. I mean, we are all held hostage to weather in this country, so production offices have to be up and running by July 1 approximately. That means that even though you may not have gotten the green light from your financing, from CTF or Téléfilm, that you have to get things in development and ready.

11114 So particularly my members are working much in advance of any guarantee of pick-up or payment which of course as a union is a very difficult place to be. But there just isn't enough time between the green light in the system and getting into production so you may have, for example, eight weeks. That is not enough time to get script material ready to be produced. You really need -- it needs to be rewritten and re-examined. Not every idea works right off the top. You have to allow for some of that throw out, and that is what the story department will do upon editing and getting that script ready for production.

11115 So there is a time squeeze.

11116 There is also a money squeeze in that there is no money in our system for waste scripts. We can't afford to say, look, that script isn't working, we won't shoot it, because every dollar is attributed. That script will have to go into production whether or not it actually is working.

11117 The other I guess area of development that is lacking in our system is pilot scripts. That is something that is very much at play in the United States. Again, it is mentioned in Trina McQueen's report in that there is an opportunity for script material to be produced and set forward in a test audience situation to see whether or not it works. Does it need another direction, stronger characters, a different locale, a different ending, anything? We don't do that in Canada, again because there is no money for pilot production or script development.

11118 COMMISSIONER GRAUER: Do you have any suggestions with respect to the specialties of particular mechanisms we could put in place, regulatory measures?

11119 MS PARKER: Quite honestly I don't feel at this point that I can answer that. We would have to get back to you.

11120 COMMISSIONER GRAUER: You referred to the industrial dramas, the six out of 10. What is the role of those on the specialty services vis-à-vis the conventional and what kind of presence do they have on the specialties? Do you know? Is that an issue?

11121 MS PARKER: It doesn't seem to be an issue for those specialty channels that currently have a licence to air Canadian drama. They seem to be focusing on original 10 point production.

11122 Peter?

11123 MR. GRANT: Certainly you have services like Showcase which will provide a second window for every drama, whether it is six point, eight point, co-venture, co-production, whatever, so there is -- and then of course services like Space will provide second windows for a fair amount of industrial drama in the sci-fi area of which there is a considerable amount in Canada.

11124 So there are lots of examples where specialty services are providing second or third windows for industrial drama as well as Canadian 10 point productions.

11125 COMMISSIONER GRAUER: In terms of your recommendations where you talk a lot about 10 out of 10 as opposed to six out of 10, do you have any particular views on that with respect to specialties, second and third window?

11126 MR. GRANT: I think this goes back to some of the research in the original CCAU report. What was interesting in that report was that it was noticeable that in general, and there are some exceptions, but in general the 10 point production has been providing better audiences than industrial. That probably is just a function of the fact that they do tend to be more Canadian specific, and the industrials are generally licensed in a scenario in which the principal genesis for the project is coming from a presale to a U.S. service of some kind.

11127 So the combination of those factors means that if you were going to try and build audience it would be useful to focus on the 10 point. The problem from the standpoint of the broadcaster however is that the 10 point productions, since they don't have generally a U.S. presale for a major portion of the budget, are much harder to finance and do require CTF money in many, perhaps most, cases. So you really have to have a balancing situation.

11128 The licence fee that broadcasters pay for the 10 point productions is also much higher, two and a half times higher typically than they pay for an industrial production which has been presold to a U.S. network. So there are many motivations why a broadcaster would want to focus on industrial even though they may get a better audience with 10 point. The 10 point really forces them to be out there with a high licence fee and in a much riskier environment of course because you don't have the benefit of a guaranteed export sale.

11129 COMMISSIONER GRAUER: We treat 10 point and six point the same way. I guess arguably with an expenditure requirement it doesn't matter. Should we treat them the same way on the specialty services?

11130 MR. GRANT: Well, you have historically given more scheduling credit, until that was changed in 1999, for the 10 point productions. There may be merit in, and I think one of the suggestions in the CCAU report is that there may well be room for more scheduling incentives for the 10 point productions.

11131 COMMISSIONER GRAUER: I am thinking here of the specialties as opposed to the conventionals.

11132 MR. GRANT: That's right. No, there is no current I guess bonus or benefit for 10 point as opposed to industrial for the specialties. It is certainly something worth considering.

11133 COMMISSIONER GRAUER: Where am I? Writers Guild.

11134 You have recommended all licences granted to the applicants for specialty channel licences invest a portion of their revenues to the development of new Canadian drama.

11135 Did I miss...?

11136 MS PARKER: I don't deny that we have said that, but if you are asking for specifics as to how much, et cetera, I am sorry, we don't have those with us today.

11137 COMMISSIONER GRAUER: Okay. I think that's my list actually. I am sure some of my colleagues may have questions. Thank you.

11138 THE CHAIRMAN: In your intervention at paragraphs 28 to 31, you mention exhibition requirements as well as CPE. Yet in your oral presentation you focus solely on the CPE.

11139 Is there any significance to that?

11140 MS MARTIRI: Generally we support Canadian content exhibition requirements for each of the channels, but we believe that that should be set on a case-by-case basis.

11141 For that reason, we are not here with fixed levels for each of the different services that are before the hearing today.

11142 THE CHAIRMAN: No, I understand that. You say on both in your intervention, paragraph 31, drive them both higher.

11143 I guess conceptually is there an argument to be made that by holding the content exhibition levels -- you call it "shelf space" -- constantly by increasing the dollars, you are allowing more dollars to go into the productions for the shelf, and hopefully raise the level, both the point level and that production value level.

11144 Should one draw that inference from the fact that you moved from one to the other?

11145 MS MARTIRI: I think our concern is that those levels should not be decreased. So for that reason, there are a couple of channels before you today like Musimax and The Comedy Network who have proposed to reduce their exhibition requirements and we oppose that. In those cases, we would like for them to maintain the levels that they have been licensed to do.

11146 THE CHAIRMAN: Do you have a view on -- I take your point on not reducing the Cancon exhibition levels. Do you have a view, though, on holding them constant versus increasing the CPE in order to get more dollars into production?

11147 MS BRAND: I think that is something we are going to have to think a little more about and get back to you.

11148 THE CHAIRMAN: You have a proposal on page 12 of your oral presentation. I think this is in Pamela Brown's portion where you suggest that we on our own initiative impose amendments, or if you like permission on the specialty licensees to air original Canadian drama up to -- I take it you are suggesting it's 5 per cent, up to that? Right.

11149 Do you have any comment on the applications of those who have argued that doing original Canadian drama as the criterion for permission to do Category 7 wouldn't do their service any good and wouldn't be in the interest of the system?

11150 MS BRAND: If we are supposed to respond by allowing them to produce or rather air American movies, et cetera, we certainly wouldn't be in favour of that. It's Canadian ten point or nothing at all.

11151 THE CHAIRMAN: That's your story and you are sticking to it.

11152 MS BRAND: That's it.

11153 THE CHAIRMAN: I don't have any further questions. Thank you for a very helpful intervention and presentation.

11154 Monsieur le secrétaire.

11155 MR. LEBEL: Thank you, Mr. Chairman.

11156 The next appearing intervenor, Stornoway Communications, has swapped its slot with l'Union des artistes and la Société des auteurs de radio, télévision et cinéma qui comparaîtront en panel.

11157 Merci.

11158 THE CHAIRMAN: You are running a little market in positions at the hearing, Mr. Secretary.

--- Laughter / Rires

--- Pause

INTERVENTION

11159 M. CURZI: Monsieur le président, mesdames, messieurs les conseillers, bonjour. Je m'appelle Pierre Curzi. Je suis comédien et président de l'Union des artistes et je suis accompagné aujourd'hui par Mme Anne-Marie Desroches, directrice des Affaires publiques, M. Yves Légaré, directeur général de la SARTEC, et Marc Robitaille, qui est le représentant de la SARTEC ici à Ottawa.

11160 La présente audience se déroule dans le un contexte de remise en question (on vient d'en entendre parler) et de crises en matière de contenus canadiens.

11161 Depuis quelques semaines il y a eu des coupures dans le Fonds canadien de télévision qui nous ont frappés durement. Mme Trina McQueen et M. Guy Fournier vous ont présenté des rapports sur l'état de la télévision. M. François Macerola termine sa réflexion sur le contenu canadien.

11162 Le Comité permanent du patrimoine canadien sortira son rapport la semaine prochaine sur le système de la radiodiffusion. Vingt-deux licences de services spécialisés sont renouvelées au moment où se définissent les rôles et les responsabilités de l'ensemble des intervenants dans le développement, la production et la diffusion de contenus canadiens de qualité.

11163 Les questions que nous nous sommes posées sont les suivantes : Comment assurer la pérennité de notre culture et de notre télévision? D'où viendra l'argent nécessaire? Quelle importance voulons-nous accorder à la musique et aux dramatiques d'ici sur nos écrans? Comment favoriser l'essor de la langue française dans un contexte nord-américain et dans un contexte de mondialisation où l'anglais domine largement? Les artistes francophones pourront-ils continuer à oeuvrer dans leur langue au Canada?

11164 Toutes ces questions sont liées directement à la politique de la Loi sur la radiodiffusion et cette politique est à la base même des questions soulevées par le Conseil dans l'avis d'audience publique.

11165 Vous avez lu notre intervention. Je n'en répéterai donc pas le contenu. Je veux juste faire remarquer que nous avons rencontré nos collègues de l'ADISQ vendredi dernier qui nous ont fait part de leur appui quant à notre intervention.

11166 Les intervenants à notre intervention nous ont fait parvenir une réplique. Ces intervenants c'est Musimax et Télétoon. Musimax traite longuement de sa situation financière précaire en comparaison avec celle d'autres services spécialisés, ce qui justifierait ces demandes de flexibilité dans certains secteurs de sa programmation.

11167 Mais le fond de la question ne résulte pas uniquement dans l'analyse économique. Il est surtout lié au respect de la nature de la licence et à la façon la plus adéquate de répondre aux objectifs de la Loi sur la radiodiffusion.

11168 Musimax a comme mandat d'être un service musical qui diffuse de la musique et qui ne fait pas qu'en parler.

11169 Nous convenons que certains arguments en faveur des modifications sont convaincants. Nous convenons aussi qu'une certaine marge de manoeuvre est nécessaire à l'atteinte des conditions de licence du service.

11170 Or, la requérante a choisi de suggérer une grande panoplie de remèdes à ses mots. Des changements sont demandés quant à la nature du service, quant à la catégorie d'émissions, quant au pourcentage d'émissions de vidéoclips, quant au ratio musique/création orale, quant à la diffusion de longs métrages, et quant au contenu canadien.

11171 Dans notre intervention écrite, nous nous sommes prononcés contre ces changements parce que nous craignons que toutes les modifications prises ensemble aient un impact sur la nature du service et sur les raisons pour lesquelles la licence a été octroyée : faire place à la musique d'ici.

11172 Contrairement à ce que la titulaire a souligné dans sa réplique, l'Union des artistes ne fait pas grief de la réduction des vidéoclips. L'Union des artistes s'inquiète de cette réduction liée à l'élimination du ratio créations orales/créations musicales, et à la réduction de contenus canadiens.

11173 Musimax nous a convaincus que le vidéoclip n'est probablement pas le médium ou la façon la plus appropriée pour présenter des genres qu'elle a pour mandat de diffuser. C'est bien possible.

11174 Par ailleurs, elle n'a pas pris d'engagements à l'égard d'émissions qui auraient un impact positif en matière de représentations musicales. Si la requérante prend l'engagement ferme de remplacer ce type d'émissions par des émissions comme « MaxLounge », des musicographies d'artistes d'ici, des artistes invités, des concerts intimes, et cetera, et cetera, nous serions favorables à la diminution des vidéoclips.

11175 Les vidéoclips ne peuvent être remplacés par des documentaires même canadiens sur les préférences vestimentaires de Madonna.

11176 Quant à la diminution de contenus canadiens, elle est d'après nous irrecevable. Premièrement la titulaire n'est pas en situation de crise financière. Deuxièmement, elle ne s'engage à aucune augmentation significative d'émissions musicales canadiennes par condition de licence.

11177 La titulaire fait part de la possibilité de diffuser des émissions comme « Willie Lamothe » ou « Harmonium », mais cela n'est pas inclus dans sa demande.

11178 Bref, l'Union des artistes continue de s'opposer aux nombreuses modifications de licence puisque la grande majorité de ces modifications empêcherait la titulaire d'atteindre son mandat et à moins d'engagements fermes par condition de licence de diffuser des émissions musicales qui visent la présentation et la promotion des artistes et de la musique d'ici, nous recommandons au Conseil de toutes les refuser.

11179 Télétoon. Comme nous vous l'avons fait savoir dans notre intervention, l'octroi d'une licence à Télétoon nous paraissait en 1996 une lueur d'espoir. Un secteur en pleine croissance au Canada aurait enfin des retombées intéressantes pour l'ensemble du milieu francophone. Or, force est d'admettre que ce service bilingue n'a pas répondu aux attentes des artistes francophones.

11180 Si dans notre intervention écrite nous ne faisions pas porter le blâme sur Télétoon pour la situation du français en animation, nous recommandions toutefois qu'elle prenne ses responsabilités de diffuseur canadien bilingue à l'égard de ce secteur de l'industrie.

11181 Nous croyons qu'il est irrespectueux de la part de la titulaire de se laver les mains en affirmant que « c'est au producteur qu'incombe la responsabilité de rassembler les partenaires nécessaires au montage financier d'une série ».

11182 Premièrement, comme chef de file et comme diffuseur principal, Télétoon a le droit et doit simuler l'offre en français.

11183 Deuxièmement, la titulaire est autorisée à diffuser des émissions provenant de producteurs affiliés à raison de 50 pour cent, et ce 50 pour cent il est contrôlé par la titulaire. Il serait donc faux d'affirmer qu'elle n'a pas une emprise suffisante sur le marché pour diriger ses productions vers le Québec.

11184 D'ailleurs nous aimerions faire remarquer à la titulaire que l'Union des artistes a juridiction partout au pays dans la langue française et que Télétoon pourrait ne pas avoir à diriger ses productions au Québec.

11185 Enfin, la licence qui a été octroyée à Télétoon est une licence bilingue. Pour nous une licence bilingue a des retombées équitables dans les deux langues officielles du pays, et l'engagement de la titulaire ne devrait pas se limiter à offrir la collaboration de sa directrice des productions originales dans le débat. Elle doit prendre des engagements fermes à l'égard de l'animation en français.

11186 Compte tenu de ce qui précède un engagement, une condition de licence visant la diffusion de séries développées et produites en français au Canada nous semblent aller de soi.

11187 Cet effort justifierait l'octroi d'une licence bilingue. Il en va du maintien de notre diversité culturelle dont nous sommes tous responsables.

11188 Sur la situation des émissions d'animation originales en langue française et dramatiques nous devons faire un constat peu reluisant pour le doublage. Dans les séries étrangères, que Télétoon s'efforce de faire doubler ici, entre parenthèses, seules les séries « Les Simpsons », « Henri pi sa gang » et « Pokémon » le sont. Il nous semble donc que les efforts ne sont pas faits de ce côté non plus.

11189 Nous constatons que sur 65 séries d'animation présentées à Télétoon, dont 30 sont canadiennes, moins d'une quinzaine ont permis aux artistes-interprètes d'ici de travailler. Cela ne représente que 21 pour cent de la programmation de Télétoon. C'est trop peu.

11190 En ce qui a trait à la redéfinition de l'heure de pointe, l'Union des artistes accepte la proposition de la titulaire ainsi que son engagement à diffuser le contenu canadien de façon raisonnable.

11191 L'Union des artistes maintient par ailleurs son opposition à la diffusion d'émissions non animées. Une multitude d'émissions non animées pourraient être diffusées au détriment des séries d'animation et nuiraient à la nature du service.

11192 Merci.

11193 Yves?

11194 M. LÉGARÉ: Fondée en 1949, la SARTEC représente près de mille auteurs de l'audiovisuel de langue française et est signataire d'une entente collective avec Radio-Canada, TVA, l'Office national du film, Télé-Québec, l'Association des producteurs de film et télévision du Québec.

11195 Aujourd'hui bien nous ayons parlé dans notre mémoire de trois demandes de renouvellement de licence, soit Musimax, Canal Vie et Télétoon, nous souhaitons principalement élaborer sur le dossier de Télétoon.

11196 Dans notre mémoire nous avons déploré la très faible contribution de Télétoon à la radiodiffusion francophone et l'absence totale de productions en français au Canada ainsi que de retombées pour les auteurs et autres créateurs qui oeuvrent dans ce secteur.

11197 En fait, comme nous l'avons mentionné, les productions canadiennes diffusées par Télétoon sont principalement des oeuvres de langue anglaise traduites en français. Les créateurs francophones en sont carrément exclus.

11198 Au constat que nous faisons relativement à la disparition de la production d'animation de langue française, Télétoon répond dans sa réplique du 13 mai en affirmant que cela reflète la chute de la production animée mondiale et que la nécessité pour compléter les budgets de réunir plusieurs partenaires internationaux de production et de produire et de pré-vendre la série à l'extérieur du Canada, et je cite :

11199 Cette réponse de Télétoon est erronée et fait fi de notre rapport sur la disparition du français en animation qui était annexé à notre mémoire écrit.

11200 Ce rapport traite des coproductions issues d'accord Canada-France car la France constitue le principal partenaire du Canada en coproduction. De 1992 à 2001, l'accord France-Canada a généré 107 coproductions d'animation pour un total de 2 323 épisodes de télévision.

11201 Durant cette période, seulement 90 épisodes ont été écrits en tout ou en partie en langue française au Québec, soit moins de 4 pour cent. De ce nombre, la grande majorité des séries d'animation coproduites par la France et le Québec ont été écrites en français en France et en anglais au Québec.

11202 Même quand des auteurs québécois écrivent sur la même série que leurs collègues français, les textes sont écrits en français lorsque commandés en France, mais en anglais lorsque commandés au Québec.

11203 Selon notre rapport sur l'animation, lorsque le coproducteur majoritaire est canadien, c'est-à-dire lorsque le Canada fournit la majorité du financement, l'anglais comme langue d'écriture devient nettement prédominant.

11204 Ainsi sur 51 coproductions où le coproducteur français est majoritaire, 41 furent écrites en français et dix en anglais. C'est l'inverse lorsque le coproducteur canadien est majoritaire : 41 furent écrites en anglais et neuf en français, et ce bien que ces coproducteurs canadiens soient Québécois dans la majorité des cas : 78 projets sur 107 impliquaient un coproducteur québécois, soit dans la grande majorité des productions de CINAR, actionnaire de Télétoon.

11205 A la lumière de ces chiffres, il apparaît évident que prétendre qu'il s'avère impossible de trouver du financement pour des productions d'animation en langue française ne tient pas la route parce que les coproductions franco-canadiennes y parviennent.

11206 M. ROBITAILLE: Certes, nous n'attribuons à Télétoon la seule responsabilité de la situation déplorable de la scénarisation d'animation en langue française au Canada, mais il nous paraît indéniable que Télétoon pourrait contribuer à renverser la vapeur en jouant un rôle plus actif dans le secteur de la radiodiffusion francophone, canadienne et québécoise.

11207 Dans sa réplique aux interventions du 13 mai, Télétoon s'attribue, et je cite :

11208 Et considère que, et je cite toujours :

11209 Ainsi Télétoon qui se vente d'être un joueur clé pour la production de langue anglaise considère ne pas avoir une emprise suffisante pour diriger l'écriture vers le Québec lorsqu'il s'agit de l'écriture en français.

11210 Certes, dans les structures de financement Télétoon n'est qu'une des constituantes, et elle a raison de stipuler que la majorité du financement vient d'autres sources : aides financières publiques, partenaires de coproductions, avances de distributeurs ou exportateurs, pré-vente aux différents diffuseurs canadiens et étrangers, et cetera.

11211 Mais dans le cas où les partenaires sont francophones, les aides financières publiques québécoises, canadiennes et françaises et les premiers diffuseurs francophones ou détenteurs de licence francophone, nous croyons que Télétoon ne devrait pas se contenter de, et je cite sa réplique du 13 mai :

11212 Mais plutôt s'engager résolument et concrètement à le faire.

11213 Il est certes intéressant qu'après la publication du rapport sur la disparition du français en animation de la SARTEC, Télétoon fasse bon accueil aux différentes initiatives prises par les gouvernements et sociétés publiques pour faciliter les efforts des producteurs canadiens et québécois désireux de développer et de tourner des séries d'animation en français.

11214 Mais si Télétoon désire réellement tout mettre en oeuvre pour appuyer de tels efforts, cela ne peut se faire que par des engagements fermes en la matière. Télétoon s'enorgueilli d'avoir versé à ce jour 92 millions de dollars en droit de diffusion à des producteurs indépendants et projette de dépenser 185 millions de dollars pour acquérir de nouvelles émissions originales canadiennes auprès de producteurs canadiens indépendants d'animation au cours de la prochaine période de sa licence.

11215 Pourquoi alors Télétoon refuse-t-elle de s'engager à acquérir un nombre prédéterminé d'épisodes de séries d'animation en français et d'accepter une condition de licence à cet effet? Cela nous semble totalement inconvenant.

11216 En sept ans, malgré l'existence d'un canal spécialité de langue française en animation, toute production de langue française dans ce secteur a disparu. Que Télétoon augmente ses dépenses est certes une bonne chose, mais cela doit aussi se traduire par des gains pour le secteur francophone de la radiodiffusion canadienne.

11217 A titre de détenteur d'une licence de radiodiffusion, Télétoon a une responsabilité à l'égard du système de radiodiffusion canadien et devrait s'engager à prendre ses propres initiatives sans référence au gouvernement et sociétés publiques.

11218 Nous croyons que le CRTC devrait exiger que les détenteurs de licence contribuent de façon concrète à la vitalité de la création et à l'expression du talent francophone.

11219 Nous croyons donc que le CRTC devrait exiger comme condition de licence que Télétoon s'engage à commander la production d'au moins 26 demi-heures par année de séries d'animation originales écrites, développées et tournées en langue française au Canada.

11220 Je vous remercie de votre attention.

11221 CONSEILLERE PENNEFATHER: Alors je vais commencer. Bonjour, monsieur Curzi, monsieur Légaré et madame.

11222 J'aurais quelques questions surtout pour vous, monsieur Curzi, de la présentation de l'UDA, mais premièrement j'aimerais vous féliciter avec tous vos collègues pour le grand succès du film récent de Denys Arcand, « Les invasions barbares à Cannes », et j'imagine que les félicitations vont continuer.

11223 J'ai des questions assez générales. Quand je lis le paragraphe de votre intervention écrite, et le paragraphe 60, est-ce que vous pourriez nous expliquer si vous ne trouvez une certaine contradiction, et c'est dans ce sens-là, et c'est une discussion qu'on a eue toute la semaine passée et c'est un élément clé de cette audience.

11224 Je comprends très bien que dans le paragraphe 59 vous résumez votre résistance aux changements. Est-ce que vous l'avez?

--- Pause

11225 CONSEILLERE PENNEFATHER: Je vous laisse un petit moment le trouver. C'est à la toute fin. Ça va?

11226 Alors ce paragraphe décrit votre positionnement vis-à-vis les changements et vous êtes complètement contre tout changement à la nature du service, et cetera. Mais le paragraphe 60 de la prochaine page finit en disant :

11227 Est-ce que vous voyez une contradiction dans le sens que les arguments présentés par les services souvent sont vraiment pour aller de l'avant dans le sens du paragraphe 60?

11228 Mme DESROCHES: En fait, quand on parle au paragraphe 59, on faisait référence surtout à l'acceptation d'avoir plus de séries dramatiques en cours qui pour nous du côté français, quand on parlait on faisait plus référence à la demande de Canal Vie. Quand on demande les séries dramatiques en cours ce n'est pas pour faire des dramatiques en général. Donc ça faisait plus référence à Canal Vie.

11229 Cela dit, pour les autres quand c'est un service (on parle de Série+, par exemple, on parle de Télétoon en animation) elles ont effectivement un rôle extrêmement important à faire dans la diffusion d'émissions dramatiques de qualité.

11230 Mais pour ce qui est de beaucoup de services spécialisés en français qui traitent beaucoup d'émissions de magasine, quand ils veulent avoir des séries dramatiques c'est pour avoir des séries dramatiques américaines l'après-midi.

11231 CONSEILLERE PENNEFATHER: Alors pour vous vous allez dans le spécifique dans le cas de Canal Vie surtout dans ce sens-là pour dire... l'argument de plusieurs c'est qu'on a besoin de plus de flexibilité pour en effet aller plus loin et supporter la culture télévisuelle francophone.

11232 Pour vous, quelle est la ligne qui fera en sorte que vous voulez opposer cette plus grande flexibilité?

11233 Mme DESROCHES: Cette flexibilité-là elle doit être là dans la mesure où il y a un échange, où il y a un engagement de la part de la titulaire à remplacer cette flexibilité-là par un engagement, par rapport à des émissions canadiennes ou des séries dramatiques canadiennes.

11234 Si on nous dit, « Moi je veux faire moins de vidéoclips, je veux faire moins de présentations. Je veux faire des documentaires sur les vêtements de Madonna. Je veux faire des entrevues avec le premier ministre du Québec », ce ne sont pas des engagements qui sont équivalents à la nature du service et qui sont... pour utiliser un terme anglais, il n'y pas de bons « tradeoffs » là-dedans. On fait juste rendre la flexibilité mais il n'y a rien en retour. La nature de ces deux derniers paragraphes-là est là. Si tu ne changes pas la nature, mais tu peux avoir de la flexibilité, mais tu dois réinvestir et contribuer à l'essor du système. Tu vas le faire autrement.

11235 CONSEILLERE PENNEFATHER: Et c'est ça le « tradeoff » que vous proposez, les « tradeoffs », si je peux utiliser le mot (vous l'avez utilisé), ça serait quoi un « tradeoff » approprié d'après vous?

11236 Mme DESROCHES: Pour lequel?

11237 CONSEILLERE PENNEFATHER: Les trois dans le sens qu'on parle d'une certaine façon en général. Est-ce que ce sont les contributions à la production, et cetera qui...?

11238 Mme DESROCHES: Les trois cas ne sont pas égaux par ailleurs. Je pense que Télétoon, je ne vois pas beaucoup de « tradeoffs ». Il faudrait juste qu'ils fassent quelque chose pour l'animation en français. Alors là je veux dire on ne peut pas vraiment leur accorder beaucoup plus de flexibilité à cet égard-là.

11239 Pour Musimax c'est un service musical. Alors comment faire pour garder un service de façon prépondérante qui soit prépondérant musical? C'est de présenter de la musique. Si tu ne présentes pas de vidéoclips, il faut que tu les remplaces par des émissions musicales, pas par des documentaires qui parlent de musique. Il faut que tu fasses jouer de la musique. C'est ça les échanges, finalement.

11240 M. CURZI: Si je comprends aussi le sens de votre question, l'idée derrière tout ça c'est que nous sommes dans un marché limité, un petit marché, et qu'on tient à ce que chacune des offres reste et demeure spécifique, liée à la nature du service qui a été déjà donné en condition de licence.

11241 Depuis les touts débuts ce qu'on craint dans un marché comme le nôtre c'est qu'il y ait une multiplication d'offres semblables, ce qui a pour effet, et ce qui a déjà eu pour effet, de diminuer finalement les budgets de production des émissions. Si on ne conserve pas une offre assez claire, assez spécifique, moi ce que je crains c'est la multiplication d'offres semblables de telle sorte que les gens qui diffusent n'auront plus les moyens d'investir dans un domaine spécifique.

11242 C'est en ce sens-là qu'il faut essayer d'avoir des « tradeoffs » qui gardent à chacun des services sa nature spécifique en espérant qu'une certaine flexibilité leur permette d'accroître leur présence et leurs revenus. Mais l'idée générale elle est là, si c'est le genre de questions que vous posez.

11243 CONSEILLERE PENNEFATHER: Oui, c'est un peu le genre des questions dans le sens qu'en effet on a devant nous les services qui ont proposé une certaine marge de manoeuvre et d'après eux ça ne changerait pas la nature des services et en effet va faire la promotion des artistes.

11244 Mais dans les trois cas vous trouvez qu'ils sont allés trop loin, c'est ça?

11245 M. CURZI: Dans le cas de Musimax ils ont dit si vous abandonnez ou si vous voulez avoir plus de liberté au niveau de votre mission, il faut quand même que ça demeure axé sur ce qui est musical, parce que l'existence de Musimax, l'existence des canaux spécialisés a eu comme effet, ou est arrivée en même temps que, à toutes fins pratiques, la disparition de l'offre musicale dans les télévisions généralistes et dans d'autres télévisions.

11246 Donc si on veut conserver une offre musicale, si on veut conserver la présence des artistes, des musiciens et des musiques, il faut que ce canal-là conserve sa mission le plus près possible de son origine.

11247 CONSEILLERE PENNEFATHER: J'ai une question spécifique maintenant sur Télétoon. Dans l'intervention écrite vous avez au paragraphe 45 recommandé un autre créneau que celui qui était proposé par la requérante.

11248 Pouvez-vous nous expliquer pourquoi vous proposez ces heures d'écoute?

11249 Mme DESROCHES: En fait c'était vraiment plus un détail qu'autre chose parce qu'en même temps si la requérante est plus à l'aise avec ça ça ne change pas énormément à nos yeux.

11250 Une des raisons c'est que les enfants ne finissent pas l'école avant 15 heures habituellement. Alors si on veut vraiment avoir une heure de pointe qui soit valable, peut-être la commencer au moment où ils sont à la maison plutôt qu'une heure avant. C'était le seul argument.

11251 CONSEILLERE PENNEFATHER: Vous n'avez pas fait de recherches en particulier là-dessus.

11252 Mme DESROCHES: Non. Je vois habituellement comment mes enfants agissent et puis c'est un peu mon sondage.

11253 CONSEILLERE PENNEFATHER: Vous avez mentionné aussi... je pense qu'on va un peu la discussion avec la SARTEC quand on parle de l'animation en général, et vous recommandez que Télétoon s'engage par condition de licence à acquérir un minimum de trois séries de 26 émissions dramatiques d'animation développées et produites en français au cours du prochain terme de licence.

11254 Maintenant, je pense qu'à la SARTEC on a dit clairement que ce n'est pas vraiment la situation vis-à-vis l'animation en français. Ce n'est pas vraiment la faute de Télétoon, si j'ai bien compris votre intervention.

11255 Devant la situation, pourriez-vous nous expliquer, devant la situation qu'on a maintenant dans l'animation en français, la situation qu'on vit au Québec et partout au Canada, est-ce que ce genre de propos de trois séries de 26 émissions dramatiques d'animation est réaliste, et est-ce que c'est une recommandation qui devrait arriver au début de la licence ou pendant la licence, et à quel rythme?

11256 M. LÉGARÉ: Nous on n'a pas dit que ce n'était pas la faute de Télétoon en tant que tel. On considère que Télétoon comme diffuseur a une responsabilité. Télétoon a une licence bilingue, peut diffuser en français. Il doit donc contribuer au système de radiodiffusion francophone, et le constat qu'on fait c'est qu'il n'y a aucune contribution au système de radiodiffusion francophone.

11257 Lorsqu'on regarde, par le passé Télétoon dans sa première licence avait, selon ses dires, dépensé 92 millions et s'était engagé à commander 78 épisodes par année. Normalement un diffuseur francophone aurait dû générer une activité économique, engager des créateurs, en proportion importante.

11258 Le résultat a été zéro. On dit, bien sûr, dans l'ensemble du Canada généralement lorsqu'il y a des dépenses qui se font, que ce soit au Fonds canadien de télévision, que ce soit à Téléfilm, une partie des fonds vont en production francophone. Cette partie-là est généralement de 30 pour cent. On s'est dit il faudrait que Télétoon, pour qu'il participe à ce système de radiodiffusion, ait une participation assez similaire à ce qui se fait dans les autres secteurs. De 78 épisodes par année qui était l'engagement de Télétoon, 26 épisodes correspondent à peu près à 30 pour cent. On voit ça pour chaque année de la licence et ça devrait donc être en vigueur dès le départ.

11259 Si on compare à ce qui se produit, à ce qui se génère en production d'animation francophone, il ne faut pas oublier que l'accord de coproduction France-Canada a généré 2 200 épisodes et plus en dix ans, donc 200 épisodes par année, et la France est le principal partenaire de coproduction.

11260 Malgré ça, aucun scénario n'a été commandé au Québec. On se dit il y a donc eu lieu dans le contexte où notre principal partenaire de coproduction est la France, il se produit un nombre d'épisodes important chaque année, que les crédits d'impôt canadiens et québécois servent à financer cette production-là, il faut un élément déclencheur.

11261 Télétoon se targue dans son document d'avoir été un élément déclencheur de la production d'animation de langue anglaise. Télétoon aurait dû être aussi un élément déclencheur de la production de langue française en commandant des séries en français qui auraient été financées à même cet accord de coproduction, à même ces crédits d'impôt provinciaux et fédéraux.

11262 CONSEILLERE PENNEFATHER: Merci. Ce sont toutes mes questions. Je laisse la parole à mes collègues.

11263 LE PRÉSIDENT: Merci.

11264 Madame la vice-présidente.

11265 CONSEILLERE WYLIE: La SARTEC a comme point principal ce qu'elle considère être une quasi-absence en animation écrite en français au Québec.

11266 Est-ce que le fait qu'il y a d'autres avenues ou d'autres fenêtres sur l'animation au Canada anglais a un effet ou a été une des causes de cette situation? Parce qu'au Canada anglais on a quand même des services spécialisés qui visent les enfants en particulier où il y a sans doute une fenêtre pour l'animation aussi. Est-ce que ça a un effet sur le fait que...?

11267 Mme DESROCHES: On a VRAC TV aussi qui est l'équivalent un peu de Family Channel qui en diffuse, et on a également Radio-Canada qui le samedi matin va faire l'acquisition d'émissions canadiennes d'animation. Il n'y en a pas une tonne, il y en a moins qu'au Canada anglais, mais il y a d'autres fenêtres.

11268 CONSEILLERE WYLIE: Est-ce que le fait qu'il y en ait moins (par exemple je pense à YTV, Treehouse, qui doivent être des fenêtres pour l'animation en anglais aussi) est-ce que ça a un effet sur ce qui s'est développé? Comment l'expliquez-vous le fait que même de la France ce soit produit en anglais? Ce n'est pas parce qu'il y a un plus grand marché en anglais où il y a des fenêtres pour cette programmation?

11269 M. LÉGARÉ: Généralement ces productions de toute façon seront diffusées et en français et en anglais, donc il y aurait eu, même pour des textes écrits en français une diffusion, une fois traduite, en anglais. D'ailleurs les productions qui ont été écrites en anglais ont été diffusées en français au Québec en tant que telles.

11270 Donc je ne pense pas que c'est parce qu'il y une plus grande commande de l'oeuvre au Canada anglais (en tout cas d'oeuvre d'animation au Canada anglais) qu'il y a eu un impact là-dessus.

11271 Dans notre rapport sur l'animation, on essaie justement d'enlever les mythes qui font en sorte que le marché générerait davantage de commandes pour des oeuvres de langue anglaise. Comme on le dit, en France ils écrivent en français ces émissions qui seront diffusées aussi au Canada.

11272 Il est sûr que les pratiques de CINAR (et on les décrits dans notre rapport) ont pesé pour beaucoup dans la balance. CINAR, effectivement, a essayé d'éviter des contrats SARTEC parce que ces contrats-là préservaient les droits des auteurs. CINAR, effectivement, a signé avec des auteurs des « buyouts » et CINAR a, d'une certaine façon justement, réclamé des redevances, dans certains cas en lieu et place des auteurs. Donc pareille pratique, effectivement, peut avoir eu un impact désastreux sur les auteurs en tant que tels.

11273 Pour les autres motivations, on n'est pas au fait de tout, mais il est sûr que ces pratiques de commander en anglais à des auteurs qui parfois étaient de langue française... il y a plusieurs auteurs québécois de langue française qui avaient l'habitude d'écrire pour les enfants, qui avaient une connaissance de l'animation et à qui on disait : Tu ne travailleras qu'en langue anglaise avec un contrat de « buyout ».

11274 Donc ce qu'on vous dit nous c'est que cette situation doit changer, et lorsqu'on regarde l'ensemble des investissements qui ont été faits dans le secteur de l'animation on trouve ça incompréhensible que les auteurs de langue français en aient été totalement exclus.

11275 La situation, peu importe les raisons, au niveau des résultats est inadmissible. On a un système de radiodiffusion qui doit préserver la dualité linguistique, qui doit développer le talent, et on se retrouve avec des investissements importants dans ce secteur-là avec aucune retombée positive pour des auteurs et donc une perte d'expertise à court terme qui va devenir incroyable alors qu'il y a eu des succès en animation au Québec par le passé.

11276 CONSEILLERE WYLIE: Alors pour vous, pour inverser la vapeur il faudrait que le Conseil exige un certain nombre que vous établissez, 26 demi-heures par année de séries d'animation originales écrites, développées et tournées en langue française au Québec.

11277 M. LÉGARÉ: Je voudrais que le CRTC... peut-être le seul argument de régulation en animation qui peut jouer un rôle important. Ce n'est pas le Fonds canadien de télévision qui peut jouer un rôle parce que les productions d'animation ne vont pas souvent au Fonds canadien de télévision pour se financer. Ce n'est pas non plus Téléfilm Canada qui peut jouer un rôle parc que les productions n'ont pas besoin de Téléfilm Canada pour se financer.

11278 Les productions se financent avec le crédit d'impôt. Le crédit d'impôt, on se fait dire au ministère des Finances, « Écoutez, ça doit rester neutre. Ce sont des dépenses de main-d'oeuvre. Nous ne pouvons induire une répartition linguistique au niveau du crédit d'impôt ». C'est la même chose même au niveau provincial où certains petits incitatifs ont été faits. Ces productions-là sont considérées comme canadiennes même lorsqu'elles sont en coproduction selon les règles du CRTC, selon les règles de toute façon de CAVCO.

11279 Si le CRTC ne met pas justement de règles ou n'oblige pas à ce que des productions d'animation se fassent en langue française, ça va être très difficile. Il est donc important que le CRTC regarde la situation et dise : « Nous considérons que le système doit permettre de développer le talent francophone, et pour cette fin nous considérons utile que comme condition de licence il y ait des productions francophones qui se fassent ».

11280 Mme DESROCHES: Je rajouterais à ça que je pense que le rôle du CRTC... en faisant ça vous allez stimuler l'offre auprès peut-être de Téléfilm et des autres institutions provinciales et fédérales qui vont mettre en place des mesures incitatives, mais tant qu'il n'y a personne qui part la machine de vraiment stimuler l'offre en français, je pense qu'on va être encore ici dans sept ans à avoir le même discours.

11281 Donc il faut que ça commence à quelque part même de façon minime, mais le CRTC, comme Yves le dit, est le seul qui peut faire...

11282 CONSEILLERE WYLIE: Oui, mais ce n'est pas l'offre aux téléspectateurs en français parce que finalement ils ont tous l'animation traduite. Vous voulez dire au niveau de la production, de la production qui se fait...

11283 Mme DESROCHES: Oui, parce que...

11284 CONSEILLERE WYLIE: Tôt ou tard l'offre est là parce que, comme vous disiez tout à l'heure, tout est traduit finalement et accessible et en français et en anglais.

11285 Mme DESROCHES: Mais ce n'est pas traduit ici, madame Wylie. C'est ça qu'est le problème aussi. Ce n'est pas traduit ici. Ça ne fait travailler aucun artiste ici...

11286 CONSEILLERE WYLIE: Mais ce n'est pas le téléspectateur quand même. Ce sont vos membres qui en souffrent.

11287 Maintenant, au niveau Musimax, vous semblez être d'accord que la réduction de vidéoclips ne serait pas nécessairement dans un service qui vise les adultes, si de fait la réduction des vidéoclips était remplacée par d'autres programmes musicaux.

11288 Maintenant, nous avons eu une discussion (je ne sais pas si vous avez suivi l'audience) sur l'effet du retrait, si nous l'acceptions, du 60-40 que la requérante elle appelle le chronométrage qui devient presqu'impossible.

11289 A votre avis, est-ce qu'il est possible d'avoir une définition de ce qu'est un programme musical sans ce chronométrage création orale à 40 et musique à 60 pour cent? Est-ce qu'on peut y arriver?

11290 Mme DESROCHES: Sans chronométrage, une prépondérance c'est au moins plus que 50 pour cent. En quelque part il faut avoir une certaine mesure. Le mieux que je pourrais vous offrir c'est d'arriver à pas moins que 55 pour cent, mais on ne peut pas vraiment sinon ça va glisser à 50, 49, 48.

11291 CONSEILLERE WYLIE: Ma question était plutôt comment on y arrive sans chronométrage. Est-ce qu'il est possible d'avoir une définition quelconque d'un programme sans avoir quelque chose d'aussi exact, une définition quelconque? Il faudrait avoir une mécanisme quand même vous pensez, que ce soit 51, 50 ou 60, et qu'il faut chronométrer pour y arriver.

11292 Mme DESROCHES: Je vois difficilement... la titulaire était supposée déposer une définition, je crois, à moins que je me trompe... je ne l'ai pas vu cette définition-là encore.

11293 CONSEILLERE WYLIE: Ils ont déjà déposé un document que je n'ai pas lu moi non plus.

11294 Mme DESROCHES: Alors donc je n'ai pas...

11295 CONSEILLERE WYLIE: Mais je ne sais pas s'il inclut une décision musicale, mais de la façon qu'eux le mettent de l'avant il y a, évidemment, une certaine difficulté avec quelque chose d'aussi précis que 60-40 parce qu'il y a, évidemment, certains programmes où personne n'aurait à calculer à savoir si c'est en prépondérance à un programme musical ou non. Mais de là au chronométrage...

11296 Mme DESROCHES: C'est pour ça que je parlais de plages, par exemple, entre 55 et 65 pour cent en gros pour ne pas arriver à du complètement pointu...

11297 CONSEILLERE WYLIE: Et si à ce moment-là on a des doutes, on peut quand même à ce moment-là essayer de faire un test quelconque pour voir si ça s'insère dans cette plage-là.

11298 Je vous remercie. Merci, monsieur le président.

11299 LE PRÉSIDENT: Merci beaucoup, madame et messieurs.

11300 Monsieur le secrétaire.

11301 M. LEBEL: Merci, monsieur le président.

11302 La prochaine intervention nous sera présentée par la Société Radio-Canada, M. Michel Tremblay and Mme Suzanne Laverdière.

INTERVENTION

11303 M. TREMBLAY: Bonsoir. Monsieur le président, membres du Conseil, bonjour. Mon nom est Michel Tremblay, vice-président, stratégie et développement commercial de Radio-Canada.

11304 Je suis accompagné de Suzanne Laverdière à ma droite, directrice générale, affaires institutionnelles et planification stratégique de la télévision française, et de M. Charles Vallerand, chef national, affaires réglementaires.

11305 Je voudrais tout d'abord vous remercier de nous avoir invités à prendre la parole devant vous aujourd'hui.

11306 Les multiples demandes de modification de services spécialisés francophones (Télétoon, Musimax et Canal Vie) constituent dans leur ensemble le motif sérieux d'inquiétude pour tous les diffuseurs généralistes.

11307 Je tiens d'ailleurs à souligner que notre analyse et nos préoccupations sont partagées par TQS et Télé-Québec qui ont fait connaître des positions similaires aux nôtres.

11308 Il est clair, de notre point de vue, que plusieurs services spécialisés dont Télétoon et Musimax proposent dans le cadre de ce renouvellement de licence un élargissement majeur à leurs services.

11309 Musimax cherche à ne plus être limitée à offrir une programmation musicale tandis que Télétoon voudrait ne plus être limité aux seules émissions d'animation. L'un et l'autre tentent d'élargir la niche dans laquelle le Conseil les a initialement autorisés.

11310 Les décisions qu'aura à prendre le Conseil suite à la présente audience publique auront une incidence importante sur la dynamique dans le marché francophone.

11311 Le Conseil ne doit pas par ses décisions sur ces amendements proposés créer des conditions qui augmenteraient la fragmentation des auditoires et ainsi contribuer à l'érosion de la capacité des diffuseurs généralistes à financer les émissions canadiennes pouvant attirer de larges auditoires.

11312 Dans le marché de langue française, les services spécialisés et payants canadiens s'accaparent de près du quart des parts d'écoute. Dans le marché de langue anglaise, la part est un peu moins d'un tiers.

11313 Ces chiffres progressent de sondage en sondage depuis plusieurs années en raison notamment de l'ajout de nouveaux services par vagues successives et du succès des services spécialisés.

11314 Notre système public de financement de la production est déjà largement ébranlé et va demander des efforts considérables concertés pour le remettre sur la bonne voie.

11315 Le moment est mal choisi de changer la dynamique dans le marché et de courir le risque d'aggraver cette situation.

11316 Les diffuseurs généralistes sont plus que jamais le moteur de la production d'émissions canadiennes pouvant attirer de larges auditoires. Ce rôle ne doit pas être fragilisé davantage.

11317 Ceci est tout particulièrement vrai pour la télévision de Radio-Canada qui est appelée à jouer un rôle de premier plan dans ses efforts pour atteindre les objectifs fixés par la Politique canadienne de radiodiffusion.

11318 La télévision française et la télévision anglaise de Radio-Canada se sont clairement positionnées. Elles entendent demeurer le château fort du contenu canadien et les premières sources d'émissions dramatiques distinctives en période de grande écoute.

11319 Il est à noter qu'à elles seules la télévision française et la télévision anglaise de Radio-Canada génèrent d'ailleurs le tiers de toute l'écoute consacrée aux émissions canadiennes dans leur marché respectif en période de grande écoute.

11320 Les changements proposés par les titulaires s'ils étaient autorisés auraient pour conséquence de leur permettre d'empiéter sur le mandat des services spécialisés francophones existants et de se rapprocher des diffuseurs généralistes dont ils doivent demeurer distincts.

11321 Rien ne nous indique que ces demandes d'élargissement apporteraient une contribution nouvelle, originale et valable à l'objectif d'une plus grande diversité. Bien au contraire, cela apporterait, selon nous, de la duplication.

11322 L'approbation des demandes de Télétoon ferait en sorte qu'elle pourrait systématiquement consacrer 10 pour cent de sa programmation à des émissions dramatiques ou des séries non animées, soit près de 2,5 heures par jour en moyenne.

11323 Dans les faits, rien n'empêcherait Télétoon de diffuser ses contenus aux heures habituelles de grande écoute.

11324 Nous sommes d'avis que l'ajout de ces sous catégories de programmes ne contribuerait en rien à l'accroissement de la diversité en diffusant des séries dramatiques ou de la comédie. Cela ferait simplement de Télétoon un service moins démarqué et potentiellement plus près des télévisions généralistes.

11325 Si Télétoon obtenait de plus l'autorisation de déplacer sa période de grande écoute, elle pourrait s'inscrire en nette concurrence avec les diffuseurs conventionnels à compter de 20 heures.

11326 Il nous semble évident qu'il s'agit là d'une déviation substantielle à la nature du service. Or, nous sommes au fait que Télétoon a déposé des renseignements additionnels aujourd'hui, mais comme nous n'y avons eu accès que tardivement nous ne sommes pas en position de commenter sur ces nouveaux éléments.

11327 Musimax tente, quant à elle par ses multiples amendements proposés, de modifier substantiellement la nature de son service. Elle voudrait offrir une programmation sur le thème de la musique et de ses artistes mais où la musique elle-même n'aurait plus un rôle prépondérant.

11328 De plus, Musimax pourrait consacrer la presque totalité des heures de grande écoute à des émissions qui n'ont rien à voir avec la musique.

11329 Suite à une révision de ses conditions de licence en 2001, la titulaire bénéfice déjà d'une grande flexibilité si on compare sa programmation actuelle à l'intention d'origine qui devait en faire la MusiquePlus pour adultes.

11330 Nous sommes convaincus que les amendements proposés par Musimax sont des déviations majeures qui empiéteraient sur le mandat des autres services spécialisés et aussi sur celui des diffuseurs conventionnels dont Musimax doit demeurer distinct.

11331 Les réponses fournies par la titulaire lors de l'audition de sa demande ne nous ont pas rassurés. Au contraire, celles-ci ont renforcé nos préoccupations par leur absence de justification et leur côté vague.

11332 Nous exhortons le Conseil de faire en sorte que le caractère spécialisé de Musimax tel qu'autorisé soit préservé.

11333 En conclusion, les titulaires de licence de Télétoon et de Musimax prétendent que les changements demandés constituent des ajustements mineurs. Notre lecture des amendements est toute autre.

11334 En conséquence, nous suggérons que les licences de Télétoon et de Musimax doivent être renouvelées aux conditions existantes.

11335 Merci.

11336 LE PRÉSIDENT: Merci beaucoup.

11337 On va prendre une pause maintenant pendant 15 minutes. We will resume in 15 minutes.

--- Upon recessing at 1805 / Suspension à 1805

--- Upon resuming at 1820 / Reprise à 1820

11338 THE CHAIRMAN: Mr. Secretary.

11339 MR. LEBEL: Thank you, Mr. Chairman.

11340 The CCTA have swapped their position with Cogeco Câble incorporé ainsi qu'avec Quebecor Media et nous entendrons ces deux intervenants en panel.

11341 Merci.

11342 THE CHAIRMAN: Whenever you are ready.

INTERVENTION

11343 M. PÉLADEAU: Monsieur le président, messieurs dames les commissaires.

11344 My name is Pierre Karl Péladeau, and I am the President and Chief Executive Officer of Quebecor, Quebecor Media and Vidéotron.

11345 With me today is Édouard Trépanier, Vice-President of Regulatory Affairs for Quebecor Media.

11346 We thank the Commission for giving us the opportunity to make this presentation today, or tonight, or a mix of both.

11347 We are here, on behalf of Vidéotron Ltée and its subsidiaries, to express our opposition to the increase in basic wholesale subscriber rates proposed for CTV Newsnet, The Score and Sportsnet.

11348 We consider this hearing an appropriate opportunity to present some of the general principles that underlie our view of the current broadcasting environment and certain changes that should be made regarding the current imbalance between specialty programming services and distribution undertakings.

11349 As you probably know, Quebecor Media is a media company with over 15,000 employees, concentrated in Quebec and the rest of Canada, but with operators elsewhere in North America and around the world.

11350 The Quebecor Média family of companies includes Vidéotron ltee. It is the largest cable television provider in Quebec with about 1.4 million subscribers -- customers, sorry.

11351 As we said in our written intervention, Quebecor Média opposition to further rate increase is not directed particularly at CTV Newsnet, The Score and Sportsnet except insofar as their applications are before you today.

11352 For reasons that I will explain, we are opposed to a basic service wholesale rate increase for any and all specialty programming services and believe that rate reductions should be introduced in many cases for analog specialty services that are successful and have various alternative sources of revenue.

11353 The financial situation of Canadian analog specialty programming services is excellent. In spite of the fact that the number of services has more than doubled over the last years, from 21 in 1996 to 48 in 2002, according to the CRT's most recent Financial Summaries, the average PBIT margin of these services increased from 15.4 per cent in 1996 to 19.4 per cent in 2002.

11354 Canadian analog specialty services are experiencing unprecedented success that will probably extend to digital specialty services once the digital universe has expanded for a few years and digital services have stabilized as part of a mature industry.

11355 Moreover, if existing wholesale rates are maintained, Canadian analog specialty programming services can be expected to enhance their financial performance in the years to come as a result of the variety revenue sources at their disposal.

11356 These include increases in the volume of subscribers as a result of Canadian population growth, increase in the volume of subscribers as a result of growth in the total penetration of distribution undertakings in Canada, particularly in small previous underserved communities, increases in advertising revenue attributable to growth in Canada's gross national income and income per capita over time, as well as the aging of Canada's population and the fact that viewers over 55 years old of age watch much more television than do younger viewers.

11357 National advertising revenue on the analog specialty channels increased from $232 million in 1998 to $490 million in 2002.

11358 Also, growth in the number of paid subscribers resulting from efforts to reduce widespread television signal piracy in Canada, the Coalition Against Satellite Signal Theft, for example, estimates that the Canadian broadcasting system loses $400 million annually, of which we estimate $30 million is lost by pay and specialty services in Quebec alone.

11359 At the same time as the analog specialty services will benefit from these revenue sources, they will not be burdened with the enormous costs associated with major investments in fixed assets.

11360 Their expenses are dominated by outlays on program rights, a form of intellectual capital that provides relatively rapid returns on investments.

11361 Television distribution undertakings such as cable operations are in a totally different situation. As a result of massive investments in new digital infrastructure, Canadian cable television's average PBIT margin has declined steadily over the last five years.

11362 The PBIT margin for all Canadian cable services declined from 23.7 per cent in 1998 to 15.6 per cent in 2002 and the PBIT margin for basic cable services declined form 17.5 per cent to 8.8 per cent between 1998 and 2002.

11363 This said, we do not believe that PBIT is an entirely satisfactory measure of the profitability of a capital-intensive industry such as cable television or an appropriate measure of comparison with other industries.

11364 The cable industry's cash flow was reinvested in network upgrades and for the deployment of digital terminals for the distribution of specialty and pay services. None of the specialty and pay services participated in this major overhaul. Instead, the profits generated by these services were transferred to their shareholders, providing them with significant cash returns.

11365 Over the last four years Canadian cable systems have spent $4.5 billion on their facilities and have had to assume negative cash flow year after year. In the same period cable systems have generated $94 million in pre-tax profit compared with $593 million for pay and specialty services. This represents a major imbalance in regard to programming services that the cable distribution industry will not be able to sustain much longer.

11366 Why this imbalance? Quebecor Média believes that the imbalance is attributable to the fact that broadcast distribution undertakings have been upgrading their systems for the new millennium with the active encouragement of the Commission while specialty programming services have not been subjected to comparable obligations.

11367 Most cable distribution industry rates are now deregulated and we do not foresee any possibility of increasing the rates charged to subscribers or customers because of the highly competitive environment introduced by the Commission in 1997.

11368 Over the last two years Vidéotron has lost 119,000 customers or 7.6 per cent of irs subscriber base. Any additional rate increase would drive even more customers away, as happened recently with the introduction of ArTV.

11369 The competitive environment we are describing has significant advantages for the customer who had not experienced this kind of price competition in the past.

11370 For example, two years ago the French language pay television services were offered by Vidéotron at $14 a month. Recently, we were obliged to reduce its price to that of Bell ExpressVu, $10 a month, before we had the chance to renegotiate the wholesale price to be paid to the owner of the pay service.

11371 As a result, Vidéotron has absorbed the entire $4 in foregone revenue per subscriber without any help from the pay programming service.

11372 In addition to this highly competitive environment, there are specific issues related to Quebec and the French language market. Historically, rates paid by Quebec subscribers have been higher than those in most other Canadian regions.

11373 Commercial and regulatory obligations required the provision of both French and English language services which resulted in higher rates and lower cable penetration than elsewhere in Canada. Furthermore, it is well recognized that the average cost of French language is higher than for English language services.

11374 Part of Bell ExpressVu's success in Quebec is attributable to its aggressive price setting by comparison with historical rates for cable services. However, this loss-leading pricing policy can only be sustained because of the monopoly profits generated by local telephone services, as demonstrated by the recent failures of other alternative distributors who did not have comparable financial backing.

11375 As a result of increased competition the total number of DTH and multipoint distribution systems subscribers in Canada expanded from 227,000 in 1998 to two million in 2002. Over the same period the total number of cable subscribers declined from 7.2 million to seven million.

11376 Quebecor Média believes that the Commission should now extend the kind of competitive framework it has introduced to the broadcasting distribution environment to the analog specialty service universe that up to now has benefited from a protected position in which services are almost never allowed to fail.

11377 As a result of competition, Vidéotron has made significant efforts to become more efficient and has demonstrated its commitment to constantly reviewing its business practices.

11378 We believe that Canadian pay and specialty services would also benefit from the greater competition that would result from an end to basic wholesale rate regulation.

11379 Even for those specialty services not on the basic tier, the results are often used in negotiations by such services to help generate greater revenue flows in order to fulfil overly zealous commitments stemming from unrealistic business plans at start-up.

11380 In our view, the Canadian broadcasting system requires a new equilibrium that recognizes the contribution of distribution undertakings to the broadcasting environment and the success of Canadian televison services.

11381 In the absence of some fundamental change, the current imbalance between programming services and distributors is going to increase.

11382 The Commission has acknowledged that improved productivity is a benefit of greater competition. The wholesale subscriber rates presently burdening the distribution industry are exorbitant and unsustainable. This is why we are so strongly in favour of a Commission review of the wholesale rate regulation issue as soon as possible.

11383 With respect to the programming services before you -- CTV Newsnet, The Score and Sportsnet -- all three have had unenviable financial results for the last few years. However, Quebecor Média believes that two of the three, CTV Newsnet and Sportsnet, are headed for positive PBIT margins this year with their existing wholesale rates and do not require any rate change to attain profitability.

11384 CTV Newsnet might also benefit from taking a closer cook at LCN's operations and financial results given that LCN offers a similar service in the French language market.

11385 The Score is somewhat of a different case from the other two since its financial situation was improving until it decided to enter the expensive business of broadcasting live sports events, something it was not initially licensed to do.

11386 The Score's track record illustrates a fundamental dilemma for the Commission that applies to other specialty services: In a competitive environment, is the Commission to guarantee the success of all of the analog specialty services it has licensed? Are there conditions under which specialty television services might be allowed to fail?

11387 Mr. Chairman, any wholesale rate changes you endorse will be with us for the next seven years. Quebecor Média believes that now is the time to begin to lay the groundwork for a new competitive environment involving all specialty televison services.

11388 A part of this new environment requires an end to wholesale rate regulation. A useful starting point would be to deny the request by CTV Newsnet, The Score and Sportsnet for their increase.

11389 We would be pleased to answer any questions you may have.

11390 Thank you very much.

11391 Good evening, Mr. Chairman, Vice-Chairs, Commissioners, Commission staff. My name is Louis Audet, President and CEO of Cogeco Cable. I am accompanied today for this presentation by Yves Mayrand, Vice-President Corporate Affairs, and by Caroline Dignard, Director of Legal Affairs.

11392 I wish to thank the Commission for giving us the opportunity to speak in support of our extensive written submission which we filed on May 1.

11393 As part of this licence renewal hearing, the Commission has invited interested parties to comment on a number of matters, including the wholesale rates charged to distributors.

11394 Cogeco Cable acknowledges the important contribution of the specialty television services to the Canadian broadcasting system over the years. Our support, however, is predicated on the economic and financial imbalance between programming service suppliers and distributors being remedied as part of this licence renewal process.

11395 The Commission's competitive framework for the distribution of broadcasting has been extremely successful by any standards. While there was essentially no competition in 1996, there is today intense competition on the distribution side in every single market we serve, particularly with Bell ExpressVu, a component of BCE, a company 40 times larger than we are, and Star Choice, resulting in aggressive promotional promise, bundling and pricing rivalry.

11396 With the support of its local telephone monopoly, Bell ExpressVu has become the fourth largest licensed distributor in Canada, based on customer count, and Cogeco Cable has gone a notch down from fourth to fifth.

11397 As you well know, we are also facing illegal competition from black market satellite equipment distributors who have managed to populate in excess of one million Canadian households with illegal pirate satellite reception equipment.

11398 Cogeco Cable has lost customers, it has lost market share, lost operating margin, lost profit in this tough competitive environment, but you know, we offer a good service to our customers and we control our expenses rigorously, yet our earnings have declined to a level where we are not adequately compensating our shareholders.

11399 Financial markets require us to generate positive free cash flow and are not prepared in the circumstances to extend at reasonable terms the financing required to grow our business. New services such as telephony will languish as a result.

11400 Based on the only data publicly available, it is clear that Cogeco Cable and Rogers Cable's return on total assets, measured on the basis of earnings before taxes over the last three fiscal years, were 1.3 per cent and minus 3.7 per cent respectively as compared to Astral and CHUM's average return on TV assets of 11.6 per cent and 8.4 per cent respectively.

11401 We wish to point out that this is the measure that is the right measure as it reflects the investments the cable companies must make in their plant with depreciation and interest properly considered in the calculation. Profit before interest and taxes as a percentage of sales is not the relevant measure to compare programmers and distributors.

11402 This is a terrible trend. We need to reverse this trend promptly and grow the return on assets given the current inflation and interest rates in this country.

11403 As it happens, it's a reality that programming services who use our plant to operate their business must face. I submit to you that it's a reality that you, as the regulator of the Canadian broadcasting system, must face squarely in this round of renewals.

11404 The need for change is even more compelling because specialty services are protected from competition, both domestic and foreign, within their respective programming formats. They have guaranteed access to distribution. We carry them all. They enjoy a number of additional regulatory protections on cable.

11405 Please note, by the way, that we have absolutely no problem with specialty services generating a healthy profit on their own. We do, however, have a big problem with specialty services generating profit at our and our customer's expense by using their monopoly power and rules set by this Commission and progressively driving us out of business.

11406 These programmers have no significant or at least very little equity investment or capital tied up in fixed assets and no significant business risk.

11407 This is why we strongly oppose all proposed specialty service wholesale rate increases and in fact suggest that existing wholesale rates should be thoroughly reviewed and adjusted downwards where appropriate. We consider that our network fees should decline by approximately 15 per cent in the aggregate.

11408 The economic and financial imbalance is even more pronounced between cable and the so-called analog specialty services in the Quebec francophone market.

11409 Basic penetration is lower in Quebec than in Ontario, customer losses have been more pronounced in Quebec and margins are lower in Quebec.

11410 In Quebec, specialty services in the French language cost more per customer than the equivalent English language in the rest of Canada.

11411 Quite frankly, to add insult to injury, in some case specialty services in the English language cost considerably more per customer in Quebec than the equivalent French language services cost per customer in the rest of Canada.

11412 This subsidy from the deprived to the privileged must end and should no longer be condoned by this Commission. We will no longer tolerate discriminatory regional pricing by wealthy specialty service broadcasting groups. Cette situation est une véritable honte et j'ai peine à imaginer comment nos clients réagiront lorsqu'ils le réaliseront.

11413 Practically speaking now, proposed increases in wholesale rates should be denied and previously approved wholesale rates should be thoroughly reviewed and reduced, even if the licensee has not proposed any changes to its wholesale rate.

11414 Regulation of specialty service wholesale rates was designed to ensure the successful launch of these services and to limit disputes on rates. It was not designed, nor should it be used by specialty services, to generate abnormal profits or to recoup abnormal increases in operating expenses.

11415 Furthermore, the Commission should ensure that reliance on subscription revenue by specialty licensees decreases over time in favour of advertising. This is the only way, in our opinion, to encourage self-discipline by specialty licensees in controlling their expenses while at the same time creating real incentive to offer better and more attractive programming to Canadian viewers.

11416 Finally, and very important, we would like to point out that given the phenomenal growth of direct-to-home satellite distribution in Canada, including U.S. satellites beaming programming choices not yet available legally in Canada which, as you know, are all fully digital and national in scope, the cable industry and our company in particular are already under tremendous competitive pressure and will have to respond with more flexible distribution and packaging geared towards digital cable.

11417 This is why we urge the Commission to ensure that the renewal term and conditions for the speciality services under review will not further in fact entrench this group of services in terms of analog cable distribution, so-called make whole or floor penetration guarantee, channel or tier placements or mandatory packaging. There is a need for the full review of distribution rules in effect and we submit that this review must take place well before the planned expiry of these licensed renewals.

11418 Chairman, Commissioner, the current wholesale rate structure is unfair to cable and not necessary to induce programmers to create quality Canadian programming, it breeds inefficiencies at the expense of our customers. Speciality programmers, for the most part, enjoy a monopoly format and enjoy guaranteed carriage through your regulation and policies, yet do not need protection from you, given their size and their level of integration.

11419 In the present framework, how can a reasonable price be negotiated? Well, the simple answer is that it can't. The fattening of a privileged few at the expense of the cable industry and Canadian consumers must be brought to an end now. We respectfully submit that you can and must correct this imbalance starting with these license renewals. Thank you for taking the time to hear us and we will be pleased to answer your questions.

11420 THE CHAIRPERSON: Thank you. We will perhaps begin with Quebecor and its intervention and then move to Cogeco. Mr. Péladeau, I'm looking at page 7 of your presentation where you coffer an end to basic wholesale rate regulation and I have a number of questions arising from that. First of all, is it your practice to basically mark the wholesale rate up by a certain amount and then charge the retail customer retail rate based on a fixed mark-up?

11421 MR. PÉLADEAU: Mr. Chairman, you mean on the analog tier?

11422 THE CHAIRPERSON: We are talking about the analog tier, yes.

11423 MR. PÉLADEAU: It is the inaggregate of many charges and, as Louis also mentioned, through the years there has been sort of a policy or a negotiation that took place regarding is it going to be on a tier but is regulated on basic -- the concept of make whole that had been disturbing a little bit and you know the policy of how we will negotiate from tier to basic. Maybe Edward, you have a lot of experience regarding this specific issue, that maybe you can handle on those aspects.

11424 MR. TREPANIER: Well, I'm not sure exactly that I understood your question, Mr. Chairman, that is why I am hesitating here.

11425 THE CHAIRPERSON: Well, I will make it simple, we are trying to figure out the impact on the rate payer on the subscriber and so if you call for an end to basic wholesale rate regulations, in order to understand that I have got to understand your current practice of charging the end user based on what that wholesale fee is. We have heard 100 per cent mark-up as a kind of practice --

11426 MR. TREPANIER: Now I see where you are coming from.

11427 THE CHAIRPERSON: I am just wondering whether you can confirm that or give me other information on that.

11428 MR. TREPANIER: Yes, in the case of the tier that we call the high penetration tier in the province of Quebec, when it was introduced anyway, and it may have changed a little bit, but it was not -- the mark-up was not as high as most high penetration tiers in Canada. Of course, the services on the basic service have been as -- but since Videotron was introduced its tier in September of 1997, the basic tier has not increased. On the contrary, it has -- the rate has decreased.

11429 MR. PÉLADEAU: Can I just add something, Mr. Chairman, just to -- because, obviously also this is a point which is quite important going forward, the competitive landscape and the migration that took place for the last four years, but probably more aggressively for the last two years from analog to digital. When we compare, you know there is a different proposal that we are offering to the French population in Quebec regarding the obligation because of technology of providing also the English languages, English specialty channels on the tiers that will be the only service available for our French customers to get.

11430 They have now a very interesting way of "getting rid" of English specialty services that they are not watching by taking the French packages that are available throughout the digital services. So, when you look in detail there is a lot of incentive going forward for our customers in Quebec to go from analog to digital. On the economical equation from a cable point of view, it is not as efficiently as it is on the analog. Because, as you know, with the highly competitive landscape I previously mentioned, we are obliged to subsidize heavily the deployment of the digital terminal that is required to have digital distribution.

11431 So, on top of probably seeing less services taken by our customers because you now have the capacity to pick and choose in paper which he was now looking to watch, we have on top of this the obligation to subsidize heavily the deployment of the terminal digital -- box.

11432 THE CHAIRPERSON: Okay, I am trying to pick-up on the logic of your presentation here on analog now and you are saying that neither request by CTV Newsnet, The Score and SportsNet for rate increases as a step as you see it towards deregulation of the wholesale rate and I guess we should focus on those because those are the ones in question that we have to rule out at this hearing. I guess I am asking you what the mark-up that you would charge -- First of all, in Quebec, are these services, Newsnet, The Score and SportsNet all carried on your tier in Videotron territories?

11433 MR. TREPANIER: Sportsnet yes, Newsnet yes, but not The Score.

11434 THE CHAIRPERSON: The Score is not carried or where is it carried?

11435 MR. PÉLADEAU: On digital.

11436 THE CHAIRPERSON: Just on digital. So, the analog rate increase -- if you are suggesting, deny Score its increase, even though you don't deal with Score in respect of that basic wholesale rate, is that correct?

11437 MR. PÉLADEAU: But they will probably be included in a sports package that is available on our digital offer.

11438 THE CHAIRPERSON: Right, but we are not talking about digital here, again we are talking about analog. So, you don't deal with Score at all or pay them that wholesale rate, now or in the future on analog?

11439 MR. PÉLADEAU: May I, Mr. Chairman, just re-emphasize the fact and maybe I was not clear enough, is that I don't think it works or it means now to think only analog, because the digital and the analog television compete against each other and, basically, the competition comes from the digital. So then, therefore, on the analog side we are also obliged to take care about what is taking place about on the digital television offers made by competition there.

11440 So, the mark-up is something as a concept, it was used before the introduction of competition, it changed significantly because the mark-up is now a factor of competition on the digital universe.

11441 THE CHAIRPERSON: Right, no, no we will get there, but I have to go a little more slowly so I can understand it. So, the Score is not anybody that you pay a wholesale rate to currently or in the future, is that correct, because they are not carrying on your basic analog service?

11442 MR. TREPANIER: That is correct, Mr. Chairman, for now. But we are talking about seven years here and of course when we do negotiate we negotiate for both, analog and digital.

11443 THE CHAIRPERSON: Right. So, tell me how the linkages go through that negotiation from the basic wholesale rate for analog, through tier for analog, through the digital, in those negotiations. How does that basic wholesale rate affect the negotiations going down the line?

11444 MR. PÉLADEAU: Well, any increases of any speciality services should be taken into consideration regarding the price of specialty programming and then therefore when we are living in a competitive environment, as I mentioned earlier with, in front of us, Bell ExpressVu which we believe enjoy a monopoly in local telephony and don't really care about the amount of losses, then therefore this is what we compete against. So then therefore the margins that we are having, either on the analog on the digital, because it doesn't matter any more, given that a competition is coming from the digital universe and a very strong competition, as I described earlier.

11445 THE CHAIRPERSON: What impact does the basic wholesale rate on your digital negotiations?

11446 MR. PÉLADEAU: It will increase the cost of programming.

11447 MR. TREPANIER: Perhaps I could try --

11448 THE CHAIRPERSON: Go ahead.

11449 MR. TREPANIER: Historically, when we negotiate, the position of the programming service is here is my rate on the basic tier, here is the number of subscribers you have on a basic tier, so here is the amount of money I should get every year. Now you want to put me on a tier, that's fine, well lets call a make whole and I will get the same amount of money and I will get that revenue because I have committed before the Commission to fulfil commitments in regard of the Broadcasting Act.

11450 So, in the digital now, what is happening is that specialty services are saying, well now you will migrate from analog to digital the amount of subscribers that I will have may decrease, so what do we do? And here we are saying well, we don't do the same thing that we did in the past.

11451 THE CHAIRPERSON: But make whole, has that been part of the system now for the past few years?

11452 MR. TREPANIER: Yes.

11453 THE CHAIRPERSON: You have effectively negotiated from your side of the table to make good on make whole?

11454 MR. TREPANIER: Not for all our services, but for some benefits.

11455 THE CHAIRPERSON: Your concern is that going down the negotiations that in the event of a dispute, if you came to the Commission for dispute settlement that's what it would rule, it would be a make whole based on the wholesale rate. Is that what you are saying?

11456 MR. TREPANIER: Well, I think we made ourselves understood clearly that the make whole era is over.

11457 THE CHAIRPERSON: Right.

11458 MR. TREPANIER: However, the regulation of the rate on the basic tier is still there as a guide from where the negotiations are starting and that kind of guides, as we are saying, it should not be there any more since we have the margin that are seeing.

11459 THE CHAIRPERSON: But the guide is something that is in the realm of understanding as this thing from realm of the regulations?

11460 MR. TREPANIER: Regulation has created a tradition.

11461 THE CHAIRPERSON: Regulation has created a tradition and so you feel constrained in those negotiations by that basic wholesale rate and by what you perceive as a tradition?

11462 MR. TREPANIER: That is right.

11463 THE CHAIRPERSON: We have heard from the programmers the programs being undertaken, the specialty services last week, was that in their negotiations with you the weakness they feel is that first of all there are a very small number of BDUs, six of them control almost 90 per cent of subscribers in the country, that they don't have control over the retail price at which they are marketed, that they don't have control over the tier that you put them in, they don't have control over the promotion and they don't have control over the bundling that you may choose to do between them and say high speed access or other services that you might offer and depending which is the BDU, an array of telecom services that would leave them as just a small player. How do you react to those arguments?

11464 MR. PÉLADEAU: Well, you have made several points there, Mr. Chairman. I think what we need to re-emphasize which I think it is clearly a new ball game is the fact that competition exists which was not the case previously in a highly regulated environment. Today, yes, there is a few distributors, but it had been always the case previously, even if they were more, all of them were enjoying a monopoly. Today we can't say this any more and then therefore we have in front of us programmers and the possibility, or not the possibility, I would say the obligation to fight to keep our customers on a daily basis, which was not the case previously.

11465 They have been enjoying this landscape to their benefit because we have been seeing, as I described in my intervention, a larger customer base that was previously available because of the benefit of competition. We have been talking about now for many months the problem of piracy, this is another issue but this is also quite important.

11466 But despite the fact that this factor exists, they have been enjoying a much larger customer base than they have been enjoying before. So, they can complain against distribution, but we also can complain the fact that there is not so much room for us to negotiate, because at the end of the day those regulations -- well, the rates will be regulated where we fight everyday with competition to retain and to bring new customers as our customer base.

11467 THE CHAIRPERSON: Thank you. What we want to get to at the end of the day is a regime that is fair to both, that promotes the carriage of Canadian programming services and that creates more and more viewed Canadian programming under the Broadcasting Act. So, the effort here is -- what I am trying to discuss with you is to get your views on how those negotiations, in your view, can both be more balanced and result in the achievement of the objecting of the Broadcasting Act so that if you say, as you do, put an end to basic wholesale regulation, beginning by denying the ones you have before you that at the end of the day were going to have negotiation that will result in a benefit to the entire system moving forward, and particularly, a benefit to the creation and viewing and watching of Canadian programming.

11468 So, I am wondering how that serves the issue if your point is simply leave it to market forces. I may be over simplifying your point, but what would be the substitute for the kind of basic rate regulation that you say guides the other discussions so that in the end parties have the ability to achieve their commitments and obligations?

11469 MR. PÉLADEAU: For sure, Mr. Chairman, I think it is far from being a simple question and there is probably no also obviously simple answer to this. I think that what we have been trying to do is to describe this new environment that we have been living in and also a little bit to try to describe what we believe being imbalance in this system for the last three or four years where we have been asking as a distributor to increase significantly the capacity to transmit those speciality services.

11470 There has been a major effort, a massive investment effort like what is done by the distributors for the sake of those specialty services that being enjoying it and for which they contribute very minimally regarding those in investment. Economically, somewhere we need to stop and watch the numbers, because at the end of the day if the numbers don't fit it will be to the detriment of the customers because the industry is not going to be able to fulfil its obligation of investment.

11471 As you know, the cable industry is highly leveraged and Videotron is not an exception to all others. So all others, we are also in a position and the obligation commercially and regulatory to invest to make space available for the distribution. So, what we are seeing here is I would say that we should try to be more realistic and ask that the burden should not be only on the shoulders, the distributors on top of this, also now need to face competition. We have been saying many times that we don't have nothing against competition, we believe competition is great but also in the meantime I think competition should be fair and should be governed by appropriate rules to make sure that it will be sustainable on a longer term.

11472 THE CHAIRPERSON: One of the factors that drives the process with speciality services is of course their Canadian programming expenditures are tied to their revenues and therefore the higher the revenue the higher the amount of money that is placed into Canadian programming through that service and from the Broadcasting Act objectives point of view, that is a good thing.

11473 I notice in your intervention and in your remarks today you have not commented on that aspect of it. You used terms like overly zealous commitment stemming from unrealistic business plans at start-up. I don't know whether that was an allusion to that. I will ask you in a moment what you actually meant by that.

11474 You didn't direct any comments directly at the issue of the contribution to the goals of more money into Canadian programming, more programming, better Canadian programming.

11475 Do you have any comments in that regard?

11476 MR. TRÉPANIER: You said earlier, Mr. Chairman, my understanding was that you would not be very comfortable if only the market rules would rule the relationship between the programming services and the distribution services.

11477 The distribution services are actually in an environment where the market rules are what is ruling the service. The programming service is committing to the Commission to do something. It is Canadian programming. We all would like to have the best fit possible to have a distribution industry and a programming industry that makes the most efficient use of the revenues for Canadian programming.

11478 What we are seeing today is that these commitments are used for negotiation, and what is the end result is that margins are very different.

11479 We are not saying that there should not be commitments. We are saying that the commitments should be reasonable; that Canada should at one point reach a point where it would pay for what it can pay as far as Canadian programming is concerned.

11480 The Commission could ask, for example, tomorrow morning to double the commitments to Canadian programming. What would that do? It would simply force the services to have more revenue, and it would need more regulations from the Commission. The distributor would have to increase the rates and there would be a reaction from the population.

11481 It all comes down to the amount of commitment that you are accepting or requiring from the programming services. There should be a balance there that would make Canadians get what they can pay for.

11482 THE CHAIRPERSON: That is why my question was: Did you have any comments? I remarked that you had not addressed those issues on the programming commitments, which in effect, as you just pointed out, have a lot to do with driving the end result in terms of the wholesale price.

11483 I will leave it at that. You have said what you said.

11484 By the way, I am a great fan of market forces and try to find them wherever I can and enlist their help. The history of Canadian broadcasting regulation though is such that market forces haven't done the job of achieving the objective set out in the Act, or we wouldn't be here and we wouldn't be going through this.

11485 It seems that that somehow is an area where market forces, if they were allowed to operate, would inundate us with foreign programming rather than having our own programming.

11486 That is why we are all at this very difficult exercise, trying to balance all the factors involved in here.

11487 I take your point that the commitment, particularly to program expenditures as a percentage, obviously drives revenues and drives specialty services to seek higher revenues, to the extent that they have higher commitments.

11488 I don't know that there is an alternative that you have put forward to choose the objectives of the Act that would help us reverse the spiral, so to speak, or come up with a solution that would allow us to take another alternative in support of what you are recommending.

11489 MR. TRÉPANIER: I would only add that in the French language market forces may work better in the sense that I don't think we would be inundated by foreign programming if there were less regulation, for example.

11490 THE CHAIRPERSON: Right. But of course the programming services you are asking that we deny the rate increases for are not French market services; they are English market services.

11491 I don't know whether you want to comment any further on overly zealous commitments and unrealistic business plans.

11492 I had thought that most of the thrust of the interventions against the rate increases was not that the business plans were unrealistic but that they were under-projecting and that in fact the success of the services has far exceeded what was projected.

11493 I am attributing what you mean by "unrealistic" here is too low. If you mean too high, then that is consistent with the results of being higher than projected rather than lower.

11494 Is that what you meant here?

11495 MR. TRÉPANIER: That is what we meant, and it was addressing the specialty services at large and not the three services.

11496 THE CHAIRPERSON: You felt that the commitments were overly zealous in 1996?

11497 Do you have any examples of that?

11498 MR. TRÉPANIER: I wouldn't give names, but I have the experience of writing applications. Of course, when you want a licence you promise a lot. If the custom of the Commission is to accept the rate as proposed, well then better to ask for a little more.

11499 THE CHAIRPERSON: My final question.

11500 I think you acknowledge in your statement, Mr. Péladeau, that you thought that the going in regulation of the rate may have had an advantage to get the system started and to allow it to take root and that you are talking about going forward in your rate regulation proposal.

11501 Is that correct?

11502 MR. PÉLADEAU: Yes, Mr. Chairman.

11503 THE CHAIRPERSON: I hesitate to recommend to you the ExpressVu brief, but in that brief they put forward a proposal like that. I don;'t know whether you have had an opportunity to review it.

11504 Do you have it?

11505 MR. TRÉPANIER: I have it. There is no collusion.

11506 THE CHAIRPERSON: That doesn't surprise me.

11507 Thank you very much, gentlemen.

11508 Commissioner Colville.

11509 COMMISSIONER COLVILLE: Thank you, Mr. Chairman.

11510 Just the way this happens, it ends up being a little bit awkward because we have the two parties here and your briefs were much similar. The Chairman has asked a lot of similar-themed questions.

11511 I saw you scribbling notes, Mr. Audet, so you will get a chance to answer the similar questions here.

11512 Let me pose them in a little different way.

11513 I am struck by both parties here, and you in particular in the context of the Cogeco submission have said: Don't allow any of these services to have increases in rates. And oh, by the way, they are already making too much money.

11514 I guess Mr. Péladeau has suggested that that is a somewhat difficult issue as to how best we should address this.

11515 It strikes me that at one level, at least, it is probably fairly simple.

11516 If your concern is that these services are too profitable, we could address that one of two ways, it seems to me. We could increase the commitments that the Chairman was just talking about in such a way that they provide more Canadian programming and spend more money on Canadian content to reduce their profitability.

11517 I guess the difficult part of that would be then reduce that profitability to what? What would be appropriate?

11518 The second alternative would be to simply reduce the price and keep the commitments the same, assuming that we decided the commitments are reasonable.

11519 Since from our point of view I suppose the price should be the price that the consumer pays, from the point of view of the regulator we would want to see that price reduction passed on through to consumers. Since we don't regulate most of their rates any more, either on basic or the tiers, I guess the question then would be -- it is a bit of a twofold problem: What is the appropriate reduction to make to the price, which gets us back to the profitability question; and how can we be assured that the consumers would see the benefit of that reduction?

11520 MR. AUDET: Thank you, Vice-Chairman Colville. It is a pleasure to be here in good company, actually.

11521 First of all, we are not advocating that wholesale rates no longer be regulated, for one very good and simple reason. If carriage were not mandatory, then you would have a fair negotiating base from which parties could negotiate.

11522 We doubt very much that this Commission will opt for anything but mandatory carriage. Therefore, in the circumstances there must be a regulated rate. In fact, it must be a lower rate.

11523 You have been struck by the similarity between the presentations between the two companies. It is not a superficial similarity. Both companies are faced with the same challenges. They are faced with the same inequities. Both companies have low return on assets, which is unacceptable to their shareholders.

11524 So of course you are hearing the same story. You may have differences of view as to whether the rates should continue to be regulated or not, but you are seeing the same problem presented by two different companies.

11525 COMMISSIONER COLVILLE: What is the inequity?

11526 MR. AUDET: The inequity is that we can invest the capital and do not make money, despite our frugality, and the programmers make loads of profit by using our plant. That is the inequity.

11527 The rates are fixed by you and therefore we are unable to reduce our operating costs. We work on reducing all our operating costs every day, day in and day out. This is our life. We are a frugal bunch, and yet we are unable to make money, not because we don't make the right decisions. We make the right decisions. We are in a tough competitive environment with competitors who quite frankly are a lot larger than we are. But that is life. We accept that.

11528 What we don't accept is regulated rates that present an honest negotiation between supplier and distributor.

11529 COMMISSIONER COLVILLE: I take it your concern is, relative to you, their profitability is too high.

11530 MR. AUDET: Since they are using our plant and relying on a wholesale rate set by you, it is unfair that because of such rates they make money when we don't.

11531 If this were an open marketplace where parties were free to negotiate, then we would have no business in complaining to you. But such is not the case.

11532 COMMISSIONER COLVILLE: You accepted there must be a regulated rate, and as I indicated --

11533 MR. AUDET: We have accepted that, yes. Our presentation is entirely clear on that.

11534 COMMISSIONER COLVILLE: All right. As I indicated earlier, we could control that profitability by increasing the commitments to Canadian programming which would get the profitability perhaps down to what you might consider to be an acceptable level.

11535 MR. AUDET: I was getting to the second part of your question, Mr. Colville.

11536 COMMISSIONER COLVILLE: That was actually the first part.

11537 MR. AUDET: You drew up two scenarios: possibly increase the commitment or reduce the price and pass it on to the consumer.

11538 We are not here complaining because programmers are making money. We wish them well. We wish them to make money. It is good for them. It is good for the system. It is good for free enterprise.

11539 The problem we do have is when that money is made at our expense, when the rate is regulated -- not because it is regulated but because it is regulated at too high a level.

11540 Our plea to this Commission today is not to decrease the profitability of programming services. That is too petty. We wouldn't do that. We are not interested in that.

11541 What we are interested in, however, is that we have a fair opportunity either to negotiate the price; or if that is not forthcoming, the prices should be reduced so that we can achieve a decent return on assets for our shareholders.

11542 So that, sir, is the middle scenario, the one you didn't mention, the one where the wholesale prices are reduced and the cable company starts making money for a change, which it hasn't in a very long time.

11543 COMMISSIONER COLVILLE: So your view is we should reduce the rate, but the consumer doesn't see the reduction. You should keep it.

11544 MR. AUDET: The consumer has enjoyed very low prices for everything in this country: local telephony, long distance, wireless, high speed Internet and video services -- the lowest prices that are practised in North America. I think the consumer is getting a good deal indeed.

11545 That should, in our opinion, not be a concern.

11546 COMMISSIONER COLVILLE: But the answer is --

11547 MR. AUDET: We are not making money to justify the investment we have made, though.

11548 COMMISSIONER COLVILLE: The answer is yes, though; that if we reduce the rate, you should be provided an opportunity to keep the distance.

11549 MR. AUDET: Of course. There is no rate of return in this business, sir. I mentioned earlier return on total assets, average over the last three years -- so that is profit before interest and taxes divided by total assets employed: Cogeco Cable, 1.3 per cent; Rogers Cable, -3.7 per cent.

11550 It is ridiculous.

11551 Other data that we have here that is -- I didn't invent anything. I just took it out of publicly available data published by the Commission.

11552 The tangible assets employed by the four major operators of specialty services in this country -- Astral, Corus, CHUM and Alliance, and we have left out Bell World Media and Rogers because essentially the percentages devoted to this activity were too small in regard to everything else they do -- is one half of one billion dollars.

11553 For the four large cable companies it is $5 billion. These four programming operators have tangible assets one-tenth of the cable industry.

11554 You can do the same thing and go through the average total assets, not only tangible assets. For these four programmers it is $1.8 billion; for cable it is $18 billion.

11555 The decisions you make on the level of that prescribed basic wholesale rate have a direct impact on the absence of return we get on these huge pools of capital.

11556 MR. PÉLADEAU: May I add one point, Mr. Chairman.

11557 You mentioned that maybe we said that specialty services are too profitable. I am not sure that Cogeco Cable said that, but I know I didn't say that.

11558 What I was trying to emphasize was the imbalance. I think, once again, we have been asking that the distributors make all those significant investments, which they did, for the benefit of the Canadian broadcasting system.

11559 Another point I would like to make is with respect to the customers. Should the customers benefit from the rate reductions? I think that the customers already benefit from rate competition, from the competition on the digital universe. Today they have the capacity, with the investment of the industry, once again to cherry-pick what they would like to pay for.

11560 We have been seeing on our side the capacity, the freedom of choosing what they want and therefore seeing a reduction of what we call our pool on the television side because now they are not obliged to pay what they used to pay for all the services that they were receiving without having the capacity to choose what they were watching.

11561 They are already benefiting from this environment which, if you were to increase the rates, will reduce once again the margins that we need to make the investment commitment for the benefit of the broadcasting system going to digital 100 per cent in the future.

11562 COMMISSIONER COLVILLE: I take it your point would be similar to Mr. Audet's; that assuming we continue to regulate the rate, and let's assume that we accepted your premise that there is an imbalance here and we should bring more balance to it and that meant a rate reduction, that it should be left to the cable operators to decide whether or not that reduction gets passed through to the consumer.

11563 MR. PÉLADEAU: Just one point, I think that on a daily basis we are facing competition and we do not know what competition will offer tomorrow or in one month, so flexibility is required all the time. So are rates going up, are we going to do more promotions, are we offering new services, are we descrambling some channels to promote, have we been doing -- This week Family channel is available to all our digital channels. These are commercial strategies that were not used in the past because you didn't have any competition and any choice for customers to take out of it. We are introducing marketing in the cable business that was not previously available or required as simply because the monopoly -- you take it or you leave it, you didn't have a lot of choice.

11564 MR. AUDET: May I comment, this is the last comment. In fact, Mr. Colville, the rates would go down for all carriers, whether satellite or cable. So, competition takes over, already has and it will continue to take over and make sure that what gets charged to the customer is reasonable. It is the best we can say.

11565 COMMISSIONER COLVILLE: Assuming, again on the presumption that as you suggested, Mr. Audet, we would continue to regulate the rate and whether we control -- and lets assume we accept your argument that more balance needs to be brought into the system, which by implication suggests that the balance means the program services profitability comes down somewhat. That can be done by one or two ways, as I suggested. We could either increase their expenses by insisting on more contribution of Canadian programming or we could simply reduce the price.

11566 What is the benchmark we would use to arrive at that acceptable profitability level?

11567 MR. AUDET: I am not sure I would define this, for now, as an acceptable profitability level, because the question in our minds is not whether it is acceptable or not acceptable, we are not that presumptuous. The question for us is simply to say there is an imbalance, it is unfair, it must be corrected.

11568 COMMISSIONER COLVILLE: What is the right balance?

11569 MR. AUDET: So, the fair balance is we have suggested, we have attempted to define this for ourselves. We have concluded that all our programming supplies should be paid 15 per cent less than they were before, that is our conclusion, conclusion that fits our company. Now, whether this fits the whole industry, I'm sure that you have a lot more data than we have on all these things and you surely have your own models of what you think potential outcomes can be. We are speaking in terms of what we can see. What our company can see is a 15 per cent reduction, on average, is fine.

11570 There is some companies that could come down 20, others could come down 10, others can't come down, it depends on the individual situation of each and quite frankly, we are so busy right now competing with titans that are so much bigger than we are that we are, quite frankly, our nose is pretty close to the grinding stone and we regrettably would not be in a position to come forth with a comprehensive framework that you could follow. But, clearly, the imbalance has to be correct.

11571 Now, I would like to add that even if you correct this imbalance I sincerely do not think that the profitability of the programming services will come down and the reason is that I think that when they are forced in this regime they will do what the rest of us have been doing now for four years and they will find better ways to operate more economically and they will do just fine thank you.

11572 MR. PÉLADEAU: May I add, Mr. Vice-Chairman, and I think I totally agree with the point that Louis just mentioned. I think that given the regulated environment that they were living in, it was a little bit like the cable industry in the past, go for an increase and you will ask the customer to pay for you inefficiency. Is the profitability the only measure of the rates that the distributors are providing them? I think that they can run their business more efficiently, they have the capacity as I mentioned earlier to better work and try to improve what they are doing on the advertising side.

11573 They have been enjoying significant amounts of increases in terms of being the BB underratings and all that stuff. They have been there, they have a high level of notoriety. Are they doing the best job on the advertising side? Maybe not, so I am not sure that we should acquaint the fact that if we were to maintain or to reduce the rates that will be to the detriment of their profitability because they have other ways to maintain it.

11574 But now they will be judged by the fact of are they good or bad operators where, on our side. As you know, we have been working for the last two or three years and have been told to reduce our expenses as much as possible. We have been unfortunately facing a long strike that recently ended. It was not funny, it was not easy. We need to go through this situation to try to explain that we are now living in a competitive environment and then our work rules need to be addressed in the environment that we are living in.

11575 COMMISSIONER COLVILLE: Thank you for that. Mr. Audet, how did you arrive at the 15 per cent?

11576 MR. AUDET: Well, we did the best we can, Mr. Vice-Chairman. We looked at our numbers, we tried to figure how we could restore decent return on assets and return on equity after taxes to our shareholders. We established that this would take probably a very long period of time and that there was one category of costs that was resisting rational behaviour, programming costs supported by regulated wholesale rates. That key has to be unlocked if we want to get decent, reasonable, acceptable, return on assets for our shareholders. Empirically working the model yields about 15 per cent. It is not a science, it is our best try at it.

11577 COMMISSIONER COLVILLE: You said that for a different cable operator that reduction could be 10 per cent or could be 20 per cent. Is that what I understood you to say earlier?

11578 MR. AUDET: That is not quite what I meant. What I meant is that for some specialty service owners their services is so overpriced that coming down 10 per cent --

11579 COMMISSIONER COLVILLE: Oh, I see.

11580 MR. AUDET:  -- might be right for them and others are more reasonable in their pricing, that might be minus 10 and others yet are so reasonable that it might be zero reduction. Yet, on average, it should be about 15 per cent.

11581 COMMISSIONER COLVILLE: So, if we concluded that the rate should stay the same, as they are, and the more profitable services should contribute more to Canadian programming, you would find that inappropriate?

11582 MR. AUDET: I am sorry to say so this frankly, Sir, but yes it would be very much inappropriate. What you have now is a sick system with a few privileged living off, scavenging off the bigger table operators who are expending all the money, investing all the money in plant and equipment. The situation is unfair. So, it is not a matter of knowing whether we are for or against more investment in Canadian programming. I'm sorry, Sir, I resent that approach. That is unfair to us. We support Canadian programming, always have. We own broadcasting undertakings, we devote much effort and indeed succeed well at doing it.

11583 So, it is not us versus spending on Canadian programming, not whatsoever. No, Sir, absolutely not, we are in favour of Canadian programming but here there are people scavenging off cable, it is unacceptable and we submitted this problem to this Commission to be resolved.

11584 COMMISSIONER COLVILLE: Well, I wasn't trying to be unfair to you or anybody else, Mr. Audet. I don't know whether you were here last week, but in fact that is one of the issues we have been pursuing with the parties in front of us, is that at certain profitability levels we have been raising with the parties whether they could in fact contribute more to Canadian programming at the current rate levels. So, that may be a reality for you and Mr. Péladeau and other BDUs.

11585 MR. PÉLADEAU: Maybe it is the right term -- I may have had one point on this, which also relates a little bit about my earlier point. From my point of view, I believe that there is no opposition between profitability or cost in Canadian programming. In fact, we have been experiencing in Quebec a significant investment in Canadian programming and we are pretty proud of it. In fact, it works very well. It works well and we believe that we can piggyback on this and do a great job of selling advertising because we are bringing audience.

11586 So, there is not an opposition once again between Canadian programming and profitability. It is not because you are not expensing or investing in Canadian programming that you will make more money or the opposite. I think that you need to invest in good or bad Canadian programming and it is not because it is Canadian or foreign that there is an equation between good and bad. I think, in fact, our experience once again is that good Canadian programming brings good audience and good audience brings good revenues and it goes in all the same direction.

11587 COMMISSIONER COLVILLE: Well, that is probably a good note to finish, Mr. Chairman. Thank you very much, gentlemen.

11588 THE CHAIRPERSON: Mr. Audet, in your presentation today you -- I am looking at page 4 here where you say that the regulation of the whole rate was not designed nor should it be used by specialty licensees to generate abnormal profits or to recoup abnormal increases in operating expenses or below the line charges. Now, your intervention opposes the rating increases by the four applicants at this hearing that are seeking those rate increases.

11589 Do you consider that any of those applicants are making abnormal profit?

11590 MR. MAYRAND: Mr. Chair, perhaps I can comment quite easily on that. I think here you have the exposé of a general concern. We have indeed in our intervention, the written intervention, specifically addressed those three specialty applications, plus VoicePrint, that are asking you to increase their approved basic wholesale fees or rates. We have also indicated that there is a group of licensees that we think are realizing, in the current setting, very high -- certainly those would be high by any standard, of comparison very high in profits, that have not necessarily asked for increases and we have said to the Commission, well you should really look at them very hard. Because what we are looking at here are new license terms most likely for the next seven years.

11591 We have already a trend based on the previous term of license where these license fees have become profitable from day one, have increased as profit, so it's a true situation.

11592 THE CHAIRPERSON: I understand that, but I wonder whether you could, having read your written intervention, whether you could summarize -- do any of those three, would you say, and NBRS fall within the phrase I just read out or do you want to summarize the basis for your opposition in those terms?

11593 MR. MAYRAND: Yes, I can do that I think without going to all the details of each one of them, which we spelled out in the written intervention. I think in all services that are requesting a basic wholesale fee increase certainly our view, based on the public documentation to which we have access, is that the forecasts are extremely conservative based on known figures and past experience and some projected plans or expenditure items appear questionable. Now, it is always difficult to complete -- for us looking from the outside -- this type of analysis, because these services are part of, in some cases, large groups that have a family of specialty services.

11594 There are historical transactions possibly built into the cost base. There is the potential and we haven't accused anyone of these services of being in that situation, but there is a potential for some cost allocations as between various services, that we are not in a position to properly assess based on the publicly released information that we have access to. We think though, that the Commission has the tools to make that analysis.

11595 So, indeed, based on just straight modelling as filed, it looks like services applying for increases are not perhaps as profitable or showing at this point the same kind of profit level on paper as some of the other services also before you today, who are not asking for a rate increase but enjoy, on paper, very high profits. We think though that the services that are asking for increases have very substantial growth regardless, in their customer base, their advertising for those that are advertiser supported.

11596 Perhaps that is a comment that I would like to make again. We have made it quite, I think, abundantly in our written intervention, but you know for us distributors looking at this situation we are greatly concerned and I think you have seen that from the owners here today, that we have to invest in this highway that is being used by a number of vehicles to reach the Canadian public. There has to be sufficient financial resource in the end to upkeep this highway and upgrade it and make it efficient and good for all to use and achieve these objectives. We are seeing that the trend right now does not allow for that.

11597 On the other hand, we have the situation where some services are still asking for increases and in fact signalling by this Commission that there is an entitlement to further increases always and always and always. That is what we are, I guess, submitting to you.

11598 THE CHAIRPERSON: Thank you very much. Merci bien. Commissioner Grauer.

11599 COMMISSIONER GRAUER: A number of the services have suggested to us that part of their frustration is not having a good idea of how many customers they have, whether it is one MDU or 10. I gather there is some negotiations that were taking place at the CAB to develop some audit plans. Do you know anything about that and can you comment or is it services to get a better idea of in fact how many customers they had?

11600 MR. PÉLADEAU: From the Videotron side, they had been enjoying an audit process which was deep enough or was important enough for them to claim that we were not paying the appropriate amount of money and, in fact, what we have been seeing when we took over at Videotron and those are significant claims. So, it is just surprising me that they are mentioning this because they are in fact claiming it through the audit process they went through for the last two, three years that Videotron are not paying them for the amount of subscribers they have.

11601 There are some arguments regarding also what is a subscriber or what is a customer, depending if it is residential or if he lives in MUD and if it is a commercial, is it a hospital. So there is some issues regarding the interpretation of this and basically those interpretations are the basis of the claims that they are asking today.

11602 COMMISSIONER GRAUER: Let me be clear, I wasn't being specific about Videotron, it was across the board and I just thought -- it appears that more transparency in every case might help reduce some of the disagreements and tension between the two, but that's all.

11603 MR. PÉLADEAU: From our point of view at Videotron, I think we have been -- I don't know what Cogeco is facing -- but given that you are talking about this, we are as also a programmer in Quebec or media asking other distributors, namely Bell ExpressVu to be able to have access to their customer base and they are not giving us the access of it, which we believe not the same rules that the cable distributors are facing.

11604 COMMISSIONER GRAUER: Thank you.

11605 MR. MAYRAND: Perhaps I could just add very briefly, by way of footnote, Mrs. Grauer, that there have occurred from time to time, and that will happen in the normal course, issues relating to the specific wording of specific contracts because there is no standard agreement being used on either side.

11606 Now, that being said, certainly speaking for Cogeco Cable, the differences can't be that huge on these interpretation issues when they arise and we have always resolved them I think to the satisfaction of both sides given the fact that our network fees continue to increase and our payments continue to increase. So obviously it can't be such a huge problem.

11607 MR. AUDET: Yes, I would like to add that disagreements have been few and far between, and I think that our transparency has been exemplary in the circumstances.

11608 COMMISSIONER GRAUER: Thank you very much.

11609 THE CHAIRPERSON: Thank you. Thank you very kindly. Those are our questions for the moment.

11610 Monsieur le secrétaire, I think we are gluttons, we can do one more.

11611 MR. LEBEL: I was hoping to get two more in, Mr. Chairman.

11612 THE CHAIRPERSON: Let's see how it goes.

11613 MR. LEBEL: The next appearing intervention will be presented by Vision Television, Mr. Brant Kostandoff.

11614 THE CHAIRPERSON: In an effort to show solidarity with our secretary, we will actually hear two more, Vision and then Stornoway.

11615 Go ahead then, sir, on behalf of VisionTV.

INTERVENTION

11616 MR. KOSTANDOFF: Thank you, Mr. Chairman, Commissioners.

11617 My name is Brant Kostandoff. I am the Director of Corporate and Legal Affairs at VisionTV, Canada's faith network.

11618 Vision is intervening against the application by Crossroads Television Systems for retransmitters in London and Ottawa.

11619 While Vision is opposed to this application, I want to make it clear at the outset that we recognize the value that local religious broadcasters, including CTS, bring to the broadcasting system, and the significant contributions that they make to meeting the needs of the local communities that they are licensed to serve.

11620 However, this application raises concerns from VisionTV's perspective that fall into two general categories: first, there are policy issues; and, second, there is the impact on VisionTV.

11621 Under the first heading, in terms of policy, the religious broadcasting policy suggests that local religious broadcasters should serve local community needs. Based on what I have read and heard in this application, I am not persuaded that retransmitters are the best way to serve the local needs of London and especially Ottawa where the French community is so significant.

11622 CTS has asserted that local broadcasters in these areas would not be viable, but there is little evidence that has been presented to support that assertion and, in my submission, it would be best to test their position by issuing a call for applications. In that way, if no applications came forward, or no viable applications in the view of the Commission, then the case for retransmitters would be more compelling.

11623 In addition, in our submission it would be appropriate at this time, before granting this application, to engage in a broader review of the religious broadcasting policy.

11624 If granted, this application would, in essence, create a regional service, and that is not specifically contemplated in the existing policy, it is not prohibited either, but before we take that step I suggest it would be appropriate to engage in a broader consultation to discuss with faith communities, with local communities and other local religious broadcasters, as well as VisionTV, what appropriate models might develop for a future service of faith broadcasting in Canada.

11625 Moving to the impact on Vision Television, I want to make it clear that I am not suggesting that the potential harm to Vision, should you decide to grant this application, outweighs the potential benefit to CTS. What we are asking is that the panel consider weighing the impact on other broadcasters in the local system, the impact on VisionTV as well, and in our submission it is a significant impact.

11626 When Mr. Gray was engaging in his introductory remarks he describes CTS as pursuing a diversity of faith perspectives, of promoting balance and understanding of programming that is free of violence and pursues family values. In many ways he could have been describing VisionTV.

11627 There are clear similarities between the two services, granted the distinction between local, over-the-air and a national specialty service, but in the content we are pursuing similar programming goals and, as a result, we are competing for the same viewers. That in turn impacts our advertising revenue because if CTS arguably some of their growth and success will be at the expense of VisionTV's audience.

11628 In addition, mosaic clients of VisionTV, producers and faith groups who buy airtime from Vision, use the existence of local broadcasters as leverage in negotiating contracts with VisionTV. So similarly, as CTS and other local broadcasters potentially grow, the argument from our mosaic clients strengthens in terms of having other options to reach their audience.

11629 The distinction at present between vision and local broadcasters in terms of what we can offer to these mosaic clients is that we give them access fairly easily to a national audience. That argument is not as persuasive if more of the national audience can be accessed through the various local and potentially regional religious broadcasters.

11630 There is also some competition between the services in terms of program acquisition, potentially even advertisers directly, although I appreciate again the distinction between the regional or local buy and the national buys on Vision, but advertisers with shrinking budgets as well are making difficult decisions between national spots and local spots or regional buys. Again, if CTS grows into a regional service there is potentially an impact on VisionTV's advertising dollars.

11631 These impacts on VisionTV are somewhat difficult to quantify, in part because we don't have the resources to engage in the fulsome financial analysis that would allow us to make accurate financial projections for you, but also because there are certain unknowns in terms of CTS, their projected success, in the London and Ottawa markets.

11632 However, being conservative, if the impact is even 1 per cent or 2 per cent of our annual revenue, for a service such as Vision with very slim margins that is a significant amount.

11633 Having said all of that, while we are concerned about the impact on Vision and while there are sound policy reasons to reject this application, we also recognize that the business model for faith broadcasting in Canada is extremely challenging, and some might even say that it is broken. Certainly VisionTV's recent experience with cost-cutting and freezing expenditures in order to offset mounting losses is very similar to what CTS is going through.

11634 The model, as Mr. Gray pointed out, again, in his opening remarks, does not accommodate ongoing deficits. So it is certainly open to this panel to determine that in this case retransmitters are the right fix, but in our submission there are steps that we should pursue before making that decision, including a call for local applications and a review of the religious broadcasting policy.

11635 Finally, in the spirit of being brief, on behalf of VisionTV it is my hope that going forward CTS and Vision and other Canadian faith broadcasters can find ways to work together to create innovative solutions and more cost-effective means to resolve the issues that we as a sector in this industry are facing so that we can better serve our mandates and deliver high quality programming to Canadian audiences.

11636 That concludes my submission. I am pleased to answer any questions you may have.

11637 COMMISSIONER COLVILLE: Thank you for your presentation today and for your written submission.

11638 I guess notwithstanding your last comment about everyone wanting to get together and work in harmony, you are here intervening against them. I am having some trouble understanding your position. You may have heard that even if we give OMNI application and the Crossroads' application there would still be at least one frequency available for a drop-in frequency, so there would still be a frequency, maybe two, for a possible religious service in Ottawa, if we can just take Ottawa since we are here, for a minute and/or a French service.

11639 I guess in view of the fact that we have had this application before us and Gazetted and that no one came forward and said, don't do this because I am putting up my hand, I would like to be at the table and use that frequency for a local service, why wouldn't we assume that that in itself has been a good indication and the fact that it has been some time and no one has come forward and applied for either one?

11640 MR. KOSTANDOFF: I have to concede that that may be an indication. But, in our submission, it would be better to test it more fully with a call for applications specifically to determine whether or not a local service is viable.

11641 In the broader context on your question with respect to the extra frequency, if it would be difficult for a local service to develop while there is none existing right now, it would be near impossible to do so if there is a service being retransmitted into the area. So in terms of the order of proceedings, I submit to you that it would be more appropriate to issue the call for application to test the assertion that the local service would not be viable and if so then to engage in a more fulsome review of the retransmitter issue.

11642 COMMISSIONER COLVILLE: In any event, Crossroads could come into Ottawa and London as a distant signal on cable, so what would your view be on that, without even using up the frequency?

11643 MR. KOSTANDOFF: Certainly it would be our preference if that did not happen, but it's open to them.

11644 From a mandate perspective, VisionTV in many ways supports more local broadcasting because the purpose of VisionTV is to deliver religious programming to Canadian audiences, so to a certain extent the more the merrier. It helps us to fulfil our mandate to see that happening.

11645 From a business perspective, it is very challenging to swallow that because it means more competition for shrinking resources.

11646 COMMISSIONER COLVILLE: So if we had an application for a local religious station in London and Ottawa you would probably support it.

11647 MR. KOSTANDOFF: Or at least be silent on it, yes.

11648 COMMISSIONER COLVILLE: You have indicated in your written brief, and again today, that there would be significant financial losses to VisionTV. Today you have said that even a 1 per cent or 2 per cent reduction of annual revenue would be significant.

11649 I don't have your numbers right in front of me. What would 1 per cent to 2 per cent of your annual revenues represent?

11650 MR. KOSTANDOFF: For Vision, 1 per cent to 2 per cent is only in the neighbourhood of $160,000 to $320,000 at present. That will go up over the next few years. But because our margins are so slight relatively to us in our situation it is a significant amount, so it is not significant in the broad terms of the broadcasting system but to Vision specifically.

11651 COMMISSIONER COLVILLE: Well, then, do you have a view on Crossroads being brought into these two cities as a distant signal?

11652 MR. KOSTANDOFF: Again, it would be our preference at this point that that not happen, but it is a difficult evaluation because of the competing internal discussion between mandate and business. On the one hand, as I said, from a mandate perspective, Crossroads being available to more viewers is a good thing, but from VisionTV as a business and the need to be a viable service in and of itself increasing competition and increasing market fragmentation is a challenge.

11653 COMMISSIONER COLVILLE: You have suggested that we should have a -- before we even do this we should have a review of the whole religious policy. I am trying to struggle with what aspect of the policy is it that you have a problem with in the context of this application?

11654 MR. KOSTANDOFF: The policy speaks to local religious broadcasters serving local community needs. It doesn't contemplate specifically a regional service developing in the most populous province in the country. It may be that regional broadcasting and religious broadcasters is in fact the appropriate model for us moving forward, but I would like to see us engage in a discussion to evaluate whether or not that is in fact the case.

11655 COMMISSIONER COLVILLE: Okay. Thank you for the answers to those questions. I appreciate your coming forward today.

11656 Thank you, Mr. Chairman.

11657 THE CHAIRPERSON: Thank you very much.

11658 Mr. Secretary.

11659 MR. LEBEL: Thank you, Mr. Chairman.

11660 The last appearing intervention for today will be presented by Stornoway Communications Limited. Appearing for Stornoway, Martha Fusca.

INTERVENTION

11661 MS FUSCA: What a day. I don't envy you at all.

11662 In any event, here we go.

11663 I actually learned a lot from Mr. Péladeau's and Mr. Audet's presentation because we have clearly unknowingly chosen to discuss the same word "balance", but I will get to that in a moment.

11664 So I have changed from good morning to good afternoon to good evening, Mr. Chair, Commissioners and staff.

11665 My name is Martha Fusca and I am President and CEO of Stornoway Communications, the licensee of the Category 1 service ichannel and Category 2 service bpm:tv. The other two, @work.ca, our Category 2, and The Pet Network, have been approved by the Commission but have not yet launched.

11666 While our comments in this proceeding stress the vital importance of the Commission's "one to a genre" policy, we also wish to comment on additional issues of concern as identified by the Commission for discussion at this hearing. I will not go over the concerns we expressed in our written intervention. I will simply expand on them.

11667 I would also like to thank you for the opportunity this hearing affords all of us.

11668 The environment in which we now find ourselves is riddled with uncertainties and challenges. I refer to the increasing fragmentation from new foreign and Canadian programming services, the impacts of HDTV, PVRs and VODs, the challenge of encouraging Canadians to buy into digital, signal theft, weak advertising revenue for digital and the need to find ways of strengthening the production sector and to level the playing field between broadcasters and BDUs.

11669 It is both exciting and rewarding to note that the specialty channel services up for licence renewals have made significant contributions to the Canadian broadcasting system. Not to in any way take away from the very talented people who run these channels, we submit that their success has been made possible by the regulatory framework.

11670 As part of that framework, the one to a genre policy recognizes the limitations of the size of the Canadian market and also the significant business risks of launching specialty television in Canada. The stability of a consistent policy in the area of direct competition is therefore critical. Without this stability, new entrepreneurs, new voices and new businesses that add diversity and help to strengthen the social, economic and political fabric of Canada, objectives at the heart of the Broadcasting Act would fail.

11671 While the Commission has never codified the one to a genre policy, it has nonetheless relied on a combination of the description of the nature of service, programming categories and conditions of license to determine whether a license is competitive or complementary to other services. Here we wish to stress that while each licence has a description of the nature of service and the programming categories that may be used, with limitations on the use of these categories, what truly distinguishes one service from another is what is being broadcast over the air, what viewers are watching. It is vitally important therefore, for the Commission to keep this delineation clearly in mind when considering whether or not to allow services to change or expand into other programming areas.

11672 If the Commission does not exercise the utmost discretion in this area, it could very well cause unintended and severe harm to some services and make it impossible for new smaller entrepreneurs to develop into thriving and vibrant options for the benefit of the Canadian public.

11673 Mr. Chair and Commissioners, I would now like also to take advantage of the invitation to raise other issues that we believe are very important to the development and success of our industry as we go forward.

11674 As the newest Canadian broadcaster and a licensee with only a single Category 1 licence, we at Stornoway are in the unusual and unique position of being the only broadcaster that can speak to the very real need to have a regulatory framework that provides meaningful certainty on such issues as I am about to bring up.

11675 The first issue of concern that we wish to bring to your attention is that of the cable licensee seeking authorization to insert commercial advertising into the local availabilities on U.S. satellite services.

11676 From our perspective, this would have very dire consequences. Unlike most but certainly not all other players in the industry, we need the ability to communicate with Canadians who do not yet have digital. As we know, the overwhelming majority of Canadians do not yet subscribe to digital. These avails provide a vital link for us to communicate with those Canadians, and we therefore strenuously appeal to the Commission not to change its current policy on this issue.

11677 It is very worthy of those seeking change in this area to propose that some portion of revenues be transferred to assist with Canadian program production, but given the critical state of the newly born digital market in Canada this is not the time to seek such concessions.

11678 So as not to leave this subject without some positive proposal for the future, we suggest that perhaps at the next specialty licence hearing an examination be undertaken to explore the possibility of selling whatever time is not purchased or used by Canadian television and radio services under the existing framework.

11679 The balance of the time not used in this manner might appropriately be sold, and some portion of those revenues could be contributed to the independent production community.

11680 Furthermore, it is becoming increasingly difficult and onerously expensive for broadcasters, particularly Stornoway, to access the use of these avails.

11681 Rates and access options to the avails vary widely among the distributors, with some distributors actually closing off this opportunity to digital channels they do not carry.

11682 This practice amounts to the ability of the BDU to censor what Canadian programming can and cannot be promoted. This type of behaviour discriminates against some broadcasters in Canadian programming to the advantage of others. As a result, we not only have an anti-competitive environment, we have an environment that does not allow Canadians from coast to coast to coast to experience the choice or even the opportunity to know what is available for them.

11683 For companies such as ours -- and there are others -- that do not own radio, magazine, analog or specialty channels, newspapers and the like, we have very few opportunities to promote our channels and the independent Canadian production we broadcast.

11684 While the digital broadcast industry is still struggling, and will continue to do so for many more years, it becomes obvious that we can ill afford to lose the use of these avails for the exhibition and promotion of Canadian content as part of our overall marketing strategy.

11685 Furthermore, it makes little sense to try to fix one problem by creating another. Since we are all struggling for advertising dollars, we certainly don't need any more advertising space to compete with and sell.

11686 During the digital hearings and since, it has been the position of the Commission that Category 1 licensees would have mandatory carriage on digital but that such matters as price, packaging and promotion of these services would be left up to negotiation.

11687 Having gone through the process of negotiations, with all except one BDU, I can assure the Commission that to the extent to which we can expect success with the deployment of interactive services and the launch of HDTV, a regulatory framework that provides a fair and open environment to nurture and promote the deployment of these services is critical.

11688 As a new participant in the broadcasting industry, it has become abundantly clear that there has developed a crippling imbalance in the negotiating power between BDUs and specialty channel broadcasters.

11689 Currently there is little that participants such as Stornoway can do except comply with the terms imposed by the BDUs if we want to participate as broadcasters in this country.

11690 Since BDUs now own many broadcasting properties on both analog and digital, they have gained advantages that no broadcaster, not even the largest broadcaster, can hope to compete with.

11691 Another area of concern -- and I thought that this might actually help Mr. Péladeau and Mr. Audet, and I mean that sincerely -- is the infamous MFN clause that all BDUs insist on having in their agreement with broadcasters. It makes little if any sense at all to have MFN clauses in agreements where there are true negotiations meant to be taking place.

11692 This too, we submit, limits and indeed may even preclude broadcasters from being able to negotiate. I would suggest that that may be happening to the BDUs, as well.

11693 So if you have a situation where a programmer might want to make a different deal with Cogeco or Vidéotron, I believe that they are currently precluded from doing that because everybody wants the same deal.

11694 Anyway, that's the way it goes.

11695 The negotiating imbalances have created an environment where the BDUs now have the authority previously held by the Commission itself. At least from our perspective, this is anything but a positive outcome. This is not to suggest that all BDUs behave in the same way. They do not.

11696 However, the negotiating imbalance I speak of is in critical need of being addressed; and the five-to-one rule, while very important, does not go far enough to achieve the Commission's objectives, those of the Broadcasting Act and therefore the public good.

11697 Over the past few years it has been said that perhaps with the development of the Internet and other new technologies, Canada would have no further need of a regulatory commission currently in the form of the CRTC.

11698 We respectfully submit that the new technologies have in fact created a far more complex world than existed even a decade ago, and that while the Commission may be in need of reform it will need to continue to play a critical role as both the guardian of the public trust, as well as the gatekeeper for this industry -- like it or not, Mr. Dolfen.

11699 Left to its own device, the current industry power structure will only result in a few powerful players who will control the goals and aspirations of the Broadcasting Act. As we all know, corporations of any kind cannot serve two masters -- the public good and their bottom line -- and therefore need encouragement to do both.

11700 I urge, I encourage and I hope that the Commission will develop a framework that allows for new voices, new business, as well existing ones such as Stornoway to develop, launch and succeed in this wonderful industry, not at the expense of anyone else but rather along with others.

11701 This can only happen if the Commission refuses to buy into its own demise. Please don't let anyone talk you into believing that the market or other forces will take care of the Canadian broadcasting system. You are the guardians of the Broadcasting Act and are the proper authorities to judge how best to serve the interests of Canadians over the long term.

11702 I guess nobody is perfect, but we still try.

11703 We cannot stress enough the need to review the current relational structure between BDUs and broadcasters, with emphasis on developing an environment that makes it possible for broadcasters to negotiate with BDUs on a level playing field. This is not only important for the present; it is critical for the future.

11704 These are some of the pressing issues we believe need to be on the agenda. Perhaps it is time for a public discussion and review of the structure and balances within the industry.

11705 Mr. Audet and Mr. Péladeau were I think suggesting the same thing.

11706 The Commission has been and needs to be congratulated for having played a vital role in the creation of our industry. Over the years the Commission has been instrumental in providing the framework that has allowed the current players to thrive.

11707 Since the industry began this way, it is only right that the Commission now not abandon the newcomers they helped to create. We, too, need the Commission to provide us with the same opportunities they provided to the current establishment.

11708 We wish you well in your deliberations and want to thank you so much for your time.

11709 THE CHAIRPERSON: Thank you very much, Ms Fusca, and thank you for the contribution which you have made to Her Majesty in terms of the decor of this hearing room.

11710 We stand adjourned until 9:30 tomorrow morning.

11711 Nous reprendrons demain matin à 9 h 30.

--- Whereupon the hearing adjourned at 2015, to resume

on Tuesday, June 3, 2003 at 0930 / L'audience

est ajournée à 2015 pour reprendre le mardi

Date modified:

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