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Providing Content in Canada's Official Languages
Please note that the Official Languages Act requires that government publications be available in both official languages.
In order to meet some of the requirements under this Act, the Commission's transcripts will therefore be bilingual as to their covers, the listing of CRTC members and staff attending the hearings, and the table of contents.
However, the aforementioned publication is the recorded verbatim transcript and, as such, is transcribed in either of the official languages, depending on the language spoken by the participant at the hearing.
TRANSCRIPT OF PROCEEDINGS BEFORE
THE CANADIAN RADIO‑TELEVISION AND
TELECOMMUNICATIONS COMMISSION
TRANSCRIPTION DES AUDIENCES DEVANT
LE CONSEIL DE LA RADIODIFFUSION
ET DES TÉLÉCOMMUNICATIONS CANADIENNES
SUBJECT:
Applications to Provide an All Channel Alert Service /
demandes visant la fourniture d'un service
d'alerte tous canaux
HELD AT: TENUE À:
Conference Centre Centre de conférences
Outaouais Room Salle Outaouais
140 Promenade du Portage 140, Promenade du Portage
Gatineau, Quebec Gatineau (Québec)
May 1st, 2006 Le 1er mai 2006
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 to Provide an All Channel Alert Service /
demandes visant la fourniture d'un service
d'alerte tous canaux
BEFORE / DEVANT:
Michel Arpin Chairperson / Président
Joan Pennefather Commissioner / Conseillère
Helen del Val Commissioner / Conseillère
ALSO PRESENT / AUSSI PRÉSENTS:
Chantal Boulet Secretary / Secrétaire
Peter McCallum/ Legal Counsel /
Reynolds Mastin Conseillers juridiques
Gerard Bergin Manager, Broadcast
Technology / Gestionnaire
de technologie en
radiodiffusion
HELD AT: TENUE À:
Conference Centre Centre de conférences
Outaouais Room Salle Outaouais
140 Promenade du Portage 140, Promenade du Portage
Gatineau, Quebec Gatineau (Québec)
May 1st, 2006 Le 1er mai 2006
TABLE DES MATIÈRES / TABLE OF CONTENTS
PAGE / PARA
PHASE I
PRESENTATION BY / PRÉSENTATION PAR:
Pelmorex Communications Inc. 8 / 40
Canadian Broadcasting Corporation 160 / 871
Bell ExpressVu 266 / 1492
PHASE II
INVERVENTION BY / INTERVENTION PAR:
Pelmorex Communications Inc. 308 / 1696
Bell ExpressVu 323 / 1774
Gatineau, Quebec / Gatineau (Québec)
‑‑‑ Upon commencing on Monday, May 1st, 2006 at 0929 /
L'audience débute le lundi 1er mai 2006 à 0929
LISTNUM 1 \l 11 THE CHAIRPERSON: Please be seated.
LISTNUM 1 \l 12 Thank you very much. Order, please.
LISTNUM 1 \l 13 Well good morning, ladies and gentlemen and welcome to this public hearing.
LISTNUM 1 \l 14 My name is Michel Arpin and I was born in Montreal and I am the Vice‑Chair of Broadcasting for the CRTC. I will be presiding over this hearing.
LISTNUM 1 \l 15 Joining me on the panel are my colleagues Helen del VAL, Regional Commissioner for British Columbia and the Yukon, and Joan Pennefather, National Commissioner.
LISTNUM 1 \l 16 L'équipe du Conseil qui nous assiste se compose, notamment, du Gérant de l'audience Gerald Bergin, gestionnaire de la technologie de radiodiffusion; de Peter McCallum et Reynolds Mastin, conseillers juridiques; ainsi que de Chantal Boulet, Secrétaire d'audience, auprès de qui vous pourrez vous renseigner sur toute question relative au déroulement de l'audience.
LISTNUM 1 \l 17 During this hearing we will examine three proposals to provide Canadians with emergency alert services. The need for a national alerting system has been apparent for some time, all the more so following the recent weather disasters in North America and throughout the world.
LISTNUM 1 \l 18 Nevertheless, given the crucial role it will play, it is especially important that the merits of each of the proposed alerting systems be carefully considered. That is why we are here today.
LISTNUM 1 \l 19 The panel will first look at the proposal by Pelmorex Communications to amend the licence of The Weather Network/MétéoMédia to enable it to provide an All Channel Alert service to broadcasting distribution undertakings across Canada.
LISTNUM 1 \l 110 The service will broadcast alerts and messages related to imminent and unexpected threats to life or property caused by severe weather disturbances, natural disasters and other emergencies.
LISTNUM 1 \l 111 To implement its project, the licensee is proposing to amend its licence and to increase its maximum authorized wholesale rate.
LISTNUM 1 \l 112 Pelmorex is also asking the Commission to issue a distribution order pursuant to paragraph 9(1)(h) of the Broadcasting Act.
LISTNUM 1 \l 113 Le Comité d'audition entendra ensuite la demande de la Société Radio‑Canada/Canadian Broadcasting Corporation, qui souhaite fournir un service de diffusion publique de messages d'alerte en cas d'urgence par le biais de ses émetteurs radiophoniques.
LISTNUM 1 \l 114 Le Comité d'audition examinera également la proposition de Bell ExpressVu Limited Partnership en vue de distribuer à ses abonnés un service d'alerte en cas d'urgence. Les messages d'alerte bilingues seraient présentés à l'aide de textes fixes par défilement à l'écran sous forme alphanumérique et par un avertissement audio.
LISTNUM 1 \l 115 The CBC/Radio‑Canada and Bell ExpressVu request to be relieved of the broadcasting obligation set out in section 7(d) of the Broadcasting Distribution Regulations in order to obtain the agreement of the operator of the programming service, the network or the distribution undertaking prior to inserting an emergency alert message into the programming service.
LISTNUM 1 \l 116 En terminant, j'aimerais préciser que, pour examiner la demande présentée par le Groupe de Radiodiffusion Astral en vue de renouveler la licence de VRAK.TV, c'est‑à‑dire l'article 6 de l'Avis d'audience publique de radiodiffusion CRTC‑2006‑3, le Comité d'audition sera modifié. En effet, le président du CRTC, monsieur Charles Dalfen, le présidera, en compagnie des conseillères Helen del Val et Joan Pennefather.
LISTNUM 1 \l 117 Before proceeding to our examination of the application, I will now invite the Secretary, Mrs. Chantal Boulet, to explain the procedures we will be following.
LISTNUM 1 \l 118 Mrs. Boulet.
LISTNUM 1 \l 119 LA SECRÉTAIRE : Merci, Monsieur le Président.
LISTNUM 1 \l 120 First, I would like to go over a few housekeeping matters to ensure the proper conduct of the hearing.
LISTNUM 1 \l 121 For your information, interpretation services are available during the hearing. To obtain an interpretation receiver, please see the technician at the back of the room. The English interpretation is on channel 6 and la traduction française est au canal 7.
LISTNUM 1 \l 122 When you are in the hearing room, we would ask that you please turn off your cell phones, beepers, BlackBerries and other text messaging devices as they are unwelcome distractions for our participants and commissioners as they cause interference on the internal communication systems used by our translators.
LISTNUM 1 \l 123 We would appreciate your cooperation in this regard throughout the hearing.
LISTNUM 1 \l 124 We expect the hearing to take approximately two and a half days. We will begin each morning, starting tomorrow, at 9:00 and finish each afternoon around 6:30 p.m. We will take an hour for lunch and a break in the morning and in the afternoon. We will let you know of any schedule changes that may occur.
LISTNUM 1 \l 125 Pendant toute la durée de l'audience, vous pourrez consulter les documents qui font partie du dossier public pour cette audience dans la salle d'examen qui se trouve dans la Salle Papineau, à l'extérieur de la salle d'audience à votre gauche. Tel qu'indiqué dans l'ordre du jour, le numéro de téléphone de la salle d'examen est le 819‑953‑3168.
LISTNUM 1 \l 126 Please note that the full transcript of this hearing will be made available on the Commission's website shortly after the conclusion of the hearing. If you have any questions on how to obtain all or part of this transcript, please approach the Court Reporter at the table in front of me.
LISTNUM 1 \l 127 The applications being considered at this hearing will follow the four‑phase approach for competitive hearings as follows.
LISTNUM 1 \l 128 First, we will hear each applicant in the agenda order and each applicant will be granted 20 minutes for their presentation. Questions from the Commission will follow each presentation.
LISTNUM 1 \l 129 Au cours de la deuxième phase, les requérantes pourront choisir de comparaître à nouveau, dans le même ordre, pour présenter leur intervention relative aux demandes concurrentes. Elles disposeront de 10 minutes pour le faire, et le Conseil pourra les interroger par la suite.
LISTNUM 1 \l 130 In Phase III, other parties will appear in the order set out in the agenda to present their intervention and 10 minutes will be allowed for each presentation. Again, questions from the Commission may follow.
LISTNUM 1 \l 131 La quatrième phase permet à chaque requérante de répondre à toutes les interventions émises à l'égard de leur demande. Les requérantes comparaissent dans l'ordre inverse et disposent de 10 minutes pour répondre. Le Conseil pourrait, à nouveau, poser ensuite des questions.
LISTNUM 1 \l 132 Finally, I would like to note for the record that documents have been added to the application of Pelmorex Communications Inc.
LISTNUM 1 \l 133 One is a letter from the Commission to the applicant regarding the issue of mandatory digital distribution by Pelmorex of its ALL CHANNEL ALERT signal and the financial consequences resulting thereof, and the other documents are revised financial projections.
LISTNUM 1 \l 134 Both documents are available on the public file in the examination room.
LISTNUM 1 \l 135 Now, Mr. Chairman, we will proceed with item 1 on the agenda, which is an application by Pelmorex Communications Inc. to amend its licence for The Weather Network/MétéoMédia to provide an All Channel Alert service to broadcasting distribution undertakings across Canada.
LISTNUM 1 \l 136 If approved, the service would broadcast alerts and messages related to imminent and unexpected threats to life or property caused by severe weather disturbances, natural disasters or other emergencies in local, regional and national areas of Canada for distribution on the licensee's services and on the other channels offered by BDUs that distribute the licensee's services.
LISTNUM 1 \l 137 Ces alertes seraient diffusées au nom d'organismes fédéraux compétents comme Environnement Canada, de même qu'au nom d'autorités provinciales et territoriales compétentes. Les téléspectateurs des régions touchées recevraient les avertissements diffusés à l'échelle locale, quel que soit le canal qu'ils regardent.
LISTNUM 1 \l 138 Appearing for the applicant is Mr. Pierre Morrissette who will introduce his colleagues. You will then have 20 minutes to make your presentation.
LISTNUM 1 \l 139 Gentlemen.
PRESENTATION/PRÉSENTATION
LISTNUM 1 \l 140 MR. MORRISSETTE: Good morning, Mr. Chairman, members of the Commission.
LISTNUM 1 \l 141 My name is Pierre Morrissette, President and CEO of Pelmorex Communications Inc., the licensee of The Weather Network and MétéoMédia. I am pleased to be here today to present our proposal for an All Channel Alert service.
LISTNUM 1 \l 142 With me is our ACA team who have been working on this concept for many years.
LISTNUM 1 \l 143 On my right is Paul Temple, Senior Vice‑President of Regulatory and Strategic Affairs and who has been driving this project for us for many years now.
LISTNUM 1 \l 144 Beside him is Alysia Charlton, our Chief Financial Officer and Senior Vice‑President, Corporate Division.
LISTNUM 1 \l 145 To my left is Luc Perreault, Vice‑President, Affiliate and Government Relations.
LISTNUM 1 \l 146 In the second row from left to right are Marc Bernier, Director, Technical Engineering; Jean‑Pierre Boulanger, Senior Vice‑President and Chief Information and Technology Officer; Tawnie McNabb, Pelmorex's Corporate Controller; and Scott Prescott, our Legal Counsel.
LISTNUM 1 \l 147 We are before you today to request an amendment to the Specialty Television licence of The Weather Network and MétéoMédia to permit alerts and emergency messages to be sent over all channels distributed by BDUs and to allow a fee for the cost of this all channel alerting service.
LISTNUM 1 \l 148 We also request a distribution order so that every Class 1 cable and DTH distribution undertaking distributes the ACA signals once available.
LISTNUM 1 \l 149 These measures will ensure a state‑of‑the‑art broadcast alerting system serving the maximum number of Canadians.
LISTNUM 1 \l 150 Before we begin, we would like to show a short video that share our vision for an All Channel Alert system.
‑‑‑ Video presentation / Présentation vidéo
LISTNUM 1 \l 151 MR. MORRISSETTE: Commissioners, this concept has generated a lot of support in the emergency planning community and with the public. More than 700 people and organizations took the time to write to the CRTC. They include nearly 100 municipalities from Vancouver Island to Gander, Newfoundland; some 20 associations with safety mandates; federal MPs and Senators; and hundreds of concerned individuals.
LISTNUM 1 \l 152 The demand for our ACA service is unequivocal.
LISTNUM 1 \l 153 Cette initiative n'est pas un luxe. Il existe un besoin urgent pour notre service, qui protégera la vie et les biens des Canadiens. Il est évident que le nombre et la sévérité des événements météorologiques violents s'accroissent. Les inondations furent nombreuses et importantes ce printemps, et tout porte à croire que cette situation sera encore pire dans cinq ans.
LISTNUM 1 \l 154 Également, la densité urbaine augmente les risques auxquels les Canadiens pourraient être confrontés. Le terrorisme demeure une possibilité. Les municipalités ont des plans d'urgence, mais le maillon faible est au niveau des communications d'urgence avec le grand public.
LISTNUM 1 \l 155 They are worried about tsunamis on the B.C. coast; forest fires and tornadoes in Alberta; train derailments and transport of dangerous goods in Saskatchewan; flooding in Manitoba; derailments, seasonal flooding and forest fires in Ontario; landslides and winter storms in Québec; natural gas, oil refinery and nuclear safety issues in New Brunswick; and violent coastal weather in Nova Scotia, P.E.I. and Newfoundland.
LISTNUM 1 \l 156 In our consultations with municipal and provincial officials, some told us their biggest concern is aging infrastructure and another tragedy like Walkerton. They know Pelmorex's ALL CHANNEL ALERT will save lives. They want it now.
LISTNUM 1 \l 157 M. TEMPLE: In CRTC Decision 2001‑123, you outlined what an all channel alert system must do to meet your approval. We have listened and responded. We are pleased to present this, our second and improved application for an all channel alert service that features a lower price;
LISTNUM 1 \l 158 a technical solution for every cable head end configuration, both digital and analog;
LISTNUM 1 \l 159 extensive work to ensure an early launch on DTH and MMDS systems;
LISTNUM 1 \l 160 a commitment to implement our satellite solution in the same year service is offered to cable;
LISTNUM 1 \l 161 a commitment to work collaboratively with distributors to provide the technical solutions appropriate to them;
LISTNUM 1 \l 162 an implementation plan involving ongoing consultations with our stakeholders; and
LISTNUM 1 \l 163 a simultaneous alert service to local radio and television stations.
LISTNUM 1 \l 164 Today we would like to tell you why our service is best at meeting the needs of Canadians and why Pelmorex is particularly qualified to operate it. We will look at our business case and we will review in more detail how we have addressed your concerns.
LISTNUM 1 \l 165 Our ACA system offers the greatest benefits to Canadians.
LISTNUM 1 \l 166 First, our service will reach more Canadians than any other proposal. It is required for DTH and large cable systems, reaching 91 percent of households within three years of launch.
LISTNUM 1 \l 167 Second, we offer an end‑to‑end service, taking responsibility for the message from the time it leaves the authorized emergency alert provider.
LISTNUM 1 \l 168 We offer one system, one point of contact, one point of accountability. We will support installation and provide operations, maintenance and ongoing upgrades to equipment.
LISTNUM 1 \l 169 We will make training and public education available. If there are issues, we will follow up and adjust our procedures.
LISTNUM 1 \l 170 Our emergency partners have told us they don't want to deal with a patchwork of systems. With our system, they won't have to.
LISTNUM 1 \l 171 Third, we are the only applicant with a business plan that provides service to all Canadian subscribers at one price. A blended rate makes it affordable for small systems to participate in the safety of their communities.
LISTNUM 1 \l 172 Finally, we have a solid financial plan to pay for equipment, ongoing maintenance, training and upgrades. If our licence amendment is approved, we can deliver.
LISTNUM 1 \l 173 MS CHARLTON: Pelmorex is uniquely qualified to run this service. The Weather Network and MétéoMédia have been in the alerting business for 18 years. We provide vital local weather information to more than 10 million Canadian households in English and in French, including weather alerts from Environment Canada.
LISTNUM 1 \l 174 Our unique enabling technology resides in 1,300 locations from coast to coast.
LISTNUM 1 \l 175 We recently announced an alert service with the provinces of New Brunswick and Québec for a similar service to broadcast authorized local alerts of all kinds on The Weather Network and MétéoMédia. The foundation of the ACA service is in place and it works.
LISTNUM 1 \l 176 We also have the relationships and credibility with emergency authorities to take on this challenge. This is demonstrated by the support from the Canadian Centre for Emergency Management, the Canadian Red Cross, the Canadian Risks and Hazards Network, the Centre for Catastrophic Loss Reduction, the Canadian Safety Association, l'Association de Sécurité Civile du Québec, the Federation of Canadian Municipalities, le Bureau du Coroner du Québec, et la Fédération québécoise des Municipalités.
LISTNUM 1 \l 177 Our technology expertise means that Pelmorex has the vision and capacity to anticipate new opportunities for improved service as technology evolves, and to continuously enhance the ACA service.
LISTNUM 1 \l 178 For all of these reasons, alerting experience, infrastructure, relationships with emergency authorities, technical skills, as well as the business plan, studies and consultation that anchor our application, we can hit the ground running when our licence amendment is approved and deliver over the long haul.
LISTNUM 1 \l 179 Our business case is based on a subscriber‑pay model regulated by the Commission similar to the 9‑1‑1 telephone service. Our $0.08 fee reflects substantial capital costs, ongoing operations and the upgrading necessary for an effective warning system. It reflects service to both analog and digital subscribers and the myriad technologies and systems used by BDUs, whether cable, DTH, MMDS or telco. It reflects the fact we offer alerts and ACA equipment to more than 1,300 cable head ends.
LISTNUM 1 \l 180 We have designed a properly managed and operated alerting system that is fully funded and sustainable over the long haul. This is a serious business: Lives are stake and it has to be done right.
LISTNUM 1 \l 181 We offer this service at one price to all Canadian television subscribers in large communities and small. Our commitment and efficiency ensure good value.
LISTNUM 1 \l 182 We surveyed 1,700 Canadians about paying for a broadcast alert service. Eighty‑two percent said they felt $0.50 a month would be fair, and we are a fraction of that.
LISTNUM 1 \l 183 Many intervenors, including Canada's Association for the 50 Plus, wrote that less than $1.00 a year was a small price to pay for the security an ACA service would provide.
LISTNUM 1 \l 184 M. MORRISSETTE: Our proposal is for an analog and digital solution required for all Class 1 systems. The business model reflects the fact that analog alerting, which is equipment‑based, is more capital intensive than the digital solution, which is software‑based.
LISTNUM 1 \l 185 The analog solution is also more expensive because of the costs of maintaining equipment in the field.
LISTNUM 1 \l 186 Vidéotron has suggested an alternative alerting model whereby an ACA service would be required for Class 1 digital systems, but would be optional for analog. It is an idea we are prepared to explore. This model would allow us to lower our costs and our fee.
LISTNUM 1 \l 187 The trade‑off is that fewer Canadian homes would receive alerts in the short term.
LISTNUM 1 \l 188 Since we filed our application, the Commission has introduced its digital migration framework which will accelerate the phase‑out of analog service. This makes an analog optional model worth exploring.
LISTNUM 1 \l 189 We expect that some major distributors would still opt to provide analog alerting, even if they were only required to alert their digital customers. Should the Commission find this model has merit, we would be prepared to proceed on that basis.
LISTNUM 1 \l 190 Nous avons développé notre demande en tenant compte du feed‑back de tous les intervenants, et notre engagement est de continuer de travailler de concert tant avec les autorités oeuvrant dans le domaine des mesures d'urgence que les distributeurs, les radiodiffuseurs, les regroupements de consommateurs tels les associations représentant les personnes sourdes et malentendantes.
LISTNUM 1 \l 191 Nous sommes particulièrement disposés à travailler avec CANALERT, un projet qui n'existait pas au moment du dépôt de notre demande. Nous travaillons, d'ailleurs, depuis plus de 10 ans avec Industrie Canada et le prédécesseur de CANALERT, le Weather Alert Steering Committee. Nous avons également conduit des tests afin de valider notre technologie durant cette période.
LISTNUM 1 \l 192 Nous nous engageons à utiliser des standards à être développés par CANALERT et considérons que notre proposition est pleinement compatible avec cette dernière.
LISTNUM 1 \l 193 Nous bénéficions déjà des opinions expertes de notre comité aviseur composé de 12 éminents spécialistes qui oeuvrent dans le domaine des mesures d'urgence, représentant trois paliers gouvernementaux.
LISTNUM 1 \l 194 Nous avons également recueilli des commentaires lors de consultations avec des représentants d'une centaine de groupes qui oeuvrent dans le domaine des mesures d'urgence d'un océan à l'autre. Leur feed‑back nous a aidés dans la préparation de notre demande.
LISTNUM 1 \l 195 Nous planifions aussi la mise sur pied d'un groupe de travail, lors du lancement et la mise en service du RAM, composé de radiodiffuseurs et de distributeurs. Ces derniers seront des joueurs clés quant à leur contribution au contenu de la campagne de notoriété publique aux périodes de test du système, ainsi qu'à toute autre activité reliée au lancement d'une telle initiative.
LISTNUM 1 \l 196 Les consultations ne s'arrêteront pas après le lancement du service. Un comité technique permanent composé d'un représentant des distributeurs, radiodiffuseurs et fournisseurs aura pour but de continuer le développement de la transmission des alertes via les décodeurs numériques. De plus, nous proposons de tenir une revue continuelle des plaintes afin de prévenir toute mauvaise utilisation ou tout abus du système RAM.
LISTNUM 1 \l 197 MR. TEMPLE: In February 2001, the Commission noted the merits of our first ACA proposal and laid out the test that any future applications would have to meet.
LISTNUM 1 \l 198 You asked for closer cooperation among broadcasters, distributors and other interested parties. We provided extensive executive and technical briefings to trade associations and major players in the broadcasting and distribution fields.
LISTNUM 1 \l 199 We met with the CAB, the CCTA and the CCSA, the satellite service providers and with individual broadcasters and cable companies. We were thorough, generous with technical information and sought real input.
LISTNUM 1 \l 1100 We also met with emergency response and public safety experts. We presented our service concept at the Broadcast Public Alerting Working Group and Industry Canada Steering Committee meetings. We briefed no less than six federal departments and had extensive meetings with provincial governments that have already led, in some cases, to expanded alerting on The Weather Network and MétéoMédia.
LISTNUM 1 \l 1101 On costs to consumers, you asked for more detailed accounting. We went back, took changing technology into account and sharpened our pencils. We have lowered our price from $0.13 per subscriber to $0.08 per subscriber, while improving the service. And we have provided you with detailed financial appendices to show where the money is going.
LISTNUM 1 \l 1102 With respect to the needs of the visually impaired, our application proposes an audio clip to provide standard audio notice with full information on websites and through a 1‑800 number. The Canadian National Institute For The Blind helped us get feedback through their website. The National Broadcast Reading Service noted our extensive consultation when it again supported us.
LISTNUM 1 \l 1103 On the technical side, our appendices fill several binders, and again we have been thorough.
LISTNUM 1 \l 1104 You had concerns about interconnecting regional systems. We addressed these with practical, workable solutions for all head‑end configurations. We provided them to the CCTA for review and engaged an independent consultant whose report is included as Appendix I.
LISTNUM 1 \l 1105 We have also worked hard to document digital solutions. Our consultant's report showing there are no technical barriers to targeting local information to satellite subscribers in Appendix J is borne out by ExpressVu's application.
LISTNUM 1 \l 1106 M. MORRISSETTE : En conclusion, je voudrais réitérer le caractère essentiel de ce service, dont le besoin est immédiat, mais qui doit être conçu et déployé de la bonne façon. Toutes les instances publiques qui sont intervenues lors de cette audience et qui ont fait état de leurs besoins en termes de communications d'urgence nous ont tous fait part du fait que l'absence d'un réseau de communications d'urgence constitue le chaînon manquant de leur planification et que tout délai dans la mise sur pied d'une telle initiative leur est inacceptable.
LISTNUM 1 \l 1107 Our application is fully funded, with a responsible, sustainable business plan. It maximizes the distribution of alerts to Canadians, whether they live in large communities or small ones. It is based on 18 years of alerting experience and comprehensive consultation with emergency experts, with broadcasters and distributors from coast to coast.
LISTNUM 1 \l 1108 Canada must be ready to meet the challenges of climate change and other emergency situations. Its citizens, communities and emergency organizations have expressed a real need and urgent demand for this service.
LISTNUM 1 \l 1109 Our proposal will provide Canada with the leading emergency alert system in the world. We are proud to have initiated this process, and hope to play an expanded role in improving the safety of Canadians.
LISTNUM 1 \l 1110 We would now be pleased to answer any questions you may have.
LISTNUM 1 \l 1111 LE PRÉSIDENT: Merci, Monsieur Morrissette.
LISTNUM 1 \l 1112 For those in the room, if I'm wearing a headset it is because I have a hearing problem. So I am listening to the floor sound, I am not listening to translation. So don't be afraid, I am hearing you very well with the headset.
LISTNUM 1 \l 1113 I will now ask Mrs. Pennefather to initiate the questions.
LISTNUM 1 \l 1114 COMMISSIONER PENNEFATHER: Thank you, Mr. Chairman.
LISTNUM 1 \l 1115 Ladies and gentlemen, good morning. Thank you for your presentation which, as you remarked, is detailed, as are your many binders of documentation. I thank you for some of the appendices which were labelled in layman's terms. They were considerably helpful.
LISTNUM 1 \l 1116 I have, on behalf of my colleagues, questions in four basic areas, areas dealing with policy, technology, financial issues and legal issues.
LISTNUM 1 \l 1117 I think you will find that we cross back and forth, however, when we are talking in these different areas with some of the same points, but looking at it from different angles.
LISTNUM 1 \l 1118 Obviously I have all the material, but we will be particularly referring to your application and the supplementary brief to some of the appendices, particularly D, F and G, your deficiency response and your reply.
LISTNUM 1 \l 1119 In asking the questions and in your responses there are some general areas that I hope we can come back to to get further clarification as we go through all the questioning.
LISTNUM 1 \l 1120 Some of these would be, for example, coordination of your proposal with existing and future other alert systems, should they go forward; the coordination with the broadcasting industry and the distribution industry going forward; and details of implementation and system usage.
LISTNUM 1 \l 1121 You will find me coming back to these points consistently in each of the areas.
LISTNUM 1 \l 1122 If you are ready, we will begin in the policy area and I have some rather specific questions that really try to fine‑tune our understanding of how it will work, particularly starting with language.
LISTNUM 1 \l 1123 When subscribers get the message ‑‑ and thank you for the demonstration this morning ‑‑ they will be sent through the system and they will see a text message as we saw in the demonstration today, either a crawl or a full message, and a generic audio message. We understand that you intend to transit English alerts on English channels and French alerts on French channels.
LISTNUM 1 \l 1124 Is that correct?
LISTNUM 1 \l 1125 MR. TEMPLE: Yes. Depending a bit on the way that a cable operator would do the wiring, it would be possible to send the English message for display on English‑language channels and the French text on the French‑language channels.
LISTNUM 1 \l 1126 COMMISSIONER PENNEFATHER: That decision would be made by the distributor, by the BDU?
LISTNUM 1 \l 1127 MR. TEMPLE: It's subject to how they're able to do the ‑‑ do the wiring and connection. There are a number of different options they have available to them, depending on how they process signals, but if they're doing a crawl, then they would be able to do the wiring so that they could select English onto English channels and French onto French.
LISTNUM 1 \l 1128 I guess they could also do it if ‑‑ I better check before I tell you something incorrect.
LISTNUM 1 \l 1129 Yes, and if they do a ‑‑ what we call an intrusive or a ‑‑ go to a full screen, they would also be able to set it up so that English would appear on English channels and French on French channels.
LISTNUM 1 \l 1130 COMMISSIONER PENNEFATHER: Now, let's go further, if we are talking about an area where there's a significant population, minority population in either French or English, would we be able to see the text in both languages?
LISTNUM 1 \l 1131 MR. TEMPLE: If the service ‑‑ if the authority who is issuing the alert issues the alert in both languages we will send the alert in both languages.
LISTNUM 1 \l 1132 We don't propose to do translation, because that raises a bunch of issues related to liability, but it doesn't matter who the authority is or where they are in Canada, if they send us the alert in English and French, we'll send the alert out in both languages.
LISTNUM 1 \l 1133 COMMISSIONER PENNEFATHER: If you send it out, however ‑‑ just forgive me if I want to make sure I thoroughly understand ‑‑ in both languages, but at the head end if you said previously that the BDU would then attach the English version to the English and the French version to the French, is it possible that someone watching ‑‑ let's say a francophone watching an English‑language channel would also be able to read the text in French? Is it possible that they would read both languages at once?
LISTNUM 1 \l 1134 MR. TEMPLE: If the authority wanted to send English and French as one message, that would be possible. In other words, if they're sending us two messages then we'll route them by language, but if they sent us one message with both languages as ‑‑ within the one message, then you would see both languages. It might make for a long message, so there are other considerations there, but it's possible.
LISTNUM 1 \l 1135 COMMISSIONER PENNEFATHER: What about other languages?
LISTNUM 1 \l 1136 MR. TEMPLE: That gets a little more complicated.
LISTNUM 1 \l 1137 COMMISSIONER PENNEFATHER: Do you have any suggested solutions?
LISTNUM 1 \l 1138 MR. TEMPLE: Well, it depends, as we get into ‑‑ it depends in a sense on the language itself. Once you start getting away from standard characters it gets a little more complex, so if you're ... if you're not following the standard ... you know, if you're get into Mandarin or something, then that may be a more complex challenge.
LISTNUM 1 \l 1139 We have been asked this a number of times by different public authorities. One of the suggestions that have been made is that within the text of the message that is issued there's a location reference for other language groups to get the information on the warning, so it might appear in English, but there would be a reference as to where you might get the message in Punjabi or Mandarin or things of that nature, but again it gets ‑‑ it is a awkward ‑‑ it is an awkward situation, because if you start making the message too long, you have English and then another language, it just makes the message too long. People are worried about it.
LISTNUM 1 \l 1140 COMMISSIONER PENNEFATHER: Bottom line, what would be your comment if the Commission were to give you a COL to oblige the display of alerts in both official languages? I don't mean at once; I mean as you first described, that on an English channel we would see an English and on a French channel, a French.
LISTNUM 1 \l 1141 Would you have any comment on that?
LISTNUM 1 \l 1142 MR. TEMPLE: No problem at all. That's our plan.
LISTNUM 1 \l 1143 COMMISSIONER PENNEFATHER: Again, you mention translation and it is our understanding that the wording in the messages will be standardized so that translation isn't necessary.
LISTNUM 1 \l 1144 But could you elaborate a little bit on the fact that ‑‑ is there any way, however, would it be useful to change to have non‑standardized language, to allow for customized alert messages? Is there any way that, for example, if one of the key features here is the localization of the message from a technical point of view, but would it be possible to add specific detail regarding that particular area?
LISTNUM 1 \l 1145 Explain a little bit more what you mean by standardized wording and how that wording could be customized to alert people in particular areas to particular problems.
LISTNUM 1 \l 1146 MR. TEMPLE: Well, there's two elements to the message. One is the text and that is fully customizable.
LISTNUM 1 \l 1147 The public authority enters in whatever message they want, so there is no ‑‑ they can just type in whatever the message is in as much detail as they wish. So that is fully customizable.
LISTNUM 1 \l 1148 On the audio end of things, as I think a first generation, we proposed a standard audio message that would alert people to the fact that there is a warning or emergency in their area, so that ‑‑ for the audio only, that is where we get into a standardized message.
LISTNUM 1 \l 1149 I think over time we're hoping that that would change so that we could actually download a specific audio message as well, but we're reluctant to promise that, because I think the first generation we know we can do and that will be a standard audio message, but future generations would provide, I think, for a customizable audio message.
LISTNUM 1 \l 1150 But I just don't with want to promise things that we can't deliver right off the bat.
LISTNUM 1 \l 1151 COMMISSIONER PENNEFATHER: We are going to get to what is one of the most important parts of this, is the consistency of languages, the reliability, the authorized use of the system and so on.
LISTNUM 1 \l 1152 Just before we get there, though, our assumption was that the audio description of the emergency could be used as well by radio stations; is that correct?
LISTNUM 1 \l 1153 MR. TEMPLE: We undertook to ‑‑ in our application to send whatever alerting information we received. We would also send that to local radio and television broadcasters in the community being impacted by the warning.
LISTNUM 1 \l 1154 We are prepared to work with the industry in terms of providing that in a way that may allow them to automatically insert it, but at a minimum, we would send it to them just so that they are aware of it.
LISTNUM 1 \l 1155 I think what we were trying to show is that we are not completing with local broadcasters. We are not trying to get something that they don't have so that, you know, we are first out with the news on it. That is not what this is about at all.
LISTNUM 1 \l 1156 So at a minimum we would send the information to local broadcasters and if there is a way we can do in a way that would permit them to automatically insert the information we would do that as well.
LISTNUM 1 \l 1157 COMMISSIONER PENNEFATHER: Just so I understand, what would be sent to the radio station is the same language, the text exactly, audio message exactly as prepared by and sent to you to the ACA service sent back to the head end, but the message as created by the authorized authority.
LISTNUM 1 \l 1158 MR. TEMPLE: Right, we would just be sending them the exact message we are receiving from the public authority. And, bear in mind, I want to ensure that if the public authority doesn't send us an audio message, we are not ‑‑ we are reluctant to create an audio message, because again, it creates liability issues. If there is a mispronunciation of a name place or a mistranslation or anything like that, any changing of the message creates liability issues, so if the authority sends us an audio message that is something we can make available on the 1‑800 or on the websites, we can send it to local broadcasters, but if they don't send us an audio message, we can't create one.
LISTNUM 1 \l 1159 COMMISSIONER PENNEFATHER: I understand. And we'll come to questions of liability obviously through the legal questioning.
LISTNUM 1 \l 1160 I do note in this morning's presentation you do say:
"We offer an end‑to‑end service; taking responsibility for the message from the time it leaves the authorized emergency alert provider."
LISTNUM 1 \l 1161 What do you mean by "responsibility" there?
LISTNUM 1 \l 1162 MR. TEMPLE: Well, it is our responsibility to take that message once it has been approved and authenticated by the issuing authority, and to take responsibility to map that and send it by ‑‑ through our system and deliver it to the appropriate cable head ends and satellite subscribers in the area affected.
LISTNUM 1 \l 1163 COMMISSIONER PENNEFATHER: Okay. Back to the radio and the generic audio message.
LISTNUM 1 \l 1164 So the text received to ‑‑ as you say on your application on page 8, "The alert is
LISTNUM 1 \l 1165 sent simultaneously to participating local radio and television news rooms so local media can provide follow‑up and further information as the event occurs."
LISTNUM 1 \l 1166 What do you mean by "participating"?
LISTNUM 1 \l 1167 MR. TEMPLE: Well, I think we would set up a process, most likely through the CAB, so that we would have contact numbers and names for radio stations and television stations throughout the country.
LISTNUM 1 \l 1168 I mean there has to be some kind of registration process or something just so that we can identify, if it is in Lloydminster, this is where ‑‑ you know, these are the people that we should be contacting and here is how they want to be contacted.
LISTNUM 1 \l 1169 COMMISSIONER PENNEFATHER:
LISTNUM 1 \l 1170 Considering this is presented as a service to the public and that it is in the public interest for the Commission to agree to your proposal and all that comes with it, I would assume that reaching the maximum number of Canadians is important in this concept and obviously I asked you previously about different languages, Canadians across this country who may speak different languages as their mother tongue, aboriginal Canadians.
LISTNUM 1 \l 1171 Do you see any aspect of the piece of the puzzle wherein the local radio and television newsroom would pursue ‑‑ receive the text and then work with it in terms of their local alert? Do you see any advantage there that we could look at?
LISTNUM 1 \l 1172 MR. TEMPLE: Oh, I think if a public authority issues the warning in multiple language we are happy to make that available ‑‑
LISTNUM 1 \l 1173 COMMISSIONER PENNEFATHER: Sorry, Mr. Temple, that wasn't my point. The point, let's assume that the alert is issued ‑‑ the public authority issues the alert in English, for the sake of argument. That same alert is sent to participating local radio and television newsrooms, correct?
LISTNUM 1 \l 1174 MR. TEMPLE: Yes.
LISTNUM 1 \l 1175 COMMISSIONER PENNEFATHER: And you say that they will follow up as they would, as a local community station. And as I understand it the CAB has guidelines in terms of alerts as well for local private radio.
LISTNUM 1 \l 1176 Therefore we could assume that the local radio stations would be able to adapt the message in different languages, could we not?
LISTNUM 1 \l 1177 MR. TEMPLE: Yes, that would be their choice.
LISTNUM 1 \l 1178 COMMISSIONER PENNEFATHER: Would it be possible for the commission to address, in looking at this application, a requirement that the participating local radio and television stations include both ethnic and native radio stations?
LISTNUM 1 \l 1179 MR. TEMPLE: Just to ensure I would the question, you're asking us whether it would be appropriate to impose a requirement on radio stations?
LISTNUM 1 \l 1180 COMMISSIONER PENNEFATHER: No, I'm not. I did not say impose a requirement.
LISTNUM 1 \l 1181 MR. TEMPLE: Oh.
LISTNUM 1 \l 1182 COMMISSIONER PENNEFATHER: I actually asked what is your comment on the possibility that the Commission could indicate its interest that the participating, to use your words, local radio and television newsrooms include ethnic and native radio stations.
LISTNUM 1 \l 1183 MR. TEMPLE: Oh, include. Oh, certainly.
LISTNUM 1 \l 1184 COMMISSIONER PENNEFATHER: Let's go on, then, to talk about the theme of the coordination with the broadcasting industry.
LISTNUM 1 \l 1185 It is an area, as you know, where there is a lot ‑‑ there is concern and certainly you have tabled your points again today that you have undertaken a considerable amount of consultation.
LISTNUM 1 \l 1186 But the focus of the questions are really to focus on specifics and practical, tell us how it is going to work in three instances: If the Commission approves another alert service in this process; and/or if CANALERT and when CANALERT goes ahead; and the fact of the matter that currently broadcasters insert alert messages on their local stations.
LISTNUM 1 \l 1187 Now, one of the questions that has come up if in the latter case television broadcasters add your alerts or an edited version to their off‑air signals, would there be situations where cable subscribers would see two alerts perhaps superimposed on each other or even offering different messages?
LISTNUM 1 \l 1188 What coordination procedures would you suggest are necessary to forestall such possibilities?
LISTNUM 1 \l 1189 MR. TEMPLE: In the situation where a local TV broadcaster is inserting an alert, if they are inserting the same alert from the same authority that we are, which is presumably the case, then there wouldn't be different messages.
LISTNUM 1 \l 1190 So if Mississauga were to issue an evacuation notice, we would air Mississauga's message verbatim and presumably a Toronto TV station would be doing the same, so you would be seeing the same message. Unless they changed the message some way for some reason I don't think the consumer would be seeing different messages.
LISTNUM 1 \l 1191 As to whether they would be seeing multiple messages, that is a possibility. We are certainly prepared to co‑ordinate with local broadcasters to try and minimize the disruption with duplicate ‑‑ you know, duplicative messages appearing on the TV screen.
LISTNUM 1 \l 1192 If they are able to take a feed from us and automatically insert it, then we may be able to eliminate that possibility altogether, but our proposal doesn't require them do that. It is basically up to them what they want to do and when they want to do it.
LISTNUM 1 \l 1193 But we are certainly open to working with over‑the‑air television broadcasters through the CAB or individually to make sure that that kind of duplication is minimized.
LISTNUM 1 \l 1194 COMMISSIONER PENNEFATHER: Have you actually discussed possible procedures to date with them ‑‑
LISTNUM 1 \l 1195 MR. TEMPLE: Yes.
LISTNUM 1 \l 1196 COMMISSIONER PENNEFATHER: ‑‑ on this specific problem?
LISTNUM 1 \l 1197 MR. TEMPLE: Yes, we have met with CAB staff on several occasions over the last number of years to discuss this issue.
LISTNUM 1 \l 1198 We even sent a proposal in terms of crawl location, so that we wouldn't be ‑‑ if we had a crawl at a certain location on the TV screen that CAB members may want to identify a separate location, just to make sure that crawls are not bumping into each other, that type of thing.
LISTNUM 1 \l 1199 So we've discussed it on several occasions.
LISTNUM 1 \l 1200 COMMISSIONER PENNEFATHER: Now, what about CBC, have you discussed this matter with them?
LISTNUM 1 \l 1201 MR. TEMPLE: Same thing, the same issues and on several occasions.
LISTNUM 1 \l 1202 COMMISSIONER PENNEFATHER: And have you discussed or thought through the coordination procedures should the Commission approve the CBC proposal brought forward in this process?
LISTNUM 1 \l 1203 MR. TEMPLE: The CBC proposal in terms of providing warnings to their radio stations is not ‑‑ I think we are quite complimentary with that.
LISTNUM 1 \l 1204 The CBC proposal in terms of providing service to BDUs, I think, is problematic.
LISTNUM 1 \l 1205 COMMISSIONER PENNEFATHER: Well, we'll get to that. My focus is the coordination with what if, as I said, the three possibilities, the current alerting that broadcasters do, the CBC proposal goes forward and CANALERT goes forward.
LISTNUM 1 \l 1206 Obviously the proposal and considerable amount of time in your application deals with the importance of clarity, reliability, consistency, and the most Canadians as possible getting the message.
LISTNUM 1 \l 1207 MR. TEMPLE: Um‑hum.
LISTNUM 1 \l 1208 COMMISSIONER PENNEFATHER: And a message. And yet there is a possibility before us of several messages going forward.
LISTNUM 1 \l 1209 In your reply you say ‑‑ I'm not sure I totally understood. You said at page 17 of your reply in paragraph 73:
"It must be emphasized that the ability of broadcasters to warn the Canadian public in advance of imminent threats to life or property is limited."
LISTNUM 1 \l 1210 Could you expand on that?
LISTNUM 1 \l 1211 MR. TEMPLE: Well, there are several. I mean, over‑the‑air television broadcasters face several problems. One is their signal covers typically a large area and is re‑broadcast, and so for local emergencies they're faced with a decision as to whether to put a message on and inform as much as half a province for what might be a local emergency.
LISTNUM 1 \l 1212 I think you'll find that sentiment when you hear from some of the appearing intervenors later in the proceeding. So that's an issue that broadcasters have to face.
LISTNUM 1 \l 1213 The second issue is just the ability to get a message on quickly. There is no system for them to do that. I mean, if a public authority decided to issue a message right now, I don't think there's any system in place for them to even necessarily know who to call, how to get the message to them, how to display it.
LISTNUM 1 \l 1214 So while some broadcasters do display warnings, I think that it's not as prevalent as people might think because of those issues.
LISTNUM 1 \l 1215 On the other hand, our system will take that message and put it on the screen within a minute. And when you are dealing with emergencies, time is of the essence. You typically don't have a lot of time to figure out who the right person is or whether they are able to get a message on the TV screen.
LISTNUM 1 \l 1216 COMMISSIONER PENNEFATHER: Well, obviously one of the points we're looking at is considering, I'm sure the broadcasters will speak to this, and they have in their interventions, that they do play across this country an important role in alerting a community to an emergency, and the concern here is what does the ACA service add?
LISTNUM 1 \l 1217 MR. TEMPLE: Well, I think broadcasters play an excellent role in following up once an emergency situation has occurred. I think typically ‑‑ I'll take the example of a tornado.
LISTNUM 1 \l 1218 Environment Canada issues a tornado warning. There may be fifteen minutes of advance notice. The tornado may strike a community. In terms of warning the community in those fifteen minutes before the event, our system will deliver that message within the minute.
LISTNUM 1 \l 1219 Once the event has occurred and people are trying to find out how to get fresh water or where to go for relief or how to find missing relatives and things of that nature, no one covers that better than the local broadcaster and that's not what we're proposing to do anyways. So I think we're quite complementary.
LISTNUM 1 \l 1220 I guess the second point I'd like to make is no system is going to be perfect and people may get two messages. The alternative is they get no message, and that's the greater harm. So for our point of view, if a local broadcaster puts a message on, that's wonderful.
LISTNUM 1 \l 1221 There are people without cable and satellite service and we're not going to reach them, and if they are able to reach those people that is wonderful. If we have to put the message on or another system puts the message on and they see it twice, that is a small price to pay to protect people.
LISTNUM 1 \l 1222 COMMISSIONER PENNEFATHER: Thank you, Mr. Temple. Just to conclude, I'm sure we'll come back to this point in interventions, but assuming then that ACA service goes forward, and assuming, as you do, that local broadcasters will continue to alert the public and play a strong role in not only alert, but in follow‑up and support to the community and to the region, have you, in fact, sat down with individual broadcasters, including the CBC, and worked out specific procedures to coordinate ‑‑ assuming you are going forward and assuming they continue with their duties and responsibilities to the communities ‑‑ have you worked out specific coordination procedures to this date?
LISTNUM 1 \l 1223 MR. TEMPLE: Not specific procedures. I suspect that is a little premature until we know whether we have a license and what the conditions are, but I think we all feel that we are ‑‑ the groups are working together in good faith.
LISTNUM 1 \l 1224 This will all get sorted out and the particulars of the details of where exactly one person's crawl is and where the other person's crawl is and those types of issues just get ‑‑ will just get sorted out.
LISTNUM 1 \l 1225 COMMISSIONER PENNEFATHER: Okay.
LISTNUM 1 \l 1226 MR. MORRISSETTE: If I could just add, it's our commitment to consult with all broadcasters, television broadcasters with respect to the orderly launch and evolution of this service.
LISTNUM 1 \l 1227 Our initial commitment obviously is to provide the information, the message from the authorized authorities in English and French. Yes, questions such as additional languages down the road will be the subject of consultation with the authorized authorities as well as the various broadcasters and distributors in terms of how we do that.
LISTNUM 1 \l 1228 But the other point too on local broadcasters and the messaging that they provide, local distributors carry hundreds of channels beyond the local broadcast signals which viewers are watching to a large, significant extent. And so obviously that is a gap that is not covered by local broadcasters that we would be covering.
LISTNUM 1 \l 1229 COMMISSIONER PENNEFATHER: Thank you. I am going to go to the other end, from the broadcasting to the beginning of the message and to the authorized "user" of the system and the definition thereof. Secondly, to the definition of emergency.
LISTNUM 1 \l 1230 Now, in reading your material and obviously the material related to this whole matter of emergency alert, and thank you for such an extensive array of material. We did read it all. One of the concerns which you addressed, which others have addressed, is the definition of authorized user.
LISTNUM 1 \l 1231 In looking at the material, we could have a concern that the number of authorized users could be a very extensive list. So what I'm trying to get at is a sense of your understanding of who these authorized government agencies or authorized users, because they could be not government agencies, who they are and how you intend to treat this matter going forward.
LISTNUM 1 \l 1232 You said you received the message and you send it back, if I understand, to confirm that, in fact, it came from an authorized user. And forgive my layman's approach to the technology, but inevitably you are going to verify that it came from somebody authorized to send and that it contains a message according to protocol, correct?
LISTNUM 1 \l 1233 MR. MORRISSETTE: Yes.
LISTNUM 1 \l 1234 MR. TEMPLE: Yes, my understanding is layman's too so we're ‑‑‑
LISTNUM 1 \l 1235 COMMISSIONER PENNEFATHER: I should say mine's a layperson's actually.
LISTNUM 1 \l 1236 MR. TEMPLE: To address the first question or the first element as to who an authorized user is, I guess there is the principle and then there's the practical application. So as a principle we said well, if an authority has the right to declare a state of emergency, it makes sense that they would have access to an emergency alerting process so that is the first kind of principle.
LISTNUM 1 \l 1237 So most provincial statutes grant municipalities the right to declare a local state of emergency and therefore we think they should have right of access to issue an emergency warning. It doesn't mean that they have to declare a state of emergency to issue a warning. The purpose of the warning is hopefully to avert the emergency, but that is the first principal.
LISTNUM 1 \l 1238 And the second principle is that there are certain departments or government agencies, Environment Canada being the prime example, who don't necessarily have the right to declare a state of emergency, but have a clear legislative mandate to warn the public of extreme weather.
LISTNUM 1 \l 1239 So if there are other government agencies who have similar legislative obligations to warn the public, they should have access. So those are the principles that we took.
LISTNUM 1 \l 1240 In practic what does that mean? I think you will find in ‑‑ certainly we found in our discussions with provinces and through our own advisory board that most of the provinces intend to supervise access within their respective jurisdictions as to who will have access. I think you will find that the provinces will want to ensure that people within ‑‑ or potential users within their province are properly trained, that there are certain security measures in place in terms of who they want to have access.
LISTNUM 1 \l 1241 A good example is what we're doing now with New Brunswick. We put in place a system with New Brunswick last fall where we are now putting provincial alerts onto the weather network in MeteoMedia and we sat down with them.
LISTNUM 1 \l 1242 As part of this pilot project we have people, security measures in place so that only authorized users and only from an authorized terminal can access the system.
LISTNUM 1 \l 1243 COMMISSIONER PENNEFATHER: Authorized in that sense, in this example of New Brunswick, by the provincial authority?
LISTNUM 1 \l 1244 MR. TEMPLE: Exactly. And so it may differ a little bit in Quebec or Ontario may want to have a different process and BC something different again, but I think you'll a find that in practice or in application each of the provinces will want to coordinate within their specific jurisdictions, and we're quite happy to work with them on that.
LISTNUM 1 \l 1245 COMMISSIONER PENNEFATHER: So as I understand the tone of your deficiency response as well where you discussed this, you are looking to all that matter of authorized user and definition of emergency to be solved, in effect, by the authorities in question.
LISTNUM 1 \l 1246 Can I ask you, though, if we wanted a little bit more clarity and definition in this area, I have in front of me the guidelines for CANALERT, and you did say this morning that:
"Nous nous engageons à utiliser des standards à être développés par CANALERT et considérons que notre proposition est pleinement compatible avec cette dernière."
LISTNUM 1 \l 1247 COMMISSIONER PENNEFATHER: There is in the CANALERT guidelines at section 9 what comes close to a definition of a guideline which, again, would be the encadrement, I would assume, of your position.
LISTNUM 1 \l 1248 Do you have any comment on the possibility of these definitions being the basis of ‑‑ that we could go forward on? I'm looking at Section 9.2, which refers ‑‑ defines the term "Public authority" and goes on to describe who would be, could be, the authorized users?
LISTNUM 1 \l 1249 MR. TEMPLE: I don't have that document in front of me, but if I can get a copy I'll...
LISTNUM 1 \l 1250 COMMISSIONER PENNEFATHER: It's available on the Industry Canada website and obviously would have been part of your consultations and discussions with Industry Canada and presentations made by them over the last few months, I imagine. So if you wanted to have a look at that, you could get back to us on that point.
LISTNUM 1 \l 1251 MR. TEMPLE: Certainly.
LISTNUM 1 \l 1252 COMMISSIONER PENNEFATHER: As well, the same document takes us into the definition of emergency and what would constitute an emergency. In other words, when you get a message and you are looking at it, you have got it from the authorized user, as you have been studying this and working on this project for sometime, what is your thought on the definition of emergency?
LISTNUM 1 \l 1253 In fact, it is important because you propose change to your COL, which includes a definition of emergency in the sense of your ability to carry such a proposal.
LISTNUM 1 \l 1254 And what I am talking about here is the proposal that would inform the public with unexpected threats to life or property of the public at large. To inform the public of imminent or unexpected threats to the life or property of the public at large. Again, the CANALERT guidelines discuss what constitutes an emergency and in certain sections of this they refer only to threats to life, not to property.
LISTNUM 1 \l 1255 I know in the CAV guidelines the threat is to life and property, but what if we were to say that, for example, since we have to address this in terms of your COL proposal, that the imminent threat would be just to life, as indicated in the guidelines of CANALERT. Would you have any comment on that?
LISTNUM 1 \l 1256 MR. TEMPLE: We have no problem with that. I mean we put forward a proposal based on feedback we had received, based on a lot of the legislation and practices in place in the United States where state jurisdictions issue guidelines, but I think everyone is kind of on the same page, so to speak. So if it is better to emphasize or to narrow the definition, we have no problem with that.
LISTNUM 1 \l 1257 COMMISSIONER PENNEFATHER: So, again, when you are talking about "nous engageons" ‑‑ I'm translating the standards developed by CANALERT ‑‑ I'm proposing that those standards would resemble the guidelines that I have in front of me here, both in terms of authorized user and definition of emergency, which is at length to describe severe high and low level emergencies, somewhat similar to the way the CAV guidelines are, would you agree that we could use the CANALERT guidelines as a guide for the definition of your service?
LISTNUM 1 \l 1258 MR. TEMPLE: Yes, I mean I will check the references you've made. I am sorry, I don't have the document with me, but I will confirm that. But basically we have been an active participant with CANALERT and with Industry Canada long before CANALERT was established and we intend to remain a participant.
LISTNUM 1 \l 1259 We have had input into most of their material and we are quite comfortable with it so I don't think there is a concern there.
LISTNUM 1 \l 1260 COMMISSIONER PENNEFATHER:
LISTNUM 1 \l 1261 Continuing on the system usage, you have also referenced the matter of responsibility this morning and we have talked about it in terms ‑‑ we have not talked about it in terms of liability. We will get there.
LISTNUM 1 \l 1262 But in terms of safeguards in the use of the system, you do reference in your deficiency response at the answer to question 10C that you will require all authorized users, and now we have some sense of who they might be, to enter into a formal agreement. All authorized users, who may be a fairly extensive list, to enter into a formal agreement that will document the roles and responsibilities of the parties prior to allowing them access to the ACA service.
LISTNUM 1 \l 1263 Now, could you discuss with us this proposed formal agreement and outline the roles and responsibilities of ACA users as you see them?
LISTNUM 1 \l 1264 MR. TEMPLE: Certainly. The agreement is modeled, or the concept is modeled along the lines of an agreement we have in place with Environment Canada and it simply spells out the responsibilities of each of the parties so that there is no misunderstanding.
LISTNUM 1 \l 1265 Confirmation that the authority takes responsibility for the content of the message and for its delivery to us, issues like security. I suspect that the agreement again will likely be customized by province.
LISTNUM 1 \l 1266 We are certainly hoping that it would be much easier and more practical to do an agreement with the province that covers its municipality than actually going out and doing an agreement with each municipality, but if the province wants us to deal individually with each municipality, we will do that.
LISTNUM 1 \l 1267 But again using the example of New Brunswick, we just entered into a simple letter agreement to confirm that they took responsibility for the content. We have to be protected on that. If they send a message out and it's the wrong information or someone decides they want to sue, that we are held harmless because of the content.
LISTNUM 1 \l 1268 COMMISSIONER PENNEFATHER: What ‑‑ do you have either this agreement, is it available or do you have a template of such an agreement that you could share with the Commission?
LISTNUM 1 \l 1269 MR. TEMPLE: Yes, we can provide the Commission with the agreement.
LISTNUM 1 \l 1270 COMMISSIONER PENNEFATHER: In that agreement, or perhaps you could explain to us what consequences you would impose for misuse of the system, you Pelmorex, for misuse or improper use of the ACA service. What consequences would you impose?
LISTNUM 1 \l 1271 MR. TEMPLE: I don't know if there is a specific consequence in the agreement. As part of our application, we have undertaken to establish a review process, so that if there is misuse, or perceived misuse, there is a complaint process.
LISTNUM 1 \l 1272 Whether it be the public or a broadcaster or a BDU who feels that the system is being misused, we would have a complaint process in place that would bring the parties together.
LISTNUM 1 \l 1273 We hadn't got to the part about sanctions or punitive action. I don't think that would be necessary. I think that just bringing the parties together to talk about a concern would be sufficient.
LISTNUM 1 \l 1274 I think that everyone is trying to do the same thing, which is to protect the public. I think our view is that any problems can just be worked out among the parties.
LISTNUM 1 \l 1275 COMMISSIONER PENNEFATHER: I guess that is why, among other things, it is important to see the formal agreement, because at some stage Pelmorex is operating the ACA service, and we would want to know what is in place for you to exercise some control over the use of that ACA service.
LISTNUM 1 \l 1276 You do say that not the content, the text is created by the authorized user, but you are dealing with that authorized user and it is going through your system.
LISTNUM 1 \l 1277 MR. TEMPLE: Yes, and there is no provision in it for us to refuse a warning. Even if someone were, in anyone's view, misusing the system, we are not cutting them off.
LISTNUM 1 \l 1278 It is not our position to judge that.
LISTNUM 1 \l 1279 After a warning goes out, perhaps in hindsight, people would say, "That shouldn't have been issued," or whatever the case may be, but we are not proposing to prevent authorized users from having access.
LISTNUM 1 \l 1280 COMMISSIONER PENNEFATHER: Could you comment on the Commission requiring you to have formal agreements which would stipulate safeguards and guidelines for the users of the system?
LISTNUM 1 \l 1281 Would you comment on the Commission having a requirement that you have such an agreement, which, again, would outline the safeguards and guidelines for use?
LISTNUM 1 \l 1282 MR. TEMPLE: That would be fine. It would probably make our lives easier.
LISTNUM 1 \l 1283 COMMISSIONER PENNEFATHER: We will come back, then, to CANALERT. You did say that you would ‑‑ "nous engagons" ‑‑ to use the standards of CANALERT. Would you accept as a condition of licence the obligation to coordinate with whatever framework might be developed in the context of Industry Canada's CANALERT initiative?
LISTNUM 1 \l 1284 MR. TEMPLE: Yes.
LISTNUM 1 \l 1285 COMMISSIONER PENNEFATHER: We are discussing this morning, and throughout the next day and a half, a service for all Canadians, and you did raise in your comments this morning, and in your proposal, your revised approach for visually impaired Canadians, and I believe that this approach is fundamentally related to the audio message and an alert to visually impaired Canadians to go to a 1‑800 number.
LISTNUM 1 \l 1286 Is that correct?
LISTNUM 1 \l 1287 MR. TEMPLE: Yes. Where the issuing authority has released an audio version of the alert, then we would make that available on the 1‑800 number.
LISTNUM 1 \l 1288 COMMISSIONER PENNEFATHER: Considering your comments that you are not in charge of the content of the message, both visual and audio, what assurances can you give us that, in fact, the authorized users will include instructions for visually impaired Canadians; not only "Here is your 1‑800 number," but that the 1‑800 number will provide you with further details on the emergency, and also describe, to some extent, the importance of going to that 1‑800 number?
LISTNUM 1 \l 1289 Since you don't control the content, what assurances do you have that an authorized user would actually do this?
LISTNUM 1 \l 1290 MR. TEMPLE: There is no guarantee that they will provide an audio message. I think that we are certainly prepared to encourage them to do that, and I think that most authorized users want to be able to provide an audio message.
LISTNUM 1 \l 1291 Again, there may be situations, perhaps in smaller municipalities, where that may be difficult, but I think that over time, really, with technology, it will be a fairly simple process to send an audio file to us, along with a text message, and we will put it right into the 1‑800 system.
LISTNUM 1 \l 1292 COMMISSIONER PENNEFATHER: It is really a sense of, yes, you can do it technically, but my question is more that you, as a service ‑‑ since you are proposing that you have reached out to the visually impaired community and solved the problem, can you assure us that in fact the content of that message will be appropriate?
LISTNUM 1 \l 1293 Do you have any sense of a way that one could be assured of this?
LISTNUM 1 \l 1294 I grant you that it is technically feasible, but can we be assured of this?
LISTNUM 1 \l 1295 MR. TEMPLE: You have to bear in mind that while there is an obligation on us, which we are prepared to undertake, to disseminate, there is no obligation on the authority.
LISTNUM 1 \l 1296 COMMISSIONER PENNEFATHER: That's my point.
LISTNUM 1 \l 1297 MR. TEMPLE: Conceptually, an authority may not even want to participate. They may not even want to issue a text message.
LISTNUM 1 \l 1298 I can't go out and tell Municipality X that they have to send me messages, and they have to do it this way, and they have to do it that way.
LISTNUM 1 \l 1299 So I can't guarantee that. That is just a practicality.
LISTNUM 1 \l 1300 I suspect, however, that in most cases they would want to send the message, and if we make the means available to them, then, in practice, they will. But I can't make a municipality or an authorized user do anything they don't want to do.
LISTNUM 1 \l 1301 COMMISSIONER PENNEFATHER: Okay. I have your answer on that.
LISTNUM 1 \l 1302 Regarding the hearing impaired, in your reply at page 18, paragraph 75, you indicate that you are working with the CAD on the concerns about closed captioning.
LISTNUM 1 \l 1303 Have you an update for us on that?
LISTNUM 1 \l 1304 MR. PERREAULT: Commissioner Pennefather, the RQST, le Regoupement québecois pour le sous‑titrage, has been extremely active, and we have been very involved with Mr. Richard McNichol in the ACA project.
LISTNUM 1 \l 1305 They didn't intervene this time around because they saw no change from our past proposal.
LISTNUM 1 \l 1306 In the past proposal, what we did with the RQST was, we organized six focus groups across Quebec to present our project and gather feedback from their constituents, and the feedback we got from them was actually what you saw on the screen earlier, whereby the crawl is in the middle of the screen, not to interfere with closed captioning at the bottom. The colours, the font, the typeset ‑‑ everything was verified in these focus groups, and they were satisfied.
LISTNUM 1 \l 1307 With our reply to interventions, we filed a letter with the Commission coming from the RQST, saying that they are still satisfied with this proposal.
LISTNUM 1 \l 1308 So we heavily consulted with them. We invested time and money in creating the focus groups for the RQST, and I think that we had very good feedback from their constituents.
LISTNUM 1 \l 1309 CONSEILLÈRE PENNEFATHER: Merci.
LISTNUM 1 \l 1310 Je pense qu'on peut prendre notre break maintenant, monsieur le Président?
LISTNUM 1 \l 1311 LE PRÉSIDENT: Nous prendron une interruption de dix miunutes. Nous reprendrons à 11 h 00.
‑‑‑ Suspension à 1050 / Upon recessing at 1050
‑‑‑ Upon resuming at 1100 / Reprise à 1100
LISTNUM 1 \l 1312 THE CHAIRPERSON: We will resume the review of the application by Pelmorex with Ms Pennefather.
LISTNUM 1 \l 1313 COMMISSIONER PENNEFATHER: Thank you, Mr. Chairman.
LISTNUM 1 \l 1314 Welcome back.
LISTNUM 1 \l 1315 Are we all alert?
‑‑‑ Laughter / Rires
LISTNUM 1 \l 1316 COMMISSIONER PENNEFATHER: I waited two hours. I had to do something with it.
LISTNUM 1 \l 1317 Again, thank you for Appendix F, which, as you say, describes in layperson terms how it will work.
LISTNUM 1 \l 1318 We will use Sections F and G now for some technical questions.
LISTNUM 1 \l 1319 Again, as I said before, things tend to go back and forth in the various areas. We may repeat ourselves, but that helps in terms of clarity.
LISTNUM 1 \l 1320 I am going to address the standby operations.
LISTNUM 1 \l 1321 In your application you noted that the standby operations centre will only be staffed during daytime hours. If the main operations centre goes down during non‑daytime hours when the standby site is unattended, can you confirm that the standby site can handle all of the network requirements when it is unattended?
LISTNUM 1 \l 1322 And how long would it take to staff the standby site in the event of a failure of the main operations centre?
LISTNUM 1 \l 1323 MR. TEMPLE: The standby centre is, I guess, what you would call a hot standby. I don't know if that is the right phrase, but it would be always fully operational.
LISTNUM 1 \l 1324 In off hours staff would be, obviously, on call ‑‑
LISTNUM 1 \l 1325 I should check, first, to find out how long it would take to get people back into the centre. If you could give me a moment, I will make sure that I am giving the right information.
‑‑‑ Pause / Pause
LISTNUM 1 \l 1326 MR. TEMPLE: The two centres are fully automated and operational at all times, so if one centre failed, the other centre would take over.
LISTNUM 1 \l 1327 In terms of getting staff on‑site, they tell me that that should happen within an hour of them being called.
LISTNUM 1 \l 1328 COMMISSIONER PENNEFATHER: All right. On page 5 of Appendix F, when you say that the standby centre will be staffed to handle the demand of launching hundreds of individual ‑‑ et cetera ‑‑ the standby centre will be staffed, meaning if the other centre goes down?
LISTNUM 1 \l 1329 MR. TEMPLE: No, the plan is to have the standby centre staffed during ‑‑ I think it is 16 hours, but I will check that to make sure I haven't misled you.
LISTNUM 1 \l 1330 It will always be staffed during daytime hours, or the 16 hours, to provide service to authorized users and BDUs, because during the actual implementation there will be an awful lot of work. We are talking about the coordination, installation and testing of equipment in hundreds of sites across Canada, so there will be an awful lot of work to do.
LISTNUM 1 \l 1331 So those people will be quite busy in terms of working on the actual roll‑out of the service, quite apart from the ongoing monitoring and supervision of the system.
LISTNUM 1 \l 1332 People will be there 16 hours a day at the standby site.
LISTNUM 1 \l 1333 COMMISSIONER PENNEFATHER: So how long to staff is a mis‑question, then.
LISTNUM 1 \l 1334 The standby centre, is it already staffed on a permanent basis, or is it empty and then ‑‑
LISTNUM 1 \l 1335 Forgive my layperson's language.
LISTNUM 1 \l 1336 MR. MORRISSETTE: If I could add, we operate two broadcast centres ‑‑ or media centres as we now call them ‑‑ one in Oakville, Ontario, which is our main one, and one in Montreal. Both centres operate 24/7.
LISTNUM 1 \l 1337 The actual control activities for receiving and distributing alerts ‑‑ both centres will have a 24/7 capability.
LISTNUM 1 \l 1338 The Montreal centre, obviously, handles our French alerting requirements, as well as English.
LISTNUM 1 \l 1339 The actual messaging part is 24/7 redundant. The operations centre is involved in managing the roll‑out, the launch, liaison, testing, and the many, many activities that go on over and above just the messaging capability. One is around the clock, and the other is the 16 hours per day process, but messaging is fully redundant 24/7 in two locations.
LISTNUM 1 \l 1340 COMMISSIONER PENNEFATHER: And the standby is the 16‑hour operation?
LISTNUM 1 \l 1341 MR. MORRISSETTE: That's correct.
LISTNUM 1 \l 1342 COMMISSIONER PENNEFATHER: Thank you. That was not clear.
LISTNUM 1 \l 1343 Moving on, you stated that you will employ satellite signal return monitoring to verify that every alert is correctly transmitted. However, you went on to note that it will not be possible to monitor every cable head end to check that every alert is properly received and identified.
LISTNUM 1 \l 1344 Have you given any thought to equipping at least the major head ends with return links that would enable you to verify that each alert was properly received and identified?
LISTNUM 1 \l 1345 MR. BOULANGER: Yes, we have done so. The design of our system is that we can retrieve from the major sites the acknowledgment of reception there. It is not a technical issue, it is more a financial question, if we were to do that for all of the sites.
LISTNUM 1 \l 1346 We can recover the acknowledgment and re‑transmit if it has not been received at the site.
LISTNUM 1 \l 1347 COMMISSIONER PENNEFATHER: So it is possible to get that verification back, and the return links ‑‑ the major head ends, certainly, you would be able to verify.
LISTNUM 1 \l 1348 MR. BOULANGER: Yes.
LISTNUM 1 \l 1349 COMMISSIONER PENNEFATHER: There was Appendix F, and then there is Appendix G. This is a little different.
LISTNUM 1 \l 1350 Again, it was written clearly, but there are those wonderful schematics, which I will not go into, but which are a lot of fun to look at.
LISTNUM 1 \l 1351 Let's focus a bit and turn to Appendix G, page 69. I want to talk about the implementation of the ACA system on ExpressVu.
LISTNUM 1 \l 1352 You state here that further discussions are required to finalize the design and select the best manner in which to implement it.
LISTNUM 1 \l 1353 Can you briefly outline what is involved in this implementation?
LISTNUM 1 \l 1354 MR. BOULANGER: In the case of the digital solution, mainly in a case like ExpressVu, the solution involves the development of software, which will be downloaded to the set‑top box, and will be able to receive the alert and display in the areas that are affected.
LISTNUM 1 \l 1355 There are multiple ways of doing that. In a sense, the software can be made to operate in different ways.
LISTNUM 1 \l 1356 It is important that there be discussion with the operator, in this case ExpressVu, or even initially we talked about OpenTV, because it would be adding functionality to their basic software, which is not required in their case, in such a way just to adopt the less impacting way of doing the thing.
LISTNUM 1 \l 1357 That means it could be that we format one way versus another way, or we use non‑volatile memory instead of the hard disk, and stuff like that.
LISTNUM 1 \l 1358 It is definitely not an issue to implement an ACA target ‑‑ ACA in both languages ‑‑ on a platform like ExpressVu at this time.
LISTNUM 1 \l 1359 COMMISSIONER PENNEFATHER: On the same page, just to carry on that point, you mention that for the non‑Open TV set‑top boxes used by ExpressVu, it would not be practical to add the ACA functionality to the existing EPG applications.
LISTNUM 1 \l 1360 I think that is what you just addressed.
LISTNUM 1 \l 1361 How long do you think it will be before all of these boxes are replaced by Open TV units?
LISTNUM 1 \l 1362 MR. BOULANGER: I believe it would be more ExpressVu that could answer that question, to be honest.
LISTNUM 1 \l 1363 COMMISSIONER PENNEFATHER: Have you discussed this timing point with them? Have you any sense of it?
LISTNUM 1 \l 1364 MR. BOULANGER: We have discussed the notion of doing it or not, and their premise was that by the time we get there, and the quantity of bucks remaining, it is probably not worthwhile to do it on the non‑Open TV box.
LISTNUM 1 \l 1365 Again, it is not technical, it is more an operational impact on them, more than anything else.
LISTNUM 1 \l 1366 COMMISSIONER PENNEFATHER: In the case of Star Choice, on the same page you mention that most of their set‑top boxes do not have Open TV at this time either. However, you were of the view that it would be possible to add ACA functionality to them. But, as you say, some software development would be necessary.
LISTNUM 1 \l 1367 Again, could you be clear on what software development is necessary?
LISTNUM 1 \l 1368 MR. BOULANGER: In the case of Star Choice, because they don't have a platform, really, like Open TV, which allows you to download additional software, the only way of doing it is to modify the basic software, which Star Choice is doing from time to time, but it is something that is more ‑‑ you have to pay more attention when you touch that software. It has the potential to have more arrays and that means that you have to pay attention and do a lot more testing.
LISTNUM 1 \l 1369 But, again, technically, it is feasible.
LISTNUM 1 \l 1370 In the case of Star Choice, they are doing this kind of stuff themselves. They have modified the software, provided by Motorola, and adapted it to their system. That is the only solution they have so far on the non‑Open TV box.
LISTNUM 1 \l 1371 COMMISSIONER PENNEFATHER: In the latter case we are closer to a solution, then, on the non‑Open TV set‑top box.
LISTNUM 1 \l 1372 MR. BOULANGER: It is not that it is closer to a solution, the solution is simpler to implement.
LISTNUM 1 \l 1373 COMMISSIONER PENNEFATHER: All right. The point being that this would affect the timing of ‑‑ the availability of the service to satellite subscribers.
LISTNUM 1 \l 1374 MR. BOULANGER: Yes.
LISTNUM 1 \l 1375 COMMISSIONER PENNEFATHER: Where can we get a sense of how that is moving along?
LISTNUM 1 \l 1376 MR. BOULANGER: The timing is influenced ‑‑ if we say that we don't modify the basic software, the timing is influenced by the supplier. We spoke to Scientific Atlanta, we spoke to Motorola, Open TV and other guys, and they were very candid in saying that there is no real issue to put it there, but until they have a bit of pressure, either from their main clients or from some government authority, they will not put energy in putting it there.
LISTNUM 1 \l 1377 We discussed that both with Motorola and Scientific Atlanta. Implementing a national alert service, according to them, will add more incentive, and they should implement that, but they didn't provide dates.
LISTNUM 1 \l 1378 COMMISSIONER PENNEFATHER: Another question regarding DTH is addressed on page 76 of Appendix G, and it is the localization information section. In other places it is called targeting.
LISTNUM 1 \l 1379 This is a very important piece of your proposal.
"It takes DTH companies some time, even hours, to update all of their subscriber accounts, because, for obvious financial reasons, they use relatively narrow band data channels. It will be necessary to target alerts to particular provinces, regions, cities, municipalities, and perhaps even to citizens living within, say, a kilometre of a railway track or a nuclear power station."
LISTNUM 1 \l 1380 At page 76 you mention several means by which this problem could be addressed, but then "the necessary capabilities are not yet all in place."
LISTNUM 1 \l 1381 Could you tell us what targeting options are available, for example, in targeting railway corridors? And, once the system is in place, how long will it take to activate the various classes of targeted set‑top boxes?
LISTNUM 1 \l 1382 MR. BOULANGER: I will have to answer in several answers, in a sense.
LISTNUM 1 \l 1383 The supplier has, in their development, the notion of implementing additional functionality to help targeting, but it is not there yet.
LISTNUM 1 \l 1384 The solution we are proposing ‑‑ and we are implementing on ExpressVu and other products ‑‑ is that we pre‑zone the box. In other words, we map them across the country, and we save on what is called a non‑volatile memory the equivalent of a group of zones, or zones in a hierarchy, which means that when the alert comes in, we don't have to send it to individual boxes. That takes a lot of time and bandwidth. We would just use the pre‑zoning that has been done hierarchically.
LISTNUM 1 \l 1385 In the case you mentioned, if you have a corridor and it has been mapped as a zone, and the identification of that zone has been saved in the non‑volatile memory of the box, just sending the alert once to that zone should activate the message there, and timing should not be an issue.
LISTNUM 1 \l 1386 COMMISSIONER PENNEFATHER: So your answer is a pre‑zoning of the boxes ‑‑
LISTNUM 1 \l 1387 MR. BOULANGER: That is one scenario.
LISTNUM 1 \l 1388 COMMISSIONER PENNEFATHER: And the implementation time for that?
LISTNUM 1 \l 1389 The pre‑zoning, is it based on postal codes? Is it based on subscriber information?
LISTNUM 1 \l 1390 How does that work?
LISTNUM 1 \l 1391 MR. BOULANGER: There are, again, multiple scenarios for doing that. You could use postal codes, but postal codes for some areas of Canada are not feasible at all. For example, some provinces have only two postal codes, roughly, to cover the whole province.
LISTNUM 1 \l 1392 The other way is to obtain some information from the billing and authorization system; no sensitive information, strictly the city and language. You could use that to pre‑zone a hierarchy of zones.
LISTNUM 1 \l 1393 The other alternative is to ask the person to identify themselves.
LISTNUM 1 \l 1394 As far as the implementation, we will be launching next week with ExpressVu products for our main products.
LISTNUM 1 \l 1395 COMMISSIONER PENNEFATHER: So you are starting to work on the pre‑set ‑‑
LISTNUM 1 \l 1396 MR. BOULANGER: Yes.
LISTNUM 1 \l 1397 MR. TEMPLE: If I could add a couple of comments; as Jean‑Pierre just mentioned, we are hoping to be able to launch interactive content on our channels on ExpressVu before the end of the month, which is, in many ways, a precursor to the ability to send warnings.
LISTNUM 1 \l 1398 We will be able now to send local weather information to viewers of ExpressVu; and, really, applying that basic framework, which will be in place, it is a relatively simple step next to send alerts, just as we do on conventional cable.
LISTNUM 1 \l 1399 So a lot of that work is already in place.
LISTNUM 1 \l 1400 In terms of the number of boxes, I think, for very good reasons, ExpressVu views those numbers as competitively confidential. They don't want their competitors to know how many boxes, of what kind, are out in the field, and who can do what, but it is certainly our sense, in working with them, that probably the majority of their subscribers, if not more than the majority, have boxes capable of displaying ‑‑ or accommodating warnings, and that number is increasing all the time.
LISTNUM 1 \l 1401 So, certainly by the time that we would be in a position to launch service to ExpressVu, most of them would be able to be served.
LISTNUM 1 \l 1402 Finally, in terms of the zoning, or pre‑zoning, I think it is important just to point out that it gives the opportunity to almost make it more precise, because if we can establish zones ‑‑ I mean, I don't think there is any practical limit to the number of zones that we create. So that our ability to send warnings to subscribers on satellite, on ExpressVu for example, may be actually a little more precise than on conventional cable.
LISTNUM 1 \l 1403 So I think we are ‑‑ I will call it "excited" about the possibility of being able to do that work on satellite.
LISTNUM 1 \l 1404 COMMISSIONER PENNEFATHER: Thank you.
LISTNUM 1 \l 1405 I want to move on to installation and launch of the ACA service and, more particularly, installation and testing and to explore some of those implementation and coordination issues that could delay or lengthen your rollout schedule.
LISTNUM 1 \l 1406 Could you outline what potential implementation problems you foresee and what specifically could be done to forestall them?
LISTNUM 1 \l 1407 For example, ACA equipment will have to be installed, interconnected and tested in cable head ends.
LISTNUM 1 \l 1408 On page 9 of Appendix G you noted that Pelmorex would supply the ACA units, but that installation and cabling would be the responsibility of the cable operator.
LISTNUM 1 \l 1409 What sort of coordination process would you establish?
LISTNUM 1 \l 1410 MR. TEMPLE: As part of our application we propose that a launch and rollout committee would be established that would certainly involve BDUs and broadcasters, as well as public alerting authorities. So one of the first steps would be to establish that and start working our procedures and guidelines with those interested groups.
LISTNUM 1 \l 1411 Concurrent with that, I think a separate team would ‑‑ for obviously reasons we can't just go and pre‑manufacture all these devices in the hope that the Commission approve our application. We might end up with a rather hefty bill, only to find out we are not approved.
LISTNUM 1 \l 1412 So we can't manufacture the devices in advance of approval, but a lot of the design work can be done and so a separate group would begin working on the physical manufacturing of the units. We put together, again in consultation with the BDUs, instructions in terms of installation, likely even more complicated than Appendix G.
LISTNUM 1 \l 1413 I think as part of our application we have included, under marketing or support, installation video so that they understand exactly how things are to be installed, how things are to be tested. Staff would be hired at the operations centre to support BDUs with questions in terms of installation and testing.
LISTNUM 1 \l 1414 So that's general.
LISTNUM 1 \l 1415 I guess in terms of what kind of problems, I mean the only problem is ‑‑ I mean, I guess there could be hundreds of problems, but we just have to be prepared to deal with them, just like you have to deal with issues that come up in the launch of any service or initiative.
LISTNUM 1 \l 1416 MR. PERREAULT: To that extent, Commissioner Pennefather, Pelmorex has experience with this. When we launched the network we had to install our own equipment at every cable head in the country. So we have experience in distance helping, if you wish, the head‑end technicians in installing equipment. We have people in‑house that understand that relationship.
LISTNUM 1 \l 1417 We are into our fourth generation of head‑end equipment, so we did that four times actually, changing this equipment.
LISTNUM 1 \l 1418 Moreover, when we went digital in 1995‑1996 we had to install and modify equipment in the 1,300 head ends, so again we are there to support the operators. That communications procedure is in place and have staff on hand to help the cable operators and satellite operations and all affiliates into performing these technical changes on par and we never missed a deadline. So experience is going to be very helpful in rolling out ACA.
LISTNUM 1 \l 1419 COMMISSIONER PENNEFATHER: Thank you for that.
LISTNUM 1 \l 1420 So you referenced in your reply a technical committee, and this technical committee then would also be available at the different locations? Because as I understand, you are offering some flexibility in terms of particular network configurations, so there would be sometimes different problems with different cable head ends, different conditions to address.
LISTNUM 1 \l 1421 Have you worked through the potential coordination of all of that beyond the committee? Are there any particular technical problems which would forestall the rollout?
LISTNUM 1 \l 1422 MR. TEMPLE: I think just to clarify a little bit, there are two committees we propose. One is the launch and rollout, which is a coordination of exactly that, the launch and rollout of the service.
LISTNUM 1 \l 1423 Separately, a technical committee to deal with technical issues, but also the development of enhancements and new features and capabilities. So there's actually the two groups.
LISTNUM 1 \l 1424 What we have tried to do is set up and provide for the BDU instructions or guidelines so that they can select the manner best suited to them to install the equipment and configure their head end.
LISTNUM 1 \l 1425 That's one of the reasons why we want two operation centres, because we expect that we are going to get a lot of calls and a lot of people, you know, "What's the best way" or "How do I do this?" You can give someone instructions. I'm probably the best example. I never read the instructions, I just kind of take it out of the box, whatever it is, and start playing around with it.
LISTNUM 1 \l 1426 COMMISSIONER PENNEFATHER: Judging from those schematics in Appendix G, that would not be wise.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 1427 MR. MORRISSETTE: If I can just add, our goal and commitment is to achieve a very successful rollout. In that regard, the relationship with the BDUs is one that we envisage to be a very positive one. We want to super serve. We want to super support. We will do what we have to do to provide the guidance, support to the extent required.
LISTNUM 1 \l 1428 For example, 24/7 hotlines on technical matters. Basically hand‑holding in certain key technical problem‑solving, and so on and so forth.
LISTNUM 1 \l 1429 So the commitment there is really to super serve, so that the success of this very, very important launch rolls out successfully.
LISTNUM 1 \l 1430 COMMISSIONER PENNEFATHER: I would like to go back to the question of localization or targeting, but in terms of analog cable systems.
LISTNUM 1 \l 1431 In terms of analog cable systems with broad services areas, you indicated that viewers will rely on the location pinpointed in the emergency message to know whether it affects them directly.
LISTNUM 1 \l 1432 Would it be possible to reduce the number of alerts that subscribers would see that aren't meant for them?
LISTNUM 1 \l 1433 For example, can ACA equipment be installed within a large system at certain key distribution nodes, or at system interconnection points, rather than just the head end?
LISTNUM 1 \l 1434 MR. PERREAULT: To that effect, Commissioner Pennefather, we already have done some experiments with two cable operators, one being Vidéotron, the other one being Rogers, for our actual weather services.
LISTNUM 1 \l 1435 Montréal is currently subdivided in five different zones for actually weather forecasting and weather alerting principles, and the GTA in Toronto is subdivided into 16 different zones. So that kind of already exists in our current thinking and delivering weather information with larger BDUs.
LISTNUM 1 \l 1436 So with their cooperation it is possible to do so.
LISTNUM 1 \l 1437 COMMISSIONER PENNEFATHER: And not only possible, but you see the point is that the feature here is to target news where it's happening, the alert where it's happening.
LISTNUM 1 \l 1438 Turning to HD and the deficiency reply of February 9 at page 5, you note that total costs ‑‑ and I'm selecting from the paragraph:
"... do not, however, include ongoing investments beyond the launch period to accommodate HDTV and other technological changes."
LISTNUM 1 \l 1439 When do you envisage upgrading your ACA technology to handle HDTV and would the upgrade to HDTV have an impact on the subscriber rate?
LISTNUM 1 \l 1440 So the first part of the question is, one of the technology changes going forward would clearly be the handling of HD and how do you envisage that upgrade? How would it be done?
LISTNUM 1 \l 1441 MR. BOULANGER: HDTV per se exists only in the digital world. That means by that time you have to have a set‑top box, which means the solution is similar to the digital approach.
LISTNUM 1 \l 1442 For the DTH or that kind of stuff, the ACA box as is known today will not be required for HDTV because it will be a software approach and not a hardware approach.
LISTNUM 1 \l 1443 COMMISSIONER PENNEFATHER: And on the digital cable side, the HD, will that ‑‑ say we go forward today, what ‑‑ and there is supposed to be, as you say, financially as well ongoing investments beyond launch.
LISTNUM 1 \l 1444 Will one of these investments not include the upgrading of the technology to include HD? Will have an effect, in other words, on the ACA service on digital cable systems?
LISTNUM 1 \l 1445 MR. BOULANGER: If I do understand correctly your question, the effect ‑‑ because the solution is a software we don't need to upgrade the physical boxes, but we need development to develop the software or adapt it. Because the HDTV will be using the digital set‑top box, as is the case for DTH or other digital approach.
LISTNUM 1 \l 1446 COMMISSIONER PENNEFATHER: So it would be another point. In addition to the targeting it would be another aspect of the set‑top box to prepare the software for the HD?
LISTNUM 1 \l 1447 MR. BOULANGER: But the HD is just a higher bit rate and having a higher resolution. The notion of receiving the alert, finding the area will be exactly the same. That is not typical to HDTV.
LISTNUM 1 \l 1448 MR. MORRISSETTE: If I can just add, the high definition capabilities is an example of a new generation that we will have to deal with. There will be other enhancements over time as technology continues to evolve, and our commitment and our plan is a long‑term one. It is not a static "Here is a box, here is a piece of software and there it is forever."
LISTNUM 1 \l 1449 On the contrary, it is a moving target, moving towards continuous progress and enhancement and all of this is our commitment to make those investments within the context of the business plan that we filed.
LISTNUM 1 \l 1450 COMMISSIONER PENNEFATHER: I think as we move into the financial issues, if you would keep that in mind as we differentiate between investments by Pelmorex and investments by the cable ‑‑ or the BDUs shall I say, because my understanding certainly at the get‑go was the ACA unit was provided by Pelmorex but the installation costs and maintenance costs and ongoing development were the responsibility of the BDUs.
LISTNUM 1 \l 1451 That's, I think, the principle going in, is it not?
LISTNUM 1 \l 1452 So assessing the costs to the BDUs is an important part of this proposal.
LISTNUM 1 \l 1453 MR. TEMPLE: Yes. Just to clarify, we supply the equipment, the ACA equipment at our cost and we bear the costs of upgrades and enhancements. The cable operator or BDU is simply expected to install the equipment as best suits their head end and how they process the signals and that's basically it.
LISTNUM 1 \l 1454 I mean obviously it's located at their head end, so they are expected to, you know, provide a safe home for it, and power and things of that nature, but if there is a failure in the equipment for any reason, we replace the equipment at our cost.
LISTNUM 1 \l 1455 We even cover the shipping cost. They call us up and tell us what's wrong, we ship them a new unit right away, or in some cases we may even provide them with a standby unit. So they are not expected to spend money repairing anything.
LISTNUM 1 \l 1456 COMMISSIONER PENNEFATHER: So taking any upgrades that we have discussed to this point, they would be included in your financial projections as part of your repair and maintenance costs of the ACA units?
LISTNUM 1 \l 1457 MR. TEMPLE: Yes.
LISTNUM 1 \l 1458 COMMISSIONER PENNEFATHER: This is our segue into a financial discussion. Again we can clarify that point if I don't have it properly.
LISTNUM 1 \l 1459 As we know, you have tabled with us ‑‑ and it is on the public record and available ‑‑ new financial projections based on a proposal called "Analog Optional", which you noted in your reply could be a model you would look at where mandatory distribution order, as you have proposed, would apply only to digital.
LISTNUM 1 \l 1460 So if the questioning is a little disjointed you will forgive me, but I'm going to ask you some questions based on this new proposal first and then go back over some of the principal questions related to the creation of your financial projections, and again make sure we have it clear.
LISTNUM 1 \l 1461 In the new proposal you have tabled some assumptions. One is:
"Class 1 systems, representing 16 percent of subscribers, are assumed to launch a digital‑only service. The balance of Class 1 systems are assumed to offer both analog and digital."
LISTNUM 1 \l 1462 What is the basis for the 16 percent and how many class systems does this represent?
LISTNUM 1 \l 1463 MR. TEMPLE: The basis of the 16 percent is really just based on the fact that one large MSO expressed interest in ‑‑ or a preference for digital only, so we took their approximate percentage of their subscribers among all Class 1 systems and said, "All right, let's just assume for the sake of argument that they did do a digital‑only service." The other BDUs or cable companies who filed comments didn't ‑‑ or the other Class 1 operators didn't indicate a preference for digital‑only so we just assumed that they would stay on the original model.
LISTNUM 1 \l 1464 So it was just based on, I guess, the proposal put forward by Vidéotron, and they are 16 percent of the Class 1 system so we said, "Okay. Well, what happens if we did 16 percent digital only?"
LISTNUM 1 \l 1465 I guess there are numerable models, but we had to start somewhere so we just figured, "Well, let's try that one and see how it works."
LISTNUM 1 \l 1466 COMMISSIONER PENNEFATHER: Just to clarify for me, Mr. Temple, that represents how many Class 1 systems, the 16 percent?
‑‑‑ Pause
LISTNUM 1 \l 1467 MR. TEMPLE: I'm sorry, did you want to know the subscribers?
LISTNUM 1 \l 1468 COMMISSIONER PENNEFATHER: The number, yes. The number of Class 1 systems ‑‑
LISTNUM 1 \l 1469 MR. TEMPLE: The number of systems.
LISTNUM 1 \l 1470 COMMISSIONER PENNEFATHER: ‑‑ that 16 percent represents.
‑‑‑ Pause
LISTNUM 1 \l 1471 MS CHARLTON: Twenty‑two.
LISTNUM 1 \l 1472 COMMISSIONER PENNEFATHER: Again on the new material you have a capital outlays page, as you did in your original Part D Appendix, Part 1.
LISTNUM 1 \l 1473 Could you file with us, if possible, the reconciliation of the capital outlays, that is numbers X1 to X7, in comparison with the original application?
LISTNUM 1 \l 1474 Would you be able to file that?
LISTNUM 1 \l 1475 MS CHARLTON: That's not a problem. We can do that.
LISTNUM 1 \l 1476 COMMISSIONER PENNEFATHER: Thank you. Can you do that by the end of the day or by tomorrow?
LISTNUM 1 \l 1477 MS CHARLTON: We would have it by the end of today.
LISTNUM 1 \l 1478 COMMISSIONER PENNEFATHER: Thank you.
LISTNUM 1 \l 1479 Just on the question also of the 16 percent and the 22 systems, you have described where you got it from, but if you are not right what would be the impact on your business plan if there were more Class 1s going digital only?
LISTNUM 1 \l 1480 MS CHARLTON: Our model is predicated on the fact that the larger systems ‑‑ which the exception obviously of one ‑‑ will still choose an analog option.
LISTNUM 1 \l 1481 Again, as Paul mentioned, we didn't get anything in the interventions indicating that they were against analog. I think in general everybody wants to meet as many Canadian needs as possible and I think that over the short term, the next couple of years, there still is going to be a number of analog services out there, either hybrids between analog or digital or homes that have several analog TVs in addition to a digital box.
LISTNUM 1 \l 1482 COMMISSIONER PENNEFATHER: Have you put that in consideration of the new digital migration policy in terms of the timing?
LISTNUM 1 \l 1483 MS CHARLTON: The systems that choose digital, we are ‑‑ our roll‑out assumes ‑‑ I think it is in the assumptions, but our roll‑out assumes it follows somewhat the digital migration policy whereby 85 percent by 2012 would be fully digital.
LISTNUM 1 \l 1484 COMMISSIONER PENNEFATHER: Okay. So what ‑‑ we understand the basis of the 16 percent and the number. You're going to look at the capital.
LISTNUM 1 \l 1485 I don't know if you would want to also look at a different scenario with an increased number of digital‑only cable systems and what impact that would have on your financials, but we understand where you were going there.
LISTNUM 1 \l 1486 The other point that is really interesting in the assumptions here is now we have a six cents per describer rate instead of the eight cents.
LISTNUM 1 \l 1487 How did you arrive at the six cents in the new scenario?
LISTNUM 1 \l 1488 MS CHARLTON: In essence, as the assumptions break out what we did was we modified the ‑‑ we removed basically the analog capital associated with ‑‑ other than the Class 1s and that one MSL we talked about. The analog capital comes out, the roll‑out of the digital systems obviously impacts the rate as well.
LISTNUM 1 \l 1489 When you run all of this together between the capital, the revenue and there are some operating expenses which are variable to revenues or to capital, when you run the model basically in order to make it hold to what our original model was, it comes to six cents.
LISTNUM 1 \l 1490 COMMISSIONER PENNEFATHER: In reviewing very quickly what we received this morning staff have pointed out to me that the new capital costs are almost half of what they were in the original application, which brings me to the question of profitability and I'm going to go back over this point because we want to have questions which are based on the original application for the record as well.
LISTNUM 1 \l 1491 But here in analyzing profitability, since the capital costs have come down that significantly, I think we would be looking at a PBIT analysis in terms of profitability and, very quickly, if we look at the PBIT in terms of the original application and in terms of the new proposal, it would appear that the PBIT in the new application in year 7, for example, is 36 percent and the PBIT margin in the new proposal is 40 percent.
LISTNUM 1 \l 1492 So even with the change, with the capital costs, about half at six cents we are still at a PBIT margin in year 7 ‑‑ let's take your 4 of 26 percent versus 26 percent, 36 percent in year 7 in the original and 40 percent, you still have a fairly significant PBIT margin here. Would you agree?
LISTNUM 1 \l 1493 MS CHARLTON: The PBIT margin on just the annual basis looks a little high.
LISTNUM 1 \l 1494 What we look at are two things. Number one, over the seven‑year period and in the analog optional model we are looking at a PBIT over the seven years of just about twelve and a half percent. In our original filing it is about 17 percent.
LISTNUM 1 \l 1495 However, it is still a fairly capital‑intensive project and in both cases at the end of seven years our cash position is still negative by give or take two million dollars and I think that is probably one of the more telling signs of this investment.
LISTNUM 1 \l 1496 There is still a great deal of risk associated with the technologies. We've talked about to a certain extent HD. We've talk about the risk associated with if more systems decide to do digital only and we are only penetrating 50 percent of their market or 60 percent of their market or 40, the impact on the revenue is fairly extreme in some cases. So there is still a fair bit of risk associated with this model.
LISTNUM 1 \l 1497 The other thing that we look at is an internal rate of return. And in this initial filing ‑‑ both in the original filing and this, the rate of return is negative.
LISTNUM 1 \l 1498 You know, I like to use the example if I gave my financial advisor, you know, $100 every year for the next seven years and at the end of it he hands me back 650 I'm not all that happy.
LISTNUM 1 \l 1499 So there is a return. It is a longer return. We are in this for the long haul, but it is a serious business and there are certain costs that will be about there regardless.
LISTNUM 1 \l 1500 COMMISSIONER PENNEFATHER: So even with the less ‑‑ at least by half capital costs you still maintain that this is a fair rate of return.
LISTNUM 1 \l 1501 And I guess I have a question that I'll come back to as well in the analysis of the original application. Why do you feel that this is an appropriate level of profitability for such a service?
LISTNUM 1 \l 1502 MR. MORRISSETTE: If I can maybe jump in.
LISTNUM 1 \l 1503 We are talking about a proposal which generally speaking is of capital‑intensive nature and for that reason we view that the more appropriate measurement for this type of business fundamentals is to look at the cumulative cash flow result and the appropriate IRR for the period.
LISTNUM 1 \l 1504 There are risks involved in this project. It is a significant long‑term undertaking. There will be a need for reinvestment over time and in that regard we expect a fair return.
LISTNUM 1 \l 1505 The other reality is that the Commission will be in the position to review on a regular basis and definitely at the appropriate licence renewal periods the inherent profitability and rates of return associated with this project and to act in whichever way it seems appropriate at that time.
LISTNUM 1 \l 1506 As we sit today, we've done an analysis and, quite frankly, we've developed a seven year business plan that shows still a significant amount of negative cash flow on a cumulative period at the end of the seven years and that has been our modelling and the new model that reflects the analog optional proposal as an alternative ultimately demonstrates a very similar result on a net cumulative cash flow basis as our original financial plan.
LISTNUM 1 \l 1507 COMMISSIONER PENNEFATHER: So even if the capital costs in the new plan have been reduced by half, you still feel that it is a viable measure of profitability to compare yourself to the level of cable capital costs, as you did in the original application?
LISTNUM 1 \l 1508 MR. MORRISSETTE: Yes, we do, because the ‑‑ the end game, the ultimate cumulative result, is a negative cash flow position of a few million dollars and a negative internal rate of return for that seven‑year period.
LISTNUM 1 \l 1509 At the end of that period or during the course of that period there will be opportunities to review that.
LISTNUM 1 \l 1510 COMMISSIONER PENNEFATHER: I'll go back to the cash flow point ‑‑ did you have something to add, Mr. Temple?
LISTNUM 1 \l 1511 MR. TEMPLE: Just on the model, just to make sure, we talked about the 16 percent reduction in Class 1, but we also assume that all other cable systems, smaller cable systems, would go digital and that is why the capital is reduced.
LISTNUM 1 \l 1512 We took the CCSA filing. They didn't express a preference for analog either, so we just assumed that smaller systems also would opt for analog and that is the reason why ‑‑ or they didn't express interest in analog, so that is why we assumed that they would opt for digital and that is the reason for the ‑‑ for the reduction in capital.
LISTNUM 1 \l 1513 The model was simply ‑‑ we put the model out because ‑‑ based on the filings. There is innumerable permutations. If more BDUs ‑‑ I think your question earlier was if more BD ‑‑ Class 1 cable operators opted for analog only, the financial attractiveness of this model would worsen.
LISTNUM 1 \l 1514 If more small BDUs than what we modeled did want analog, the financial attractiveness of this model would worsen.
LISTNUM 1 \l 1515 So there is a fair element of risk associated with this model, but we wanted to put something forward for the Commission to look at, because, you know, the whole issue of analog optional is an issue that has been raised.
LISTNUM 1 \l 1516 We don't know how it will play out, but we wanted to give you something based on the filing that had been made.
LISTNUM 1 \l 1517 COMMISSIONER PENNEFATHER: Fair enough. We'll come back to the model. Just before I leave it, to ‑‑ we asked for comparisons on capital costs.
LISTNUM 1 \l 1518 The other difference between the two models is the ACA licence fee. I think I see a considerable difference in that fee.
LISTNUM 1 \l 1519 Can you clarify that?
LISTNUM 1 \l 1520 MS CHARLTON: The ACA licence fee is based on 5 percent of the revenues associated with the ACA service, so with the fluctuations with revenues there is also the impact on the ACA fee. It actually will go down by about 600,000.
LISTNUM 1 \l 1521 COMMISSIONER PENNEFATHER: The reason for the ‑‑ where did the 600,000 go?
LISTNUM 1 \l 1522 MS CHARLTON: There is ‑‑ under the analog optional model the revenues themselves dropped by about 30 percent and therefore there is an associated drop in a variable expense, such as the ACA licence fee.
LISTNUM 1 \l 1523 COMMISSIONER PENNEFATHER: On the licence fee in your original application you note what it will cost Pelmorex, I think about a million three, a million four, to support the ACA. Has that cost changed at all in the new model?
LISTNUM 1 \l 1524 MS CHARLTON: No, that cost will remain. That's the ‑‑
LISTNUM 1 \l 1525 COMMISSIONER PENNEFATHER: That will remain the same?
LISTNUM 1 \l 1526 MS CHARLTON: That will basically remain the same.
LISTNUM 1 \l 1527 COMMISSIONER PENNEFATHER: Even with the different scenario with fewer analog BDUs?
LISTNUM 1 \l 1528 MS CHARLTON: That is going to be the risk of the agreement that we have with Pelmorex Media.
LISTNUM 1 \l 1529 COMMISSIONER PENNEFATHER: There may be some other points in the new scenario that we'll come back to, but I'm going to almost back up a little bit and take us through the original application and some of the same questions.
LISTNUM 1 \l 1530 I particularly want to go back to the question of profitability and how you have looked at it. We take your point of the analysis and the comparison with cable because of the intensity of capital costs. We also would want to table again the potential to look at profitability in terms of PBIT.
LISTNUM 1 \l 1531 Just starting in your application ‑‑ and I'll rely a lot of the deficiency response, again very detailed ‑‑ a quick question regarding the ‑‑ in the application you state:
"The cable companies will be able to pass through their implementations costs directly."
LISTNUM 1 \l 1532 Again, what do you estimate these implementation costs to be for the different cable systems and could you also tell us what you expect the implementation costs to be under your new proposal?
LISTNUM 1 \l 1533 MR. TEMPLE: The implementation costs vary depending on the way that the cable operator processes their signals and how they want to do it, whether they are going with a base band crawl or they are doing switching and how the ... how many channels they have, so there is a number of factors that go into estimating the cost.
LISTNUM 1 \l 1534 As part of ‑‑ I believe it is Appendix I, Mr. Anderson estimated the installation costs. If I recall correctly ‑‑ I'll check it ‑‑ but I think it was anywhere from $2,000 to ... a number that was obviously ... he says on his executive summary page 1:
"The labour, equipment and cabling costs will vary somewhat, but an 80‑channel head and AC configuration could be installed for $2,000 to $15,000 depending on the types of processing technology used by the cable operator."
LISTNUM 1 \l 1535 So that ‑‑ I don't think that would change under the models significantly ‑‑ well, if they weren't installing analog, if they went digital only, then their installation costs would be significantly less.
LISTNUM 1 \l 1536 COMMISSIONER PENNEFATHER: But do you have some sense ‑‑ I believe the Anderson report deals with analog systems.
LISTNUM 1 \l 1537 Do you have any sense of the costs with a digital only? You said it would be less, but do you have something more specific than that?
LISTNUM 1 \l 1538 You can get back to us if you would prefer.
LISTNUM 1 \l 1539 MR. TEMPLE: Rather than me winging it, that is probably a safer option, so I'll take you up.
LISTNUM 1 \l 1540 COMMISSIONER PENNEFATHER: I'm going to ask another question about administrative expenses. I think the question still applies in the new model.
LISTNUM 1 \l 1541 The administration expenses which you've supplied are costed at 3 percent of total revenues. Correct? And that assumption remains in the new model?
LISTNUM 1 \l 1542 MS CHARLTON: That's correct.
LISTNUM 1 \l 1543 COMMISSIONER PENNEFATHER: In your deficiency response, I believe it is page 7, we have a chart here where the administration fees charged to ACA are a percentage of total operating costs in that chart.
LISTNUM 1 \l 1544 Why do you propose to base the charge to the ACA on revenues as opposed to expenses?
LISTNUM 1 \l 1545 MS CHARLTON: I think what we were doing with that chart was trying to outline the fact that the administration costs associated with the ACA system are actually less than what is it is in the current Weather Network/MeteoMedia services.
LISTNUM 1 \l 1546 It is based on revenue ‑‑ the revenue is very tied in essence to the operating costs and the capital costs and therefore the workload associated with the administration office, be it the people, the financing, the capital, asset management, et cetera, so we feel that is a more fair comparison.
LISTNUM 1 \l 1547 COMMISSIONER PENNEFATHER: Well, you did the comparison, but in terms of the financial proposal in front of us, why percentage of revenues not a percentage of cost? Forgetting the comparison for a moment, why did you do it on revenues as opposed to costs?
LISTNUM 1 \l 1548 MS CHARLTON: That is actually currently our policy as well with The Weather Network and MeteoMedia. We simply applied the same policy.
LISTNUM 1 \l 1549 COMMISSIONER PENNEFATHER: On revenues to the ACA system.
LISTNUM 1 \l 1550 MS CHARLTON: Yes.
LISTNUM 1 \l 1551 COMMISSIONER PENNEFATHER: And why the 3 percent? What was the basis for 3 percent?
LISTNUM 1 \l 1552 MS CHARLTON: The 3 percent, again, is what we have found is we did kind of a combination of things. We didn't feel it was necessary to actually hire specific staff for ACA that could do the multitasking of a payroll function, and HR function, a finance function. We would lever off the expertise currently within the staff that we have, although it will increase their workload, and we may have some extra staff hired within the parent company.
LISTNUM 1 \l 1553 But if you do hire a senior finance person to handle all the finance functions, an HR payroll person, a clerical person to deal with the asset management procurement, things like that, it will run easily $250,000 a year and that roughly equates to what 3 percent of the revenues is.
LISTNUM 1 \l 1554 COMMISSIONER PENNEFATHER: Thank you.
LISTNUM 1 \l 1555 You also address in your application at page 17 that:
"the ACA service is a stand‑alone operation receiving administrative support from Pelmorex that is being costed on an incremental basis."
LISTNUM 1 \l 1556 What synergies will be derived from the relationship between the proposed ACA service and Pelmorex?
LISTNUM 1 \l 1557 MR. MORRISSETTE: I might just kick that off in terms of a big‑picture response.
LISTNUM 1 \l 1558 This new service builds on just about everything that we do as a company. It takes advantage and benefits from a very elaborate infrastructure that is in place that is been evolving since inception eighteen years ago.
LISTNUM 1 \l 1559 Our company is all about aggregating dynamic information that is changing all the time, processing and managing that information. It is about profiling, it is about scheduling, it is about delivering the information in a very localized and targeted manner, so that everything ends up at the right place at the right time within milliseconds.
LISTNUM 1 \l 1560 We operate a huge database service. We have this competency of dealing with all kinds of different technologies and standards and modes of distribution, so everything that we stand for, which is unique in the Canadian broadcasting system, the ability to operate a national network distributing localized information, we are the only people who do that, and it is an expertise that we are very proud of, that has required huge amounts of investments over time.
LISTNUM 1 \l 1561 So that is what we have in place and that is why creating an emergency broadcasting system or the foundation for that kind of system in Canada is a very natural extension of what we do, of what we ‑‑ we are all about.
LISTNUM 1 \l 1562 We have been distributing alerts since inception, eighteen years ago, but it's only been to our own services and targeted areas. Now, this goes the extra mile of a long journey, mind you, but the extra mile to share those alerts with all other channels, because people don't just watch one channel.
LISTNUM 1 \l 1563 So that's the very significant benefit of our proposal. It builds on our track record, it builds on our expertise, it builds on our credibility of doing it and doing it right. It builds on our relationships and so on and so forth.
LISTNUM 1 \l 1564 Turning to the new project, we said, well, we have got all this in place, we have invested large amounts, we have a great infrastructure, but this new project we have looked at strictly an incremental basis and everything has been costed and priced on that basis.
LISTNUM 1 \l 1565 So we're not charging a few for all of our expertise and what have you. That's a given. What we are ‑‑ all of our pricing and so on is based on a purely incremental costing case.
LISTNUM 1 \l 1566 So that is ‑‑ I don't know if that answers your question, but there are huge amounts of synergies based on what we already have.
LISTNUM 1 \l 1567 COMMISSIONER PENNEFATHER: Well, I am looking at the deficiency plots on page seven, and in terms of the financial scenario going forward, you would propose that those are relying on the parent company to provide the following additional back office scenarios and some specifics are ‑‑ that is the synergies. Is there anything over and above that, other than the big picture point that you made?
LISTNUM 1 \l 1568 MR. MORRISSETTE: Well, as we develop ongoing new technology and for our existing activities and so on, this will facilitate and enhance the ability to roll out some of these changes in the all channel alert service. But, again, anything that we do going forward is going to be on an incremental basis.
LISTNUM 1 \l 1569 But, yes, you have to imagine, I guess, this end to end infrastructure that we already have. We deal with every BDU almost in this country. We deal with all the different technologies in this country and we have relationships with all these people. And so as we continue to evolve all that, there's no question that that will transcend into the ACA service.
LISTNUM 1 \l 1570 COMMISSIONER PENNEFATHER: Thank you. I am going to go back to the ACA license fee and asked a question based on the original application and I'm assuming the answer will apply, if it doesn't please tell us, to the new proposal.
LISTNUM 1 \l 1571 The financial ‑‑ if we are looking at the financials it's item C1, ACA license fee. And you note in your deficiency response that the total costs for the above, namely the services provided by PMI, are estimated to be 1,350,000, and I just mentioned to you that in a ‑‑ a few moments ago, and they're in addition to investments already made by PMI.
LISTNUM 1 \l 1572 So the first question, does the total cost estimate of 1,350,000 cover the entire ten year period of the agreement?
LISTNUM 1 \l 1573 MS CHARLTON: That is the estimate, yes.
LISTNUM 1 \l 1574 COMMISSIONER PENNEFATHER: And can you provide any more detail as to the amount that PMI has already invested in relation to the ACA's activities?
LISTNUM 1 \l 1575 MS CHARLTON: I don't have it in front of me, but I think I've got ‑‑
LISTNUM 1 \l 1576 COMMISSIONER PENNEFATHER: You can get back to us on that?
LISTNUM 1 \l 1577 MS CHARLTON: I can get back to you on that, yes.
LISTNUM 1 \l 1578 COMMISSIONER PENNEFATHER: Thank you. Now, according to the financial projections for the ACA, and again I am on the original application, the license fees total two million six, let's say, over seven years and this is a significant part of the operating expense items.
LISTNUM 1 \l 1579 We calculate that the total ten year expense would likely be around four million, and if we looked at the new proposal and we put it forward to ten years, we might also find the two million rising again.
LISTNUM 1 \l 1580 Can you provide the financial projections used to conclude that PMI expects to break even over the ten year term of the agreement, including the projected costs to PMI associated with its commitments to ACA?
LISTNUM 1 \l 1581 MR. TEMPLE: We'll have to ‑‑ because we have to get the specific amount that's already been expended, we'll address that specifically when this additional question ‑‑ when we have that number, but just as a matter of ‑‑ just by way of background, the agreement is such that these are estimates.
LISTNUM 1 \l 1582 If it costs more for them to develop then they bear the risk. I mean, there's a risk to PMI of ‑‑ in the agreement. If it's more difficult for them to develop the enhancements that are required of them, then they're going to be out of pocket. So there is risk there, but when we get the specific amount that has already been expended, we will be able to show you not only that amount, but how it works over the course of ten years.
LISTNUM 1 \l 1583 COMMISSIONER PENNEFATHER: That would be very helpful. If, too, we could do that in terms of both the original and the new, we can see the methodology, but we can also see the numbers, is that all right?
LISTNUM 1 \l 1584 MS CHARLTON: That is no problem.
LISTNUM 1 \l 1585 COMMISSIONER PENNEFATHER: On another expense item is the communications, training and education. I am doing a quick look. Have the numbers changed significantly in the new? I don't see that they have. I don't think so.
LISTNUM 1 \l 1586 Just generally, these expenses continue out ‑‑ throughout the process, and I think in your deficiency and as you explained the reason for the continuing training, education and so on, and why, though, do the costs remain the same if it's a refresher continuing? Why would the costs for communication, education, training, implementation, high at first, but why would they not decrease gradually over the seven years?
LISTNUM 1 \l 1587 MR. TEMPLE: A lot of the materials that we are preparing are to assist employees of BDU's, whether they're technicians, CSRs, TSRs. The general public users, they all ‑‑ they all experience turnover. Anyone who has been involved in a cable call centre knows that there is a significant amount of turnover. You can train everyone in year one and in year three you will be a little hard pressed to find the same crew there.
LISTNUM 1 \l 1588 The same is going to be with ‑‑ among users. I mean, people are changing all the time, so it's not sufficient just to provide materials. I know Luke gets requests for materials all the time for the Weather Network and MeteoMedia, and we have been around for a number of years. So there's always going to be a demand for that.
LISTNUM 1 \l 1589 I guess the second thing is, one of the first questions we get asked when we go and talk to a public authority is what kind of training and support are you going to provide, and that is a significant portion of these costs and they are ongoing.
LISTNUM 1 \l 1590 We plan to make enhancements and changes, so it is ‑‑ in our view it would be ‑‑ it would be foolish not to recognize the fact that those costs are always going to be in place. And in perspective, they are higher as a percentage at least of revenues, they are higher in the first years, but overall I believe that in year seven they are about 8.6 percent of revenue, which is basically what analog services spend as a percentage of sales and marketing costs now.
LISTNUM 1 \l 1591 So we are not really out of line, I don't think. But we recognize the need that we have got to keep people fully trained.
LISTNUM 1 \l 1592 MR. MORRISSETTE: If I could just add, we are talking about a large scale, national undertaking reaching most ‑‑ the vast majority of Canadians in the vast majority of communities, rural areas, two languages. It is not just a uni‑lingual service here. A lot of the information has to be duplicated. Lots of travel.
LISTNUM 1 \l 1593 There is going to be ‑‑ this is a very major large scale undertaking, not just at launch, but ongoing, dealing with many, many stakeholders. And when we look at the level of costs here for the size of responsibility that is being assumed and the extent of reach that this kind of service has and impact, it has got to be done right. And skimping on probably one of the most important elements of the plan, communication, training, education, is ‑‑ would be very ‑‑ well, probably shortsighted.
LISTNUM 1 \l 1594 So we think that we have an optimal amount budgeted, given the task at hand, which is a never‑ending process.
LISTNUM 1 \l 1595 COMMISSIONER PENNEFATHER: Thank you. Just let me ask a general question. I noted ‑‑ I was trying quickly to compare the line D1 between the two. With this new proposal today with the new analog optional numbers, you did say in your reply that you expected that the approach for an analog optional model would provide cost savings. Are there ‑‑ it doesn't seem that that is one of the expense items where there would be cost savings.
LISTNUM 1 \l 1596 Could you tell us where the expense items are where you would have saved in the new model?
LISTNUM 1 \l 1597 MS CHARLTON: Most of the savings relate to the expenses that are variable again to revenues or to the capital itself. As we talked about the ACA license fee. There would be some savings there. On the repair and maintenance side, obviously if the ‑‑ because it is based on a percentage of the capital, there are some savings there.
LISTNUM 1 \l 1598 In terms of partner education and communication, we don't think that whether we go based on our original model or an analog optional model that that communication and education and training is something that we would cut. Most of it is not necessarily variable in nature, so that stays the same.
LISTNUM 1 \l 1599 In terms of the administration expenses, the admin fee, bad debt expense, copyright, and to a certain extent other administration are all reduced slightly as well.
LISTNUM 1 \l 1600 COMMISSIONER PENNEFATHER: Okay. And if we have ‑‑ we might have further questions on that, but certainly looking at the comparisons and some of the questions I've raised with you might clarify further.
LISTNUM 1 \l 1601 Let's go back again to the question of profitability, both with the current ‑‑ with the existing application and the model, the new model. The question of profitability again.
LISTNUM 1 \l 1602 Now, originally ‑‑ we do take your point about capital intensity perhaps giving you another approach to analyze rate of return as opposed to the PBIT approach. Again, with the new model perhaps it is not as applicable because the capital costs have been cut in half, although I think you have said it remains a more appropriate analysis for rate of return.
LISTNUM 1 \l 1603 In looking at this matter, Staff have analyzed, in fact, what the rate of return or the profitability would be using, in fact, return on average net fixed assets values which is used for cable, analysis of cable assets.
LISTNUM 1 \l 1604 Again, looking at your 8 cent proposal profitabilities levels in year four of 31 percent and year seven, 73 percent, if we look at comparing class one cable in Canada, return on average net fixed assets in 2004, twenty percent.
LISTNUM 1 \l 1605 So again we find that ‑‑ again, I am looking at a thesis here where if we look at PBIT margins for the ACA service the way Staff have analyzed it, and there is a small point there of difference in the way you have put it together, we are still in the range of 36, and under your new proposal, forty percent.
LISTNUM 1 \l 1606 The question there is if ‑‑ is this not an opportunity, for example, if you come in at six cents and your profitability is, we estimate, in the range of forty percent and your seven, is this not an opportunity to say that that rate of six cents could be lowered to four cents, for example?
LISTNUM 1 \l 1607 The bottom line question is what's an appropriate rate of return for such a service? And going in to analyze on the basis as you have done on the rate of return, more appropriate, more related to intense capital cost endeavours such as cable may not be an appropriate analysis, but there you are, you did it. We also look at it in terms of PBIT.
LISTNUM 1 \l 1608 Without going into too many details on the analysis of your cash flow chart at this point, one question I could ask you, it seems that no matter what methodology we use we come out at a certain percentage of profitability, which could allow for more flexibility in terms of the rate, for example.
LISTNUM 1 \l 1609 Taking us that ‑‑ you already went from eight to six. Why not go to another rate or have a variable rate or would the rate be the same for analog optional as it is for digital only? Is there a way, because there seems to be some room to manoeuvre here in terms of the rate of return. Not in any undermining what you're looking for as a business, but just trying to see from the public interest point of view what would be different options we could look at.
LISTNUM 1 \l 1610 MR. MORRISSETTE: If I can just kick off the answer to quite a few questions there. The first point is that the fundamentals of our business plan from a financial and economic return point of view is that during the seven year period of our plan that we come close, don't necessarily have to, come close to a cumulative net cash flow figure which is neutral. In other words, we have recovered our investment cumulatively over time.
LISTNUM 1 \l 1611 The end result of both plans show that it is approximately two million dollars in the hole and a negative IRR. What kind ‑‑ we view this project as a hybrid between a capital intensive cable plan and a specialty television service kind of plan. One approach for either would not necessarily be a perfect fit here. Hence our guiding principles have been cumulative free cash flow and IRR.
LISTNUM 1 \l 1612 If we were, let's say, to have extended ‑‑ if we were to apply a reduced rate, the only ‑‑ you suggested four cents, the net result at the end of the seven years would be our negative two million dollar number would be increased significantly and the IRR would be even more significantly negative, and that is ‑‑ over a long term period we view a fair return, because there is risk associated with this project, in the range of about fifteen percent on an IRR basis.
LISTNUM 1 \l 1613 Again, I repeat that the Commission will have regular opportunities to review profitability and the rates of return. This is not a cash grab, as some have suggested. It is a question of a fair return relative to the risk involved.
LISTNUM 1 \l 1614 COMMISSIONER PENNEFATHER: That is the nature of my question and I appreciate your response. It leads me just to make sure we understand then, to amplify your point, the way you've done the cash flow, and I have just a couple of questions on that just to make sure we have understood how you have arrived at the cash flow analysis you have.
LISTNUM 1 \l 1615 And, for example, is it your intention ‑‑ if we look at the cash flow, and I am going to ask a couple of questions on the capital costs then, is it your intention to pay for the annual capital costs with cash from operations or do you plan on taking out loans every year, as indicated by the increasing interest expense?
LISTNUM 1 \l 1616 MS CHARLTON: We would assume arranging a loan, a line of credit in advance of the project to finance this.
LISTNUM 1 \l 1617 COMMISSIONER PENNEFATHER: Why have you included, then, in your cash flows each year both the interest on the loan and the disbursement of capital, instead of the interest on the loan and the repayment of a portion of the principal? Does this not distort the cash flow statement?
LISTNUM 1 \l 1618 MS CHARLTON: No, because even though we will ‑‑ basically the line of credit will allow us to be in a deficit position to ‑‑ I believe, it is a cap at almost 12 million dollars. What we are hoping to be able to do is through the roll out maximize the cash flow, the positive cash flow by rolling out the larger systems first, thereby impacting the most Canadians possible and allowing the most positive impact on the cash flow.
LISTNUM 1 \l 1619 However, it does take quite some time to pay back.
LISTNUM 1 \l 1620 But it would be, basically, a loan of, give or take, $12 million.
LISTNUM 1 \l 1621 COMMISSIONER PENNEFATHER: You can see why I am asking, because the influence of your approach, wherein you are looking at both interest and the disbursement of capital, instead of interest on the loan and repayment of a portion of the principal, does make it a more difficult ‑‑
LISTNUM 1 \l 1622 What is the word I am looking for? Dire or difficult or ‑‑ negative.
LISTNUM 1 \l 1623 This is very much the point that we were discussing with Mr. Morrissette, what is a fair rate of return, and we have backed our way through the cash flow statement.
LISTNUM 1 \l 1624 Is it as severe as ‑‑ it could be less severe, perhaps, with a different accounting of the loan and interest on the loan and the principal payment on the loan.
LISTNUM 1 \l 1625 Would you have any comment on that?
LISTNUM 1 \l 1626 MS CHARLTON: No. I think what we were trying to do here is indicate what the net cash position would be for the company under this scenario, and I think it does show that.
LISTNUM 1 \l 1627 MR. MORRISSETTE: It also reflects that we have structured the financial plan for this service on a totally incremental basis, with borrowed funds used as the source of funds to fund the project.
LISTNUM 1 \l 1628 COMMISSIONER PENNEFATHER: Finally, on the financials, both the revised and Part D, as submitted, what would be the impact on your financials if the Commission were to decide that the CBC's proposals should be implemented, and/or, secondly, if the Commission were to approve the ExpressVu application?
LISTNUM 1 \l 1629 MR. MORRISSETTE: It is clear that it would have a very material impact on our financial plan, segmenting significantly the revenue derived from our distributors to support this project.
LISTNUM 1 \l 1630 The operating cost would stay roughly the same, and the end result would be that it would no longer be viable.
LISTNUM 1 \l 1631 The licensing of alternative services, or several services, in this instance, we don't view as being a favourable model.
LISTNUM 1 \l 1632 Going back to what I was saying earlier, this is a very large‑scale, major undertaking, with the lives of the public at risk. We do not believe that there is a business model here where you can have a competitive process and many different players acting in the dissemination part of the end‑to‑end chain. It should be one party that is responsible and accountable in dialoguing with all BDUs, with all emergency authorities, holding consultation with all of these people, working on the ongoing evolution of the system and the next generations of the system.
LISTNUM 1 \l 1633 To fragment that, I think, would create a double‑headed dog, which, in our experience, doesn't work very well, and, on that basis, we would not be prepared to consider the significantly augmented risk and exposure and liabilities that are associated with this kind of venture.
LISTNUM 1 \l 1634 COMMISSIONER PENNEFATHER: Let me see if I have understood you correctly, Mr. Morrissette.
LISTNUM 1 \l 1635 In your application and deficiencies you make very strong points about the complementarity of the ACA service with other warning systems, be they through CANALERT ‑‑ and I had thought I had read, and I thought we had discussed this morning, with the role that over‑the‑air broadcasters would play, that local broadcasters would play.
LISTNUM 1 \l 1636 Did you, in answering my question coming out of our financial discussion, say that, should the Commission go ahead with the CBC proposal and/or the ExpressVu proposal, your service, the ACA, would not be viable?
LISTNUM 1 \l 1637 MR. MORRISSETTE: No, what I was saying was that the CBC proposal, as it relates to their over‑the‑air broadcasting activities, is fully compatible. That is not an issue.
LISTNUM 1 \l 1638 If we create redundancy in the distribution of messaging to BDUs, that creates the issues that I was describing earlier, and that is problematic.
LISTNUM 1 \l 1639 So it is that part of the chain.
LISTNUM 1 \l 1640 COMMISSIONER PENNEFATHER: That part. It is slightly different, and we discussed that, in some ways, earlier, in terms of coordination, and that is why my questions, because you, yourself, have said that redundancy would create serious problems. So one would assume that coordination efforts had been made.
LISTNUM 1 \l 1641 From a financial perspective, what is your comment on the ACA service should the Commission agree with the CBC proposal, should the Commission approve the ExpressVu approach?
LISTNUM 1 \l 1642 MR. MORRISSETTE: It materially and adversely affects the financial model that we have proposed.
LISTNUM 1 \l 1643 It would result, I guess, in considering much higher pricing.
LISTNUM 1 \l 1644 Another very important feature of our approach is the concept of cross‑subsidization. There is no question here that we are seeking to achieve the most successful national result, in both languages, at the lowest cost possible, in a fully managed way, end to end. To fragment that would go against that particular philosophy.
LISTNUM 1 \l 1645 There is no question here ‑‑ and we must be very, very clear ‑‑ that this whole business plan assumes that large systems support small systems, cross‑subsidize small systems, which enables this service to reach the largest number of Canadians possible ‑‑ large centres, small centres, rural, et cetera.
LISTNUM 1 \l 1646 COMMISSIONER PENNEFATHER: Thank you. You can see the relationship, though, with the profitability discussion, in terms of how much flexibility you have. I was very interested in hearing how you addressed profitability, because, in our view, it gives us a sense of ‑‑ at 36 percent profitability, give or take, and we use the PBIT, or we use other forms of discussing rate of return, how much room there is to absorb the financial impact of other alert services.
LISTNUM 1 \l 1647 This brings me to the legal questions, and I would hope that my legal colleagues don't get too concerned. I passed the mark with my technical colleague, but I am going to ask you some questions now to help us understand some of your proposals.
LISTNUM 1 \l 1648 Let's go back to legal liability, which, Mr. Temple, you raised early in the discussion. We will go back to the formal agreement that you propose be entered into with ACA providers ‑‑ authorized users, if I could use that term.
LISTNUM 1 \l 1649 I am looking at page 19 of the deficiency letter for that formal agreement.
LISTNUM 1 \l 1650 We looked at it before in terms of guidelines and definitions and some sense of clarity as to how responsibly the system would be used, but now I want to look at it from a legal and regulatory perspective.
LISTNUM 1 \l 1651 Who will bear the legal responsibility for misuse of the system, or the consequences of false or misleading alerts, and for system failure to deliver or display the alerts?
LISTNUM 1 \l 1652 MR. TEMPLE: As I mentioned, the issuing authority will take responsibility for the content of the message. So if it is false or misleading, then it is their responsibility.
LISTNUM 1 \l 1653 In terms of issues such as Pelmorex not delivering the message, or sending it to the wrong place ‑‑ sending Halifax's message to Red Deer ‑‑ then that would be our responsibility, and that is one of the reasons why a significant element of our costs is insurance.
LISTNUM 1 \l 1654 COMMISSIONER PENNEFATHER: Yes, I did see that liability line.
LISTNUM 1 \l 1655 From a legal perspective, though ‑‑ and I am repeating your view that the originator, or originators, of the alert messages are ultimately responsible for the content of the alert messages ‑‑ would this not constitute a de facto network broadcasting undertaking that should be licensed or exempted from licensing agreements? If not, why not?
LISTNUM 1 \l 1656 MR. TEMPLE: I will start, but Mr. Prescott will help me out on this question.
LISTNUM 1 \l 1657 One of the reasons that we want to have an agreement is because, as a licensee, we do have to take responsibility. We want to ensure that, through the agreement, the rules are made clear.
LISTNUM 1 \l 1658 MR. PRESCOTT: Pelmorex will exercise a degree of control. They will have control over the system and the delivery of the message, and they will exercise that control through these agreements, the same way as you would through a program supply agreement. They would have control over receiving the message and then sending it out.
LISTNUM 1 \l 1659 COMMISSIONER PENNEFATHER: What is your comment on the legal question, though, if the content is in the hands of the originator that we have here, a network broadcasting undertaking?
LISTNUM 1 \l 1660 MR. PRESCOTT: I don't really think ‑‑ it is possible that it could be a network undertaking that would have to be licensed ‑‑ approved by the Commission as part of this, but the content is ‑‑
LISTNUM 1 \l 1661 I don't see a great deal of difference in the degree of control that Pelmorex will exercise over the content for this aspect of its service, as opposed to other aspects of other services. Local broadcasters receive emergency alerts from local authorities and they immediately put them on in the form that they receive them, so they are not giving up control, they are still offering the system. They are entering into an agreement to exercise control over that system.
LISTNUM 1 \l 1662 Ultimately, the theory is that you don't want to mislead the public in some way, so you want the message provider to be the one who actually decides what the content will be.
LISTNUM 1 \l 1663 COMMISSIONER PENNEFATHER: Continuing on that line, with the control, as you have defined it, as far as Pelmorex is concerned, how would Pelmorex propose that the Commission have end‑to‑end recourse against the licensee, Pelmorex, in case of misuse of the all‑channel alerts, or false or misleading alerts, or system failures?
LISTNUM 1 \l 1664 MR. PRESCOTT: One way to do it would be to have an agreement that would be approved by the Commission that would set up the controls over access to the system, and who would use it, and what kind of messages would be ‑‑ what would be the nature of the emergency. And you would have a definition of an authorized user, a definition of an emergency.
LISTNUM 1 \l 1665 You could exercise control that way.
LISTNUM 1 \l 1666 I guess that it could be done through a regulatory ‑‑ that would be a complicated way to do it ‑‑ a regulatory amendment, or a mandatory order. You would put that information right in there.
LISTNUM 1 \l 1667 But you could also do it through having a standard agreement that would apply to all users and would require Pelmorex to exercise a degree of control over who is ‑‑
LISTNUM 1 \l 1668 COMMISSIONER PENNEFATHER: This is the formal agreement that is mentioned ‑‑
LISTNUM 1 \l 1669 MR. PRESCOTT: Yes.
LISTNUM 1 \l 1670 COMMISSIONER PENNEFATHER: That's why previously I was discussing what would be in that formal agreement, looking at a template.
LISTNUM 1 \l 1671 In terms of that, if complete enough, you are saying, if I have heard you right, that that would allow the Commission to have end‑to‑end recourse against the licensee, Pelmorex.
LISTNUM 1 \l 1672 MR. PRESCOTT: Yes.
LISTNUM 1 \l 1673 COMMISSIONER PENNEFATHER: Let's get to the question of jurisdiction. In the proceeding leading up to the denial of the previous Pelmorex application, that is, Decision 2001‑123, intervenors argued that the Commission had no jurisdiction to deal with the application because it would have meant dealing with a service that was primarily an alphanumeric service.
LISTNUM 1 \l 1674 In Decision 2001‑123, the Commission rejected this argument.
LISTNUM 1 \l 1675 In Pelmorex's view, is the present application similar to the previous application, such that the Commission could come to the same conclusion as in 2001, and what are the material elements that the Commission should consider in this regard?
LISTNUM 1 \l 1676 MR. PRESCOTT: The ACA system is functionally the same. It has been updated and it has evolved, but it is functionally the same service that it was in 1999 ‑‑
LISTNUM 1 \l 1677 Was that when we applied for the first time?
LISTNUM 1 \l 1678 COMMISSIONER PENNEFATHER: That's correct.
LISTNUM 1 \l 1679 MR. PRESCOTT: So the same rationale that was applied at that time in Decision 2001‑123 would apply to this case.
LISTNUM 1 \l 1680 And Pelmorex is proposing to offer this service ‑‑ this system ‑‑ this ACA system ‑‑ as part of its existing programming undertaking.
LISTNUM 1 \l 1681 Pelmorex already offers weather warnings and weather alerts on its two services now, which are operated under one licence. It is simply asking that that be extended, so that those alerts would be visible on other channels.
LISTNUM 1 \l 1682 It is important that the Commission has the authority under the Broadcasting Act to license programming undertakings, and a programming undertaking is permitted to broadcast programs. And then you follow it down to the definition of a program, and programs are defined under the Act to include any combination of sounds and visual images, provided that those visual images do not consist of predominantly alphanumeric text.
LISTNUM 1 \l 1683 The alphanumeric visual images that are broadcast by all programming undertakings, which include things like on‑screen movie credits, closed captioning, news crawls, weather alerts, those kinds of things, are currently provided as part of an existing programming undertaking. They are not a separate undertaking when somebody offers that alphanumeric visual text.
LISTNUM 1 \l 1684 Similarly, if the ACA is approved, the ACA will offer it as part of the programming undertaking, and the alerts will be visible on the Weather Network and MétéoMédia.
LISTNUM 1 \l 1685 Pelmorex will exercise control over the system. Pelmorex will put those alerts on its own two services, and they will be visible on other channels.
LISTNUM 1 \l 1686 So it will be part of the same undertaking. We are not proposing to operate something completely different.
LISTNUM 1 \l 1687 The other thing that I think is important to understand is that the one aspect of our application that some intervenors have suggested makes this a distinct service, or a separate service, is the fact that the alerts will be visible on channels other than those that are used to distribute the Weather Network and MétéoMédia. Nobody has intervened in this proceeding to say that Pelmorex doesn't have the authority to broadcast alerts on its own two services ‑‑ on the channels that are used to distribute its own two services.
LISTNUM 1 \l 1688 Pelmorex is distributing alerts now on those two services, and nobody is saying that that turns those services into something that is non‑programming. Eighty percent of the service, or more, is moving video images.
LISTNUM 1 \l 1689 The reality is that the Commission has licensed a whole host of services to operate on more than one channel. VOD services, pay‑per‑view, the movie networks, specialty services that have an HD TV conditional licence, all operate on more than one channel.
LISTNUM 1 \l 1690 Similarly, substitution rules require programs from one service to be distributed on another channel.
LISTNUM 1 \l 1691 If that is the only aspect that has led people to believe that this is a separate service, then it can't be a separate service. It is not a separate service. Each of these HD channel services are offered by one undertaking under one licence, and that will be the same approach for ACA. It is going to be one service, once licence, except that the programming that is on that service will be visible on other channels.
LISTNUM 1 \l 1692 COMMISSIONER PENNEFATHER: My question was ‑‑ and I want to pursue the question. I fully understand the Commission's decision in 2001‑123 and its comment on this point. It is not that I am questioning that or that I have a different opinion, but I do want to push a couple of other options.
LISTNUM 1 \l 1693 One of the points here is, has there been any factual change between the application as presented in 1999, decided on in 2001, and today?
LISTNUM 1 \l 1694 Let me ask you about your comment on the fact that in your application you propose a change to your Condition of Licence 1(a)(ii) ‑‑ and I take your point that you mention in reply that you currently distribute weather‑related alerts, but in this application you add, in addition to "weather‑related", "national disasters and other emergencies".
LISTNUM 1 \l 1695 Does this alter your position at all?
LISTNUM 1 \l 1696 MR. PRESCOTT: That's why we have asked for the condition of licence, so that expands the kinds of alerts that Pelmorex is authorized to provide.
LISTNUM 1 \l 1697 I think, but I can't remember, we proposed last time that we would expand the condition of licence to extend to other kinds of alerts as well.
LISTNUM 1 \l 1698 It hasn't changed.
LISTNUM 1 \l 1699 COMMISSIONER PENNEFATHER: It doesn't change your position ‑‑
LISTNUM 1 \l 1700 MR. PRESCOTT: It doesn't change ‑‑
LISTNUM 1 \l 1701 COMMISSIONER PENNEFATHER: ‑‑ in terms of the decision.
LISTNUM 1 \l 1702 Let me ask you again from another point of view, again remembering that the ACA service is now more than weather‑related, it is proposed as an alert regarding weather disturbances, natural disasters and other emergencies, which we have discussed at length cover a number of possibilities, and we have agreed, more or less, to work within the CANALERT Guidelines.
LISTNUM 1 \l 1703 Some would argue, and this is your point, your portion, the AC portion of your signal, is not predominantly alphanumeric, and that remains your position. And that remains your position even if this alert is viewed on another channel.
LISTNUM 1 \l 1704 Is that correct?
LISTNUM 1 \l 1705 MR. PRESCOTT: Yes, because it is part of the same undertaking.
LISTNUM 1 \l 1706 COMMISSIONER PENNEFATHER: But some would argue that even if it remains not a predominantly alphanumeric text, but the fact that it can be seen separately on another channel means it is no longer integral to the original service.
LISTNUM 1 \l 1707 What is your comment on that?
LISTNUM 1 \l 1708 MR. PRESCOTT: My comment on that is that there are multichannel services that are authorized by the Commission, even services that overlap with one another. I mean network operations are an example of where programming from one service is visible on another.
LISTNUM 1 \l 1709 As I mentioned, the simultaneous substitution rules allow for the same thing, you are programming from one service to be visible on another.
LISTNUM 1 \l 1710 The Commission doesn't licence undertakings that operate on a channel‑by‑channel basis on a single channel. Even Pelmorex has two services that operate on separate channels.
LISTNUM 1 \l 1711 COMMISSIONER PENNEFATHER: So as I understand your position, it remains not predominantly alphanumeric, it remains a programming service whether seen on The Weather Network or on other channels.
LISTNUM 1 \l 1712 Is that your position still?
LISTNUM 1 \l 1713 MR. PRESCOTT: That's correct, and it's just because this is an enhancement to the existing service. It's something that Pelmorex is already doing and the only change is that it's going to be visible on other channels.
LISTNUM 1 \l 1714 COMMISSIONER PENNEFATHER: Well, it's not quite what they are already doing, because as I made the point before, it's more than weather‑related.
LISTNUM 1 \l 1715 MR. PRESCOTT: Exactly. Exactly.
LISTNUM 1 \l 1716 We have applied for that amendment to the licence as well, to expand the category of alert messages that we could provide.
LISTNUM 1 \l 1717 COMMISSIONER PENNEFATHER: Some have also raised the point that the Commission laid out, in Decision 2004‑82, certain criteria and I'm wondering if you could not comment on each of those criteria and their applicability to this particular situation?
LISTNUM 1 \l 1718 MR. PRESCOTT: I don't see the applicability of this test at all program‑related. The program‑related test is something that what put into section 7 of the Broadcasting Distribution Regulations and the test that the Commission has come up with the WGN, or the variation of the WGN test, is applying section 7 in the context of interactivity and what kinds of services that BDUs will be required to pass through to subscribers.
LISTNUM 1 \l 1719 The words "program‑related" don't appear in the Broadcasting Act, in the definition sections of the Broadcasting Act. And this is something that was created to ensure that BDUs only pass through certain kind of information or, are required to pass through certain kinds of information or certain kinds of content and do not alter or delete that content. So it would have to be program‑related.
LISTNUM 1 \l 1720 So in my mind it's in a completely different context and it's not something that should be applied to determining whether an ACA system is a separate programming undertaking.
LISTNUM 1 \l 1721 COMMISSIONER PENNEFATHER: So in your view it does not apply these criteria. Regarding program‑related interactivity does not apply to the circumstance in front of us wherein you say that the ACA service is an integral part of The Weather Network service?
LISTNUM 1 \l 1722 M. PRESCOTT: Yes. The ACA system will be an integral part of The Weather Network service and MétéoMédia.
LISTNUM 1 \l 1723 COMMISSIONER PENNEFATHER: Even if this enhancement ‑‑ which again is a term used in 2004‑82 ‑‑ even if this enhancement can be seen on its own on other channels it remains part of the programming service and remains not ‑‑ if I can use it that way, in a negative way ‑‑ not alphanumeric?
LISTNUM 1 \l 1724 MR. PRESCOTT: Precisely, because it is an undertaking. An undertaking is, you know, according to a reference case, it's an arrangement under which things are used. That is precisely what Pelmorex is doing.
LISTNUM 1 \l 1725 Pelmorex is already providing weather alerts. They have a localized technology in every head end, or almost every head end, and they are providing alerts now. The fact that those alerts will be visible in other channels doesn't alter the fact that it is still part of the same programming undertaking.
LISTNUM 1 \l 1726 COMMISSIONER PENNEFATHER: Thank you. I have your position on that.
LISTNUM 1 \l 1727 Mandatory nature of the ACA service. Here we are dealing with the original proposal in which you asked the Commission to use paragraph 9(1)(h) of the Broadcasting Act to require all Class 1, cable, DSL, MDS, BDU, and all satellite, DTH, BDUs, to distribute the ACA enhancement and authorize the broadcast of emergency messages on every channel carried by BDUs serving the effective areas.
LISTNUM 1 \l 1728 What is the effect of the comment in your reply regarding the Vidéotron intervention to require mandatory digital only on your position?
LISTNUM 1 \l 1729 MR. MORRISSETTE: First of all, we have listened carefully to Vidéotron and what they had to say with regards to what is going on in the marketplace. We have experienced what is going on in the marketplace. That is the whole reality of the evolution towards a totally digital environment.
LISTNUM 1 \l 1730 When we first submitted our first application back in 1999 there were very little digital subscribers. Today we find ourselves in approximately the 50 percent threshold. And there is no question that by the time we reach let's say the end of the planned rollout period that the digital environment will be significantly higher than the current 50 percent. level. Several BDUs may already be fully migrated in the digital way.
LISTNUM 1 \l 1731 Since we filed our second application almost two years ago, or a year and a half ago, a major development has been initiated by the Commission itself, that is the digital migration procedures and policy. So that also has kind of established some time lines, benchmarks on what is happening.
LISTNUM 1 \l 1732 Now, the major part of our business plan has been clearly to invest significant amounts in the analog technology, but with the reality of digital migration and the Commission's policy and the rapid evolution towards digital, it is legitimate to question a plan that would invest so significantly in a technology which is being phased out.
LISTNUM 1 \l 1733 Now, there is no question that we stand by our original application but, having said that, since the original application there has been change and we could not ignore that change. Therefore, the proposal of an analog optional service, digital required, is one that has merit, that ought to be considered.
LISTNUM 1 \l 1734 And if that were to be the outcome of these proceedings, this is an approach that we would support and would follow through with.
LISTNUM 1 \l 1735 We think, our assumption, is that the larger systems, given the realities of second and third and fourth outlets being analog for quite a while, given the realities that a significant part of their subscriber base today is analog, given the realities of public responsibility, that they would nonetheless implement an analog solution as well as a digital one. The smaller systems would be the ones that would most likely opt for the far more efficient digital approach.
LISTNUM 1 \l 1736 COMMISSIONER PENNEFATHER: In your view, then, since we are discussing your proposal for mandatory order under 9(1)(h), would your proposal now be, just pursuant to those comments, to impose the mandatory order on all systems or just on the digital systems or on analog, large systems and digital? Is it the same approach, or have you varied your approach to the 9(1)(h) mandatory order?
LISTNUM 1 \l 1737 MR. TEMPLE: In terms of 9(1)(h) the approach would be the same, it would just be adjusted to reflect the fact that it would be required of Class 1 for digital as opposed to digital and analog, but it would still be a requirement of ‑‑ or we would still be looking to an order under 9(1)(h).
LISTNUM 1 \l 1738 COMMISSIONER PENNEFATHER: One of the rationales you give for the 9(1)(h) is that you:
"... serve the most Canadians possible in the fastest amount of time."
LISTNUM 1 \l 1739 Under this latter proposal what do you expect the timing to be? Let's assume for the sake of argument that the voluntary application, the voluntary sending of the messages does not occur ‑‑ just for the sake of argument, no comment on the fact that probably it would ‑‑ what is your sense of timing? How long will it be until we get to as many Canadians as possible?
LISTNUM 1 \l 1740 MR. MORRISSETTE: Well, I think the time lines that have been outlined in the digital migration rules or approach sort of form a pretty clear framework as to what some expectations might be.
LISTNUM 1 \l 1741 We speak to some BDUs who hope to be fully digital before the end of this decade. We would expect that many of the smaller systems that use the hits approach would be substantially digital.
LISTNUM 1 \l 1742 I don't know if that answers your question, but I think the framework of digital migration kind of outlines that.
LISTNUM 1 \l 1743 COMMISSIONER PENNEFATHER: Turning, then, to other matter legal regulatory in this proceeding, as you are aware there has been discussion about as well the section 7 of the Regulations and an amendment to that section.
LISTNUM 1 \l 1744 In its application the CBC has proposed that section 7(d) be changed and be worded as follows:
"... be changed for the purpose of transmitting ..."
LISTNUM 1 \l 1745 Adding:
"... for the purpose of transmitting an authorized public alert message."
LISTNUM 1 \l 1746 Do you agree with this proposal?
‑‑‑ Pause
LISTNUM 1 \l 1747 MR. TEMPLE: We don't think that's the most appropriate approach. It makes it really permissive and there's not an obligation to do alerting by the BDU. So I think we still prefer the approach that we put forward, which would be an order under 9(1)(h).
LISTNUM 1 \l 1748 COMMISSIONER PENNEFATHER: Assuming, though, that the Commission did move for other reasons to amend 7(d) along the lines that the CBC has proposed to change the wording of 7(d) to:
"... for the purpose of transmitting an authorized emergency public alert."
LISTNUM 1 \l 1749 Do you have any comment: Should we proceed?
‑‑‑ Pause
LISTNUM 1 \l 1750 MR. TEMPLE: If we were to be licensed but the wording ‑‑ if we were to be licensed and the Commission changed section 7 as you propose, then it would just be an optional service. There would be no obligation for any BDU to take it, so it would be difficult for us to make the investments and offer the service not knowing whether anyone was going to take it.
LISTNUM 1 \l 1751 COMMISSIONER PENNEFATHER: So in your view, just changing the regulation to allow "for the transmission of an authorized emergency public alert message" without the current wording, which is "in accordance with agreement entered into with the operator of the service or network responsible for that service", to you it is of no use?
LISTNUM 1 \l 1752 MR. TEMPLE: Not in terms of providing the type of system, a comprehensive system to serve Canadians, not the kind that we are proposing.
LISTNUM 1 \l 1753 I mean, in a sense they can do that now with the permission of the programming service, put warnings on. You just get into a system of volunteerism that may or may not work. That we don't believe is really providing the public alerting service that Canadians need.
LISTNUM 1 \l 1754 COMMISSIONER PENNEFATHER: So in your view, an order under section 9(1)(h) of the Act would suffice to grant mandatory carriage of the ACA service?
LISTNUM 1 \l 1755 MR. TEMPLE: For Class 1s. I mean, clearly, as Mr. Morrissette mentioned earlier, by being able to require Class 1 systems to provide the service, (a) there's large coverage, but (b) it creates a situation where it makes it more affordable for smaller systems to do so.
LISTNUM 1 \l 1756 Under our proposal, because we can spread the costs of services over a wider base, then it's more affordable for small systems. But if people can just kind of opt in and out as they wish, there is really no service there at all.
LISTNUM 1 \l 1757 COMMISSIONER PENNEFATHER: Continuing to explore options other than or in addition to 9(1)(h) and altering the regulations, for example could mandatory carriage be accomplished via an amendment to the distribution linkage rules or through amending the access rules of section 18?
LISTNUM 1 \l 1758 Have you explored those options?
LISTNUM 1 \l 1759 MR. PRESCOTT: We thought about it. When we came up with the idea of a management order we thought about other options and it becomes complicated for a few reasons.
LISTNUM 1 \l 1760 One is that I think multiple sections of the regulations would have to be, especially for ‑‑ let me start again.
LISTNUM 1 \l 1761 Especially for the ACA proposal, and the way that Pelmorex has proposed to implement it, would require multiple amendments to the regulations if it was to be done that way. It couldn't just be done through section 7 unless you insert a ‑‑ in this current scheme of section 7 unless you blow it out.
LISTNUM 1 \l 1762 I mean, I think that there would at least be six or seven sections, including the definition section, section 7 and section 18, 19, 33, 38, a whole bunch of sections would have to be amended for DTH for cable, for small cable, plus you would have to amend all of the ‑‑ not all of the, the two small cable exemption orders to ensure that those cable systems would be authorized to distribute this ‑‑ would be authorized to make the decision to distribute this portion of the service or decide not to.
LISTNUM 1 \l 1763 And you would also have to work into ‑‑ you would have to take into account the rollout schedule, I think, that Pelmorex would have to implement in order to ‑‑ the service wouldn't be available to everybody at the same time. So that would have to be worked into the regulations as well, which wouldn't seem to appear to me to fit within the regulations very easily.
LISTNUM 1 \l 1764 So the simplest way, I think, would be to just have a distribution order in the same way that it was done for CPAC and for others, that would set out all of the different requirements for carriage, when would have to be rolled out, who could opt in, who could opt out. So I just think it's the simplest way.
LISTNUM 1 \l 1765 Having said all that, I mean we wouldn't be opposed to a significant overhaul of the regulations that would allow ‑‑
LISTNUM 1 \l 1766 COMMISSIONER PENNEFATHER: Don't get carried away.
LISTNUM 1 \l 1767 MR. PRESCOTT: Yes, exactly.
LISTNUM 1 \l 1768 So I think it just would be simpler, in the same way it was done for APTN and CPAC and others, to just put it in one distribution order and lay out all the rules for everybody.
LISTNUM 1 \l 1769 COMMISSIONER PENNEFATHER: Ah, my last question is exactly that: Could you propose wording for it? If this is your preferred option, do you have wording you could propose to us for such an order?
LISTNUM 1 \l 1770 MR. PRESCOTT: We have thought this and we've gone through potential wording, but I don't have the actual wording that we want to propose ‑‑ give our wording for this, but we would undertake to provide that, if you ... if you need it.
LISTNUM 1 \l 1771 COMMISSIONER PENNEFATHER: I think that would be helpful.
LISTNUM 1 \l 1772 And thank you very much for your patience. Merci beaucoup. Merci monsieur le Président.
LISTNUM 1 \l 1773 THE CHAIRPERSON: Thank you, Madam Pennefather. Commissioner del Val?
LISTNUM 1 \l 1774 COMMISSION del VAL: Thank you. I'm taking note of the comments by other parties on the intrusiveness of the nature that they ‑‑ of this service that you're proposing that they feel.
LISTNUM 1 \l 1775 Now, how would it work? What would the world look like if our government saved us here, the CRTC and they decided to pass legislation and say okay, all BDUs must participate in an alert system, but we are not going to legislate what system or what technology you use. Okay?
LISTNUM 1 \l 1776 And then in my ideal world all the of the BDUs and broadcasters got together and they agreed that to avoid all of the equipment problem of what event types to program into their equipment, the BDUs and the broadcasters decided that ‑‑ you know how one of your options was in case of an alert it could switch to a screen and they all decided that The Weather Network would be that screen and so the only thing that the ‑‑ that we would see, say if I were watching "This Hour Has 22 Minutes" on CBC, it would say, "Weather Warning" or "Emergency Alert, switch to Weather Network."
LISTNUM 1 \l 1777 Would that work for you?
LISTNUM 1 \l 1778 MR. TEMPLE: In many ways that is essentially what's happening, but rather than switching to our network they are switching to ‑‑ they can at their options just switch to a page that gives that information. So conceptually that is what's happening.
LISTNUM 1 \l 1779 When we ‑‑ I'll try not to make this too technically complicated, because I'll probably confuse myself, but the equipment that we put in place creates ‑‑ we'll just talk about the full page. You can get more elaborate with crawls, but we'll just talk about the full page.
LISTNUM 1 \l 1780 The equipment that we put into the cable head end creates that page right there and so rather for them to switch to our channel, which I don't think broadcasters would be too comfortable with, we've created a non‑branded, generic ‑‑ there is no, you know, it doesn't advantage one broadcaster over another. They just switch to this kind of phantom channel that shows the message.
LISTNUM 1 \l 1781 So that is ‑‑ what you're talking about is conceptually exactly what we are doing.
LISTNUM 1 \l 1782 The equipment at the cable head end creates that page and all the channels are switched to it and everyone sees the same message and they are not going to The Weather Network, so there would not be a ‑‑ you know, sometimes you have the branding or the logo burnt in or there is nothing ‑‑ and that is fair, because it is not about us, the warning is about the warning, it is not about The Weather Network.
LISTNUM 1 \l 1783 So that is really what we are suggesting.
LISTNUM 1 \l 1784 COMMISSION del VAL: I guess one of the points that I was trying to make was the importance of co‑operation and co‑ordination to make something like this work and to probably take ‑‑ take away the feeling of some of the interveners who feel that they are having something rammed down their throats.
LISTNUM 1 \l 1785 Now, you know, one of the comments you made in your opening was that our emergency partners have told us that they don't want to deal with a patchwork of systems and this really goes to the same point.
LISTNUM 1 \l 1786 I was reading the intervention of I think the British Columbia Ministry of Public Safety and Solicitor General and they talked about in B.C. an all‑alert system is likely to reach only 20 percent of the population during daylight hours and, for example, in the Kelowna fire it was door‑to‑door that was the most effective.
LISTNUM 1 \l 1787 Is it realistic for us to expect that we not have to work with a patchwork of systems?
LISTNUM 1 \l 1788 MR. TEMPLE: There is I guess patchworks and then there is patchworks.
LISTNUM 1 \l 1789 Public alerting officials, and I think you'll be talking to a number of them tomorrow and I suspect most of them will tell you that they need it to be as simple as possible.
LISTNUM 1 \l 1790 It is quite right that there is no one perfect way and we've never suggested that. If you're driving in your car a television‑based system isn't of much use. Having said that, we all know that TV is a very powerful medium and it can reach a lot of people very quickly.
LISTNUM 1 \l 1791 So I think public alerting officials want as many means as possible to reach the public: Sirens, radio, TV, wireless, internet, you name it. They'd love it all.
LISTNUM 1 \l 1792 However, within that I think what they'll also tell you is I don't ‑‑ if I'm going to put a warning on cable I don't want to deal with 27 different people.
LISTNUM 1 \l 1793 I don't want to have to phone this cable operator if it is in that area or I got to figure out who to call here. I want as much as possible a simplified approach.
LISTNUM 1 \l 1794 In many ways I think we'll see over the evolution of time CANALERT helping solve some of those problems, so that we'll ultimately get to the stage where you input the warning once and it goes to all these separate medium simultaneously, but that doesn't exist and we don't know when or if it will exist, but in the interim we can provide that and we are happy to ‑‑ we won't necessarily be one‑stop shopping, but we can deliver the warning to any BDU within their jurisdiction. They don't have to worry about who has this coverage area or who is licenced over there.
LISTNUM 1 \l 1795 And, as we've mentioned, we are happy to provide that to other broadcasters so that they can deal with the alerts and as they see fit.
LISTNUM 1 \l 1796 So we are trying to move to that one‑stop shopping. We are not quite there but that is part of our goal.
LISTNUM 1 \l 1797 COMMISSION del VAL: And why do you think it should be the CRTC to mandate this carriage? Why shouldn't it be the government to say that this is an initiative for ‑‑ for this type of an initiative, you know, should be mandated by legislation? And because one of the reasons being, you know, if I look at the ‑‑ all the paper and the technology where did our expertise come from?
LISTNUM 1 \l 1798 MR. TEMPLE: Our view is that you are experts in regulating the broadcasting industry and that is what we are doing. We are putting alerts through the broadcasting industry and no one is more qualified to do that than the Commission.
LISTNUM 1 \l 1799 I think the government through CANALERT and the activities of Industry Canada have identified that it is important, but when it comes time to setting the rules of how it should work within the broadcasting industry, our view is that is the Commission.
LISTNUM 1 \l 1800 COMMISSION del VAL: Then on your ‑‑ on your application there was ‑‑ on page 2, I believe, you said that consequently the ACA service we propose would work in tandem with any service to over‑the‑air broadcasters and then you talked about the costs and that the costs could slightly increase, if anything, if Pelmorex were required to deliver alerts using different protocols to accommodate the different equipment used by various over‑the‑air broadcasters.
LISTNUM 1 \l 1801 So now your financials, I'm not clear as to ‑‑ they have not included your ‑‑ the ‑‑ the contingency of needing to increase your cost to accommodate over‑the‑air transmission?
LISTNUM 1 \l 1802 MR. TEMPLE: What we were trying to explain is we ‑‑ we will provide ‑‑ we will provide the messaging, the content of the alerts to broadcasters, but we would not provide the equipment they need to insert alerts. That is not part of our business plan.
LISTNUM 1 \l 1803 So we can ‑‑ it is kind of the taking ‑‑ what's the saying? Taking the horse to water, but you can't make them drink.
LISTNUM 1 \l 1804 COMMISSION del VAL: Okay.
LISTNUM 1 \l 1805 MR. TEMPLE: I mean, we'll take it to them, but we can't ‑‑ we are not proposing ‑‑ I mean, the CBC application, I think just for their own radio is 16 million dollars for their transmitter, so we've not included that in our business plan, but if we can work with broadcasters to at least get the message to them and then they can invest however in their own funds or government grants or whatever, to insert it, then that is wonderful.
LISTNUM 1 \l 1806 COMMISSION del VAL: So I think I'm confused, because you then go on to say:
"However, using the ACA network to alert over‑the‑air broadcasters and their audiences of local emergencies will certainly cost the Canadian Government far less."
LISTNUM 1 \l 1807 So my one question is far less than what? And then I'll go on.
"And allow for a quicker provision of service than establishing a ESA type service in Canada on a standalone basis, it will also provide operational simplicity for authorized alert providers."
LISTNUM 1 \l 1808 So the first question is less than what? CBC?
LISTNUM 1 \l 1809 MR. TEMPLE: Less than the Government of Canada replicating all the work that we'll have already put in place. We'll already have operation centres and whatnot there, we'll already have the signals on the satellite so there is no need to replicate that, so if we are licenced our view is that there is an opportunity there for the Government of Canada to save money should they want to extend the service to other broadcasters, because we are going ‑‑ you know, we wouldn't say, no, you can't use our system. I mean, of course we would let them have access.
LISTNUM 1 \l 1810 So there is an opportunity, rather than creating a second distribution service.
LISTNUM 1 \l 1811 COMMISSION del VAL: So your proposal as it stands does not include over‑the‑air except to give them the message.
LISTNUM 1 \l 1812 MR. TEMPLE: That's correct.
LISTNUM 1 \l 1813 COMMISSION del VAL: Is that correct? Okay. So you are coming back for Phase II, aren't you? Definitely?
LISTNUM 1 \l 1814 MR. TEMPLE: We haven't decided that.
LISTNUM 1 \l 1815 COMMISSION del VAL: Okay. Because I do have questions that are more appropriate for Phase II.
LISTNUM 1 \l 1816 So if you're not coming back then maybe we should take a lunch break.
LISTNUM 1 \l 1817 MR. TEMPLE: If you would like us to come back we can come back. Whatever is most convenient for you.
LISTNUM 1 \l 1818 THE CHAIRPERSON: I hear you that you will be coming back, so we'll ask the questions at that point.
‑‑‑ Laughter
LISTNUM 1 \l 1819 COMMISSION del VAL: Then one thing, if you could prepare for, is I'm not ‑‑ I'm really not clear from statements like this from your letter that you filed against the CBC, what exactly is it that you're objecting to? They are asking really basically at this point of the proposal over‑the‑air for radio, which you said that you're not doing, and then they are asking for the 7(d) amendment and I think I've got your position when you discuss the 7(d) amendment slightly, but I also see the two as complimenting each other, so I'm ‑‑ if you want to answer it when you come back for Phase II, is I'm not clear what it is that you're objecting to.
LISTNUM 1 \l 1820 And then I'll have other questions in Phase II. Thank you.
LISTNUM 1 \l 1821 Thank you, Mr. Chair.
LISTNUM 1 \l 1822 THE CHAIRPERSON: Thank you, Commissioner del Val. Legal, Mr. McCallum.
LISTNUM 1 \l 1823 MR. McCALLUM: You made a series of undertakings this morning and I just wanted to see if we can fix a time for them. I think with respect to the capital outlays you said you would be prepared to file those at the end of the day.
LISTNUM 1 \l 1824 But then there were other undertakings that were made both before and after and I'm just wondering if there is sort of one time when you can respond to the various undertakings that were made this morning?
LISTNUM 1 \l 1825 MR. TEMPLE: Well, we've made a number of them and I'm not even sure my list is complete, so if it is all right just to be on the safe side, I would like to say we'll respond to all the undertakings by tomorrow morning, if that is all right.
LISTNUM 1 \l 1826 MR. McCALLUM: I think with the permission of the Chair, I think that would be satisfactory.
LISTNUM 1 \l 1827 There was one matter that didn't come across quite as clearly as I was hoping in terms of the official languages of the messages.
LISTNUM 1 \l 1828 As I understood your answer this morning, if a public alerting authority issues an alert in one language, you will distribute that alert in one language, is that correct?
LISTNUM 1 \l 1829 MR. TEMPLE: That's correct.
LISTNUM 1 \l 1830 MR. McCALLUM: And if the alerting authority issues it in both languages you would distribute it in both languages.
LISTNUM 1 \l 1831 MR. TEMPLE: That's correct.
LISTNUM 1 \l 1832 MR. McCALLUM: And you would accept a condition of licence to do that?
LISTNUM 1 \l 1833 MR. TEMPLE: That's correct.
LISTNUM 1 \l 1834 MR. McCALLUM: But then at the receiving end, at the BDU receiving end, as I understand it, whether they receive the alert in English on an English channel or in French on a French channel depends on how the BDU wires the undertaking. Is that a correct summary of your answer this morning?
LISTNUM 1 \l 1835 MR. TEMPLE: Yes. If ... it gets complicated when you get to the cable head end, depending on how they are processing the signals. In most cases you could accommodate placing English channels ‑‑ or English messages on English‑language channels and French language messages, but it ... it could be ‑‑ it could be very expensive, depending on how the cable operator is processing their signals.
LISTNUM 1 \l 1836 An alternative might be to put both on the channels and I'll give you a example. If they are doing ‑‑ and I expect my colleagues in the back to correct me, but if you're doing a comb generator and you are basically just substituting the message for all the channels, if you've got a couple of English channels and a French channel and then a couple of English channels, now all of a sudden it gets real complicated, because what you're basically doing is switching all of them. So now you have got to switch some and not switch these ones there and so it can get a little complicated. I'm not describing it technically, but hopefully you are getting the idea that it is awkward.
LISTNUM 1 \l 1837 So one alternative might be to make available both languages in a single message, if that is a requirement, but it does make it complicated.
LISTNUM 1 \l 1838 MR. McCALLUM: So if that were a concern for the Commission, that in the case of the alert be being issued in both official languages that they be available on a distribution system in both languages, that Pelmorex would accept a condition of licence to make them available in both official languages and in some cases it would be implemented by issuing a bilingual alert in one message. Is that a fair summary?
LISTNUM 1 \l 1839 MR. TEMPLE: Right. But the condition of licence would apply to what we send, if I'm understanding you correctly, not what would be the obligation of the BDU.
LISTNUM 1 \l 1840 MR. McCALLUM: What I'm trying to see is if there is a way to ensure that the message is received at the receiving end by the subscriber in some bilingual manner and, as I understand it, you are saying that in some cases it is technically difficult because the BDU may not have the technology to insert French on French channel, English on English channel and you said you would address that by putting a bilingual assert in such cases.
LISTNUM 1 \l 1841 Did I correctly summarize you?
LISTNUM 1 \l 1842 MR. TEMPLE: Let me just make sure I haven't misspoken.
LISTNUM 1 \l 1843 As with most things technical, it is always a little more complicated than you think.
LISTNUM 1 \l 1844 Theoretically, yes. It was pointed out that one of the practical problems is that the messages don't arrive at the same time. A case in point is often we will get a message from ‑‑ well, we'll use the example Environment Canada in English, if it was issued in English and sometime later we'll get the French version, because it has to go through processing or translation or the opposite could happen, depending on which office issues the original warning for what area, so it can get a little complicated, because we couldn't send the French until we got the French and if it came five minutes later, we'd have a bit of a problem.
LISTNUM 1 \l 1845 MR. McCALLUM: I'm just wondering if ‑‑
LISTNUM 1 \l 1846 MR. TEMPLE: We're certainly comfortable having an obligation on us to deliver warnings in both languages and certainly you have our undertaking to work with BDUs to help them deliver warnings in both languages, I'm just not sure there's a way to guarantee that can happen in a reasonable way.
LISTNUM 1 \l 1847 MR. McCALLUM: I'm just wondering if ‑‑ in responding to the undertakings, if you could come up with some sort of wording for tomorrow morning that might address that preoccupation.
LISTNUM 1 \l 1848 MR. TEMPLE: We'll do our best.
LISTNUM 1 \l 1849 MR. McCALLUM: Thank you. This will be kind of a blunt question. If the Commission were prepared to approve your proposal, but grant a rate of six cents per subscriber per month, would Pelmorex go ahead with the proposal?
LISTNUM 1 \l 1850 MR. MORRISSETTE: I guess I'm tempted to say that we'll come back to you on that. The financial models that we have developed, and we extensively discussed those earlier today, indicate a negative cash flow at the end of the period and the negative IRR.
LISTNUM 1 \l 1851 Six cents would just significantly and materially increase that. We did indicate that an analog optional model could lead to a six cent rate. In fact, if ‑‑ just a few numbers that we have run comparing a six cent ‑‑
LISTNUM 1 \l 1852 MR. McCALLUM: I guess what I'm trying to get at really is is a six cent rate such an impediment that you would not implement the service? I understand that it's far less profitable and it would take longer to recover it and there's problems with the internal rate of return, but I really was hoping for a ‑‑
LISTNUM 1 \l 1853 MR. TEMPLE: A yes or no?
LISTNUM 1 \l 1854 MR. McCALLUM: A yes or no. Because I do have a follow‑up question and that relates to the scenario that you posited this morning.
LISTNUM 1 \l 1855 MR. TEMPLE: Yes, our model shows that instead of a 1.6 million negative number at the end of year seven, there would be 13 and a half million dollars negative and a very significant negative IRR, which indicates that relative to the risk involved, that this would not justify a ‑‑ proceeding on that basis.
LISTNUM 1 \l 1856 MR. McCALLUM: And with respect to the scenario you've furnished this morning, analog optional and digital mandatory, if the Commission were tempted to approve that model, but impose a rate of four cents per subscriber per month, would you implement that proposal?
LISTNUM 1 \l 1857 MR. MORRISSETTE: The same logic applies. I mean, we assess all of these projects on an incremental basis and assess the risk involved and expect a reasonable and fair return. And the lower pricing that you've indicated would not produce that result, so it would make it very difficult for us to proceed on that basis.
LISTNUM 1 \l 1858 MR. McCALLUM: I guess ‑‑ finally, I guess, with the indulgence of the Chair, I'd just like to know what ‑‑ you spoke about coordination I think in New Brunswick and I was wondering if the service were approved, what would be your plans to coordinate with emergency officials in the province of Alberta?
LISTNUM 1 \l 1859 MR. TEMPLE: The same. I mean, I've gone out and visited with them all. I visited with the emergency ‑‑ emergency measures people in Alberta and we'd coordinated the launch with them.
LISTNUM 1 \l 1860 They seem to be ‑‑ I don't want to speak on their behalf, but certainly my meeting with them was very good and they seemed to be quite interested in what we were proposing, so we are ‑‑ we have talked to, I think, all of the provinces or pretty well all of them, and we have coordinated through them.
LISTNUM 1 \l 1861 We are hoping to be able to do that. It is certainly much simpler to coordinate with the provinces than with each municipality individually, so that wouldn't pose a problem at all.
LISTNUM 1 \l 1862 MR. McCALLUM: In your opinion then, approval of your service would not ride roughshod over the emergency public warning system in place in the province of Alberta currently?
LISTNUM 1 \l 1863 MR. TEMPLE: Oh, not at all. We'd work to integrate it and coordinate it so that it is complementary. It is not a replacement. It is not meant to displace what they're doing at all.
LISTNUM 1 \l 1864 MR. McCALLUM: Thank you. Thank you, Mr. Chair.
LISTNUM 1 \l 1865 THE CHAIRPERSON: Thank you. Thank you, Mr. Morrissette. Thank you to your group. We will break for lunch and we will get back at 2:30 with the CBC/Radio‑Canada application.
‑‑‑ Upon recessing at 1325 / Suspension à 1325
‑‑‑ Upon resuming at 1433 / Reprise à 1433
LISTNUM 1 \l 1866 THE CHAIRPERSON: Order please. À l'ordre s'il vous plaît.
LISTNUM 1 \l 1867 LA SECRÉTARE: Merci, monsieur le Président.
LISTNUM 1 \l 1868 We will now proceed with item 2 on the agenda, which is an application by the Canadian Broadcasting Corporation to provide an all hazard all channel emergency broadcasting public alert service. The messages would be distributed by satellite to the CBC Radio transmission backbone for broadcast by the appropriate transmitters.
LISTNUM 1 \l 1869 Selon la requérante, les organismes autorisés à émettre des avertissements auraient la responsabilité d'encoder les messages d'alerte dans un format normalisé respectant des protocoles techniques et informationnels précis. Ces organismes comprendraient entre autres Environnement Canada, la GRC, de même que les organismes provinciaux de secours. La Société Radio Canada n'exercerait aucun contrôle sur l'émission, le contenu ou la fréquence des alertes publiques.
LISTNUM 1 \l 1870 Appearing for the applicant is Mr. Steven Guiton, who will introduce his colleagues. You will then have twenty minutes for your presentation. Mr. Guiton.
PRESENTATION/PRÉSENTATION
LISTNUM 1 \l 1871 MR. GUITON: Merci. Bonjour. Good afternoon, Commissioners. My name is Steven Guiton and I am executive director, strategy and government relations at CBC Radio Canada. With me today is Mr. Ray Carnovale, vice‑president and chief technology officer.
LISTNUM 1 \l 1872 To Mr. Carnovale's left is Mr. Francois Gauthier, senior manager delivery systems at Spectrum Engineering. To my right, Mr. Rob Scarth, director of regulatory affairs, and to Mr. Scarth's right is Ms. Edith Cody‑Rice, our legal counsel.
LISTNUM 1 \l 1873 We are pleased to be here today to discuss CBC's proposal for an all channel emergency alert service which would be used by BDUs on both their analog and digital systems to notify the public of emergencies.
LISTNUM 1 \l 1874 À l'heure actuelle, le Canada ne possède pas de système national d'alerte au public. Plusieurs systèmes régionaux sont déjà en place ou le seront sous peu, mais il n'existe aucun système national qui peut fontionner à l'échelle du pays au moyen d'indicateurs d'emplacement géographique communs et de protocoles de communication.
LISTNUM 1 \l 1875 Le gouvernement du Canada reconnaît la gravité de ce manque et a entrepris d'y remédier.
LISTNUM 1 \l 1876 En 2004, le gouvernement a commencé l'élaboration de CANALERT, un système pancanadien d'alerte au public, dans le cadre de la vaste initiative gouvernementale visant à mettre en oeuvre un système de protection civile.
LISTNUM 1 \l 1877 Depuis deux ans, j'assume la présidence du groupe de travail des radiodiffuseurs sur les systèmes d'alerte au public, dans le cadre du projet CANALERT.
LISTNUM 1 \l 1878 À titre de participant à ce projet, CBC/Radio‑Canada collabore avec Industrie Canada, les gouvernements provinciaux ainsi que diverses sociétés privées, notamment des radiodiffuseurs, des EDR et des entreprises de télécommunications, en vue d'élaborer des protocoles d'urgence et autres éléments clés indispensables à la création d'un système national d'alerte au public.
LISTNUM 1 \l 1879 The CANALERT initiative is based on two key principles. First, that no single medium, system or technology can ensure that public alerts will reach all Canadians in an emergency. Consequently, the CANALERT initiative embraces broadcasters, BDUs, cellular providers, internet providers as well as Telcos and other communication providers.
LISTNUM 1 \l 1880 The second key CANALERT principle is even more fundamental. In order to have a robust public alerting system that can operate consistently across all of these different distribution platforms, it is necessary to have a uniform approach, using common, open and non‑proprietary protocols.
LISTNUM 1 \l 1881 CBC's proposal for an all channel emergency alert is based on this CANALERT vision. We see our proposal as a natural and cost effective way to use CBC's ubiquitous over‑the‑air radio services in conjunction the CANALERT program to enable alerts to be carried over BDU distribution systems.
LISTNUM 1 \l 1882 In fact, our proposal is simple and flexible enough to be easily used by other communications media, such as other broadcasters, telephone companies, ISP's, to enable them to provide public alerts as part of the CANALERT system.
LISTNUM 1 \l 1883 That being said, we would like to emphasize that we view CBC's proposal as complementary to the other proposals before you today. We are not proposing or seeking any form of exclusivity when it comes to public alerting. In our view, what is important is that there be uniformity in the protocols and alert messages that are used across all communications media.
LISTNUM 1 \l 1884 That idea, as I mentioned earlier, is central to the CANALERT initiative. However, it is also important that BDUs and other players implement common alerting standards and protocols, using the technologies and mechanisms that best suit their particular communications systems or network architecture. This will ensure that the CANALERT initiative can be implemented in the most efficient and cost effective manner possible.
LISTNUM 1 \l 1885 I would like to now turn things over to Mr. Carnovale to give you an overview of how our proposed system would work.
LISTNUM 1 \l 1886 MR. CARNOVALE: As you have just heard, CBC's proposal is based on the CANALERT initiative, and would make use of CBC Radio Canada's national radio transmission system that covers 99 percent of the Canadian population.
LISTNUM 1 \l 1887 To start at the beginning, emergency alerts would originate with authorized agencies under the CANALERT system. Those authorities would be the only entities permitted to originate alerts.
LISTNUM 1 \l 1888 Alert messages would be based on a predetermined set of protocols. Each event type or emergency would have an assigned code or number. As well, the country would be divided into a sequence of geographic areas and these would be assigned a unique geo code or number. The alerts would consist of a sequence of numbers selected and ordered according to the protocol established by CANALERT.
LISTNUM 1 \l 1889 Since the alert code is numeric, each code can be directly linked to an appropriate text message in either English or French or both. Associated with each alert there would also be an audio message that would play and also be displayed as on screen text.
LISTNUM 1 \l 1890 When an authorized agency identifies an emergency and issues an alert, that alert would be transmitted to CBC's national alarm centre in Ottawa. The alert would then be up‑linked for satellite distribution across CBC's entire terrestrial radio transmission back bone. Based on geo codes, the alert would be decoded by an EAS decoder at the appropriate CBC transmitter site and broadcast over the air in the affected area.
LISTNUM 1 \l 1891 Once the alert message is generated by an authorized user, the process of delivery to the public is almost instantaneous. Satellite delivery of the alert message enables reception and delivery by other entities such as cable, DTH or other BDUs.
LISTNUM 1 \l 1892 A BDU that wished to make use of CBC's alerting system could do so in one of two ways. It could receive the alert directly from satellite, which we believe would be the most cost‑effective approach, or it could receive the alert signal off‑air from one of CBC's radio transmitters. In either case, the BDU would require an EAS decoder at its head end that would decode the alert and identify whether the alert was applicable to the BDU's service area.
LISTNUM 1 \l 1893 If the alert applied to a BDU service area, it would be distributed to subscribers within that area. The simplest way to do this would be to replace all analog signals with a single broadcast screen that would include the appropriate text and audio message.
LISTNUM 1 \l 1894 In the case of digital systems, all digital receivers would be force‑tuned to an alert channel consisting solely of the alert message in both text and audio.
LISTNUM 1 \l 1895 If the BDU wished to adopt a more sophisticated approach, such as a text crawl over an existing signal, it could do so.
LISTNUM 1 \l 1896 To recap, the alert in the CANALERT protocol would originate with an authorized agency under the CANALERT system.
LISTNUM 1 \l 1897 The alert would be transmitted to the CBC national alarm centre and uplinked to satellite for distribution across the country.
LISTNUM 1 \l 1898 Using EAS decoders at its radio transmission sites, CBC would broadcast the alert over the air where applicable.
LISTNUM 1 \l 1899 BDUs could pick up the alert signal either directly from satellite or off air.
LISTNUM 1 \l 1900 EAS decoders within a BDU system would then determine whether the alert was applicable to its geographic area, and, if so, the alert would then be distributed to subscribers.
LISTNUM 1 \l 1901 That is our proposed system.
LISTNUM 1 \l 1902 We have a short video demonstration that provides you with an overview of how the system works. Before we turn to the video, though, I would like to say a word about EAS decoders.
LISTNUM 1 \l 1903 EAS decoders employ existing non‑proprietary technology that has been in use in the United States since 1994, and available from several manufacturers. It is a relatively simple technology by today's standards.
LISTNUM 1 \l 1904 We, like the FCC in the U.S., believe it is a robust technology that provides a cost‑effective solution to a very basic but extremely important problem, broadcasting emergency alerts in a reliable and efficient manner.
LISTNUM 1 \l 1905 As indicated in our application, CBC has conducted a field trial using the system I have just described, including the EAS decoders. We consider the field trial to be a complete success, and are confident that, from a technical perspective, the system could be implemented across the country without difficulty.
LISTNUM 1 \l 1906 Let's turn to the video.
‑‑‑ Video presentation / Présentation vidéo
LISTNUM 1 \l 1907 MR. GUITON: I hope that video provided you with a better understanding of how our proposed system would work.
LISTNUM 1 \l 1908 I would like to point out that what you heard was a unilingual English version of how a BDU could implement our service. It could also be presented in a French‑only format or in a bilingual format.
LISTNUM 1 \l 1909 I would like to take a few minutes to highlight a couple of aspects of the system.
LISTNUM 1 \l 1910 First, as I hope is evident by now, CBC would not originate or exercise any control over the nature of the alerts. CBC would simply receive the alerts from authorized agencies under the CANALERT system and then pass those alerts through to both its own radio service and to any BDUs that wished to rely on CBC as the deliverer of alerts.
LISTNUM 1 \l 1911 Second, I would like to emphasize that reliance on CANALERT would ensure consistency in the area of emergency alerting across all media and communications technology. We consider this an extremely important feature of our approach, as I indicated earlier.
LISTNUM 1 \l 1912 Third, the fact that the CBC's system would use existing technology makes it both simple to implement and very cost effective. It could be easily implemented by all BDUs, including small cable systems.
LISTNUM 1 \l 1913 It also has the added advantage of being accessible by any participating broadcaster, either radio or television.
LISTNUM 1 \l 1914 Fourth, the cost of implementation would rest with the individual entities involved and would not require a charge to be imposed on BDU subscribers. In particular, BDUs would bear their own cost, which should not be significant on a per system basis.
LISTNUM 1 \l 1915 CBC Radio Canada is seeking government funding for its part of the system.
LISTNUM 1 \l 1916 Finally, reliance on EAS technology would help facilitate cross‑border coordination with the United States. This is obviously a significant benefit in an emergency alerting system.
LISTNUM 1 \l 1917 Given the nature of our proposal, there is only one regulatory change required to permit all‑channel emergency alerting. This is a change to section 7 of the Broadcast Distribution Regulations to permit BDUs to alter the signal of a programming service in order to transmit an emergency alert.
LISTNUM 1 \l 1918 Specifically, we believe that section 7(d) should be revised as follows:
"The licensee shall not alter or delete a programming service in a licensed area in the course of its distribution except
(d) for the purpose of transmitting an authorized emergency public alert message;"
LISTNUM 1 \l 1919 En conclusion, la proposition de CBC/Radio‑Canada s'appuie sur le projet CANALERT afin d'adopter une approche cohérente, ouverte et non‑exclusive en ce qui concerne les alertes d'urgence dans l'ensemble des médias et des technologies, et ce, de manière sûre et économique.
LISTNUM 1 \l 1920 CBC/Radio‑Canada ne cherche pas à obtenir quelque forme d'exclusivité que ce soit en ce qui a trait aux alertes au public. Nous croyons plutôt que chaque entité devrait avoir le choix de la technologie et de l'approche qui convient le mieux à sa situation particulière, à condition qu'elle observe les normes et les protocoles définis dans le système CANALERT.
LISTNUM 1 \l 1921 However, in order for CBC's proposal to be put into effect, an amendment to the BDU regulations would be required. In our view, such an amendment would clearly be in the public interest, given the high level of importance that must be given to public alerting.
LISTNUM 1 \l 1922 Thank you for your time and attention. We would be pleased to respond to any questions you may have.
LISTNUM 1 \l 1923 THE CHAIRPERSON: Thank you, Mr. Guiton.
LISTNUM 1 \l 1924 Commissioner del Val.
LISTNUM 1 \l 1925 COMMISSIONER del VAL: Thank you for the presentation.
LISTNUM 1 \l 1926 I have questions in four main areas, as did Commissioner Pennefather ‑‑ technical, financial, policy and legal ‑‑ but I don't think that I will be able to be as organized in keeping my questions to one issue, so I hope you will bear with me.
LISTNUM 1 \l 1927 I would like to start with clarifying some of the areas raised in your application.
LISTNUM 1 \l 1928 First, you talked about the field study and the EAS system that you tested, and you described it as providing a basis for estimating the cost of implementing a baseline EAS system. I need some clarification on exactly what the baseline EAS system is.
LISTNUM 1 \l 1929 Is it the one that is currently being used by the U.S., without any of the identified weaknesses corrected, except for the satellite transmission, which you are using to correct the daisy chain latency problem?
LISTNUM 1 \l 1930 MR. CARNOVALE: Actually, I think that our definition of baseline is the radio‑only system that we have proposed to you today.
LISTNUM 1 \l 1931 I would add that several of the deficiencies that were noted in our EAS field trial have, in fact, already been corrected.
LISTNUM 1 \l 1932 MR. GAUTHIER: I would add to that that the basic EAS system used in the United States is made of multiple components. One of them is the EAS decoder with the EAS message. As part of our proposal, we are saying that we will provide the EAS decoder segment, the message, because it is a more robust component of the EAS system in the U.S., and we will replace the weak link, which is the daisy chain distribution, by satellite distribution.
LISTNUM 1 \l 1933 That is our proposal.
LISTNUM 1 \l 1934 COMMISSIONER del VAL: In your field study ‑‑ and I am thinking of the Types 1, 2 and 3 reception systems and those diagrams ‑‑ what exactly did you test?
LISTNUM 1 \l 1935 MR. GAUTHIER: Our proposal is slightly different from our test study, to address your first point.
LISTNUM 1 \l 1936 In our test study, we tried to test all of the possible ways for a potential user to receive a signal. Type 1 reception was a direct satellite to transmitter transmission, and it was the best approach and the lowest latency approach. This is the one that we are proposing today.
LISTNUM 1 \l 1937 Type 2 distribution was using a mix of satellite and maybe terrestrial links coming from original offices. This could create some latency and some kind of daisy chain approach, which is also used in the United States. Again, we tested it for the purpose of the Industry Canada trial, but it is something that we would avoid using in our system.
LISTNUM 1 \l 1938 But, again, in our proposal the Type 2 approach could always be used as a back‑up possibility, if the Type 1 link was not possible.
LISTNUM 1 \l 1939 The last link was a Type 3 approach, which was using multiple transmitters in an off‑air repeater mode.
LISTNUM 1 \l 1940 Again, it is really that there are technical differences between Types 1, 2 and 3, and I could brief you in more detail on the technical differences if you want, but it is really Type 1 that we are proposing today.
LISTNUM 1 \l 1941 COMMISSIONER del VAL: So the costs in the financials that you have presented are only for the Type 1, then.
LISTNUM 1 \l 1942 MR. GAUTHIER: Yes, that's correct.
LISTNUM 1 \l 1943 COMMISSIONER del VAL: So the pro forma financial statements that you have provided include the costs of the centralized satellite distribution and the external originating systems?
LISTNUM 1 \l 1944 MR. GAUTHIER: Yes, that is correct.
LISTNUM 1 \l 1945 You have to remember that the external originating system, for our part, will only be an access to a server in the National Alarm Centre, and then to have access to the distribution system from the CBC. Each EMO will have to provide their own hardware in order to communicate with us.
LISTNUM 1 \l 1946 It means a terminal access. It means to have a computer and to have a communication line with our National Alarm Centre, which could be Internet, phone‑based, ISDN, or another type of connection.
LISTNUM 1 \l 1947 COMMISSIONER del VAL: As you are aware, and you have told us, the FCC is still in the midst of a process to study the improvements they can make to the EAS system. In your field study you identified and summarized some of the problems.
LISTNUM 1 \l 1948 Are you aware of any other problems identified by the U.S. broadcast community that are relevant to our Canadian system but are not identified in your EAS field study?
LISTNUM 1 \l 1949 MR. GUITON: I would like to add a point of clarification. I think you were reading from our application, and since our application was filed, and since we responded to your deficiencies, the FCC, on November 10th, 2005, issued a report ‑‑ it's first report and order for the Notice of Proposed Rule Making on Emergency Alert Systems, and in that report they indicate that they intend to make EAS alerting mandatory for all distributors in the United States, and they endorse the EAS technology.
LISTNUM 1 \l 1950 That is just a point of clarification, that their study has been completed.
LISTNUM 1 \l 1951 COMMISSIONER del VAL: Yes, but I thought there was another study under way, where they were addressing issues such as the permissive nature of state and local signals, and I thought the comments wouldn't close until the end of April.
LISTNUM 1 \l 1952 MR. GAUTHIER: We also want to emphasize that the FCC has clearly stated that the EAS technology, as far as hardware base and robustness, is the one that they want to build on in the future and we strongly agree with the response on that.
LISTNUM 1 \l 1953 Regarding the usage of the EAS and the ability to send alerts into that system, our proposal is relying on CANALERT. We fully agree that in the U.S. there are still some uncertainties, but on our side we are relying on Industry Canada's work and all the other community work to provide a CANALERT definition for this part.
LISTNUM 1 \l 1954 MR. SCARTH: Commissioner del Val, perhaps if I can just close the loop on the FCC Issue.
LISTNUM 1 \l 1955 COMMISSIONER del VAL: Yes.
LISTNUM 1 \l 1956 MR. SCARTH: You are quite correct. I mean, there is a further notice of proposed rule‑making which was triggered as a result of the first report that was issued back in November.
LISTNUM 1 \l 1957 So they have not concluded their work, but with respect to the sort of basic premise behind the EAS system, the FCC has sort of seen it as a robust technology that they are prepared to see implemented across a variety of distribution platforms.
LISTNUM 1 \l 1958 COMMISSIONER del VAL: Great, thank you.
LISTNUM 1 \l 1959 So back to the original question: In your field study you have identified some of the problems, so you are not aware of any other that has already been identified in the States that would be relevant to ours?
LISTNUM 1 \l 1960 MR. GAUTHIER: No, we are not aware of a States problem that could be common to the problem that we have identified, or problems that are not solved by our proposal today.
LISTNUM 1 \l 1961 COMMISSIONER del VAL: All right. Thank you.
LISTNUM 1 \l 1962 Then on page 15 of your application you were talking about staffing of the national alarm system on a 24/7 basis.
LISTNUM 1 \l 1963 How many staff are currently employed there?
LISTNUM 1 \l 1964 MR. GAUTHIER: It's about six to seven staff during a daytime, and during nighttime there is at least one or two persons who are there also during nighttime.
LISTNUM 1 \l 1965 If a major problem occurs, more staff can be called back into the office.
LISTNUM 1 \l 1966 COMMISSIONER del VAL: Do you anticipate that you would have to add to that staff on implementing this alerting system?
LISTNUM 1 \l 1967 MR. GAUTHIER: Our staff is already addressing more than 1,600 transmitters in Canada and they can monitor all that right now using the system that is already in place. Adding an EAS monitoring component to our site is only one monitoring line out of maybe 40 or 50 different lines that can come from each of these sites. So we don't see any overload on that point.
LISTNUM 1 \l 1968 COMMISSIONER del VAL: Then again in your EAS report, I am looking at page 5, the section 3 objectives, and in your third bullet one of the objectives of the study identified was:
"... to determine whether the American EAS can be adapted to the Canadian market to operate effectively when overlaid on the CBC broadcast transmission distribution system and by extension with any other Canadian broadcasting services."
LISTNUM 1 \l 1969 So over which other Canadian broadcasting services was the EAS overlaid as part of this trial?
LISTNUM 1 \l 1970 MR. CARNOVALE: It wasn't overlaid with any other broadcasters. However, the technology is very amenable to being used by television, by any television and radio operator.
LISTNUM 1 \l 1971 I should add that I believe we also did some actual television over‑the‑air testing. So it was both radio and television that was tested, including the generation of text messages as you saw there.
LISTNUM 1 \l 1972 COMMISSIONER del VAL: On page 6 of your field study you identified that another problem with the EAS system in the U.S. is funding.
"The equipment is often not maintained and since its operation isn't funded it is not always properly attended."
LISTNUM 1 \l 1973 I note that in your financials there isn't really any provision for ongoing maintenance or upgrades and, as we stand today, don't we have the same problem?
LISTNUM 1 \l 1974 MR. GAUTHIER: In our proposal we already said that the operating cost that we estimate at $700,000 will be buried within the own CBC's budget. This is part of our budget to make sure that our transmit operation and satellite distribution of that system will be up and running accordingly.
LISTNUM 1 \l 1975 Regarding the equipment at the BDUs, as we indicated the BDUs will have the responsibility of the good usage of the equipment and the good health of the equipment.
LISTNUM 1 \l 1976 COMMISSIONER del VAL: So has CANALERT or has CBC decided on the EAS system already?
LISTNUM 1 \l 1977 MR. GAUTHIER: Yes, we decided that the EAS will be the component of the delivery of our system.
LISTNUM 1 \l 1978 COMMISSIONER del VAL: Then going back to your field study at section 4.1.5 on page 8, you talked about the Mnet system. Then I know that in your reply letter you said that that was to improve the EAS user interface.
LISTNUM 1 \l 1979 Is there any other purpose or significance of mentioning the Mnet, say for example redundancy?
LISTNUM 1 \l 1980 MR. GAUTHIER: Mnet is not really used for redundancy. Mnet will be used by the EMO user in order to enter the alerts and to access our server into the national alarm centre in a transparent way.
LISTNUM 1 \l 1981 So again we are proposing here the Mnet system or we are proposing Mnet‑like system. So we are not tied to that system at this point. Right now it is one system that we know it can do the job. We still have to do some customization on it to make sure it is compatible first with the CAP protocol as we want to implement it within CANALERT.
LISTNUM 1 \l 1982 So we will have to go into a public process to make sure that we get the correct system that supports everything we need in Canada and that is the interface. It is easily usable by EMO users so they can be compatible with our proposal.
LISTNUM 1 \l 1983 COMMISSIONER del VAL: Okay. I'm glad you brought up the CAP because I'm sure you are aware of the letter from Mr. Gehman of Pennsylvania which was attached to Pelmorex's intervention. A very entertaining letter.
LISTNUM 1 \l 1984 So you can anticipate the question, that he said categorically that EAS is not compatible with CAP.
LISTNUM 1 \l 1985 So two questions.
LISTNUM 1 \l 1986 The first is: In this proceeding that the FCC is still undergoing, were there any comments on CAP and the compatibility between CAP and EAS?
LISTNUM 1 \l 1987 Then, second, what is your response to Mr. Gehman's position about the compatibility of CAP and EAS?
LISTNUM 1 \l 1988 MR. SCARTH: Perhaps if I can start and François can pick it up at the end.
LISTNUM 1 \l 1989 It is our understanding that the CAP, Common Alerting Protocol is compatible with EAS. This is certainly the documentation that we have seen. We participate in Industry Canada's sub‑working group on the CAP protocol and the EAS technology, as we are sort of looking at its implementation, is compatible with CAP.
LISTNUM 1 \l 1990 MR. GAUTHIER: I would like to add on that, also on the technical side, that TFT, one of the possible manufacturers from EAS have tested successfully transferred off CAP protocol using EAS equipment.
LISTNUM 1 \l 1991 And, second, regarding Mr. Gehman's intervention, I met personally one full day with Mr. Gehman in Pennsylvania and we took all his notes regarding the problem of the EAS system in the U.S. and most of the problems were coming from the daisy chain distribution and were coming with the interface, and this is exactly what our proposal is fixing.
LISTNUM 1 \l 1992 I just want to add at this point that the Environment Canada network that is broadcasting on 161 megahertz are using the technological as the same format for the transmission, with is an EAS‑compatible technology. So they are already using the same kind of protocols.
LISTNUM 1 \l 1993 COMMISSIONER del VAL: I would love to have been a fly on the wall in that meeting you had with Mr. Gehman.
LISTNUM 1 \l 1994 Another question that I want to ask is on your field study on page 17. You were testing the reception type 2, the studio centre feeding terrestrial network. It said that:
"Instead of interrupting the normal programming of a specific location, the interruption is performed on a complete region."
LISTNUM 1 \l 1995 So the question was: Was there any testing of broadcasting the alert to a more specific location, smaller than a complete region?
LISTNUM 1 \l 1996 MR. GAUTHIER: First, as we said, we will implement type 1. But the way type 2 worked into our test set ‑‑ as an example, in Montréal when we wanted to send a message to our Victoriaville Première Chaîne transmitter. It's all on the same terrestrial link. There were no satellite facilities.
LISTNUM 1 \l 1997 We had to trigger the Première Chaîne in Montréal in Sherbrooke, in Abbotsford and in Victoriaville in order to address that specific transmitter and we saw that as a limitation to our system. This is why we are proposing type 1 with satellite reception everywhere.
LISTNUM 1 \l 1998 COMMISSIONER del VAL: All right. Thank you.
LISTNUM 1 \l 1999 So then for type 1, did you test broadcasting to a more specific location?
LISTNUM 1 \l 11000 MR. GAUTHIER: In a type 1 type configuration each transmitter is individually addressable.
LISTNUM 1 \l 11001 COMMISSIONER del VAL: The interoperability of the EAS equipment with digital standard, isn't that quite a significant problem?
LISTNUM 1 \l 11002 MR. CARNOVALE: It isn't any longer. There are manufacturers that ‑‑ are you talking about for digital terrestrial transmitters or for digital cable systems, just to clarify?
LISTNUM 1 \l 11003 COMMISSIONER del VAL: I'm referring to page 23 of your EAS field study.
LISTNUM 1 \l 11004 MR. CARNOVALE: That comment is relative to the fact that at the time the EAS decoders did not actually provide either digital audio or video streams to be interfaced with digital radio studios or digital television studios. Since then TFT does have a digital audio insertion unit and another company, Vela, works with a Canadian company, Vertigo, and have developed a digital character generator interface. So those issues are also address.
LISTNUM 1 \l 11005 MR. GUITON: Commissioner, if I could just clarify, sorry.
LISTNUM 1 \l 11006 COMMISSIONER del VAL: Sorry.
LISTNUM 1 \l 11007 MR. GUITON: Just the reference that you are referring I believe is, as Mr. Carnovale was saying, was with respect to digital over‑the‑air.
LISTNUM 1 \l 11008 Our system as proposed works perfectly fine for digital cable systems, analog cable systems, so there is no issue there.
LISTNUM 1 \l 11009 COMMISSIONER del VAL: All right.
LISTNUM 1 \l 11010 So for just the type 1 that you are proposing, the cost that you have projected includes the cost of making the system interoperable with digital system, let's say digital radio?
LISTNUM 1 \l 11011 MR. CARNOVALE: in our case, our radio transmitters, the vast majority of them, are still fed by analog‑based band signal, so there would be no increased cost there.
LISTNUM 1 \l 11012 COMMISSIONER del VAL: All right.
LISTNUM 1 \l 11013 I didn't understand on page 24 when you were talking about the interoperability of the EAS equipment with composite signal on transmitters.
LISTNUM 1 \l 11014 I just didn't understand that, so could you explain that, please?
LISTNUM 1 \l 11015 MR. GAUTHIER: All right. I think the example was for the composite signal.
LISTNUM 1 \l 11016 Let's say that you have a separate what we call SCMO or SCA channel into our FM transmitter. So let's say like in Montreal on la Première Chaîne we have a Portuguese station that is on the composite segment, so on the second FM, right now when we go into EAS mode, if an alert goes on la Première Chaîne, only the main FM Première Chaîne will have the alert. The SCMO will be blacked out and it won't be receivable any more, but the main channel will be received. That is the limitation.
LISTNUM 1 \l 11017 COMMISSIONER del VAL: All right. So if someone is listening to the Portuguese channel, they wouldn't hear the alert.
LISTNUM 1 \l 11018 Is that what it means to a listener?
LISTNUM 1 \l 11019 MR. GAUTHIER: This will have to be tested, but what's going to happen is that they will lose the carrier. Again, I can come back with an answer on that because I will need to look into SCMO receivers. So if their default or fall back mode is to the main FM carrier, it means that they will receive the alert from the Première Chaîne. They will lose the Portuguese part.
LISTNUM 1 \l 11020 THE CHAIRPERSON: How long will you need to verify the SCMO question?
LISTNUM 1 \l 11021 MR. GAUTHIER: How long will it take? I don't know if I will have it for tomorrow.
LISTNUM 1 \l 11022 MR. CARNOVALE: We will try.
LISTNUM 1 \l 11023 MR. GAUTHIER: We will try to surf the web tonight.
LISTNUM 1 \l 11024 COMMISSIONER del VAL: Thank you.
LISTNUM 1 \l 11025 MR. CARNOVALE: Just to clarify, this really is only an issue with the general public receiving the EAS message if they are tuned to an SCMO channel. It has no impact whatsoever on the ability of any BDUs that are using our radio signals as a back‑up source of triggering the EAS messages.
LISTNUM 1 \l 11026 Again, in the type 1 system it is satellite to the BDU head end is the primary method of transport. The fact that the EAS message is being sent out on our transmitters means that if the decoder at the BDU is equipped with the off‑air reception option, then it's a belt and suspenders redundancy.
LISTNUM 1 \l 11027 In fact, the EAS decoders are capable of taking up to six simultaneous different inputs and decoding the message from any one of those.
LISTNUM 1 \l 11028 MR. GAUTHIER: I just want to add also that if it comes to a problem and we want to make sure that all our SCMOs in our network are also fed by EAS system, we could use a second encoder for that audio component and make sure it is inserted.
LISTNUM 1 \l 11029 So yes, there is a solution and we can solve it.
LISTNUM 1 \l 11030 COMMISSIONER del VAL: Great. Great. That's great.
LISTNUM 1 \l 11031 Would it be too much trouble to maybe just give me an order of magnitude of what percentage would be affected by this SCMO problem, like how big the problem is, please
LISTNUM 1 \l 11032 MR. GAUTHIER: There is not much of them, but we will find this information for the next round.
LISTNUM 1 \l 11033 COMMISSIONER del VAL: Thank you.
LISTNUM 1 \l 11034 Now, I just want to go into your financial statements.
LISTNUM 1 \l 11035 You have the capital cost of, I think, $15 million plus, 15,563,000, and am I correct in assuming that that is the number that is projected as capital expenditure on a national basis in your performance statements?
LISTNUM 1 \l 11036 MR. SCARTH: That is correct, Commissioner.
LISTNUM 1 \l 11037 COMMISSIONER del VAL: Great.
LISTNUM 1 \l 11038 On page 25 of your EAS study you had a summary of key findings. I'm just trying to get a sense of what your projected cost includes. In particular, does it include the costs of correcting the following identified problems?
LISTNUM 1 \l 11039 The first problem is:
"The cost of a well‑trained technician to conduct installation and configuration procedures."
LISTNUM 1 \l 11040 MR. CARNOVALE: We have almost 200 technicians that maintain our transmission infrastructure. We consider them well trained so it is already covered.
LISTNUM 1 \l 11041 COMMISSIONER del VAL: All right.
"Cost of transition to digital radio and/or TV."
LISTNUM 1 \l 11042 Let's just take radio for now.
LISTNUM 1 \l 11043 MR. GAUTHIER: If you want to take radio, as indicated from when that report was first submitted, now there is some EAS digital audio boxes and they are about the same cost as the analog boxes, so it is just a matter of buying this one instead of buying the analog one. So there is no incremental cost there.
LISTNUM 1 \l 11044 COMMISSIONER del VAL: All right.
LISTNUM 1 \l 11045 What about:
"Cost of improving EAS alert generation interface"?
LISTNUM 1 \l 11046 MR. GAUTHIER: On that side, as we indicated, we won't use the EAS part of the system for that, we will use an Mnet‑like compatible system in conjunction with a CAP and a CANALERT compatible system.
LISTNUM 1 \l 11047 MR. SCARTH: Commissioner, those costs have been built into the projections that have been provided.
LISTNUM 1 \l 11048 COMMISSIONER del VAL: Great. Thank you.
"Cost of updating the EAS equipment to support, say, two languages"?
LISTNUM 1 \l 11049 MR. GAUTHIER: Right now in our RFP when we will go to buy our equipment, we will already ask to have these two languages to be implemented.
LISTNUM 1 \l 11050 But as we are speaking, we received information from TFT, one of the vendors, that they already supported French and Spanish language.
LISTNUM 1 \l 11051 COMMISSIONER del VAL: So your projections include that?
LISTNUM 1 \l 11052 MR. GAUTHIER: It is already included in the price, yes.
LISTNUM 1 \l 11053 COMMISSIONER del VAL: Next:
"Cost of overlaying the EAS equipment with a management system in order to interface with an outside alert originator."
LISTNUM 1 \l 11054 MR. GAUTHIER: Again, this is already part of our proposal. This is the component from the EMO side that will talk to our national alarm centre.
LISTNUM 1 \l 11055 COMMISSIONER del VAL: So now I just want to go to your reply to deficiencies on the detailed estimated transmission costs.
LISTNUM 1 \l 11056 It is Attachment 4 to your letter of October 21.
‑‑‑ Pause
LISTNUM 1 \l 11057 COMMISSIONER del VAL: On the line item under "Detailed Estimated Transmission Costs", "Decoder EAS", unit price of $2,250 per unit, and then ‑‑ and it ‑‑ comments, it is one per language per site.
LISTNUM 1 \l 11058 Now, I understand from your ‑‑ from page 19 of your application that you have about 1,060 radio sites. You're just talking about radio sites. So if at one ‑‑ one unit per language per site, I would need ‑‑ I would double the cost.
LISTNUM 1 \l 11059 I count that with the total capital costs of about ‑‑ of just over 1.5 million, you would only be able to buy 680 units. And if you've got ‑‑ you need two units per site, then only 340 sites would have these decoders. So what happened to the other 600 and something sites? Do you need decoders there?
LISTNUM 1 \l 11060 MR. CARNOVALE: Actually because the message will be uniform for both the English and the French services, that is really a function of what CANALERT decides to send. The same message would go out on both the English and French language transmitters.
LISTNUM 1 \l 11061 MS DEWAR: And I just want to add that some of our sites also are repeaters of others, so we cannot derive a direct number, say that we have such amounts of sites and we need such amounts of decoders.
LISTNUM 1 \l 11062 We need to look into the details of each sites, which sites can be used in a common way and which sites are repeaters of the other one and which sites will need the two decoders. So we need to go into the detail numbers before giving that.
LISTNUM 1 \l 11063 COMMISSIONER del VAL: Okay. So maybe the question is when you provided the estimate of 1.5 million, did you take into consideration already which sites need the decoders and which sites do not? And is that how you arrived at ‑‑ because at the cost of 2,250, then there would only be 680 units, and on the basis of your own analysis, you need only 680 units?
LISTNUM 1 \l 11064 MR. GAUTHIER: Yes, exactly, yes.
LISTNUM 1 \l 11065 COMMISSIONER del VAL: Okay. We have mentioned Mr. Gehman's letter already and then in your own application in Appendix A on page 25 you mentioned the need for a well trained technician. And then in ‑‑ also on page 22 of the ESA field trial you again mentioned that the encoder interface requires a well trained operator. And both Mr. Gehman and in your own field trial you commented that the single line LCD screen is a weakness.
LISTNUM 1 \l 11066 And now ‑‑ and I think the second appendix that is the letter of Mr. Afflerbach that is attached to Pelmorex's intervention, he said that complete ‑‑ it is a complete inability of EAS to interface to modern peripherals, including monitors.
LISTNUM 1 \l 11067 So I know that in your application when you were talking about the single LCD screen being difficult to read, but that you could get a bigger monitor for it, I ‑‑ there were two impressions that I was left with when I read all of this together. One is that perhaps the EAS system is not that user friendly, and secondly, with the problem that was singled out on the single line LED screen, if it were that easy to fix, wouldn't it have been fixed already?
LISTNUM 1 \l 11068 MR. CARNOVALE: It is. Again, you have to look at this in the context of the timing of when this report was written when we did the actual field trial, which is now over two years ago.
LISTNUM 1 \l 11069 I was just at the National Association of Broadcaster's Convention, I met with both TFT and Trilithic and there has been really very considerable progress made in dealing with these issues.
LISTNUM 1 \l 11070 Both companies work with partners to have the ‑‑ call it an interface layer that deals with all these issues and that layer talks to the EAS box.
LISTNUM 1 \l 11071 So Trilithic does it. There's a company called Tech Scan which partners with TFT. And of course Com Labs does EM Net. So both ‑‑ either EM Net or Tech Scan are examples of two appropriate technologies that provide very simple interfaces for the organization originating the message to format them in a very ‑‑ in a mouse click type fashion. So ‑‑ and you're looking at a large computer screen when you're doing that.
LISTNUM 1 \l 11072 We'd be happy if you wished us to file with you supplementary information from these manufacturers, if you so desire.
LISTNUM 1 \l 11073 MR. GAUTHIER: I would like to add on top of that during the EAS system trial at Industry Canada, we tested the EAS system to the bone, from the beginning to the end, and we clearly identified a couple of missing points. We verified that with Mr. Gehman and I don't know Mr. Afflerbach, but I know that what he said is true.
LISTNUM 1 \l 11074 All these points are difficult for the EAS system, the way it is implemented in the U.S. This is why in our proposal we are saying that we will use the EAS‑based distribution system. We will put it on that common terminal that will be easy to use for everyone.
LISTNUM 1 \l 11075 The EAS encoder is only going to be used once during the configuration by one of our trained technicians that knows how to operate it and once it is within the BDU system or any other system, nobody has to touch it anymore. It decodes the information, it can be feedback into a computer system with easy interface with this integration with anything else.
LISTNUM 1 \l 11076 COMMISSIONER del VAL: Thank you. And what about his comment that you actually need physical upgrades to update the equipment?
LISTNUM 1 \l 11077 MR. GAUTHIER: The boxes that we use during our trial, when I'm talking about physical updates, you need to change the memory chip inside the box, what we call an E‑prong, so this is a limitation of the box at this point.
LISTNUM 1 \l 11078 Again, we are a ‑‑ it is a price you have to pay when you want to have a robust device that can survive in minus ten to plus 16, to entrust with the environment, you need to go with these type of devices. Our technicians are used to that. they can go around and they can do all the updates. And it is something ‑‑ although it is hardware based, it is easy for us to do.
LISTNUM 1 \l 11079 COMMISSIONER del VAL: CBC is all the purple post‑its. We can move on to another topic now.
LISTNUM 1 \l 11080 On ‑‑ this is relating to voluntary participation, and here I am trying to understand some of the statements that you've made in your application and just trying to reconcile some of the statements. In ‑‑ on page 6 of your field study, the appendix A, in section 4.1 and ‑‑ .2, the first bullet was referring to all the limitations of the ESA, of how ESA currently functions in the US, and you pointed out that for state and local messages the system is used on a voluntary basis. This scheme creates complications such as who has the authority to use the ESA system on the state and local level.
LISTNUM 1 \l 11081 And then from the ‑‑ and then we talked about earlier the FCC itself is examining the issue of the permissive nature of the ESA at both the state and local levels and whether they should be mandated to participate in ESA.
LISTNUM 1 \l 11082 So I find ‑‑ is there any inconsistency between the weaknesses that we have pointed out of the ESA system and how it is used in the States and the issue of voluntary participation and your proposal that the BDUs have a choice of whether to deploy the system?
LISTNUM 1 \l 11083 MR. CARNOVALE: No, and the reason is the reference that you're referring to there really, it is not about so much the EAS technology, it is the way it is being used in the United States where they have not established uniform protocols. That's the key problems. You have differences in the way that the state level and municipal level people are interpreting it and using the technology, but it is not about the technology, it is about establishing something like CANALERT that allows everybody to understand a consistent formatting.
LISTNUM 1 \l 11084 COMMISSIONER del VAL: Okay. Then the second ‑‑ another point for you to please explain is that in your application you said that no one public alerting system can meet all Canadians in all ‑‑ in all locations at all times, therefore a combination of different technologies and platforms is the only way to ensure most Canadians in an affected area become aware of an alert.
LISTNUM 1 \l 11085 And then on page 17 you say:
"All of these distribution media or networks needed to work to a common set of protocols and rules, these standardized alert messages will then need to be carried and delivered over a uniform technology."
LISTNUM 1 \l 11086 Is there any inconsistency between those two?
LISTNUM 1 \l 11087 MR. CARNOVALE: I don't think so. I think in that context the last statement you just referred to, a uniform technology, we are really talking about, again, the CANALERT notion.
LISTNUM 1 \l 11088 The first ‑‑ the first part of what you referred to is the basic CANALERT principle, which is that there will be multiple technologies ultimately providing an early message, whether it is cellular, ISPs, broadcasters, BDUs. Those are all different technologies, different distribution platforms, and Industry Canada and the provincial government's view of that, of course, is that you want to increase the probability that you will get to people and one distribution platform alone is not going to give you that highest probability. And as long as they are all working within the same protocols then you've got the maximum coverage and consistent coverage.
LISTNUM 1 \l 11089 I believe the technology reference in that last piece you were talking about, you were really referring to the system that is being used to format the message to make sure that the event codes are all well defined.
LISTNUM 1 \l 11090 COMMISSIONER del VAL: And so you're not referring ‑‑ when you talk about uniform technology here as opposed to different technologies, in the uniform technology you're not referring to the EAS technology, for example?
LISTNUM 1 \l 11091 MR. CARNOVALE: Actually, I didn't think so, but I will pass it to Francois.
LISTNUM 1 \l 11092 MR. GAUTHIER: When we are talking about uniform technology, we are talking about a known and a non‑proprietary redistribution mechanism that everybody can hook into it and decode it and adapt it to their own system.
LISTNUM 1 \l 11093 In our proposal we are proposing the EAS because it is known, it is defined, and any user, just like we have seen from some interventions, some BDUs specify that they are the one, that they are the best suited to know their system and to know how to implement any alert into their system.
LISTNUM 1 \l 11094 What we are proposing to them is that there will be an EAS message coming out of the satellite. You just have to use off the shelf equipment that can be provided by anybody because it is a non‑proprietary technology. You can use that and put it ‑‑ and insert it into your own system.
LISTNUM 1 \l 11095 COMMISSIONER del VAL: Okay. Then on page 25 of your field report you said:
"Several management problems encountered in the US can be avoided if a single entity such as, in this case, the CBC, is managing the entire proposed backbone. This would allow for the uniform installation and maintenance of the hardware."
LISTNUM 1 \l 11096 Now, is there any inconsistency between this statement and the statement that ‑‑ for Canada there will necessarily be a combination of different technologies and platforms to disseminate the signals to most Canadians.
LISTNUM 1 \l 11097 MR. GAUTHIER: Again, the idea is that once we know that the single is encoded into a known format, like in a cap protocol format encoded into EAS, then it means after that once it is distributed it could be picked by satellite, just like we are proposing in our proposal. It could be picked from our FM transmitters. It could even be picked directly from the internet to our server. So any other providers of emergency alerts just ‑‑ just like cell phone operators, internet providers or BDUs or anybody else that will like to receive these messages.
LISTNUM 1 \l 11098 It is not ‑‑ the technology is not the limitation. The only common part of the technology is a known protocol, which is the EAS for the distribution is the cap protocol for the encoding of the message. And once everybody agree into that, then everybody else can hook into their system and distribute the alerts.
LISTNUM 1 \l 11099 COMMISSIONER del VAL: Okay. So it is not really uniform technology that you are talking about. You are talking about uniform protocol.
LISTNUM 1 \l 11100 MR. GAUTHIER: Yes, and the EAS part for the technology with the uniform cap protocol. That's the only part that needs to be uniform. And again, it is open standard that everybody has access to that.
LISTNUM 1 \l 11101 COMMISSIONER del VAL: Okay. And to your statement that sort of a single entity such as the CBC is managing the entire proposed backbone, the way I see it is if down the road the signal were to be distributed by all of the various, say, BDUs. You know the Telco's use the VDSL technology, cable companies using their cable systems, satellites using the DTH, then what is the backbone of the ‑‑ for broadcasting the signal? Isn't it then the entire Canadian Broadcasting System?
LISTNUM 1 \l 11102 MR. CARNOVALE: Well, our definition of the backbone is the part that stops at the satellite transmission of the encoded signal. The ‑‑ that's the part that we would manage.
LISTNUM 1 \l 11103 It is then up to the individual broadcaster or BDU to purchase the decoder or decoders if they want redundancy with ‑‑ option them however they wish, because there are a myriad of EAS options available, and interface it with their system in the way they best see fit.
LISTNUM 1 \l 11104 COMMISSIONER del VAL: Okay.
LISTNUM 1 \l 11105 MR. GAUTHIER: Now, I just want to add that really the heart of the back bone is CANALERT and, again, CBC could be the only provider of CANALERT or we could hook into the Industry Canada CANALERT system and then distribute the alert. But again, the heart is a known common format as defined by CANALERT.
LISTNUM 1 \l 11106 COMMISSIONER del VAL: Okay. Do you think it is realistic to expect a single entity to manage the entire broadcast backbone of the alert system?
LISTNUM 1 \l 11107 MR. CARNOVALE: If you're talking about the satellite distribution that we have shown in our functional diagrams, we do it already every day. I mean that's part of ‑‑ CBC's big advantage is that we have one of the largest networks in the world in terms of geographic area and number of transmitters and we have to manage these issues every day.
LISTNUM 1 \l 11108 COMMISSIONER del VAL: Okay. So ‑‑ sorry.
LISTNUM 1 \l 11109 MR. GUITON: Yes, I am sorry, I was actually just a little confused by your question. Was your question that ‑‑ to suggest that we are seeking exclusive ‑‑
LISTNUM 1 \l 11110 COMMISSIONER del VAL: No.
LISTNUM 1 \l 11111 MR. GUITON: Okay. Because we are not. So you can envision that there might be multiple providers to the broadcast industry.
LISTNUM 1 \l 11112 COMMISSIONER del VAL: Now, then let's go back to backbone. I just want to understand better agin what you mean by backbone.
LISTNUM 1 \l 11113 MR. GAUTHIER: What we mean is that once we know that the EMOs will issue a message and will talk to a CANALERT central office to bring their message or ‑‑ they're all going to be CANALERT compatible, that's the heart of our ‑‑ that's the foundation of our application.
LISTNUM 1 \l 11114 Then after that, CBC collects that information, brings it to the National Alarm Centre, and then use our satellite backbones for the distribution into all the different locations in Canada. And we have the possibility to address every single transmitter in Canada and we have also the possibility within the cap protocol and within the ‑‑ under the umbrella of CANALERT to specify locations that are only, I guess, latitude and longitude, so that any participating user can take that satellite information and address specifically every area or every type of alert.
LISTNUM 1 \l 11115 COMMISSIONER del VAL: Okay. So for you, then, you hand off the ‑‑ it is the signal from the NAC to the transmitters is the backbone for the ‑‑
LISTNUM 1 \l 11116 MR. GAUTHIER: From the NAC to a satellite receiver. That could be our transmitter, that could be a BDU, that could be an ISP.
LISTNUM 1 \l 11117 MR. GUITON: Can I just try something? My success in technical answers is not very good so far, but let me try again. The ‑‑ from the BDUs' point of view, they do not need to access alerts from our transmitters. As we envision it, they're accessing the alerts directly from our satellite, so the backbone is the national alarm centre and the satellite facilities.
LISTNUM 1 \l 11118 The proposal that we have given to you is a proposal in the context of what we had ‑‑ what we had submitted to Industry Canada and what we had contemplated in the CANALERT context, including the radio component.
LISTNUM 1 \l 11119 Now, the radio component in what we are proposing to you is almost a redundancy. In the event that the satellite link is not working or the BDU is not obtaining the message that way, they can get is it from the radio transmitters.
LISTNUM 1 \l 11120 The 16 million dollar capital cost that we've identified in our proposal, the vast majority of that is the radio component, but from a primary fee to BDUs, it would be the National Alarm Centre satellite portion.
LISTNUM 1 \l 11121 COMMISSIONER del VAL: Thank you. That helps. Thank you.
LISTNUM 1 \l 11122 Moving on to another topic, the time for implementation of the CANALERT project, you have it on page 5 of your application. So can any of the steps after funding progress without funding?
LISTNUM 1 \l 11123 For example, rules of use and protocols be in place, can that progress without funding right now?
LISTNUM 1 \l 11124 MR. GUITON: Absolutely.
LISTNUM 1 \l 11125 COMMISSIONER del VAL: Okay.
LISTNUM 1 \l 11126 MR. GUITON: In fact, if I look at this list that we have here, points 2 and 3 are actually underway right now and I think Commissioner Pennefather made reference to the draft user guidelines. That work is going on and that is part of number 2.
LISTNUM 1 \l 11127 COMMISSIONER del VAL: Yes.
LISTNUM 1 \l 11128 MR. GUITON: And the development of those protocols, so that work is all going ahead.
LISTNUM 1 \l 11129 COMMISSIONER del VAL: Okay. At the bottom of page 5 you have footnote number 3 and you have referred to a meeting June 3005.
‑‑‑ Laughter
LISTNUM 1 \l 11130 MR. GUITON: Okay.
LISTNUM 1 \l 11131 COMMISSIONER del VAL: Is this a Freudian slip that I need to look a thousand years ahead?
LISTNUM 1 \l 11132 MR. GUITON: Okay. Our apologies. It is 2005.
LISTNUM 1 \l 11133 COMMISSIONER del VAL: Okay. Thanks.
LISTNUM 1 \l 11134 MR. GUITON: And, just if I could, while we are on page 5, the ‑‑ what we tried to identify was at that time based on our June 30th meeting with Industry Canada officials, how Industry Canada had portrayed to us the timing and how we understood working through the various committees things were going to roll out.
LISTNUM 1 \l 11135 Of course there has been a change in government and certain things have happened politically that maybe have put some dent in this timing, but we still anticipate that this will and based on our conversation with Industry Canada and we have no reason to think otherwise, that this whole schedule, apart from the ongoing work that we were talking about, the whole schedule of funding and roll‑out, Alberta, et cetera, we are probably on a six‑ to eight‑month delay.
LISTNUM 1 \l 11136 But the ‑‑ there is nothing incorrect in the way that we've done this in terms of items that are going to be rolling out.
LISTNUM 1 \l 11137 COMMISSIONER del VAL: Thank you. Now, then, I found appendix B of your application, which was the summary of ESA event types quite interesting.
LISTNUM 1 \l 11138 So does this mean ‑‑ if, say, this is voluntary participation by the BDUs then firstly the BDUs would have the choice of whether to have ESA equipment on their head ends, that is the first choice, and then even if they choose to, they can also pick what event types they want to receive.
LISTNUM 1 \l 11139 For example, they may not ‑‑ they can exclude avalanche warnings, if they want. Is that how I should read this?
LISTNUM 1 \l 11140 MR. GUITON: No.
LISTNUM 1 \l 11141 COMMISSIONER del VAL: Okay.
LISTNUM 1 \l 11142 MR. GUITON: So, again, the definition of event types and how the emergencies would be defined, when they would be triggered, are a CANALERT issue again that is going to be defined throughout user guidelines, through the CAP protocol, and the document again, the draft users guidelines, you may have seen is in draft form and the discussions are taking place between broadcasters, emergency officials, Industry Canada, is about what are the event codes that actually trigger the system?
LISTNUM 1 \l 11143 Now, once those are defined by CANALERT, the BDU isn't the one that is triggering or choosing whether the alert is going to happen and whether that is an emergency or that is an emergency.
LISTNUM 1 \l 11144 The emergency is being triggered by the MO, the MO is passing the alert along. The BDU is receiving it. The EAS decoder, because it is programmed to understand whether this is an emergency or not, automatically transmits it through and it appears on the BDU system.
LISTNUM 1 \l 11145 The BDU is not making any decision as to what is an alert, provided ‑‑ I'm saying all of this in the context of CANALERT.
LISTNUM 1 \l 11146 COMMISSIONER del VAL: CANALERT, yes.
LISTNUM 1 \l 11147 MR. GUITON: This is how CANALERT would work.
LISTNUM 1 \l 11148 COMMISSIONER del VAL: Yes. Thank you.
LISTNUM 1 \l 11149 So then on the issue of voluntary, the ‑‑ several of the interventions have said that emergency public alert is too important to be voluntary. Do you have a comment on that?
LISTNUM 1 \l 11150 MR. GUITON: Yes. The CANALERT proposal and the CANALERT work that I do and Industry Canada does, that my colleagues do through various committees, it is being done on a voluntary basis.
LISTNUM 1 \l 11151 Broadcasters such as the CBC and private broadcasters have been invited to participate, BDU participate in that. It is all being done in a voluntary context and the Alberta system is ‑‑ it is currently in place that works as a voluntary system.
LISTNUM 1 \l 11152 So it is in that mode that we've structured our application, thinking that voluntary seems to be the way it is going.
LISTNUM 1 \l 11153 However, should the Commission feel that they want some level of assurance that BDUs are going to implement a system, that they are going to participate in CANALERT, we certainly have no objection to the Commission requiring that. Our point would simply be it should be in the context of CANALERT and, secondly, that there should be no requirement ‑‑ implemental learning is final, but as long as there is no requirement to utilize a single proprietary technology.
LISTNUM 1 \l 11154 The BDU should be allowed to choose whatever suits its facilities the best, provided that it is done in the context of CANALERT and if you wanted that to happen you could mandate broadly that that happen, without indicating how they do it.
LISTNUM 1 \l 11155 COMMISSIONER del VAL: Yes. I think at least one of the interveners have also said that an emergency public alert is too important to have uncertain funding. Do you want to comment on that?
LISTNUM 1 \l 11156 MR. GUITON: Yes. As I indicated earlier when we were referring to page 5, the information that we have from speaking with government is that CANALERT is going to proceed, that ‑‑ I spoke recently, several weeks ago, with the Minister for Public Safety and he assured me that this also is a key issue for the government.
LISTNUM 1 \l 11157 So we have no reason to doubt that funding won't be forthcoming on this project.
LISTNUM 1 \l 11158 And, again, it is critical, we believe, extremely important that it happen in that government context of CANALERT so that we have consistency, we don't have a problem of disparate systems being put into place, so that the government clearly has a role for this and we believe that the government funding of this is the right way to go.
LISTNUM 1 \l 11159 COMMISSIONER del VAL: And what do you say to the interventions who take the position that the CBC should be focusing its resources on programming and existing services rather than a new initiative such as this?
LISTNUM 1 \l 11160 MR. GUITON: Well, I ‑‑ several things. First, we're not proposing to use any of our existing funding for this service. If CANALERT funding is not forthcoming we will not be offering this service.
LISTNUM 1 \l 11161 It is our understanding based on our discussions with Industry Canada at an informal level, I haven't ‑‑ we haven't seen the memorandum to Cabinet that went ahead and was approved, but on an informal level Industry Canada has assured us that the CANALERT project contains funding for CBC.
LISTNUM 1 \l 11162 It is on that basis that we would fund this proposal and not via our own appropriations. As you know, our appropriations are severely reduced, have been for some time, and we use as much as we can to create programming. This is aside from all of that. This would be CANALERT funding and we would use it on that basis.
LISTNUM 1 \l 11163 COMMISSIONER del VAL: But what about the ongoing operational costs, which you said would be funded through your own ‑‑ from your own budget right now?
LISTNUM 1 \l 11164 MR. GUITON: Right. The ongoing costs we've identified in this proposal was $700,000.
LISTNUM 1 \l 11165 COMMISSIONER del VAL: Yes.
LISTNUM 1 \l 11166 MR. GUITON: That amount of money we don't see as a significant amount money. You are right, it is ‑‑ it is not zero. I have no idea what type of funding has been created for us through CANALERT and I've ‑‑ from my conversations with Industry Canada officials, the amount of money that we've identified, 16 million, is not at all out of line with what CANALERT has in store for us, so we are hoping to cover the 700,000 as well, if we could.
LISTNUM 1 \l 11167 But in making our proposal to you today we thought the best way to do this would be to identify that as an operational cost that we would assume, in the same way that we are proposing that BDUs assume their share of the costs in this alerting system.
LISTNUM 1 \l 11168 COMMISSIONER del VAL: Thank you. Now, as you know, the Pelmorex application, they are proposing that they aggregate the signal.
LISTNUM 1 \l 11169 Is sounds to me like they ‑‑ they have a function that is very much like the function that is performed by your NAC, your National Alarm Centre.
LISTNUM 1 \l 11170 Now, if the Pelmorex application were approved and they aggregated the signal, would the CBC take the signal from them?
LISTNUM 1 \l 11171 MR. GUITON: No.
LISTNUM 1 \l 11172 COMMISSIONER del VAL: Okay. Why not?
LISTNUM 1 \l 11173 MR. GUITON: As we understand it ‑‑ well, first of all, we can get the information directly from the MOs, so we don't need Pelmorex to do that.
LISTNUM 1 \l 11174 And in the context of the model that we propose, where BDUs be permitted to use the best system possible to access these alerts, I believe several interveners such as Rogers and Shaw have indicated that they too might go directly to the MO. That is a possibility.
LISTNUM 1 \l 11175 We don't need Pelmorex to get access to the MO alerting. The first point.
LISTNUM 1 \l 11176 The second point, and I'd ask Francois or Ray to comment on this, but as I understand it at least, if we were to use the Pelmorex proposal ‑‑ sorry, the Pelmorex system to access alerts, we would in fact have less information‑rich alerts than if we were to go directly ourselves to the MO.
LISTNUM 1 \l 11177 MR. CARNOVALE: Well, in particular the Pelmorex system only provides a generic audio message, which we think is a major shortcoming.
LISTNUM 1 \l 11178 The EAS system was designed at the outset to provide location‑specific video and audio. Therefore, we don't know how we would have that degree of granularity from Pelmorex.
LISTNUM 1 \l 11179 COMMISSIONER del VAL: Okay. Maybe I should ask at this point whether you are intending to come back in Phase II, in the intervention? Because I note that you didn't file a written intervention against of the other applicants.
LISTNUM 1 \l 11180 MR. GUITON: We would be pleased to come back. We ‑‑ based on what we heard this morning from Pelmorex we did not see the need to be coming back, because our position I think is fairly clear.
LISTNUM 1 \l 11181 COMMISSIONER del VAL: Okay.
LISTNUM 1 \l 11182 MR. GUITON: However, if the Commission would like us to come back, we would be more than pleased to come back.
LISTNUM 1 \l 11183 COMMISSIONER del VAL: No. Okay. Then I'll ask some of the questions now. There may not be that many.
LISTNUM 1 \l 11184 Do you see your system as compatible? Because what I hear today is basically you are just implementing radio for now, that is phase 1, and then you are asking for an amendment to section 7(d) and while ‑‑ you were here this morning when Pelmorex in ‑‑ according to my understanding is not really including over‑the‑air in their proposal right now, so do you see the two as compatible or ... would you see a problem if both were licenced?
LISTNUM 1 \l 11185 MR. GUITON: Well, our service or our proposal doesn't need licencing.
LISTNUM 1 \l 11186 COMMISSIONER del VAL: Yes, I know.
LISTNUM 1 \l 11187 MR. GUITON: The issue really is, I think, that we would have no trouble at all with the Commission allowing BDUs to choose whatever means possible to access alerts under the CANALERT initiative. That is our main point.
LISTNUM 1 \l 11188 If the Commission were to make ‑‑ were to approve Pelmorex on the basis that it has filed, I'm not sure really whether that gives BDUs any choice. I'm not sure it does.
LISTNUM 1 \l 11189 COMMISSIONER del VAL: Yes.
LISTNUM 1 \l 11190 MR. GUITON: So the approval process would have to be along the lines of changing the Pelmorex application in some way.
LISTNUM 1 \l 11191 We still believe the section 7 amendment to the regs is critical, that BDUs for some time, of course, have not been participating in public alerting and we think the 7(d) as it is worded today precludes them from doing so.
LISTNUM 1 \l 11192 Requiring them to come up with ‑‑ to reach ‑‑ negotiate and reach agreement with every programming service is probably too difficult.
LISTNUM 1 \l 11193 So the section 7 amendment would have to happen and then on that basis if BDUs were allowed to choose between ourselves, between Pelmorex, between however they would like to obtain the messaging, that seems fine to us.
LISTNUM 1 \l 11194 Just, if I may, I may be repeating myself, but I just want to make an important point here.
LISTNUM 1 \l 11195 The radio component of our system is, as I've mentioned earlier, not critical to feeding BDUs.
LISTNUM 1 \l 11196 COMMISSIONER del VAL: Yes.
LISTNUM 1 \l 11197 MR. GUITON: And in the event that the Commission felt it wanted to make mandatory a public alerting system for BDUs prior to the roll‑out of CANALERT, what we would probably do is hold off on the roll‑out of our radio component and waiting for the funding for the radio component, but we would offer the satellite National Alarm Centre component to BDUs as a service, as a means of accessing public alerting.
LISTNUM 1 \l 11198 So there is really ‑‑ you can separate and this is the point I was trying to make earlier, and I'm apologize if I didn't make it clearly, you can separate the two components here.
LISTNUM 1 \l 11199 Our radio service proposal was one that we tested with Industry Canada, that we think will emerge in the CANALERT context and we'll be seeking funding for that via CANALERT.
LISTNUM 1 \l 11200 If the Commission wants to move ahead prior to CANALERT and therefore prior to funding for our radio component, but ‑‑ and requires public alerting to be mandatory for BDUs but leaves it open for them to choose how they do that, we would naturally want to work with BDUs so that they could use our National Alarm Centre or we would use and provide a service to them using our National Alarm Centre, the satellite uplink, and the cost for that we would seek to recover. We wouldn't do that on a free basis. We would seek to recover the cost of doing that from BDUs.
LISTNUM 1 \l 11201 And, as I said, the 16 million dollars that we put on the table here, the vast majority of that is for the radio proposal.
LISTNUM 1 \l 11202 COMMISSIONER del VAL: Yes.
LISTNUM 1 \l 11203 MR. GUITON: So the National Alarm Centre satellite component is much ‑‑ is a much smaller cost and we would try to recover that cost in the event you required BDUs to achieve the signal somehow, obtain the signal somehow, we would recover that from BDUs.
LISTNUM 1 \l 11204 COMMISSIONER del VAL: Okay. So just from ‑‑ I think I should have worded my question better, which is really if the Pelmorex application as is were successful, how would it change your plans?
LISTNUM 1 \l 11205 MR. GUITON: I'm sorry, I misunderstood.
LISTNUM 1 \l 11206 COMMISSIONER del VAL: No, no, no. No, I didn't ask it clearly.
LISTNUM 1 \l 11207 MR. GUITON: Well, first of all, if you approve Pelmorex I'm quite sure BDUs would have no use for us.
LISTNUM 1 \l 11208 Secondly, our radio component would go ahead once CANALERT funding was available.
LISTNUM 1 \l 11209 COMMISSIONER del VAL: Okay.
LISTNUM 1 \l 11210 MR. GUITON: Now, we wouldn't therefore be using the satellite component to feed BDUs because BDUs would say why do I need that extra expense?
LISTNUM 1 \l 11211 COMMISSIONER del VAL: Okay. But so if the Pelmorex were successful in part, which is ‑‑ if they were not successful in getting the mandatory and exclusive aspect, then what would happen?
LISTNUM 1 \l 11212 MR. GUITON: Then what would happen, I believe, is BDUs ‑‑ which is our preferred approach ‑‑ BDUs would have the option of choosing however they wanted to participate in public alerting. They may want to choose us as the deliverer of alerts, they want to choose Pelmorex.
LISTNUM 1 \l 11213 As I understand the record of this proceeding, Videotron has indicated that they would like to work with Pelmorex. I'm not sure that there is that same level of comfort from other BDUs, but the ‑‑ there is ourselves, there is Pelmorex. There may be other ways and so that would be fine.
LISTNUM 1 \l 11214 COMMISSIONER del VAL: Great, thank you. Do you have any comments on Pelmorex's estimated costs and the business case?
LISTNUM 1 \l 11215 MR. SCARTH: No, we have no particular comments with respect to Pelmorex's business case.
LISTNUM 1 \l 11216 COMMISSIONER del VAL: So in light of your proposed alert system being on a voluntary basis, how would you characterize your proposed system as being a national system?
LISTNUM 1 \l 11217 MR. GUITON: Well, we have the capability of feeding BDUs nationally.
LISTNUM 1 \l 11218 COMMISSIONER del VAL: Through the ‑‑
LISTNUM 1 \l 11219 MR. GUITON: Through the satellite feed.
LISTNUM 1 \l 11220 COMMISSIONER del VAL: Okay. But it would be voluntary, they would take the signal signals on a voluntary basis?
LISTNUM 1 \l 11221 MR. GUITON: Whether BDUs participate voluntarily or are mandated to do so, currently the ‑‑ my impression, and I don't want to speak for the entire broadcasting industry, but my impression from working within CANALERT and working with Industry Canada on all of this, as well as the Alberta proposal, public alerting is voluntary today, and we have not adopted any mandated ‑‑ in my work at CANALERT as Chair of the Broadcasting Public Alerting Working Group ‑‑ we have not adopted anything along the lines of making it mandatory.
LISTNUM 1 \l 11222 So, on that basis, we came forward with a national proposal able to feed BDUs nationally and their participation we would presume to be forthcoming, once they are able, under Section 7, to implement All Channel Alerting, emergency alerting and once the ‑‑ I mean, our preference would be to do it under the CANALERT initiative, but on that basis we describe ourselves as a national system.
LISTNUM 1 \l 11223 COMMISSIONER del VAL: Okay. Are you aware of the public alerting systems and arrangement studies that was carried out by the Zeta Group in March 2003?
LISTNUM 1 \l 11224 MR. GUITON: I'm sorry, I don't believe we are.
LISTNUM 1 \l 11225 COMMISSIONER del VAL: Okay.
LISTNUM 1 \l 11226 So, I just want to clarify how your proposed system will coordinate with the existing and proposed alert systems.
LISTNUM 1 \l 11227 Now, your proposed system would be just one of a number of alert systems that currently exist, such as the Amber Alerts and Alberta's Emergency Public Alert system, how would you ‑‑
LISTNUM 1 \l 11228 MR. GUITON: I'm sorry, I don't think that's right. We are not creating an alerting service in the sense of originating messages. The CBC is not and will not be an originator of emergency alert messages. Alberta's system is an originator of emergency messages,
LISTNUM 1 \l 11229 COMMISSIONER del VAL: Okay.
LISTNUM 1 \l 11230 MR. GUITON: And so, I am just ‑‑ I wasn't following you completely, I'm sorry.
LISTNUM 1 \l 11231 COMMISSIONER del VAL: Maybe I should just ‑‑ but, how do you, how do you intend ‑‑ this is the question: How would you intend to coordinate with existing Alert systems if you were to proceed with your proposal?
LISTNUM 1 \l 11232 MR. GUITON: Existing ‑‑ the proposal we have in front of you today is for all‑channel alerting for BDUs There is no such thing today.
LISTNUM 1 \l 11233 So, what we would be doing is implementing something that's new.
LISTNUM 1 \l 11234 In the context of the, say, the Alberta system which is feeding broadcasters today, our radio base system can work within that context and we have met, we have gone out and met with the Alberta authorities.
LISTNUM 1 \l 11235 We've talked to them, they are looking at revamping their system, I believe, and I don't want to speak for them, but I believe they are looking at EAS.
LISTNUM 1 \l 11236 And so, we would work with them in however they wanted to revamp their system to make sure that the radio component of our proposal, once it obtained funding from CANALERT and once it got going, was completely complementary to what else, whatever else they wanted to do.
LISTNUM 1 \l 11237 MR. GAUTHIER: I would just like to add on that on a technical level regarding compatibility. Again, everything in our proposal will be based on CANALERT and will be based on a CAP Protocol.
LISTNUM 1 \l 11238 If we want to implement rapidly, using other systems, just like Environment Canada system, what we would like to make sure is that the Environment Canada system has all the required field from the CAP Protocol.
LISTNUM 1 \l 11239 We are just going to use an informatic translator that will put it back into the real CAP format and that we could pass it through our CANALERT system.
LISTNUM 1 \l 11240 COMMISSIONER del VAL: Thank you. Do you intend to transmit the national alerts on your satellite radio service and the short wave services as well?
LISTNUM 1 \l 11241 MR. CARNOVALE: We really can't speak for Sirius because Sirius Canada is a licensee, not CBC, but just as a matter of information, there is nothing in anybody's satellite radio technology that knows where the receiver is and, therefore, any kind of emergency alerting that would be going out on satellite would go not only nation‑wide, it would go North America‑wide.
LISTNUM 1 \l 11242 So, there are some wrinkles in that regard.
LISTNUM 1 \l 11243 COMMISSIONER del VAL: Now, if someone were listening to a digital feed of the CBC radio broadcast, would he or she be able to read the text portion of the alerts on the digital radio display?
LISTNUM 1 \l 11244 MR. CARNOVALE: Are you talking about a DAB receiver or an RDBS functionality and an FM receiver?
LISTNUM 1 \l 11245 COMMISSIONER del VAL: I didn't think in those details. What would be the difference?
LISTNUM 1 \l 11246 MR. CARNOVALE: I'll turn this over to François.
LISTNUM 1 \l 11247 MR. GAUTHIER; I can tell you that right now, this is a very good proposal that we haven't thought at this point, but I don't see any technical burden of implementing that.
LISTNUM 1 \l 11248 So, if it was of any use of anybody else, we could easily insert a text into all our transmitters that are RDS compatible or we could insert the text of the alert into our DB audio very rapidly.
LISTNUM 1 \l 11249 COMMISSIONER del VAL: Thank you. In your application you identified as one of the benefits of made‑in Canada solution, that alert messages would be available everywhere in both official languages and during the test trial English stations transmitted the Alert in English and the French stations in French.
LISTNUM 1 \l 11250 Now, has CBC considered other options? For example, could alerts be transmitted in both official languages since there are many markets that have significant minority language population?
LISTNUM 1 \l 11251 MR. CARNOVALE: It's actually preferable to transmit the same alert on all transmitters, regardless of the language of the originating network. It is a much simpler architecture to do it that way.
LISTNUM 1 \l 11252 MR. SCARTH: A bilingual language, yes.
LISTNUM 1 \l 11253 COMMISSIONER del VAL: Okay. Would you accept an amendment to your condition of licence to broadcast or display alerts in both official languages?
LISTNUM 1 \l 11254 MR. GUITON: No.
LISTNUM 1 \l 11255 COMMISSIONER del VAL: Okay. Why not?
LISTNUM 1 \l 11256 MR. GUITON: First of all, we would be unable to accept the condition of licence at this time since we don't have funding. Our proposal is contingent on CANALERT funding.
LISTNUM 1 \l 11257 The second thing I would like to say and I am going to apologize again, I am probably going back to the same point, I am going to repeat myself a little bit, but it's a little counter intuitive to be putting a condition of licence on our radio services when what we are trying to achieve is all‑channel emergency alerting. We can feed BDUs without necessarily the radio component.
LISTNUM 1 \l 11258 So, if the Commission is ‑‑ as I've said earlier, if the Commission's goal is to make all‑ channel emergency alerting, to advance all‑channel emergency alerting or to make that mandatory for BDUs, it's a little counter intuitive to be putting a condition of licence on our radio services.
LISTNUM 1 \l 11259 We can feed BDUs directly from the national arm centre and our satellite feed, BDU could choose that feed, they could choose a Pelmorex feed, they could choose to go directly to the emergency authority.
LISTNUM 1 \l 11260 They don't need our radio component and our radio component in our proposal, as I've mentioned earlier, was in the context of the CANALERT initiative. That was as an entire proposal that allows us to do over the air radio, plus it allows us to ‑‑ we would be feeding BDUs via satellite component.
LISTNUM 1 \l 11261 The radio component in that context is redundancy. It ensures that we are able to get the BDUs but if the goal of the Commission is to advance all‑channel emergency alerting, the condition of licence is not the direct way to do it we believe.
And as I have mentioned, just to reiterate, we could not accept that without funding.
LISTNUM 1 \l 11262 COMMISSIONER del VAL: Okay. Now, I know that you currently ‑‑
LISTNUM 1 \l 11263 THE CHAIRMAN: Excuse me, but do you mean that if you were to get funding, you would be accepting the condition of a licence? So, the day you get funding, we could impose the condition of licence?
LISTNUM 1 \l 11264 MR. GUITON: Possibly. Absolutely. I am just thinking, but I can't see why we wouldn't, if we had the appropriate funding.
LISTNUM 1 \l 11265 MS CODY‑RICE: Just to add to that, I am not sure again that it would be necessary. If you felt that it was necessary to make this mandatory, then you could put that on the BDUs and we would happily feed them.
LISTNUM 1 \l 11266 COMMISSIONER PENNEFATHER: If it's radio only?
LISTNUM 1 \l 11267 MS CODY‑RICE: I believe the radio is for redundancy in this.
LISTNUM 1 \l 11268 COMMISSIONER PENNEFATHER: But if in fact we have at least developing about, you would go ahead with radio if, for example, A.C.A. service was licensed. You would carry on potentially if you got the funding?
LISTNUM 1 \l 11269 MR. GUITON: Yes, yes. I guess ‑‑ let me see if I understand both of your questions. The idea is outside of an all‑channel emergency alerting, if in a context, for example, of an over‑the‑year broadcast proceeding, the Commission was to impose or seek to impose on us a condition of licence on our radio services and we had CANALERT funding at that time, then we are proceeding, I don't think we would have any problem with that.
LISTNUM 1 \l 11270 THE CHAIRMAN: That was the question and we registered the answer.
LISTNUM 1 \l 11271 MR. GUITON: Thank you.
LISTNUM 1 \l 11272 COMMISSIONER del VAL: So, I know that CBC now broadcasts in I think at least eight of the aboriginal languages?
LISTNUM 1 \l 11273 MR. GUITON: That's correct.
LISTNUM 1 \l 11274 COMMISSIONER del VAL: And now, say, in Northwest Territories and several of the aboriginal languages have official status in the Northwest Territories and Inukitut is the majority language in Nunavut and has official status.
LISTNUM 1 \l 11275 So, does the proposed system have the capability of providing alerts in aboriginal languages?
LISTNUM 1 \l 11276 MR. GAUTHIER: At this point, the text portion of the message and the CAP portion of the message is not language specific. It's not either English or French, it's purely codes, so the operators enter a number 10 for a tornado; he enters a time, he enters the location and he enters all the information that are related to the alert. This means that this could be translated in any language you want on the planet.
LISTNUM 1 \l 11277 The second part is the audio portion of it. First, we see the operators or the E.M.O. to record the language if it's possible in bilingual format. If the message is not bilingual, either English or French or any other languages, at this point we know that our system can translate into English or into French the text coming into the CAP protocol and if there is a requirement for a visual impaired person to have a voice in a certain language and if we have the proper funding, for sure we will have a specific development to make sure that we have a text to Inuktatut translation, if needs be.
LISTNUM 1 \l 11278 COMMISSIONER del VAL: Thank you. Now, in the case of non‑standard alerts for which there are no pre‑agreed text, how will the CBC ensure that there will be an acceptable translation?
LISTNUM 1 \l 11279 MR. GAUTHIER: Then it means it won't be a CANALERT accepted text, then we won't pass it through.
LISTNUM 1 \l 11280 COMMISSIONER del VAL: Okay. We have received an intervention from the Canadian Association for the deaf and I just want to clarify how individuals with impaired hearing will be served and in your application it is stated that the use of audio and text alerts ensures that messages can reach the visually and hearing impaired.
LISTNUM 1 \l 11281 Can you clarify how you will be able to provide service to individuals with impaired hearing when they roll out to, say, television transmitters will only occur in phase 2, subject to funding and the participation of broadcast distribution undertakings is voluntary?
LISTNUM 1 \l 11282 MR. SCARTH: The television portion of the system is BDU based. Therefore, an individual who is hearing impaired would see the alert screen that they have been driven to as a result of an authorized alert message.
LISTNUM 1 \l 11283 In such an instance, all they would see would be ‑‑ hear if they could, but what they would see would be the text message available in the bilingual format. There would be no program sort of behind the message and, therefore, no interfering close captioning.
LISTNUM 1 \l 11284 COMMISSIONER del VAL: If your alert is broadcast by a TV station or inserted on a TV channel by a BDU, will both the audio and text version of the alert be broadcast on the television channel and/or if only the text version will be available with some form of alarm, for example, a tone used to signal to a visually impaired person that an alert is being issued?
LISTNUM 1 \l 11285 MR. CARNOVALE: If a television broadcaster is participating, they would get both the text message and the geographic specific audio message, as you saw during the demonstration.
LISTNUM 1 \l 11286 COMMISSIONER del VAL: Thank you. So, the broadcast of alerts in areas for which they are not intended may lead to listener annoyance, confusion and tune out. So, do you have any thoughts on how much of a problem this may be in terms of the impact on listeners and what can be done to minimize it?
LISTNUM 1 \l 11287 MR. GAUTHIER: Again, our network is configurable about on a transmitter basis. So, we know that we have transmitters that they have a vast area carriage.
LISTNUM 1 \l 11288 Regarding the annoyance of the message, again only the level one message justified by CANALERT will be passed through, so it's only the message of first urgency that are threats to people.
LISTNUM 1 \l 11289 So, again, even if it's not directly for your area, people travelling towards that area will need to be informed and will be pleased to be informed. So, I don't think there is any harm in sending a message a little bit too far away than for a too short distance.
LISTNUM 1 \l 11290 MR. GUITON: Yes, and if I can add to that, as we mentioned earlier, the work that we are doing with CANALERT is, in fact, to come out with defined event codes for emergencies and we, the broadcasters group, like Alberta define emergencies as eminent life threatening situations to communities and neighbourhoods and, of course, that type of information you are not going to be getting every day, but when you get it, you want to make sure it gets out. So, we're talking about serious emergencies here.
LISTNUM 1 \l 11291 The annoyance factor, of course, becomes an issue when you are getting alerts all the time or that you don't have to listen to them because while you think it might not apply to you.
LISTNUM 1 \l 11292 The whole purpose of CANALERT and why it's very important that we get these protocols right is that you want to make sure that if it's a real emergency people get it.
LISTNUM 1 \l 11293 COMMISSIONER del VAL: Okay. If a rebroadcaster is fed off air, will there be an EAS unit at the rebroadcast transmitter to insert an alert intended solely for the rebroadcaster or will the entire chain disseminate that alert?
LISTNUM 1 \l 11294 MR. GAUTHIER: In our plan right now, we will have satellite reception to any of our single sites even those that are rebroadcasting off air signals.
LISTNUM 1 \l 11295 The only problem, let's say, as an example in the Toronto area, if Paris is a rebroadcaster of Toronto, if there is an alert for the Paris area, only the Paris transmitter will rebroadcast it.
LISTNUM 1 \l 11296 If there is an alert for the Toronto area, the C.B.L.A. transmitter will broadcast it and the Paris retransmitter will rebroadcast it because it is fed off air from Toronto, but not the reverse. So, that's how it is going to be implemented.
LISTNUM 1 \l 11297 COMMISSIONER del VAL: Okay. So, would Paris receive it twice then?
LISTNUM 1 \l 11298 MR. GAUTHIER: No. It means that Paris will also receive the Toronto alerts, but Paris would receive only Paris alerts.
LISTNUM 1 \l 11299 COMMISSIONER del VAL: Okay. When it is fed through the rebroadcaster, would that have the daisy chain effects or would Paris receive it after Toronto?
LISTNUM 1 \l 11300 MR. GAUTHIER: Since it's an off air, it doesn't even need an EAS decoder for that function because Paris will only see an audio stream coming from Toronto as if it was a normal programming because it's off air. So, there is no program to substitute at that point because its main feed is broadcasting the EAS alerts.
LISTNUM 1 \l 11301 But I just want to point out that less and less in our network we have these off air broadcasters, especially in critical area. We are going more and more on a territorially distributed base for the radio and/or EAS system will address each of these transmitters individually.
LISTNUM 1 \l 11302 MR. CARNOVALE: I would add that the key strength of the EAS system is the fact that the data is encoded in audio. That's that rocket bursts that you've heard, the three bursts that you've heard at the beginning. That's data.
LISTNUM 1 \l 11303 So, wherever an audio signal can go, the data signal can go.
LISTNUM 1 \l 11304 COMMISSIONER del VAL: Okay. Now, you mentioned in your application that cable and DTH operators could voluntarily participate by installing ESA decoders at their head ends. Would adding cable and DTH distribution of the radio transmissions require any modifications to the address codes?
LISTNUM 1 \l 11305 MR. GAUTHIER: No, because again the address code is not... is not specific to a transmitter. It is specific to an area. So, everybody serving that area, any system serving that area, whether it is radio, TV. ISPs, cable or you can name them, they only pick the messages that are related to them, to the zone serving.
LISTNUM 1 \l 11306 MR. CARNOVALE: Just to add to that, in the case of a DTH headender, a cable headender, it's more than likely that they would be accessing the authorized alert message via satellite rather than off air from our radio service.
LISTNUM 1 \l 11307 COMMISSIONER del VAL: Now, you've in your reply said that you don't really foresee any significant operating cost for the first five years, nor have you accounted for any replacements or upgrade systems, do you have an estimate of the operating cost to BDUs, DTH or MDS as well as cable over the first five years?
LISTNUM 1 \l 11308 MR. SCARTH: No, we have provided no estimates of operating costs for BDUs
LISTNUM 1 \l 11309 COMMISSIONER del VAL: Okay. You've also estimated that the life expectancy of the equipment is about five years. So, do you anticipate that under your proposal the capital cost to cable companies will occur at approximately the same intervals?
LISTNUM 1 \l 11310 MR. GAUTHIER: We know from the U.S. that some of these boxes have been put in place in 1994 and they are still in perfect operation. So, again the life expectancy is like every hardware equipment and will have to be ‑‑ j'ai amorti dans la tête ‑‑ over the years and be replaced over a normal term of years.
LISTNUM 1 \l 11311 MR. GUITON: I am sorry; could you just refer as to where you've seen the five years? I didn't understand that we had actually said that.
LISTNUM 1 \l 11312 COMMISSIONER del VAL: In your reply to deficiency questions.
LISTNUM 1 \l 11313 MR. GUITON: Question 6?
LISTNUM 1 \l 11314 COMMISSIONER del VAL: Yes. For which we have estimated ‑‑
LISTNUM 1 \l 11315 MR. GUITON: But what we say here is that it has been in operation for over a decade and has not required any replacement to date.
LISTNUM 1 \l 11316 COMMISSIONER del VAL: We have estimated equipment life of five years and have not accounted for replacement or implementation of next generation EAS systems in this proposal.
LISTNUM 1 \l 11317 MR. GUITON: Right. But we did that in a context of costing out the proposal. We used the five years because CANALERT was based on a five‑year roll‑out. We cost it out and estimated the lives over that five‑year period. But that's not to say that the equipment after five years breaks down.
LISTNUM 1 \l 11318 In the United States, the equipment has been in place for over a decade and it's working fine. Just to clarify.
LISTNUM 1 \l 11319 COMMISSIONER del VAL: So, why did you say that you estimate equipment like five years?
LISTNUM 1 \l 11320 MR. GUITON: What we were trying to do was originally when we ‑‑ in working with CANALERT, the CANALERT proposal was based on a five‑year roll‑out. So, in coming up with our proposal and costing out our proposal, we tried to include the costs, all of the costs for the entire project over five years. That's what we've done.
LISTNUM 1 \l 11321 Basically, we have capital costs and we've estimated them over a five‑year period.
LISTNUM 1 \l 11322 COMMISSIONER del VAL: So, are you saying now that despite the statement, the life expectancy of the equipment is beyond five years, that that is not really ‑‑
LISTNUM 1 \l 11323 MR. GUITON: Well, as I was trying to indicate, the prior sentence to where you were quoting indicates that the equipment has been in place for over a decade in the United States and has not been subject to replacement.
LISTNUM 1 \l 11324 We were only trying to give you information on how we estimated the life of the equipment. The equipment will last more than five years.
LISTNUM 1 \l 11325 THE CHAIRMAN: If I understand very well, you have developed a financial model that is based on the five‑year term and that five‑year term is the one of CANALERT, but that financial model is not necessarily the way you will amortize the equipment in reality.
LISTNUM 1 \l 11326 MR. SCARTH: That's correct.
LISTNUM 1 \l 11327 COMMISSIONER del VAL: It actually didn't struck me as that unusual for equipment of this nature to have a life expectancy of only five years. I mean because of all of the upgrading that would be needed, because of technological change?
LISTNUM 1 \l 11328 MR. CARNOVALE: One of the key points I asked the EAS equipment suppliers during NEB was whether they saw any quantum in the underlying technology and the clear message that we got from them and also a clear message I think being sent by the FCC is that the simplicity of EAS will continue to be the underpinning of the system for the foreseeable future.
LISTNUM 1 \l 11329 Any enhancements that anybody might come up with will have to be backward compatible, that the foundation is still the simple data burst that you saw and heard earlier.
LISTNUM 1 \l 11330 So, these are digital systems, but as was indicated, because the programming is in effect in firmware, we are not talking about moving parts here. It's not an issue of computers that have to booth up or describes the kinds of things that do tend to have a limited life.
LISTNUM 1 \l 11331 There is a lot of broadcast equipment out there I'm sure that's 12, 15 and 20 years old. You only need to visit some locations to know that.
LISTNUM 1 \l 11332 COMMISSIONER del VAL: Thank you. Any words on whether the government has decided whether or not to proceed with the implementation of the National Public Alerting system?
LISTNUM 1 \l 11333 MR. GUITON: As I indicated earlier, we have from both Industry Canada and from public safety, Department of Safety, we have heard nothing but good things about this.
LISTNUM 1 \l 11334 I believe tomorrow the budget is coming out and hopefully there will be some information in there. If not, I don't think that that means that the government is not supporting it.
LISTNUM 1 \l 11335 As I indicated, the Ministry of Public Safety has indicated to me that it's a key ‑‑ I don't want to say priority, as we know there are five priorities ‑‑ but it's a key issue for them.
LISTNUM 1 \l 11336 COMMISSIONER del VAL: Thank you. Okay. Legal issues.
LISTNUM 1 \l 11337 Now, your proposed amended wording to 7(d), I don't have the entire sections in front of me, but the existing wording is something to the effect to allow to insert an emergency alert message. Then it goes on to say, you know, if there is an agreement. And then, your proposal is to change it to "of transmitting an authorized emergency public alert message.
LISTNUM 1 \l 11338 So, I am wondering what is the significant changing insert to transmit?
LISTNUM 1 \l 11339 MS CODY‑RICE: Well, I think the key element of our change was really to not require you to get an agreement.
LISTNUM 1 \l 11340 COMMISSIONER del VAL: Yes.
LISTNUM 1 \l 11341 MS CODY‑RICE: We would be ‑‑ the BDU would be inserting or transmitting I suppose you could say or could be either, you could use either wording. We just chose this wording.
LISTNUM 1 \l 11342 COMMISSIONER del VAL: Okay. And I understand why you would want the ‑‑ of course, I understand why you don't want to meet the agreement, that goes without saying.
LISTNUM 1 \l 11343 MS CODY‑RICE: Of course.
LISTNUM 1 \l 11344 COMMISSIONER del VAL: And I think I understand why also you want the word "authorize" there, you know, taken the light of your whole proposal and ‑‑ but why do you need the extra word "public", emergency public alert messages rather than the ‑‑ the old wording was "emergency alert". Is there a significance to that?
LISTNUM 1 \l 11345 MR. GUITON: Nothing other than that's the common terminology being used in CANALERT today.
LISTNUM 1 \l 11346 COMMISSIONER del VAL: Okay. So, it's just modernization of the housekeeping, I would call it?
LISTNUM 1 \l 11347 MR. GUITON: I think that's right.
LISTNUM 1 \l 11348 COMMISSIONER del VAL: Okay. So, who will bear the legal responsibility for misuse of the system for the consequences of, say, false or misleading alerts and/or for system failure to deliver or display the alerts, in your opinion?
LISTNUM 1 \l 11349 MR. GUITON: Just as an intro before you do answer to that. I just want to say that that is an issue in CANALERT as well, something that we are discussing as you may imagine, and the ‑‑ one of the reasons that broadcasters in general who are participating in CANALERT have indicated they don't want to be touching the message, they don't want to add any editorial input on the messages, of course, to reduce the legal liability.
LISTNUM 1 \l 11350 And the other thing that we are looking for or we are discussing is some form of indemnification from the government participating in this in a way that holds us protected from any associated liability issues.
LISTNUM 1 \l 11351 Those discussions are going on currently and the proposal in our first round of comments to the User Guideline, broadcasters have indicated they would like to see something, some sort of indemnification added into the User Guideline into the notion of CANALERT.
LISTNUM 1 \l 11352 COMMISSIONER del VAL: So, Okay.
LISTNUM 1 \l 11353 MS CODY‑RICE: I was just thinking in addition of course that sometimes even though we would not change the message, the message would be the CANALERT message if someone in terms of legal liability wants to sue, they'll sue everybody up the chain, even the people who were not changing the message.
LISTNUM 1 \l 11354 So, then, your indemnification would work to ‑‑ I mean, sometimes an indemnification, as you know, is not necessary because the Law implies what it implies. We would be a conduit for the CANALERT message.
LISTNUM 1 \l 11355 COMMISSIONER del VAL: Okay. So, in a situation where, say, the signal was really meant for warning for Vancouver, but your transmission went to Victoria, who would be liable?
LISTNUM 1 \l 11356 MS CODY‑RICE: Well, it depends on the ‑‑ as you are aware it depends on the particular conditions because it becomes an element of negligence, were we in some way at fault. And then, the first liability in Law would be ours and it would depend on the terms of our indemnification from government, whether they would indemnify us for such an accident.
LISTNUM 1 \l 11357 COMMISSIONER del VAL: Okay. The indemnification is actually one step removed if, say, if I was just looking at it ‑‑
LISTNUM 1 \l 11358 MS CODY‑RICE: Yes.
LISTNUM 1 \l 11359 COMMISSIONER del VAL: ‑‑ from the receiver of the signal, who would I ‑‑ who would I look for?
LISTNUM 1 \l 11360 MS CODY‑RICE: Who would you go after?
LISTNUM 1 \l 11361 COMMISSIONER del VAL: Yes.
LISTNUM 1 \l 11362 MS CODY‑RICE: Well, normally, people go after everyone in the chain.
LISTNUM 1 \l 11363 COMMISSIONER del VAL: Everybody, yes.
LISTNUM 1 \l 11364 MS CODY‑RICE: People go after everyone in the chain and then a judgment, if it goes that far, apportions the liability according to who may have been at fault.
LISTNUM 1 \l 11365 COMMISSIONER del VAL: Okay. So, if you had the indemnity, then you ‑‑ well, the payment would be ‑‑ a compensation would be paid by the government, but ‑‑ for your liability. Go ahead.
LISTNUM 1 \l 11366 MR. GUITON: I'm sorry, I just add that in the context of an all channel alerting service, just on Edith's point, probably it would start with the A.BDU From the subscriber's point of view, they don't know who is providing the message. It's a message that's coming over a cable system or a D.T.H. system as Edith was saying, they will start with the BDU and then work their way all the way through, including government.
LISTNUM 1 \l 11367 MS CODY‑RICE: But if they did not, I mean, let's say that they just sued party A, the BDU, the BDU in its defence would probably join, bring into the action all the people in the chain and then, it would be sorted out in the end.
LISTNUM 1 \l 11368 Your liability depends on your own actions, so if we are ‑‑ if something happens through absolutely no fault, then there would not be liability.
LISTNUM 1 \l 11369 COMMISSIONER del VAL: I just want to leave the indemnity out of it right now.
LISTNUM 1 \l 11370 MS CODY‑RICE: All right.
LISTNUM 1 \l 11371 COMMISSIONER del VAL: I think it's just that if, say the mistake was in ‑‑ CBC had send the signal to the wrong transmitter, then that is something that the CBC would be liable for?
LISTNUM 1 \l 11372 MS CODY‑RICE: Or we may be responsible for it, but as you know, liability will attach if we did something wrong.
LISTNUM 1 \l 11373 COMMISSIONER del VAL: Yes.
LISTNUM 1 \l 11374 MR. GUITON: Can I just jump in? The signal is sent via satellite to all BDUs that are participating and all transmitters.
LISTNUM 1 \l 11375 We can't actually send it to the wrong site. It goes everywhere. What's happening is that the EAS decoder at each BDU head end recognizes whether or not it should trigger.
LISTNUM 1 \l 11376 So, in that sense, it's not an error that we can make. The technology is robust, the technology ‑‑ the signal will go from coast to coast, only that BDU head end in the Kamloops triggers and it sends out the message. The rest of the EAS decoders recognize that the signal through the G.O. codes was not meant for me, so I am not triggering.
LISTNUM 1 \l 11377 COMMISSIONER del VAL: Okay. But if you failed to maintain that, yes, a decoder in Kamloops and the message that was destined for Kamloops and it's also ‑‑ I'll skip all of the variables stable, that decoder had no manufacture defaults, the signal from the government was correct. It's sent to like you, like you play it out, everyone got the signal, but Kamloops was supposed to trigger the alert and you did not maintain that, yes, a decoder on your Kamloops transmitter, who would be liable?
LISTNUM 1 \l 11378 MR. GUITON: Well, in the context of the Kamloops BDU, because this is an all‑channel alerting system, they have the EAS decoder in their head end and if for some reason, I can't imagine what, but if for some reason the EAS decoder and their head end didn't work, they would have the backup system of our radio network to receive that.
LISTNUM 1 \l 11379 Now, still if there is something happen there, the BDU as Edith was saying, would ultimately receive legal action against it, but it would be the BDU in the first instance, we are talking about all‑channel emergency alerting. It is not radio component, the BDU as the EAS decoder and head end.
LISTNUM 1 \l 11380 COMMISSIONER del VAL: Okay. If we were just ‑‑ if we just had the radio right now, I am just ‑‑ we are talking about the radio component and the signal was destined for radio in Kamloops and the EAS decoder on your radio transmitter in Kamloops failed because of your failure to maintain, would it be CBC?
LISTNUM 1 \l 11381 MS CODY‑RICE: I think that the Law implies liabilities, so that if something happens in the system for which we are at fault and for which nothing ‑‑ for which we don't have an indemnification that leaves that aside, but the Law would say that the person who is at fault is the person who is responsible.
LISTNUM 1 \l 11382 COMMISSIONER del VAL: I can see how difficult it would be to, if I were the recipient of a wrong signal to find any recourse. I mean, just from our conversation here I can just see that.
LISTNUM 1 \l 11383 MR. GUITON: Well, the other point I was just going to make on that is, of course, that one of the key principles of CANALERT is that you have multiple layers of alerting, minimizing the harm that comes from an alert that may not fire.
LISTNUM 1 \l 11384 For example, in Kamloops a BDU service didn't actually fire for whatever reason, again I can't imagine what, and it wasn't able to use a redundancy and we weren't able to get the BDU to five the message, even though we knew that they hadn't fired, there are multiple levels of alerting going on under CANALERT. The cellular via over‑the‑air broadcasters, via all sorts of ways that are reducing the probability that that one system failure is causing an issue.
LISTNUM 1 \l 11385 COMMISSIONER del VAL: Okay. I don't know if there is any point asking the next question, but how would the CBC propose that the Commission have end to end recourse against the licensee CBC in case of misuse of the all‑channel alerts or false or misleading alerts and system failures?
LISTNUM 1 \l 11386 MR. GUITON: I'm sorry. Could you repeat the question? I'm sorry.
LISTNUM 1 \l 11387 COMMISSIONER del VAL: How would CBC propose that the Commission have end to end recourse against the licensee CBC in case of misuse of the all‑channels alert or false or misleading alerts and system failures?
LISTNUM 1 \l 11388 MR. SCARTH: The issue of misuse of the system and consequent sanctions is one of the elements within the draft CANALERT User Guideline, which is still currently in development. So, it's not an inconsequential issue, but it's still under discussion in the context of CANALERT.
LISTNUM 1 \l 11389 COMMISSIONER del VAL: So, until then, your answer would be that the Commission should not expect to have end to end recourse?
LISTNUM 1 \l 11390 MR. SCARTH: Well, unless the Commission was going to assume part of the role that CANALERT is currently assuming on behalf of the government, I am not sure that it would be practical.
LISTNUM 1 \l 11391 MR. GUITON: Sorry; just a small point. Again, it's just clarifying language. We aren't issuing alerts. The CBC is not the issuer, it's the emergency management or emergency organization that issues the alerts, we are passing them through.
LISTNUM 1 \l 11392 COMMISSIONER del VAL: Okay. If the CBC is of the view that the originators of the alert messages are to be ultimately responsible for the content of the alert messages, would this not constitute a de facto network, broadcasting undertaking that should be licensed or exempted from licensing requirements?
LISTNUM 1 \l 11393 MS CODY‑RICE: We are not asking to be licensed, so we haven't really investigated this. We understand that that is really a question that Pelmorex is very interested in, but we haven't taken a position on this. We are not asking for a licence for our service.
LISTNUM 1 \l 11394 COMMISSIONER del VAL: Okay. In the case of BDUs carrying emergency alerts, CBC has stated that cable and DTH operators would switch all channels in their systems, including the CBC channels over to a common channel or to an alert message screen, so that the message is the only thing that is accessible by viewers for its duration. That is the simplest form; right.
LISTNUM 1 \l 11395 Now, there would be both an audio and text message available on this common channel. So, would this be an alphanumeric service or a stand‑alone programming service or an integral part of programming service?
LISTNUM 1 \l 11396 MS CODY‑RICE: We really ‑‑ we have not really investigated this thoroughly. We recognize that there are arguments on both sides.
LISTNUM 1 \l 11397 COMMISSIONER DEL VAL: Do you have any comments on just your views, Ms Cody‑Rice, on if this were an alphanumeric service would the Commission have jurisdiction?
LISTNUM 1 \l 11398 MS CODY‑RICE: I really have no personal comments to make on that.
LISTNUM 1 \l 11399 COMMISSIONER DEL VAL: Okay. Would CBC want other radio and television programming undertakings to carry its emergency alert signal?
LISTNUM 1 \l 11400 MR. GUIDON: In the context of CANALERT, other broadcasters and BDUs would participate in CANALERT. Again, we are not suggesting that we have exclusive distribution of the alerting.
LISTNUM 1 \l 11401 COMMISSIONER DEL VAL: Those are my questions. Thank you.
LISTNUM 1 \l 11402 Thank you, Mr. Chairman.
LISTNUM 1 \l 11403 THE CHAIRPERSON: Thank you. Commissioner del Val. Commissioner Pennefather.
LISTNUM 1 \l 11404 COMMISSIONER PENNEFATHER: Thank you, Mr. Chairman.
LISTNUM 1 \l 11405 I just wanted to go back to the idea you put on the table, which you can correct me if I'm not saying it correctly, that if the Commission wished, we could issue a ‑‑ I assumed mandatory order under 9(1)(h) to all BDUs. It had to be in the context of CANALERT, is the words you used, but they could issue the alert in any way they would like.
LISTNUM 1 \l 11406 In other words, to dictate they have to, but not how to.
LISTNUM 1 \l 11407 Did I understand your proposal?
LISTNUM 1 \l 11408 MR. GUIDON: What we were suggesting is that ‑‑ in fact I hadn't thought about 9, section 9. I'm not sure that is the right way to go. It would be probably an entire new 7.1 or something, where the Commission could indicate that it wanted to see mandatory ‑‑ it wanted to have BDUs, either Class 1, Class 2, or optional for 3, participate in public alerting and you would do that within the regs, that's correct.
LISTNUM 1 \l 11409 COMMISSIONER PENNEFATHER: Now, you said through whatever proprietary technology the BDU would like to use, I believe.
LISTNUM 1 \l 11410 MR. GUIDON: I hope I didn't use the word "proprietary".
LISTNUM 1 \l 11411 COMMISSIONER PENNEFATHER: You did, but let's assume you didn't. We'll all check the transcripts after.
LISTNUM 1 \l 11412 MR. GUIDON: I hope, if I could, I'm sure I'm hoping ‑‑
LISTNUM 1 \l 11413 COMMISSIONER PENNEFATHER: It is not crucial to my point.
LISTNUM 1 \l 11414 MR. GUIDON: Okay. It should be non‑proprietary.
LISTNUM 1 \l 11415 COMMISSIONER PENNEFATHER: My point is more what would happen, then, if I understand you, is the BDU would pick up the signal off the satellite.
LISTNUM 1 \l 11416 MR. GUIDON: Yes.
LISTNUM 1 \l 11417 COMMISSIONER PENNEFATHER: But under your proposal if they can use ‑‑ they can distribute it perhaps not via an EAS decoder, but some other way. This was what I understand that you were saying.
LISTNUM 1 \l 11418 How would that assure consistency in terms of what the viewer sees? Because you have put a lot of emphasis on the values, the richness of the EAS decoder way, but to your suggestion that we back away from how it would be done or even that for reasons you don't go ahead with your alert systems through BDUs, but just the radio component, but if you have got the possibility of different technologies used by the BDUs, what ‑‑ would be there be a risk to the consistency of the messages received by the viewers?
LISTNUM 1 \l 11419 MR. SCARTH: The issue of consistency is primarily a function of the CAP protocol. The CAP protocol sets out all of the key elements that an alert message has to contain and provides a standardized format that is intended to work across multiple platforms, not just broadcast platform or BDU platform, but also a cellular platform or telephony platform.
LISTNUM 1 \l 11420 I'll pass the ‑‑
LISTNUM 1 \l 11421 COMMISSIONER PENNEFATHER: Just so I understand, you are putting the consistency of message content back at the starting point.
LISTNUM 1 \l 11422 MR. SCARTH: That's correct.
LISTNUM 1 \l 11423 COMMISSIONER PENNEFATHER: And that is the reason you say "Context of CANALERT".
LISTNUM 1 \l 11424 MR. SCARTH: Correct.
LISTNUM 1 \l 11425 COMMISSIONER PENNEFATHER: Does the word "context" mean that there should be a formal agreement, that there should be ‑‑ what does the word "context" mean?
LISTNUM 1 \l 11426 MR. SCARTH: In the ‑‑ with regard to the CAP protocol the working group that is currently been established by Industry Canada is working on essentially Canadianizing the existing CAP protocol, which is currently in place in a number of jurisdictions around the world.
LISTNUM 1 \l 11427 The key sort of elements with respect to how the CAP protocol gets Canadianized have to do with a Canadian‑specific geocoding and a level of agreement on the nature of the emergency events that would actually trigger the systems, so the front end design utilizing the CAP protocol is really to us kind of a foundation stone for this particular system.
LISTNUM 1 \l 11428 COMMISSIONER PENNEFATHER: So your proposal is based on the concept that BDU would have to work within the CANALERT protocols.
LISTNUM 1 \l 11429 MR. SCARTH: Yes.
LISTNUM 1 \l 11430 COMMISSIONER PENNEFATHER: And how would that be achieved? Formal agreement?
LISTNUM 1 \l 11431 MR. SCARTH: It is currently working its way through Industry Canada and CANALERT on a voluntary basis. I would suppose that if there are indications down the road that government doesn't have confidence that various industry sectors are prepared to participate, then they can bring other sort of measures to bear to compel participation, but at this stage, it seems the voluntary nature of it seems to be working in terms of generating that level of co‑operation.
LISTNUM 1 \l 11432 COMMISSIONER PENNEFATHER: Thank you. Thank you, Mr. Chairman.
LISTNUM 1 \l 11433 THE CHAIRPERSON: Mr. McCallum?
LISTNUM 1 \l 11434 MR. McCALLUM: Thank you, Mr. Chair. Just a couple of quick things.
LISTNUM 1 \l 11435 First of all, for all your undertakings, you are fine with coming back tomorrow morning for any undertakings?
LISTNUM 1 \l 11436 MR. GUIDON: Yes.
LISTNUM 1 \l 11437 MR. McCALLUM: Thank you. Just a quick question on attachment 4 to your application, which is the detailed breakdown of CBC Radio Canada capital costs.
LISTNUM 1 \l 11438 MR. GUIDON: Yes.
LISTNUM 1 \l 11439 MR. McCALLUM: Just on the line item, I guess it is 80,000 implementation, you have got 8.9 million dollars. I just wondered what's associated with that 8.9 million dollars at the top of the chart and, in particular, what of that relates to satellite uplink components and what of that relates to radio?
LISTNUM 1 \l 11440 MR. GAUTHIER: We don't have the complete breakdown here in that ‑‑ in that document. It could be filed for you later.
LISTNUM 1 \l 11441 But regarding the implementation, of course that huge number comes from the facts that we have 680 sites that we need physically to go there and to install on each site the system and we had a price per site that we listed and this is the figure that is coming back from there.
LISTNUM 1 \l 11442 MR. McCALLUM: So you'll be providing a greater breakdown tomorrow with the details of extra ‑‑ with your undertakings.
LISTNUM 1 \l 11443 MR. GUIDON: Okay. Just give us you one second to make sure we understand your question.
LISTNUM 1 \l 11444 MR. CARNOVALE: Is the number you are referring to 8,905,000?
LISTNUM 1 \l 11445 MR. McCALLUM: That's right.
LISTNUM 1 \l 11446 MR. GAUTHIER: And to which level you want the breakdown? You want to know exactly the uplink facilities regarding with the radio side portion of implementation?
LISTNUM 1 \l 11447 MR. McCALLUM: Yes, what relates to the radio side that doesn't, you know, technically require Commission approval to implement and then also what relates to satellite uplink, which I suppose requires Commission approval vis a vis changing section 7(d) of the regulations?
LISTNUM 1 \l 11448 Just trying to break it that way.
LISTNUM 1 \l 11449 MR. GAUTHIER: And you understand that on the satellite uplink side it is also including the servers and a system per se for the distribution of the EAS and the CAP?
LISTNUM 1 \l 11450 MR. McCALLUM: Yes, please. I would like to have as complete an understanding of that side as possible.
LISTNUM 1 \l 11451 MR. GAUTHIER: Okay. Thank you.
LISTNUM 1 \l 11452 MR. McCALLUM: Just a couple of things. A question was asked about the Commission having end‑to‑end recourse vis a vis CBC and the purpose of that is that a message would be issued by an alerting authority and it would be transmitted by CBC and it would be received by a BDU and CBC is responsible for a good portion of that transmission.
LISTNUM 1 \l 11453 And as you know, section 3(1)(h) of the act says that all persons who are licenced to carry on broadcasting undertakings have the responsibility for the programs they broadcast.
LISTNUM 1 \l 11454 So what I'm trying to understand is vis a vis the Commission applying that section of the Broadcasting Act to CBC, how does that work in a situation where CBC is not responsible for a portion of the transmission of the message?
LISTNUM 1 \l 11455 MS CODY‑RICE: Well, CBC is responsible for the transmission of the message, but not the content of the message, so I don't think that we wish to say that anybody ‑‑ that if we did something that was absolutely wrong that there would be absolutely no recourse against us.
LISTNUM 1 \l 11456 We are looking, because of all of the elements of a public alerting system, we are looking for indemnification from the government, but CBC ‑‑ and this is in all things ‑‑ takes its responsibilities, so ‑‑
LISTNUM 1 \l 11457 MR. McCALLUM: But when ‑‑
LISTNUM 1 \l 11458 MS CODY‑RICE: But what I was thinking and one of the reasons I didn't really respond to the question of recourse is when someone has received a wrong alert, the damage is to a degree done. So what I think they would be looking for is some kind of compensation and if they are looking for compensation I think that probably the Commission is not the appropriate body to do that. There are other bodies like the courts that can do that.
LISTNUM 1 \l 11459 Or sometimes if you say to someone, you know, this caused a problem, first of all we are not going to try and cause a problem, but this caused a problem, some arrangement may be made.
LISTNUM 1 \l 11460 But in terms of a recourse, these ‑‑ the CRTC is our licencing body. It has the various elements that it has, receiving complaints, calling hearings, and so on, if necessary. I am not sure that in this ‑‑ it depends what you're looking at. If you're looking that it should never happen again, we certainly would reply to any complaints, but if the person is looking for some kind of financial compensation, then I don't think the CRTC is the body to award the financial compensation, so ‑‑
LISTNUM 1 \l 11461 MR. McCALLUM: Yes, I was only looking as to how the Commission would apply the Broadcasting Act to CBC in responding to complaints from the public or whatever, and the problem that I have is that if CBC is delegating an element of control to some other entity and saying that other entity is responsible for the content, it kind of looks kind of like a network and that is kind of the problem that I was trying to understand so we can understand how 3(1(h) applies.
LISTNUM 1 \l 11462 MS CODY‑RICE: Yes, I think that we are not addressing the question of whether this is really a network and whether in fact it is a alphanumeric system.
LISTNUM 1 \l 11463 We didn't see that as part of our application, because we are not asking to be licensed to do this.
LISTNUM 1 \l 11464 So can the CRTC ‑‑ you know, we'll be doing it in the context of our total broadcasting, we are part of the broadcasting system. If complaints were made about that, we certainly would respond, but you would be interested in seeing, I think, that it never happened again, not in an awarding compensation to someone.
LISTNUM 1 \l 11465 MR. McCALLUM: Yes, compensation is a different element.
LISTNUM 1 \l 11466 MS CODY‑RICE: Yes.
LISTNUM 1 \l 11467 MR. McCALLUM: And basically, if I understand you right, there is one element of that transmission that ‑‑ it is difficult to apply to the CBC because CBC is not responsible for the origination and the content of that element of the transmission.
LISTNUM 1 \l 11468 MS CODY‑RICE: Well, that is the whole premise of the public alerting system, though. CBC is not and does not claim to be experts in the determining of what is a disaster and what is not and what kind of alert should be given to the public. That really is expertise in someone else.
LISTNUM 1 \l 11469 We want to participate to make sure the message that is developed by CANALERT is transmitted to the public and so the ‑‑ our role in that is a co‑operative role where we will cooperate with government to get the messages out, but we are not the originator of the message and therefore, you know, we ‑‑ and I think Pelmorex is of the same view, they are not originating the message and therefore they are not liable for the message and no court would find them liable for the message, for the content of the message.
LISTNUM 1 \l 11470 If the whole arrangement is that a government is issuing a message in which it has the expertise to issue it and we as a participant in the system want to make sure that this message gets out to everyone involved ‑‑ or everyone who could be affected by it, we are performing a public service as a public broadcaster.
LISTNUM 1 \l 11471 MR. McCALLUM: All right. Thank you. At least we understand your position on that.
LISTNUM 1 \l 11472 MS CODY‑RICE: Okay.
LISTNUM 1 \l 11473 MR. McCALLUM: Can you give me help with one final matter, then. And that is you have proposed that section 7(d) be worded for the purpose of transmitting an authorized public alert message and I wanted to have your views on how the Commission would define "authorized public alert message".
LISTNUM 1 \l 11474 MR. GUIDON: Currently, as you know from the CANALERT users guidelines, this is a definition of authorized user. I believe it is federal, provincial and municipal governments that are legislated or have the authority to issue alerts and that is ‑‑
LISTNUM 1 \l 11475 MR. McCALLUM: And that is as specific as it gets? I'm just trying to think in terms of the specificity that has to be put into a regulation. That is as specific as it gets from your perspective?
LISTNUM 1 \l 11476 MR. GUIDON: I'll pass to Edith to see if it needs to be more specific, but that is the type of language that is being discussed.
LISTNUM 1 \l 11477 If that is not sufficient certainly I'm sure CANALERT will investigate more specific language if the Commission feels that is necessary.
LISTNUM 1 \l 11478 MS CODY‑RICE: Yes, I think if authorized ‑‑ right now the CANALERT protocol is not finalized, so that it is difficult for you to put something in for us to say it is a CANALERT‑authorized system ‑‑ or authorized message, but if the Commission were to feel more comfortable and they wanted to put in the elements of I believe it is the draft protocol, which is section 9.2, I believe, which indicates what they would authorize as a message, then that would be fine.
LISTNUM 1 \l 11479 We recognized "authorized" in the current circumstances is not quite as clear as it could be just standing alone.
LISTNUM 1 \l 11480 MR. McCALLUM: Okay. Well, thank you. The question is looking at the degree of specificity that is needed to make a change to regulations and knowing that, you know, they have to be very specific for that purpose.
LISTNUM 1 \l 11481 Thank you Mr. Chair.
LISTNUM 1 \l 11482 THE CHAIRPERSON: Thank you, Mr. McCallum. So we will thank you gentlemen. Thank you Mr. Guiton, thank you, madam, for your presentation.
LISTNUM 1 \l 11483 We'll take a 15 minute break, so we'll resume at ten past five with the application by Bell ExpressVu.
‑‑‑ Upon recessing at 1655 / Suspension à 1655
‑‑‑ Upon resuming at 1715 / Reprise à 1715
LISTNUM 1 \l 11484 THE CHAIRPERSON: Order, please. A l'ordre, s'il vous plaît.
LISTNUM 1 \l 11485 Mrs. Secretary...?
LISTNUM 1 \l 11486 THE SECRETARY: Thank you, Mr. Chairman.
LISTNUM 1 \l 11487 We will now proceed with Item 3 on the Agenda, which is an application by Bell ExpressVu Inc., the general partner, and BCE Inc. and 4119649 Canada Inc., partners in BCE Holdings G.P., a general partnership that is the limited partner), carrying on business as Bell ExpressVu Limited Partnership, ExpressVu, for authorization to provide an all channel emergency alerting service.
LISTNUM 1 \l 11488 According to the applicant, notification of imminent threats to public safety would be received by ExpressVu either directly from CANALERT when it becomes fully operational within the next five years, from CANALERT via an authorized third‑party emergency alert service provider, or directly from a third‑party service provider. ExpressVu would then insert the alert over the in‑progress programming of all televisions programs and services it distributes.
LISTNUM 1 \l 11489 Les messages d'alerte bilingues prendraient deux formes, un défilement à l'écran sous forme alphanumérique et un avertissement audio, et ils seraient diffusés à l'échelle nationale ou régionale, selon les besoins.
LISTNUM 1 \l 11490 Appearing for the applicant is Mr. Gary Smith, who will introduce his colleagues. You will then have 20 minutes for your presentation.
LISTNUM 1 \l 11491 Mr. Smith...?
PRESENTATION/PRÉSENTATION
LISTNUM 1 \l 11492 MR. SMITH: Good afternoon, Vice‑Chairman Arpin and Commissioners.
LISTNUM 1 \l 11493 My name is Gary Smith and I am the President of Bell ExpressVu, a direct‑to‑home satellite service provider. I am also responsible for Bell Canada's terrestrial distribution undertakings in the video sphere. All of these distribution undertakings are part of the Bell video group.
LISTNUM 1 \l 11494 With me today, on my left is Chris Frank, Vice President of Programming; on my right Terry Snazel, Vice President of Technology; and on my far left, David Elder, our Regulatory Counsel.
LISTNUM 1 \l 11495 ExpressVu very much appreciates the opportunity to participate in this proceeding to reiterate our support for a national emergency warning system based on Industry Canada's CANALERT initiative and to confirm our commitment to participate in its development and implementation along with other Canadian broadcasting distribution undertakings and Canadian programming undertakings.
LISTNUM 1 \l 11496 Our remarks today, therefore, will focus on a number of key emergency warning issues fundamental to that commitment.
LISTNUM 1 \l 11497 It is important to note at the outset that ExpressVu's application to provide an emergency warning service is predicated on Industry Canada's vision of and plans for CANALERT, as shared with the broadcasters Public Alerting Working Group, which I will refer to in this opening statement as "the working group" for simplicity.
LISTNUM 1 \l 11498 As charter member of the working group, ExpressVu joined others from the broadcasting sector in providing Industry Canada with its perspective on the roles and responsibilities of this industry with respect to CANALERT. That dialogue, and the government's proposed operational structure of CANALERT have served as a guiding framework for ExpressVu's emergency warning service application.
LISTNUM 1 \l 11499 As originally presented to the working group, CANALERT's objective was to deliver all authorized emergency alerts directly to distributors for subsequent dissemination to Canadians. Thus, the context in which ExpressVu committed its participation did not contemplate the possible involvement of national third‑party distribution intermediaries unless they are subcontractors chosen by Industry Canada to perform all or part of CANALERT's responsibilities.
LISTNUM 1 \l 11500 This changed with the Commission's call for emergency warning system applications competitive to that of Pelmorex. Thus, this proceeding is not a response to CANALERT, it is a response to a Pelmorex business initiative.
LISTNUM 1 \l 11501 ExpressVu requests, therefore, that in reaching its determinations the Commission bear in mind the original intent of direct Industry Canada alert distribution and the goals of CANALERT.
LISTNUM 1 \l 11502 The possible establishment of an emergency warning regulatory framework raises three key considerations on which ExpressVu has chosen to comment.
LISTNUM 1 \l 11503 Number one, the licensing of emergency warning services.
LISTNUM 1 \l 11504 Number two, the universal voluntary participation by the broadcasting sector in CANALERT.
LISTNUM 1 \l 11505 Number three, the need for BDUs to be free to choose how to deliver emergency alerts in the most operationally and cost‑effective manner possible.
LISTNUM 1 \l 11506 Dealing with these in turn, on the matter of the licensing of emergency warning services, ExpressVu maintains that such a service does not comprise programs as defined under the Broadcasting Act. Therefore, transmission of emergency alerts would not constitute broadcasting and an undertaking for transmission of such alerts would not constitute a programming undertaking as each of those terms is defined in section 2 of the Act.
~ Thus, licensing under the Act to provide such a service is neither appropriate nor required. The only authorization necessary would be the addition of a condition of license relieving a broadcasting distribution undertaking of the obligations set out in section 7(d) of the Broadcasting Distribution Regulations to obtain the agreement of the operator of a programming service or the network responsible for the service prior to an emergency alert affecting that programming service.
LISTNUM 1 \l 11507 Indeed, an emergency warning service need not, in fact, constitute a programming service in order to comply with the anticipated standards and operating guidelines to be confirmed by Industry Canada for CANALERT.
LISTNUM 1 \l 11508 ExpressVu's own proposal is for a stand alone alphanumeric service that should not require licensing.
LISTNUM 1 \l 11509 Second, I would like to turn to the matter of universal voluntary participation by members of the broadcasting industry in CANALERT. The broadcasting sector, through the working groups dialogue with Industry Canada has expressed a preference for and commitment to its universal voluntary participation in CANALERT, rather than a regulatory obligation to do so. ExpressVu reiterates that commitment.
LISTNUM 1 \l 11510 Broadcasters are supportive of the CANALERT initiative and can be relied upon to fulfil their critical role in its implementation in the public interest. For its part, ExpressVu has submitted an emergency warning system application for a condition of license as the most appropriate way to demonstrate a commitment to participate in this process. Thus there is no cause for the introduction of regulation mandating participation of the broadcasting industry in CANALERT. At most, a Commission expectation of broadcaster participation should suffice.
LISTNUM 1 \l 11511 Third and finally is the need for BDUs to determine how best to provide emergency alerts to their subscribers. Each distributor understands its own distribution technology the best. Each could undoubtedly operate an emergency warning service based on that technology with maximum cost effectiveness, certain and accurate message delivery and no customer disruption outside targeted geographical zones.
LISTNUM 1 \l 11512 Unequivocally that is the case for ExpressVu. Each BDU should be granted the freedom to craft its own emergency warning service that best serves the needs of its subscribers, whilst complying with CANALERT requirements.
LISTNUM 1 \l 11513 ExpressVu encourages the Commission to avoid obliging BDUs to interact with any third party whose understanding of their respective technologies would be inadequate and whose best interests could conceivably differ from those of the BDUs in satisfying the emergency alert needs of the Canadians they serve. Again, the sole limitation should be that the emergency messages which they distribute comply with guidelines and standards established by Industry Canada and the Commission.
LISTNUM 1 \l 11514 However, if the Commission determines that emergency warning services require licensing, then ExpressVu would encourage it to adopt an open authorization regime. All interested parties who apply for authority to provide such a service should be granted approval, provided they satisfy the Commission's requirements and comply with certain operating parameters and guidelines to be stipulated by Industry Canada through the CANALERT initiative. No one service provider merits an exclusive license.
LISTNUM 1 \l 11515 An emergency warning service is not an conventional genre protected programming service and no single applicant ought to be the beneficiary of regulation calling for its mandatory carriage with a de facto exclusivity that that implies.
LISTNUM 1 \l 11516 In addition, the Commission should acknowledge that CANALERT remains a work in progress and ensure that any licenses issued for emergency warning services, allow for a certain flexibility to accommodate CANALERT decisions yet to be made.
LISTNUM 1 \l 11517 I think our position can best be illustrated by reference to the diagram attached to your copies of the opening statement, and reproduced in post‑it form to my left. It is our understanding that the CANALERT initiative includes the aggregation of alert messages from various sources filtering and qualifying them and distributing them to various media companies, be they broadcasters or BDUs.
LISTNUM 1 \l 11518 Our role is to take the messages delivered to our master control centre by CANALERT and to deliver them to all our subscribers in the affected areas, thus providing an end to solution from source to customer.
LISTNUM 1 \l 11519 We would expect each BDU to use a technology solution that is the most efficient and cost effective for their system. Therefore we would anticipate that each BDU would develop its own solution consistent with the standards for delivery developed by Industry Canada through its CANALERT initiative.
LISTNUM 1 \l 11520 As a final thought, ExpressVu notes that the Commission indicated in its call for comments that it had not reached a conclusion as to whether it would authorize any emergency warning services at this time. If the Commission ultimately determines that such authorizations are either premature, given the status of CANALERT's implementation timetable, or are unnecessary given the proposed infrastructure of CANALERT and the defined nature of an emergency warning service, then ExpressVu encourages the Commission to refrain from introducing an emergency warning service regulatory framework.
LISTNUM 1 \l 11521 We thank you for your attention to our thoughts on these matters and we welcome any questions you may have.
LISTNUM 1 \l 11522 THE CHAIRPERSON: Thank you, Mr. Smith. I will say that your oral presentation as well as your applications are very clear and very straightforward. That being said, I will have some questions and I will use the same framework that my two colleagues used with the two other applicants.
LISTNUM 1 \l 11523 You may have different answers, but ‑‑ or may not have answers depending on the question.
LISTNUM 1 \l 11524 I will ‑‑ and I appreciate your views. I think it is, as I said, they are very clear, but in order of saving time I will go straightforward to the questions and avoid to go into too many details because your position is very clear.
LISTNUM 1 \l 11525 Well, we will start with questions regarding the delivery of the pop‑up alert, because you are at least ‑‑ you have submitted a proposal in a working model, so we want to know a bit more about that working model.
LISTNUM 1 \l 11526 So will the channel location where the emergency warning messages are displayed always be the same, and if not, for public education purposes, will having the message consistently in the same channel be more beneficial?
LISTNUM 1 \l 11527 MR. SMITH: I am just going to give a brief comment on that before I hand over to my colleague, Mr. Snazel, who will talk about the technology in a little more detail, but at the moment we do feel that we need to get further down the road with CANALERT before making any final decisions on how the messages will be displayed to our subscribers.
LISTNUM 1 \l 11528 We think that it is an industry issue that needs to be addressed and CANALERT is in a good position to do that and the working party. And there are many interests which need to be considered such as the ‑ some of our broadcasters, we know, are very concerned about putting emergency messages over content they may have which may relate to that same emergency and may give more detailed local content. So I think those are all valid views that do need to be considered.
LISTNUM 1 \l 11529 So in our application we have shown some screen shots, I think, of how it could appear, but at this stage those are just ideas about how it could appear and I think that needs to be evolved a little bit further.
LISTNUM 1 \l 11530 Terry, would you like to answer more?
LISTNUM 1 \l 11531 MR. SNAZEL: Yes, one comment regarding the pop‑up. Since we put the application in, we have not only been consulting with ourselves, but we have also been talking to industry working groups and so on. We think the pop‑up idea is probably not the best way.
LISTNUM 1 \l 11532 One thing that came through every time we listened to an expert on the topic was the importance of the view or understanding that this is really a serious alert and that leaving the program content on the screen at the same time as the alert I think is something that we have decided is not such a good idea.
LISTNUM 1 \l 11533 So our actual proposal now is to, in fact, switch it to a full screen text channel that very clearly identifies to people that are somewhat visually impaired as well as those who are hard of hearing that there's a serious alert being targeted to them.
LISTNUM 1 \l 11534 THE CHAIRPERSON: So the model that you are now contemplating is somehow similar to the one CBC presented to us this afternoon, at least on the screen?
LISTNUM 1 \l 11535 MR. SNAZEL: Yes, it is very similar and in terms ‑‑ in concept, the ‑‑ obviously the same CANALERT cap protocol to deliver the actual messages to us. The question in our minds, much as in the CBC's, is exactly how the guidelines are going to be formulated and put forward, but the standard protocol is very important.
LISTNUM 1 \l 11536 But also the way the message is displayed on the screen I think ‑‑ and also their thoughts on the loud noise that would awake people from their sofas I think is kind of important too. So very similar in a lot of ways to the way the CBC plans to actually implement it on screen.
LISTNUM 1 \l 11537 THE CHAIRPERSON: Thank you. In figure 7 of your original application, you state that the screen containing the emergency warning message will simultaneously exhibit multiple warnings from across the country.
LISTNUM 1 \l 11538 Is there any way to highlight or make more permanent the alert that directly pertains to the subscriber who is viewing the screen or what will happen to the audio portion of the various warnings?
LISTNUM 1 \l 11539 MR. SMITH: I think, again, everything in our presentation and also Terry's comments with respect to the CBC's proposal, they're all good ideas. I think they need to be put into the CANALERT forum and we would expect to adhere to the CANALERT forum's decisions over how alerts should be displayed to consumers.
LISTNUM 1 \l 11540 But I know that our platform has substantial capabilities in terms of providing messages in English and French, for example, and messages targeted to a zone of customers in a targeted zone. So, Terry, perhaps you could expand upon that.
LISTNUM 1 \l 11541 MR. SNAZEL: Yes, two comments. One is the mechanism for identifying where our subscribers are. Our actual method is postal codes. We will be using the full six digits of the postal codes which are, in fact, quite specific as to where people are living.
LISTNUM 1 \l 11542 The other piece of the puzzle that we do have an advantage is that we know which language our customers are more comfortable with, because they're actually selecting on the set top box, whether it is an English box or a French box, so we can target specific messages to either English or French accurately.
LISTNUM 1 \l 11543 THE CHAIRPERSON: So there won't be the need to send a bilingual message, the system is sophisticated enough to target exactly the box ‑‑ the French box or an English box in any given community.
LISTNUM 1 \l 11544 MR. SMITH: Again, like Terry said, there's still some protocols to be determined, but the answer, technically we can identify our English customers from our French customers accurately. So we could deliver French to one, English to the other, bilingual to both or whatever the protocol ends up being or the guidelines end up being.
LISTNUM 1 \l 11545 THE CHAIRPERSON: And are they all your digital box that have that facility or only the open TV boxes.
LISTNUM 1 \l 11546 MR. SNAZEL: We are not going to be using the open TV system at all, so we are very concerned that a hundred percent of our set top boxes and a hundred percent of our viewers can see the messages.
LISTNUM 1 \l 11547 THE CHAIRPERSON: I see.
LISTNUM 1 \l 11548 MR. SMITH: If I could just expand upon that. Certainly in the earlier comments from Pelmorex, they were illustrating some concern not all our boxes are open TV compatible, which is absolutely true. But we have a variety of boxes in the field, including open TV boxes and other boxes. But the type of solutions that we put in our proposal and the type of solution that we would expect to implement following CANALERT's recommendations would not be dependent upon the open TV middle ware.
LISTNUM 1 \l 11549 THE CHAIRPERSON: Okay, fine. Thank you. We have a few questions regarding what are the problems associated with automatically switching all the boxes of subscribers in a designated area to a channel that contains the emergency alert all at the same time? Are there any problems or ‑‑
LISTNUM 1 \l 11550 MR. SNAZEL: No, it is a single message essentially force tuning the box to go to a particular channel and it will happen, not absolutely instantly, but within seconds. Once the initiation is sent out across our network for all the boxes to tune to that particular emergency channel, whichever one it might be, then it happens very, very quickly.
LISTNUM 1 \l 11551 THE CHAIRPERSON: Thank you. If the Commission decides that the two‑stage alert process as proposed in your application is not adequate, which are the two options stated in the previous question ‑‑ I only gave you an option, but the thing is I think you already ‑‑ I didn't have to give you the second option because you have already answered to it. But the second option was placing the alert message rather than the pop‑up alert, as you've said in an earlier statement, obviously it is clear the answer is that you have taken another approach and so ‑‑
LISTNUM 1 \l 11552 MR. SMITH: Perhaps I could add something which I think is relevant. The DTH, the digital direct home satellite platform is a complex technology beast and we do have limitations in how we apply this emergency alert service to our platform, and I think we ‑‑ for example, we can send an individual message to an individual subscribers, but the unique identification of that subscriber through our subscriber records and through the smart carve that they have in the sentel (ph) box, or we can do a certain amount of zoning. But there's probably a grey area in the middle where you have got very small zones of maybe, you know, just a small area which may be more technically cumbersome to implement or the time it takes to get the message to those customers may be longer.
LISTNUM 1 \l 11553 So there's a lot of technical complexity behind delivering this service, and I wouldn't want to trivialize it because we do think we are going to have to be exploiting capabilities of our platform that we do not currently use and clearly one of the key features of our application is that we feel we should be responsible for doing that, not a third party, because of our complexity and we are the only ones who know it to that degree of detail.
LISTNUM 1 \l 11554 THE CHAIRPERSON: Have you already read ‑‑ I know you have said you will be working with the postal code, six digit postal code, so it is more refined than using obviously the three first ones as a lot of marketers will do, but the ‑‑ but have you grid the country so that say that there has been a railway accident in a very limited area, are you capable to limit yourself only to that area that you know where all the postal codes are very specifically or is it something you will have to do?
LISTNUM 1 \l 11555 MR. SNAZEL: The postal code, the six digits of the postal code is the granularity with which we can very address very small areas. I mean it is literally the corner of a street in some areas or sometimes it is a large field.
LISTNUM 1 \l 11556 THE CHAIRPERSON: Yes.
LISTNUM 1 \l 11557 MR. SNAZEL: So we have the ability to geographically identify specific areas. We think, and this is something that is going to emerge I think throughout the working group process is that there may be a slightly better way of actually defining the targeted area rather than trying to use raw postal code, which is a ‑‑ quite a cumbersome thing and that in fact there will longitude mechanisms or other, if you like, guidelines used to identify certain geographic areas.
LISTNUM 1 \l 11558 But then for us to fill those geographic areas, we would use the postal code to identify where they were, at which point they would become zones, as you were saying, that the CANALERT process could identify perhaps more easily and simply for the operators of the actual message. So we are a bit flexible, but we have the granularity to be as flexible as the standard allows.
LISTNUM 1 \l 11559 THE CHAIRPERSON: Okay, thank you. we have discussed the language of the emergency alert messages earlier and you said you will have the capability to toward them in French or in English obviously, but I understand also from your proposal that your position is exactly the same one than the two other applicants, that you are not taking any responsibility in the message, per se.
LISTNUM 1 \l 11560 So if the message is only forwarded to you in one given language, what will happen with the other situation?
LISTNUM 1 \l 11561 MR. SNAZEL: Again, I don't want to keep saying we will be flexible, we will be flexible, but it will depend on how it is implemented. We have the capability to go directly to a French channel with a French message and to the English channel with the English message.
LISTNUM 1 \l 11562 My guess is we would do a combination. We would actually ‑‑ if there was a message coming out in English only, that it would in fact ‑‑ and it was for a particular geographic area and there was no French message, we would target that to both the French and the English set top boxes so that those that were bilingual would have the opportunity to read it, even if it wasn't their native language.
LISTNUM 1 \l 11563 THE CHAIRPERSON: Okay. So will ExpressVu accept a condition of license to display alert in both official languages when they are available in both languages?
LISTNUM 1 \l 11564 MR. SMITH: I think to the extent that the messages are made available to us by CANALERT then, yes, we would expect to display them in both languages.
LISTNUM 1 \l 11565 THE CHAIRPERSON: Thank you. You've answered already those questions. Now I am moving to getting a better understanding of the time it takes ‑‑ these are questions that you have already alluded to, but if it will be necessary to target alert message to particular provinces, regions, cities, municipalities, even to citizens living within, say, a kilometre of a railway track or an airport, what targeting options will be possible? For instance, will it be possible to target railway corridors?
LISTNUM 1 \l 11566 MR. SNAZEL: Yes, absolutely.
LISTNUM 1 \l 11567 THE CHAIRPERSON: Once your system is in place, how long will it take from ExpressVu's point of view of transmission of the alert message to the point of activation or involve the target set top box?
LISTNUM 1 \l 11568 MR. SNAZEL: The time from when we get the message to when the set top boxes actually get it?
LISTNUM 1 \l 11569 THE CHAIRPERSON: Yes.
LISTNUM 1 \l 11570 MR. SNAZEL: It is actually fairly quick. It depends obviously on the size of the geographic area and how many boxes we are talking to. I would say it is anywhere from between ‑‑ well, instantly to some boxes, but some period between a minute and two minutes probably and we probably within two minutes have covered the largest ‑‑ like GTA or Montreal would be probably within two minutes.
LISTNUM 1 \l 11571 MR. SMITH: If I can add, I think that if we do ever get down to very specific targeting, which would achieve through a different method of sending messages to those boxes specifically, it may take longer than that and that was one of the reasons in our proposal we allowed for a five‑minute period for warnings to reach the box, but generally our system does work in one to two minutes, as Terry describes, and that's what we would expect the CANALERT conclusion to support.
LISTNUM 1 \l 11572 THE CHAIRPERSON: And I'll have a few questions on backup and verify if the message has reached the intended customer.
LISTNUM 1 \l 11573 In the event that there was aN equipment failure of power outage is there any means of rerouting alerts to backup facilities?
LISTNUM 1 \l 11574 MR. SNAZEL: We have a very reliable broadcast centre and, as my boss tells me, it costs an awful lot of money. We have backup services ‑‑ backup capability on backup capability.
LISTNUM 1 \l 11575 We have sort of three generators and UPSs and it's a very, very well backed up facility to the point we really, really haven't had a major facility outage ‑‑ in fact, we haven't since we have been on there. We have been very, very fortunate. So our backup capability is good.
LISTNUM 1 \l 11576 The monitoring and the management and the ‑‑ in a sense the supervision of the messages going to our servers will not be totally automated either. We have a 24 by 7 broadcast centre, master control operation, and part of their new function, once this would come to pass, would be in fact to not only to validate the ‑‑ that there is a message coming in, but actually to make sure that it makes some kind of sense and there is not sort of gobbledygook being put up on the screen, because someone was typing in a probably very, very sort of excited state, perhaps, somewhere and the message isn't clear.
LISTNUM 1 \l 11577 If, in fact, that was the case we would take some kind of manual intervention, perhaps, and call the CANALERT people to say is this really what you mean to say and so on.
LISTNUM 1 \l 11578 So there is a high degree of technical backup and a degree of manual sort of supervision of the service as well.
LISTNUM 1 \l 11579 THE CHAIRPERSON: Will the provider of the message receive an acknowledgment that the alert has been properly sent and received?
LISTNUM 1 \l 11580 MR. SNAZEL: We'll acknowledge as part of the protocol the interface with CANALERT, the CANALERTing protocol level.
LISTNUM 1 \l 11581 It depends on where and how the actual originator of the message is located. If ‑‑ one of the fortunate things we do have with ExpressVu and one of the ways we'll be able to make sure that this message is getting out, is we'll have representatives set‑up boxes at our broadcast centres, so if a message is going to a particular zone we'll have the ability at master control to say this is entirely there, so we would in fact create a box in Toronto that was theoretically in B.C. or the railway corridor or whatever, so we can make sure that it's being targeted properly to that specific location.
LISTNUM 1 \l 11582 If the originator of the message had a Bell ExpressVu set‑up box, and if they were in the sort of geographic area that was being targeted very much so, they could see the message coming up.
LISTNUM 1 \l 11583 THE CHAIRPERSON: Do you intend to implement a regime to test the ‑‑ their ability to receive and distribute emergency message?
LISTNUM 1 \l 11584 You're always ahead of me by one question, but ‑‑ and the following question is could you describe it? You just described it.
LISTNUM 1 \l 11585 MR. SNAZEL: I'm sorry.
LISTNUM 1 \l 11586 THE CHAIRPERSON: No problem.
LISTNUM 1 \l 11587 MR. SNAZEL: I guess a philosophy, and I have sort of been around a while, and I've discovered that unless you test things properly and unless you test things with as close to reality as possible, you're going to mess something up and there are examples whereby people have tested their emergency generator system, for instance, not totally simulating a true power outage and when the real power outage came along there were problems.
LISTNUM 1 \l 11588 My point is that we're very concerned and we do regular testing of all systems like this and in particular this one, which is so critical that it's ‑‑ it's understood not only by our operators and our people who are trained to use it but also there has got to be a degree of understanding of what this means to the public.
LISTNUM 1 \l 11589 It shouldn't be sort of the first time they ever see an alert when there is a tornado heading towards them and there is a degree of education of the public and of subscribers, which we will take responsibility for.
LISTNUM 1 \l 11590 And I know that CANALERT is developing those kind of guidelines for us.
LISTNUM 1 \l 11591 THE CHAIRPERSON: You have stated that you prefer the multiplicity of emergency alert providers from which you may choose.
LISTNUM 1 \l 11592 Are ExpressVu plans for distribution of an alert message based on the assumption that it will only have to deal with one provider of emergency alert messages; that is every provider will provide every alert?
LISTNUM 1 \l 11593 MR. SMITH: I think at this point I would like to refer back to the diagram, because I know that from the questions that arose on our original proposal, this is a source of some confusion about our proposal, so I would like to spend a minute just answering that question, if I may.
LISTNUM 1 \l 11594 We feel quite strongly that there are two parts to this ‑‑ to the process, the end‑to‑end process of supplying emergency alerts to subscribers or to end households in Canada.
LISTNUM 1 \l 11595 On the chart it's divided by the line two‑thirds of the way down the page that there is one business function, if you like, which is the aggregation of emergency alerts from originating agencies and potentially the filtering and approval of those messages and the distribution of those messages to media across Canada and if I may refer back to the preceding presentation from the CBC, I think their satellite distribution, their ‑‑ I can't remember what they called it, but the control centre and the satellite distribution of the messages to all the BDUs across Canada would fall very firmly and squarely into that business function. So that is the above‑the‑line piece.
LISTNUM 1 \l 11596 For that portion of the supply chain we think it is most likely that there is ‑‑ it would be in Industry Canada's interest and CANALERT's interest to only have one provider, because, as I think Pelmorex referred to, we are sure that the emergency alert authors would prefer to deal with one agency to aggregate and disseminate their messages across to the various BDUs across Canada.
LISTNUM 1 \l 11597 When you are talking about the distribution of messages below the line here, this is when it becomes our problem and that is, you know, we are a BDU operating in Canada, there are many others, and we think that we should have choice of how we want to distribute those messages.
LISTNUM 1 \l 11598 And at that point, yes, we can envisage there could be competitive solutions available from any of the applicants here today or we may wish to do it ourselves.
LISTNUM 1 \l 11599 We think that the right thing to do is to allow the BDUs choice of how they want to distribute the messages, because they are in the best place to decide how to do it most cost effectively and the most technically efficiently and therefore there is a definite dividing line there and it is consistent with the CANALERT assumptions that CANALERT is taking the messages as far as delivering them to the door of the BDUs and then the BDUs take up the responsibility from there. Very much the model which we expect to be the right one.
LISTNUM 1 \l 11600 THE CHAIRPERSON: Thank you. We'll move to the more financial aspect of your proposal.
LISTNUM 1 \l 11601 In your view the cost of distributing an emergency alert service ‑‑ well, you ... does the amount allocated to support personnel include costs associated with ongoing system training and co‑ordination for ExpressVu personnel?
LISTNUM 1 \l 11602 If so, what percentage of the overall costs is allocated for this purpose?
LISTNUM 1 \l 11603 MR. SMITH: We did ask for the commercial data associated with our proposal to be held in confidence by the Commission so I prefer not to deal with specific numbers, if that is acceptable.
LISTNUM 1 \l 11604 The costs which we have included within our proposal are those costs involved in handling the below‑the‑line element for our platform only.
LISTNUM 1 \l 11605 And the costs, I think, were explained in our proposal for that part of the supply chain.
LISTNUM 1 \l 11606 We have not assumed that we'll be making any payment for any other components of the supply chain, because it is our understanding that CANALERT will be funded from central government resources.
LISTNUM 1 \l 11607 THE CHAIRPERSON: Have you established some public education costs for the subscribers concerning your ‑‑ that new system, making sure that they understand? You have got to have flyers, I suppose, with your billings and that is the way ‑‑ that is how you are going to sensitize your subscriber that when there is an alert they could receive a message.
LISTNUM 1 \l 11608 MR. SMITH: We have a variety of methods of communicating with our customer base.
LISTNUM 1 \l 11609 For example, we have recently launched a magazine which goes to a large proportion of our customer base and which we can use to communicate this type of thing.
LISTNUM 1 \l 11610 So I would expect to use those to a certain extent, although I must admit I can't confirm whether we have allowed for any of the costs of the use of those things in our commercial proposal.
LISTNUM 1 \l 11611 I would be happy to take an undertaking to review that and respond to the Commission by tomorrow.
LISTNUM 1 \l 11612 THE CHAIRPERSON: Okay. Fine.
LISTNUM 1 \l 11613 MR. FRANK: Mr. Vice‑chair, to the extent that a picture is worth a thousand words, we also have on‑screen marketing channels which we can use to demonstrate how the service works and what a subscriber would see, much like we do when we are describing the functionality of our set‑top box, for instance, for lockout purposes, violence and what have you.
LISTNUM 1 \l 11614 THE CHAIRPERSON: Thank you. You have stated in your application that you ‑‑ that it underscores, it supports for universal BDU participation in a national emergency alert system on a voluntary basis.
LISTNUM 1 \l 11615 In your view is it possible to achieve universal BDU participation on a voluntary basis?
LISTNUM 1 \l 11616 MR. SMITH: We would sport response that was made to that same question by the CBC. I think their response was very thorough.
LISTNUM 1 \l 11617 At the moment the CANALERT initiative is very strongly supported and we would expect to capture all the major BDUs across Canada through that initiative using voluntary means, so whether there is any need for any regulation, there is no clear need for that at this point in time.
LISTNUM 1 \l 11618 THE CHAIRPERSON: Thank you. If cable and DTH companies are not required to participate and some of the larger BDUs opt out, what assurances are there that the public served by these BDUs will receive a warning when necessary?
LISTNUM 1 \l 11619 This is more a theoretical question than a very practical one that is addressed to you, but ...
LISTNUM 1 \l 11620 MR. SMITH: My colleague, Mr. Frank, has a comment.
LISTNUM 1 \l 11621 MR. FRANK: We are at this point, having worked with BPOG, as the team leader from CBC has indicated to you, it is been working very well. There is lots of examples of where the industry has come together on these kindS of issues, such as programming codes, violence codes, et cetera.
LISTNUM 1 \l 11622 At this point we are convinced that the voluntary route is going to work. If in the future there is a problem I think you have the tools to step in and fix the problem, but at this point, as I said, we are convinced that things are working very well and everyone seems to be committed to a national system.
LISTNUM 1 \l 11623 THE CHAIRPERSON: Thank you. You have stated that you will also be prepared to provide your emergency alert service to other BDUs should there be any such interest.
LISTNUM 1 \l 11624 Will this service be potentially available to all interested BDUs or only those who are subscribing to your service?
LISTNUM 1 \l 11625 MR. SMITH: I think, it would be in the country's interest if companies like ExpressVu, which clearly have a national footprint, make the services that we have available, you know, such as an emergency alert service, to any BDU that wishes to use it. But I would say that the service that we have ‑‑ we have documented in our submission to the Commission is very much a service which is targeted at end users, just as the service that the CBC documented was one which was targeted at BDUs.
LISTNUM 1 \l 11626 Now, I think ExpressVu could produce a service which was directed at BDUs, in which case it would probably be a very different technical format, but we would be able to do so and we would take a lead from CANALERT as to whether that was appropriate to do. At the moment we are following the distribution to end users initiative that CANALERT has been leading us to.
LISTNUM 1 \l 11627 THE CHAIRPERSON: Now, you have answered earlier that you will be ‑‑ well, one of the ways to provide the service is to use the postal code for targeting, but if you were to provide the service to other BDUs how will this work with the other BDUs getting the ...
LISTNUM 1 \l 11628 MR. SMITH: This is a rather theoretical question, I would suggest, but we would have to look at it in the same way that the CBC has looked at their service. We would have to be distributing our messages across our satellite system using the common alerting protocol, but we have not done that. Our service is designed to deliver messages to end consumers.
LISTNUM 1 \l 11629 If there is an interest, either from the Commission or from CANALERT in us pursuing alternatives, we would be more than happy to do so.
LISTNUM 1 \l 11630 THE CHAIRPERSON: And if you had the capacity to develop the necessary software and everything for it to provide the service to other BDUs, will there be a charge for the BDUs that will subscribe to ‑‑ who get the alert from your service?
LISTNUM 1 \l 11631 MR. SMITH: It is something we haven't considered. I can only reiterate that we would be prepared to look at that business model, if the Commission wished us to do so or if CANALERT wished us to do so.
LISTNUM 1 \l 11632 THE CHAIRPERSON: What will be the impact on your application if the Commission was to decide that the CBC proposal should be implemented?
LISTNUM 1 \l 11633 MR. SMITH: Based on what we understand of the CBC's proposal and based on our understanding of the state of the CANALERT initiative, we think the CBC proposal and the ExpressVu proposal are very complementary.
LISTNUM 1 \l 11634 The CBC appear to be handling the distribution of alerts from the original sources of alerts through to BDUs and we then pick up the baton and take the message to the end consumer for our satellite customers and the CBC continue to hold the baton in respect of radio distribution.
LISTNUM 1 \l 11635 The two proposal seem to be very complementary. I think we have to caveat that with a still ‑‑ there is still work to do by CANALERT to complete their work in terms of the protocols, et cetera, but it looks very complementary at the moment.
LISTNUM 1 \l 11636 THE CHAIRPERSON: Thank you. In the event that there is no public funding available for a national alerting system and that this responsibility is left to the private sector, from what sources shall such a service derive its revenues?
LISTNUM 1 \l 11637 MR. SMITH: Again, that is not a scenario we have considered, because we have received the same type of assurances that were referred to by the team from the CBC in respect of the ‑‑ there is an expectation that CANALERT and Industry Canada will obtain funding for this from central government sources.
LISTNUM 1 \l 11638 If that becomes not the case anymore, then I think we would take a lead from Industry Canada and from CANALERT as to whether they would entertain proposals from us and from other parties as to how to best meet that need.
LISTNUM 1 \l 11639 And we would consider that should it become an eventuality.
LISTNUM 1 \l 11640 THE CHAIRPERSON: Now, my next question is ‑‑ I don't want to you use it as an opportunity to make a intervention at the Pelmorex application, but my question has to do with that they are proposing a monthly fee to carry their service.
LISTNUM 1 \l 11641 Could you please comment on the appropriateness of using subscriber fees to fund a national alerting service to BDU subscribers and specifically on the amount.
LISTNUM 1 \l 11642 The amount proposed by Pelmorex, I think that is a matter for an intervention rather than for a question at this stage, but the appropriateness of having a subscriber fee for a national alert service.
LISTNUM 1 \l 11643 MR. SMITH: I must admit I think I would go back to say that I think that if that circumstance does arise and the ‑‑ excuse me one second, I'm just going to confer with my colleague.
LISTNUM 1 \l 11644 Sorry, I just wanted to clarify my understanding of the question from my colleague.
LISTNUM 1 \l 11645 We feel that it is important, first of all, that the services are operated as cost effectively as possible. That is one of the key aspects of our proposal and we feel that for the purposes of distributing the emergency alerts work on the ExpressVu platform, we are in the strongest position to be able to choose a technology solution to enable us to do that, so we think that ExpressVu should be responsible for and is happy to accept that responsibility for distributing the alerts in the most cost‑effective way.
LISTNUM 1 \l 11646 We think that the emergency alert service overall is a public service and it is appropriate to fund that from the public purse to the greatest extent possible and certainly that aligns with the current view that we understand Industry Canada has and CANALERT is proceeding on.
LISTNUM 1 \l 11647 I think if it becomes necessary to charge consumers, then our first point would be to seek a common view across all broadcasters and all BDUs at the Canada level of how that should be implemented, and then we would try to comply and we would expect to comply with CANALERT's conclusions.
LISTNUM 1 \l 11648 THE CHAIRPERSON: Thank you.
LISTNUM 1 \l 11649 We will now move to the last section, the legal issues.
LISTNUM 1 \l 11650 My first question will have to do with the end‑to‑end service and the liability.
LISTNUM 1 \l 11651 What safeguards will be in place to deal with possible misuse of the system for false or misleading alerts and/or for system failures?
LISTNUM 1 \l 11652 MR. SMITH: I think Terry described earlier how the messages would go through our master control centre which has a certain degree of oversight to make sure that mistakes don't take place. I would say that we already fulfil that function in respect of things like simultaneous substitution and blackouts. So we already have some track record of implementing these things for the industry.
LISTNUM 1 \l 11653 With regard to the legal aspects of that, I would hand over to my colleague Mr. Elder to comment on that.
LISTNUM 1 \l 11654 David, would you like to comment?
LISTNUM 1 \l 11655 MR. ELDER: Yes. I don't have a lot more to add. I mean certainly we are very conscious of the potential liabilities associated with delivering this sort of service. We take these responsibilities very seriously, as we do our other broadcast responsibilities. As Gary has outlined, and I think Gary said earlier, we do have systems and controls currently in place and we will continue to do that with any emergency alerting program.
LISTNUM 1 \l 11656 THE CHAIRPERSON: Who will bear the legal responsibility for misuse of the system, for false or misleading alerts and/or for system failures?
LISTNUM 1 \l 11657 MR. ELDER: Well, I guess that depends on who causes it. I mean, we very much see ourselves as the distributor. As we explained earlier, we are getting the messages directly from some other aggregator or directly from various government agencies, so we would expect to the extent that it relates to any problem with the message or any confusion about where it should be directed, we would expect those aggregators to bear that responsibility.
LISTNUM 1 \l 11658 I think it's fair to say that if there was some element of gross negligence on our part where we didn't do what we were supposed to do or our systems didn't hold, there may be some room there for liability but for the most part I think we would be looking for a limitation of liability.
LISTNUM 1 \l 11659 As you can probably appreciate, the potential liabilities here could be huge. While one wants to perform the public service, one doesn't want to go out of business trying to do that.
LISTNUM 1 \l 11660 THE CHAIRPERSON: Your answer triggers the question about the need to have a network licence. We had that same discussion with the two other applicants today. The fact that you are saying that you are only the distributor of the message and you are not taking any responsibility in the content of the message, aren't we here moving towards the need to have a network licence?
LISTNUM 1 \l 11661 MR. ELDER: With respect, I would say no. We are already a broadcasting distribution undertaking. Our bread and butter is receiving content that we don't originate and we don't alter and purely distributing it. Really we would be looking at doing much the same thing here.
LISTNUM 1 \l 11662 So I would say that our existing framework and licensing covers the concept much better than a network licence which I would normally associate with programming undertakings.
LISTNUM 1 \l 11663 THE CHAIRPERSON: Thank you.
LISTNUM 1 \l 11664 You have asked for a condition of licence accepting it from section 7(d) of the regulations, which provides that:
"A licensee may not alter or delete programming service in the course of its distribution except in certain cases, including for the purpose of altering the programming service to insert an emergency alert in accordance with the agreement entered with the operator of the service or the network responsible for the service."
LISTNUM 1 \l 11665 Will an amendment to this section as proposed by CBC not accomplish the same goal as the one you are seeking?
LISTNUM 1 \l 11666 MR. SMITH: I think our view is, yes, in principal. The amendment proposed by the CBC looks very sensible.
LISTNUM 1 \l 11667 But I would say that I think that it is early days with respect to the conclusions that CANALERT is going to reach and it would be prudent to wait until the CANALERT conclusions have been reached and there is some consensus across the industry about how this is done before section 7(b) be modified.
LISTNUM 1 \l 11668 THE CHAIRPERSON: We are talking here section 7(d).
LISTNUM 1 \l 11669 We asked the CBC to provide us with some wording. Could you undertake to make some suggestions as well?
LISTNUM 1 \l 11670 MR. SMITH: Yes, we can.
LISTNUM 1 \l 11671 THE CHAIRPERSON: You can, all right. We can expect to have that by tomorrow morning?
LISTNUM 1 \l 11672 Thank you.
‑‑‑ Pause
LISTNUM 1 \l 11673 THE CHAIRPERSON: Are you of the view that the Commission should define what is an authorized public alert message?
LISTNUM 1 \l 11674 MR. SMITH: We would prefer the Commission to support CANALERT's conclusions on that matter.
LISTNUM 1 \l 11675 THE CHAIRPERSON: I see.
LISTNUM 1 \l 11676 Well, that's the end of my questions.
LISTNUM 1 \l 11677 Commissioner del Val...?
LISTNUM 1 \l 11678 COMMISSIONER del VAL: Thank you.
LISTNUM 1 \l 11679 Just to follow up on your answer to the Chairman's question on in the event that there is no public funding available for a national alerting system and this responsibility fell on the shoulders of the private sector, if it came to that and the private sector had to fund this in some manner, can you comment on whether or not this should be a for‑profit proposition for the private sector who is left with the responsibility of funding the service, please?
LISTNUM 1 \l 11680 MR. SMITH: I think we would acknowledge that there may well be a role for the private sector in certain portions of the supply chain that we have illustrated on our diagram. The private sector has the advantage that it often has a lot of experience or has assets that it can leverage to provide a cost‑effective service and therefore it would be worthy of consideration.
LISTNUM 1 \l 11681 But the ultimate aim must be to provide a cost‑effective, technically adequate solution and the best way that would be achieved probably will be through some sort of competitive tender and then agreeing a funding mechanism separate to the solution provider.
LISTNUM 1 \l 11682 But I'm speculating here. The situation hasn't arisen as far as we are aware.
LISTNUM 1 \l 11683 COMMISSIONER del VAL: I understand the cost‑effective part, but whether it should be ‑‑ and I'm not saying whether it's right or wrong.
LISTNUM 1 \l 11684 Do you have any comment on whether it should be for‑profit or not, or is it if you can make some money out of it then by all means, as long as it's cost‑effective, or it should be a non‑profit proposition?
LISTNUM 1 \l 11685 MR. SMITH: I think it is something we are happy to consider and take away and come back to you with a more detailed response, but I would say that the upstream functions in this supply chain of aggregating messages, collating them, processing them, distributing them, involves activities which are in the industry undertaken by commercial operators operating on a for‑profit basis. Those companies are likely to be able to do it most effectively.
LISTNUM 1 \l 11686 So my inclination is to say that there is nothing wrong with pursuing it on a for‑profit basis for the upstream components, but I think the structure of how you set out the pieces of the jigsaw that aggregate up to the complete service needs to be considered very carefully.
LISTNUM 1 \l 11687 COMMISSIONER del VAL: Thank you.
LISTNUM 1 \l 11688 THE CHAIRPERSON: Mr. Smith, gentlemen, thank you very much.
LISTNUM 1 \l 11689 This completes Phase I of the hearing and, Mrs. Secretary, we will now move to Phase II.
LISTNUM 1 \l 11690 MR. SMITH: Thank you.
LISTNUM 1 \l 11691 THE SECRETARY: Thank you, Mr. Chairman.
LISTNUM 1 \l 11692 Phase II is where applicants appear in the same order to intervene on competing applications.
LISTNUM 1 \l 11693 I would like to indicate for the record that CBC/Radio‑Canada will not be appearing in this phase.
LISTNUM 1 \l 11694 Therefore, I would ask Pelmorex Communications to come forward.
‑‑‑ Pause
LISTNUM 1 \l 11695 THE CHAIRPERSON: Mr. Morrissette...?
INTERVENTION
LISTNUM 1 \l 11696 MR. TEMPLE: Mr. Chairman, we are almost ready. We need a patch cord to be able to display some slides, which apparently was there this morning but they have removed the cord so we can't show a slide.
LISTNUM 1 \l 11697 I can start on some of the comments, but at some point I will have to stop because I can't demonstrate what I'm trying to refer to. So I can start now and we can pause or we can wait for the cord, or whatever you prefer.
‑‑‑ Pause
LISTNUM 1 \l 11698 THE CHAIRPERSON: Have you alerted somebody to get the cord?
‑‑‑ Laughter
LISTNUM 1 \l 11699 MR. TEMPLE: Yes. We did that within a minute I might add.
LISTNUM 1 \l 11700 THE CHAIRPERSON: I see.
‑‑‑ Laughter
LISTNUM 1 \l 11701 MR. TEMPLE: Any luck? They are coming.
LISTNUM 1 \l 11702 THE CHAIRPERSON: They are coming.
LISTNUM 1 \l 11703 MR. TEMPLE: If you like, I will ‑‑
LISTNUM 1 \l 11704 THE CHAIRPERSON: Yes. Okay.
LISTNUM 1 \l 11705 MR. TEMPLE: I will start and then we will just play it by ear.
LISTNUM 1 \l 11706 Pelmorex supports the CBC's initiative to distribute alerts to their radio stations and TV stations. I think their credentials to serve radio are certainly not being questioned by us.
LISTNUM 1 \l 11707 However, their decision to also serve BDUs unfortunately turned them into a competitor rather than a complementary service offering.
LISTNUM 1 \l 11708 We are prepared, if licensed, to cooperate fully with the CBC in its endeavours to provide service to radio and TV broadcasters.
LISTNUM 1 \l 11709 We are quite happy to send them audio alerts. I'm not sure they will take them from us, but we will be receiving audio alerts if licensed and we would provide those, and we would be working with the alerting community to ensure that they also provide audio alerts which we would pass on.
LISTNUM 1 \l 11710 The CBC's proposal to serve BDUs, apart from being competitive is, in our view, flawed. The technology they propose to use is inferior for use by cable. In today's world the EAS system is in many ways like using a Commodore 64. It will work, it has been around for 10 years, but it is not the best technology.
LISTNUM 1 \l 11711 Another flaw or concern we have with the CBC proposal to serve BDUs is that it is more capital‑intensive for small cable operators. That's a point I will illustrate in a moment when we have some slides.
LISTNUM 1 \l 11712 It is predicated on funding from CANALERT, which I will address in a little more detail in a minute.
LISTNUM 1 \l 11713 And it results in uncertainty as to who, if anyone, is going to be served in terms of the general public.
LISTNUM 1 \l 11714 I would like to spend a little time on dealing with the EAS implications for BDUs specifically. Jean‑Pierre can go into more detail if you wish, but I will just kind of bullet a few points.
LISTNUM 1 \l 11715 EAS could not deliver ‑‑ would not permit the CBC to deliver the text message that they illustrated today. The EAS system would not support the message that they showed you.
LISTNUM 1 \l 11716 EAS is not fully CAP compatible, but rather can only deal with a subset of the CAP protocol.
LISTNUM 1 \l 11717 EAS requires hardware upgrades which, if they are not made, the EPROM that was discussed, then changes to the alerting system will not flow through to the viewer.
LISTNUM 1 \l 11718 And EAS hardware is not as robust as the CBC would lead you to believe. The letters that we filed as part of our intervention certainly bear that out. And the letters did not discuss or raise the issue of ‑‑ I mean they raised the issue of the daisy chain, but the substance of the letters were about the equipment itself and not the concept of the daisy chain.
LISTNUM 1 \l 11719 A less obvious concern, however, is the capital cost and the implications for small cable systems.
LISTNUM 1 \l 11720 I guess we are not set up so I will move on to just a few comments about CANALERT. I now have my trusty CANALERT Authorized User's Guideline Draft so I can also reply to Commissioner Pennefather's comments or questions earlier about authorized users.
LISTNUM 1 \l 11721 In terms of 5.1 activation criteria, and I think it was 9.2 authorized users, we have no problems with that at all. I think those were the references.
LISTNUM 1 \l 11722 But, more importantly, CANALERT ‑‑ we are very supportive of CANALERT. We are fully committed to working with Industry Canada and the other participants, but it seems that CANALERT is kind of becoming whatever the speaker wants it to become. We are not sure that is really ‑‑ CANALERT is, in our view, going to be very helpful in putting together standards and procedures like this manual that deal with activation and governance and all sorts of issues, but when one listens to the CBC proposal you get the impression that there is going to be some kind of central clearing house of warnings that will just be delivered to CBC and they will plug something in and they will have all the warnings.
LISTNUM 1 \l 11723 It is not entirely clear to us that is what CANALERT is going to be at all.
LISTNUM 1 \l 11724 When you read on page 10 of the CANALERT, their goals are:
"to promote ensuring all hazard approach; building on existing communications; obtaining strong commitments from levels of government; obtaining the participation of the private sector..."
LISTNUM 1 \l 11725 But I don't think that there is going to be necessarily this CANALERT operation somewhere operated by the federal government that is going to take every warning from any province or municipality and deliver that to the CBC.
LISTNUM 1 \l 11726 So as a result there are, I guess, two elements of concern. One is the funding element and one is whether CANALERT will perform the tasks that the CBC is depending on.
LISTNUM 1 \l 11727 MR. PERREAULT: Further to Paul's comment, it is interesting to note that none of the 750 intervenors who intervened in favour of our application mentioned CANALERT. In these intervenors you have provinces, you have la Fédération des municipalités du Québec, la Fédération des municipalités de l'Ontario, you have many people who are knowledgeable. Even the Québec government didn't mention it in its intervention, the Bloc Québecois didn't mention it, the Chief Medical Examiner of Québec didn't mention it. These are important people and they are not either aware, conscious that CANALERT exists.
LISTNUM 1 \l 11728 I myself am asking the question: Would the Québec government go through CANALERT to issue warnings?
LISTNUM 1 \l 11729 So I think we are looking for someone who can aggregate these alerts now instead of waiting for something that may be or is still a concept.
LISTNUM 1 \l 11730 THE CHAIRPERSON: On the screen we're seeing your name, so I think we're coming. Could you open up your mike.
LISTNUM 1 \l 11731 MR. TEMPLE: If we could bring up slide 3, and I don't know ‑‑ it may be a little difficult to read.
LISTNUM 1 \l 11732 What we did is we took from the CBC application their costing. I think it was page 14 of their reply to deficiencies and we took the costing that they showed and we put beside it what a cable operator would have to spend in terms of capital under our proposal.
LISTNUM 1 \l 11733 And as you can see in the first couple of lines, the equipment provided by us is ‑‑ it's provided under our proposal, so the net result is 6,000 and change, 6,491 saving for the cable operator where they decide to implement an intrusive alerting scheme. And by intrusive I mean you take the broadcaster's signal and you replace it with the full page.
LISTNUM 1 \l 11734 So in terms of that, you know, clearly we think that our proposal makes it a little more affordable for small cable operators in particular to spend the capital to implement our system.
LISTNUM 1 \l 11735 More telling, however, is the next slide, and this is the non‑intrusive. Now, the CBC has indicated in their filings that their costing, I think it was $6,000,000 for cable, was based on the intrusive model. They don't call it that, but where cable operators would just take out the signal, put in the warning. But it is not a very friendly system to the broadcast community.
LISTNUM 1 \l 11736 A crawl allows the viewer to still see the programming, which obviously is of interest to the viewer and to the broadcaster, and in this case for a cable company with ‑‑ not all channels would be processed at base band, but we just assumed that, okay, let's take 48. If they've got 70 something or whatever channels, let's say they wanted to do 48 channels of base band, then they would have to spend an additional almost $19,000 per head end to be able to put a crawl in.
LISTNUM 1 \l 11737 While the CBC has acknowledged for the cable operator to do it, they didn't really identify this premium. They didn't cost the premium out. So if you started to take a mix of what it would actually cost the cable industry to insert crawls, that $6,000,000 rapidly escalates if a BDU wanted to do the crawl.
LISTNUM 1 \l 11738 So I think for those reasons we view our system as much more flexible, particularly for smaller cable operators, so that the capital expenditures that they would be called upon to make would be a lot less. I think that really summarizes our comments. We have probably run our ten minutes anyways.
LISTNUM 1 \l 11739 THE CHAIRPERSON: Thank you. Commissioner del Val?
LISTNUM 1 \l 11740 COMMISSIONER del VAL: Just while this slide is up where you are comparing the cable capital costs, but if I were using the model where the BDU would have a choice of several providers, then I could ‑‑ and Pelmorex and CBC both provided the feed, then I as the BDU provider would have the choice of spending, say, 21,000 or 2,000, right?
LISTNUM 1 \l 11741 MR. TEMPLE: I think we discussed earlier, if there was a choice we probably wouldn't have a business plan, so there would still be one provider and it would cost the higher amount.
LISTNUM 1 \l 11742 COMMISSIONER del VAL: Okay. But if there were other providers, I as the BDU, I would have the choice of spending however much I wanted to, I mean if ‑‑ theoretically I would have the choice, right?
LISTNUM 1 \l 11743 MR. TEMPLE: Under our ‑‑ the reason there's a savings is because we have integrated the functionality that allows for the crawl into our equipment, but no other supplier does that.
LISTNUM 1 \l 11744 So in the absence of our proposal, if they went to Trilithic or they mentioned another supplier, you would be looking at the same $21,000 if you wanted to do crawls.
LISTNUM 1 \l 11745 COMMISSIONER del VAL: Okay. I understand what you are saying is that I would have ‑‑ if that were ‑‑ if voluntary participation were allowed, then we would have eliminated you, which could be the best choice, but it would be then up to the BDU to decide how much they want to spent, is that correct?
LISTNUM 1 \l 11746 MR. TEMPLE: Yes, and even with us it is up to them. We're not requiring them to do crawls. We are just saying that if they want to do crawls, it is more cost effective for them.
LISTNUM 1 \l 11747 But if they want to do it by inserting the full page, our equipment supports that, as seen by the first slide. If they want to take the approach of removing the signal and putting the full page up, our equipment supports that completely and the costing was there. They'd still save money, but just not as much.
LISTNUM 1 \l 11748 MS. DEWAL: So if CBC's proposal were approved and the NAC, the national alarm centre were the aggregator and you were at the same time also successful in part, would you take the signal from CBC's National Alarm Centre?
LISTNUM 1 \l 11749 MR. TEMPLE: To answer your question, I am assuming you are ‑‑ in the scenario described, we'd be taking the feed from the CBC, but they would not also be providing it the BDUs, we'd be providing it the BDUs. We could do that. There are a number of limitations.
LISTNUM 1 \l 11750 It wouldn't ‑‑ we would still require our operations centres, so there would be no savings because we have to monitor our network. The additional problem ‑‑ not problem, but it would limit the ability of the system because we would be getting an EAS feed and that is a ‑‑ you know, it is ‑‑ it is not as flexible or as adaptable as the CAP protocol so we'd have an inferior product and no cost savings, I guess.
LISTNUM 1 \l 11751 MR. MONKMAN: If I can just add, we'd also add a leer in the value chain. Our proposal is to enter into agreements with each of the authorized issuers of warnings and to then introduce an intermediary between them and ourselves other than a central body organized specifically by the government adds that level of complexity and also perhaps introduces a little bit more uncertainty when it comes to responsibility and accountability and liability too.
LISTNUM 1 \l 11752 COMMISSIONER del VAL: Just one moment. I just need to consult with the Chair. You've heard today CBC's response when I said that ‑‑ when I brought up from the materials the comments that EAS is not compatible with CAP. But now I am hearing ‑‑ and they said no, it is. And now you are saying no, it is not.
LISTNUM 1 \l 11753 So can you help me out and tell me why in your opinion it is not? Preferably it is more than just an opinion. Could you maybe give me some facts please?
LISTNUM 1 \l 11754 MR. TEMPLE: I will start off and I will give is it to Jean‑Pierre, but basically if you want, CAP is this big and EAS is that big. It can only handle a portion of CAP, so it is compatible, but it can't handle all the information and the ‑‑ it doesn't have the power.
LISTNUM 1 \l 11755 That is why I used the example of the Commodore 64. I mean it will work and it has a certain amount of power, but it is not going to be as powerful as CAP can be or CAP can become, but that is my layman's understanding of it. I will let Jean‑Pierre just ‑‑‑
LISTNUM 1 \l 11756 MR. BOULANGER: The EAS protocol has een defined quite a long time ago and that for the US set‑up using the FIPs code, nothing taken into consideration to language. And it has been mentioned today, has been embedded particularly in the hardware or the firm ware.
LISTNUM 1 \l 11757 As you can see, CANALERT are not speaking of adopting EAS at all. They're looking at other protocols, such as CAP. Why, because they are open standard. You can modify them. In the future you can add to it.
LISTNUM 1 \l 11758 You add a level of independence. You are disconnecting yourself from the live end technology. That means, yes, it is incompatible that you can extract from the CAP some element of information to put in the EAS, but some of them you won't be able to carry, like future expansion or even accommodating in a nice fashion bilingual for Canada or even the mapping for that matter.
LISTNUM 1 \l 11759 EAS is based on the States. To use it here, you have to use unallocated, leftover number that the US are not using today. They use it tomorrow morning, we have zoning conflict. That mean yes, EAS is downward compatible, but EAS is limiting. It cannot evolve.
LISTNUM 1 \l 11760 COMMISSIONER del VAL: Sorry, I've forgotten whether I've asked you this question already, so if I repeat myself, forgive me.
LISTNUM 1 \l 11761 What did the FCC proceeding that is currently still underway, did they deal with the issue of compatibility of the EAS with CAP at all to your knowledge?
LISTNUM 1 \l 11762 MR. BOULANGER: Not to my knowledge.
LISTNUM 1 \l 11763 MR. TEMPLE: I don't have any reference.
LISTNUM 1 \l 11764 COMMISSIONER del VAL: Okay. Then ‑‑ now, I understand ‑‑ you are also part of the working group that is ‑‑ now, I ‑‑ correct me if I am wrong here, I understand that in one of the last ‑‑ one of the conference calls that the ‑‑ one of the discussions focused on compatibility with CAP. Am I wrong there?
LISTNUM 1 \l 11765 MR. TEMPLE: There was a meeting in Ottawa several weeks ago which I attended where the ‑‑ most of the presentations and discussions were on the CAP protocol.
LISTNUM 1 \l 11766 COMMISSIONER del VAL: Okay. And was there any consensus or ‑‑
LISTNUM 1 \l 11767 MR. TEMPLE: Oh, I think everyone is very supportive of CAP. That is not the issue. There's still development work to be done and, again, Jean‑Pierre might want to talk about. It is kind of a ‑‑ it is a system that can evolve and develop, so it hasn't finished evolving and developing, but I think everyone's on board in terms ‑‑ we used CAP to ‑‑ in the messaging, I believe ‑‑ yes, from New Brunswick. So it is ‑‑ that is not an issue for us.
LISTNUM 1 \l 11768 COMMISSIONER del VAL: So do you know whether CANALERT has decided on EAS as the technology or ‑‑
LISTNUM 1 \l 11769 MR. TEMPLE: I don't think CANALERT is talking about EAS.
LISTNUM 1 \l 11770 COMMISSIONER del VAL: Okay. Those are my questions. Thank you. Thank you, Mr. Chair.
LISTNUM 1 \l 11771 THE CHAIRPERSON: Thank you. Thank very much, Mr. Morrissette. Thank you to your group. Madam secretary.
LISTNUM 1 \l 11772 THE SECRETARY: Thank you, Mr. Chairman. I would now call on Bell ExpressVu to come forward to intervene on the competing applications.
LISTNUM 1 \l 11773 THE CHAIRPERSON: Yes, Mr. Smith.
INTERVENTION
LISTNUM 1 \l 11774 MR. SMITH: Thank you for the opportunity to speak again. I'd just like to invite my colleague, David Elder, to raise some points on the legal issues here. David.
LISTNUM 1 \l 11775 MR. ELDER: Thanks Gary. Sorry, you'll have to bear with me a little bit here as I piece this together. We were expecting a little bit of a break before we came up so...
LISTNUM 1 \l 11776 As ExpressVu noted in its written comments of April 6th, we are not opposed to Pelmorex's being authorized to offer its emergency warning service to those broadcasting distribution undertakings interested in receiving it.
LISTNUM 1 \l 11777 Rather, ExpressVu's opposition to Pelmorex's application is based on a couple of subsidiary issues. First, the requested mandatory carriage pursuant to section 9 1H of the Broadcasting Act with ‑‑ as well as having a regulated wholesale rate. And finally, we have some concerns about liability.
LISTNUM 1 \l 11778 ExpressVu submits that Pelmorex's proposed emergency warning service is not a broadcasting service, is not integral to the broadcasting services currently provided by Pelmorex, does not require a broadcasting license, and could not properly be the subject of a mandatory carriage requirement imposed pursuant to section 9 1H of the act.
LISTNUM 1 \l 11779 Pelmorex is seeking regulatory approval to become the sole distributor of emergency alerts to Canadians, however ExpressVu notes that section 9 1H authorizes the Commission to require the carriage of programming services only. An alpha numeric message, such as that delivered by Pelmorex, would prima facie fall outside the definition of program.
LISTNUM 1 \l 11780 As such, transmission of such a message would not constitute broadcasting and an undertaking for transmission of such an alphanumeric message would not constitute a programming undertaking, as each of those terms is defined in the Act.
LISTNUM 1 \l 11781 As a result, no broadcasting license is required to transmit such an alphanumeric message. Pelmorex refers to its proposed service as an integral component of its two specialty services, The Weather Network and MeteoMedia.
LISTNUM 1 \l 11782 In this regard, ExpressVu notes that since the Commission's denial of Pelmorex's initial application, in which the Commission apparently determined that the all channel alert service would be an enhancement to the existing licensed weather services, the Commission has clarified its approach to considering alphanumeric content as an integral part of a programming service.
LISTNUM 1 \l 11783 In its regulatory framework for interactive television services, broadcasting public notice CRTC 2004 82, the Commission endorsed a three part test for determining whether alphanumeric content was program related. The first of these criteria is that the broadcaster's intention must be that the alphanumeric content be seen by the same viewers as those who are watching the main program.
LISTNUM 1 \l 11784 In the context of the all channel alert service, this analysis may work for viewers of the Weather Network, MeteoMedia, but that is certainly not the case for viewers of any other programming service over whose signal Pelmorex would seek to insert its text warning.
LISTNUM 1 \l 11785 The second criteria is that the content must be available during the same interval of time as the main program. In an all channel alert context, this criteria is inapplicable since there is no unity between the main program, that being carried on all programming services carried by a BDU other than the Pelmorex services, and the alphanumeric alert message that Pelmorex seeks to deliver over these services.
LISTNUM 1 \l 11786 ` The final branch of the program related test is that the alphanumeric content must have a substantial connection to 3the main program, providing enhancement to the viewers of the main programming. Again, since the main program would be the service to which the viewer was actually tuned, as opposed to the services for which Pelmorex holds broadcasting licenses, there would be no nexus at all between thIS program and the all channel alert message, unless the viewer happened to be watching Pelmorex's specialty services or by pure happenstance the broadcast service happened to be airing a news item on the same subject matter as the all channel alert.
LISTNUM 1 \l 11787 From a legal perspective, it is impossible to distinguish interactive content from an all channel alert text alert. Both are on their own clearly alphanumeric content, and therefore prima facie not broadcasting within the meaning of the Act.
LISTNUM 1 \l 11788 The Commission has clearly articulated the circumstances in which such alphanumeric content will be considered to be part of the main broadcast signal, i.e., part of the program being aired.
LISTNUM 1 \l 11789 By the Commission's own test, the all‑channel alerts cannot be considered to be part of the main broadcast signal of Pelmorex's specialty undertakings.
LISTNUM 1 \l 11790 Earlier today, Pelmorex attempted to argue that its all‑channel alerts were akin to the news crawls, text credits and closed‑captioning that are currently considered to be part of the programs carried by programming undertakings. However, Pelmorex ignores the fact that in each of these cases, the text is placed into the broadcast signal by the broadcast licensee in question.
LISTNUM 1 \l 11791 Indeed, in the case of movie program credits, these are baked into the programming acquired by programmers.
LISTNUM 1 \l 11792 By contrast, the all‑channel alert service, Pelmorex seeks to place text that it distributes into the broadcast signal of other broadcasters. This is a fundamental and important distinction.
LISTNUM 1 \l 11793 To illustrate the point one might ask could the Commission have the legal authority to require BDUs to insert over a CTV signal the closed captioning associated with The Weather Network Garden Tip?
LISTNUM 1 \l 11794 Could the Commission compel a BDU to display over a Global TV signal the credits from Meteoedia's news update?
LISTNUM 1 \l 11795 Could the Commission require a BDU to make available during The Mercer Report interactive content that provides for local weather forecasts from Pelmorex?
LISTNUM 1 \l 11796 With respect, the answer to all these questions is no.
LISTNUM 1 \l 11797 While these text streams could reasonably be considered to be part of the programs aired by Pelmorex's own licenced services, they cannot be considered to be part of the programs aired by Pelmorex when they are transmitted in conjunction with another broadcast service.
LISTNUM 1 \l 11798 Similarly, an all‑channel alert messages from Pelmorex aired over another broadcaster's signal cannot be considered to be part of the programs aired by Pelmorex. If it is not part of the program then it can't be given mandatory carriage under section 9(1)(h) of the Act.
LISTNUM 1 \l 11799 Thus the use of section 9(1)(h) to require carriage by distribution undertakings of alphanumeric emergency messages is unnecessary and in any case outside the Commission's jurisdiction, with the greatest respect.
LISTNUM 1 \l 11800 Another point on the breadth of the application of section 9(1)(h),if Pelmorex's emergency warning service were to be combined with its weather services and granted section 9(1)(h) priority status as proposed, its weather services would automatically receive similar priority status, bootstrapped, as it were, by its all‑channel alert service. ExpressVu submits that this should not be case.
LISTNUM 1 \l 11801 Further, the company notes that the Commission recently determined in a digital distribution environment the dual status designation that Pelmorex's services currently enjoy, in other words mandatory carriage on the basic service of a BDU, would cease to apply on 1st September 2007.
LISTNUM 1 \l 11802 Hence, ExpressVu submits that priority status should not be granted to Pelmorex's weather service as a consequence of Pelmorex's proposed integration of its emergency warning service.
LISTNUM 1 \l 11803 Next, Pelmorex proposes to integrate the wholesale fee that it would charge for its emergency warning service with the wholesale fee that it charges for its weather services. Such integration would make it difficult for BDUs to negotiate with Pelmorex for wholesale fees and related terms of carriage, because it would be unclear what portion of any fee increase was required for continuation of the programming services and what portion was required for the warning service. If such negotiations reached an impasse and were referred to the Commission for dispute resolution, the Commission would face similar difficulty.
LISTNUM 1 \l 11804 Accordingly, if the Commission deemed that Pelmorex's emergency warning service could be licenced, ExpressVu submits that the financial accounting for that service should be distinct from other programming services.
LISTNUM 1 \l 11805 Absent such a provision and faced with the probability of repeated demands for wholesale fee increases, a BDU could lose its ability to control the cost of its subscribers.
LISTNUM 1 \l 11806 ExpressVu also has concerns that it would need to consult with Pelmorex whenever it wished to change its technical operations, limiting its ability to manage its operations independently and efficiently.
LISTNUM 1 \l 11807 Finally, I would like to just make a comment about legal liability. We had a bit of a discussion a moment ago on this point. Certainly if ExpressVu was to be mandated to carry the Pelmorex service, we would be looking to Pelmorex for an indemnity in that agreement with respect to wrongful messages delivered to our head end.
LISTNUM 1 \l 11808 That being said, an indemnity is only a minimum that we would be looking for in terms of liability protection and that kind of indemnity, frankly, is only as good as the insurance that Pelmorex carries or how well capitalized they are.
LISTNUM 1 \l 11809 I think the better solution would be to have a legislated limitation of liability that would apply to all BDUs that distribute an all‑channel alert service or an emergency warning service.
LISTNUM 1 \l 11810 Unfortunately I don't think that such a limitation of liability is something that is within the Commission's jurisdiction under the Broadcasting Act; however, we would look to Industry Canada or potentially PSEPSI to provide us with such a limitation of liability.
LISTNUM 1 \l 11811 As the last‑mile distributor of alerts to its own subscribers, ExpressVu seeks the freedom to select the most operationally and cost‑effective approach to accomplishing that task. We submit that a BDU should be authorized to interface with an emergency warning service developed by any third party service provider provided that it meets standards established by Industry Canada through the CANALERT initiative.
LISTNUM 1 \l 11812 Pelmorex's application for mandatory carriage should be denied.
LISTNUM 1 \l 11813 Thank you. We welcome any further questions you may have.
LISTNUM 1 \l 11814 THE CHAIRPERSON: Thank you, Mr. Elder. For somebody who was not ready, who wanted a bit more time, I think you did very well.
LISTNUM 1 \l 11815 Mr. McCallum will have a question for you.
LISTNUM 1 \l 11816 MR. McCALLUM: Your position ‑‑ your view is that the Commission's public notice in 2004‑82 that sent criteria for ITC should guide the Commission's consideration today as to whether or not it is an alphanumeric message that is being distributed, is that correct?
LISTNUM 1 \l 11817 MR. ELDER: Yes, yes, that's correct.
LISTNUM 1 \l 11818 MR. McCALLUM: So aside from that, if the Commission looked at that and thought for whatever reason that that was different or not applicable or not to guide the situation, is there anything else the Commission should have reference to in determining whether or not this service would be alphanumeric?
LISTNUM 1 \l 11819 MR. ELDER: Well, first of all, as I've just send in my remarks, I think that it is very difficult to distinguish those two, in both ‑‑ I mean, essentially you are looking at what is a broadcasting service, what is the provision of programs, which may include some incidental alphanumeric content and I guess the question before the Commission is how much alphanumeric content can truly be seen as included in that program? I think that is where the tests provided in the ITV decision is instructive.
LISTNUM 1 \l 11820 Again, I don't see how you distinguish the different types of alphanumeric content on that basis.
LISTNUM 1 \l 11821 I guess further than that, I would look to the requirement in the Broadcasting Act relating to predominance and I would suggest that when you are looking at an emergency warning alert that pops up on a screen, when that appears and when that programming is being distributed, when that message, rather, is being distributed, it seems to me that that is clearly the predominant aspect of that transmission at that point in time and by the Commission's own test, predominance is that which is more influential or more powerful and I put it to you that when we're sitting watching Rick Mercer and all of a sudden the screen goes red and is telling us that we have to get out of our homes because there is a gas leak or something, that is clearly the predominant part of that content and that is alphanumeric and that is not broadcasting.
LISTNUM 1 \l 11822 MR. McCALLUM: And your submission is that the Commission should be guided, not necessarily bound, but definitely guided by the public notice 2004‑82?
LISTNUM 1 \l 11823 MR. ELDER: I would go further than guided. I would say, as I said before, I think it is very difficult to distinguish the two and if the Commission were to do something else I'm not sure what kind of a meaningful distinction could be made between the alphanumeric content that constitutes a text message for emergency warning system and the alphanumeric content that would constitute an interactive television application.
LISTNUM 1 \l 11824 MR. McCALLUM: Thank you, Mr. Chair.
LISTNUM 1 \l 11825 THE CHAIRPERSON: Thank you, Mr. McCallum. Thank you, Mr. Smith. Thank you, Mr. Elder. This completes Phase II.
LISTNUM 1 \l 11826 We will resume the public hearing tomorrow morning at nine o'clock with the Phase III of this hearing.
LISTNUM 1 \l 11827 Thank you very much. Have a nice evening.
‑‑‑ Whereupon the hearing adjourned at 1853, to
resume on Tuesday, May 2, 2006, at 0900 /
L'audience est ajournée à 1853, pour reprendre
le mardi 2 mai 2006 à 0900
REPORTERS
_____________________ _____________________
Marc Bolduc Lynda Johansson
_____________________ _____________________
Jean Desaulniers Sue Villeneuve
_____________________ _____________________
Monique Mahoney Madeleine Matte
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