ARCHIVED -  Transcript

 

 

 

 

 

 

 

              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 / SUJET:

 

 

 

Review of the regulatory frameworks for broadcasting distribution undertakings and discretionary programming services /

Révision des cadres de réglementation des entreprises de

distribution de radiodiffusion et des services de

programmation facultatifs

 

 

 

 

 

 

 

 

 

 

 

 

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)

 

April 18, 2008                        Le 18 avril 2008

 

 

 

 

 

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

 

 

Review of the regulatory frameworks for broadcasting distribution undertakings and discretionary programming services /

Révision des cadres de réglementation des entreprises de

distribution de radiodiffusion et des services de

programmation facultatifs

 

 

BEFORE / DEVANT:

 

Konrad von Finckenstein           Chairperson / Président

Michel Arpin                      Commissioner / Conseiller

Leonard Katz                      Commissioner / Conseiller

Rita Cugini                       Commissioner / Conseillère

Michel Morin                      Commissioner / Conseiller

Ronald Williams                   Commissioner / Conseiller

 

 

ALSO PRESENT / AUSSI PRÉSENTS:

 

Cindy Ventura                     Secretary / Secretaire

Cynthia Stockley                  Hearing Manager /

                                  Gérante de l'audience

Martine Vallée                    Director, English-Language

                                  Pay, Specialty TV and

                                  Social Policy / Directrice,

                                  TV payante et spécialisée

                                  de langue française

Annie Laflamme                    Director, French Language

                                  TV Policy and Applications/

                                  Directrice, Politiques et

                                  demandes télévision langue

                                  française

Shari Fisher                      Legal Counsel /

Raj Shoan                         Conseillers juridiques

 

 

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)

 

April 18, 2008                    Le 18 avril 2008

- iv -

 

           TABLE DES MATIÈRES / TABLE OF CONTENTS

 

 

                                                 PAGE / PARA

 

PRESENTATION BY / PRÉSENTATION PAR:

 

 

Astral Media Inc.                                1855 /10656

 

Coalition of Canadian Audio-visual Unions (CCAU) 1990 /11560

 

Alliance of Canadian Cinema Television and       2027 /11789

  Radio Artists (ACTRA)

 

Directors Guild of Canada                        2039 /11857

 

Writers Guild of Canada                          2049 /11904

 

L'Union des artistes et SARTEC                   2060 /11973

 

Only Imagine Inc.                                2117 /12372

 

 

 

 

 

 

 

 

 

 

 

Gatineau, Quebec / Gatineau (Québec)

‑‑‑ Upon commencing on Friday, April 18, 2008 at 0900 /

    L'audience débute le vendredi 18 avril 2008 à 0900

10649            THE CHAIRPERSON : Good morning.

10650            Madame Secretary?

10651            LA SECRÉTAIRE : Merci, Monsieur le Président, et boujour à tous.

10652            J'inviterais maintenant Astral Media Inc. à faire sa présentation.

10653            Monsieur André Bureau comparaît pour Astral et nous présentera ses collègues.

10654            Après quoi, vous aurez 15 minutes pour votre présentation.

10655            Monsieur Bureau?

PRÉSENTATION / PRESENTATION

10656            M. BUREAU : Monsieur le Président,

10657            Messieurs les Vice‑présidents, Madame (congratulations for your reappointment), Messieurs les Conseillers,

10658            Membres du personnel, pour les fins du procès‑verbal, je suis André Bureau.

10659            I am probably one of those obsolete elements of the system that some would like to change.

‑‑‑ Laughter / Rires

10660            M. BUREAU : Et je suis aussi président du conseil d'administration d'Astral Media.

10661            M'accompagnent aujourd'hui à ma droite, John Riley, président d'Astral Televison Networks, à sa droite Pierre Roy, président des Chaînes Télé Astral ainsi que Johanne Saint‑Laurent, vice‑présidente principale, Affaires commerciales, Les Chaînes Télé Astral.

10662            À ma gauche, Sophie Émond, vice‑présidente, Affaires réglementaires et gouvernementales, Astral Media.

10663            Et à sa gauche, Nathalie Dorval, conseillère principale, Affaires réglementaires et propriété intellectuelle, Astral Media.

10664            Derrière moi, au centre, Ian Greenberg, président et chef de la direction d'Astral Media.

10665            À sa droite,  Michel Houle, consultant, Industries culturelles et communications.

10666            Et à sa gauche, Me Hank Intven, auteur de l'étude que nous avons soumise au sujet des mécanismes de règlement des différends.

10667            Monsieur le Président, la présente audience est sûrement la plus importante depuis l'audience sur la structure de l'industrie en 1993.

10668            Elle est particulièrement importante pour un groupe comme Astral qui n'exploite que des services de télévision facultatifs et indépendants, c'est à dire sans lien avec un réseau de télévision en direct ou avec une entreprise de distribution de radiodiffusion.

10669            Cette révision du cadre réglementaire des entreprises de distribution et des services facultatifs arrive à point donné.

10670            Il est en effet souhaitable de procéder à une mise à jour de la réglementation, pour la délester de ses composantes non‑essentielles et la rendre plus équilibrée et pertinente.

10671            De plus, cette révision peut se dérouler dans un climat serein, puisque il n'y a ni crise, ni urgence.

10672            En effet, le système canadien de radiodiffusion dans son ensemble est en bonne santé financière et l'évolution des nouveaux médias n'entraîne pas de bouleversements imminents du système d'une nature et d'une ampleur telles qu'ils en menacent la viabilité.

10673            Et ce qu'il faut retenir, c'est que les consommateurs canadiens sont globalement satisfaits du prix, de l'étendue et de la diversité des services qui leur sont offerts.

10674            Le modèle que nous vous soumettons prend en compte ces réalités et tente de répondre à vos questions et d'atteindre trois objectifs qui nous paraissent essentiels.

10675            Le premier objectif, c'est d'assurer que le public canadien ait accès à un très vaste choix de services canadiens, tout en disposant de la plus grande autonomie dans la sélection des services qu'il veut recevoir.

10676            Cet objectif peut‑être atteint, il nous semble, à travers les mesures simples suivantes...

10677            L'établissement d'un service de base restreint, entièrement canadien et accessible au plus bas coût possible.

10678            La suppression des règles de distribution et d'assemblage et l'offre obligatoire dans les marchés francophones d'un volet comprenant tous les services spécialisés canadiens de langue française.

10679            Et troisièmement, le maintien du droit d'accès des services facultatifs canadiens au système de télédistribution.

10680            Par l'adoption de ces mesures, le Conseil conférerait par ailleurs aux EDR une plus grande flexibilité dans l'assemblage et la mise en marché des services qu'elles offrent.

10681            Le deuxième objectif est de conserver un éventail de services canadiens variés et distincts, en mesure d'offrir aux auditoires canadiens la plus grande diversité de programmation possible.

10682            Cet objectif peut‑être atteint de la façon suivante...

10683            En maintenant la nature des services existants ainsi que leurs conditions de licence relatives au contenu et dépenses d'émissions canadiennes.

10684            Deuxièmement, en maintenant les règles relatives à la non‑autorisation de services étrangers concurrentiels.

10685            Troisièmement, en rétablissant un système d'attribution de licence pour les nouveaux services facultatifs qui soit significatif et efficace.

10686            Le troisième objectif est d'encadrer, au moindre fardeau réglementaire possible, les relations entre EDR et services facultatifs, de manière à s'assurer qu'elles soient le mieux équilibrées possibles.

10687            Pour ce faire, nous proposons l'établissement d'un mécanisme de règlement de différends rapide, équilibré et efficace.

10688            Et, compte tenu de l'importance que la plateforme de vidéo sur demande est appelée à prendre, nous proposons...

10689            De lever les restrictions relatives à la diffusion de publicité dans les émissions offertes en VSD.

10690            Et d'autoriser les services canadiens à offrir des blocs d'émissions en VSD, par l'abonnement, provenant de leur programmation linéaire.

10691            Mes collègues vont maintenant vous exposer plus en détail les tenants et aboutissants de ces mesures, tout en répondant, évidemment, aux questions du Conseil.

10692            Pierre Roy ?

10693            M. ROY : Astral souscrit à l'hypothèse d'un service de base restreint au plus faible coût possible pour l'usager.

10694            Il serait composé exclusivement des stations locales de télévision en direct, y compris celles des diffuseurs éducatifs dans leur province d'origine, et des services 9(1)h).

10695            Les seuls services auxquels un consommateur serait contraint de s'abonner seraient donc ceux qui composent ce service de base entièrement canadien.

10696            Certaines EDR voudront sans doute offrir également un service de base étendu, auquel le consommateur serait cependant libre de s'abonner ou non.

10697            Tout comme il sera libre de s'abonner à des volets préétablis de services regroupés sur une base thématique, linguistique ou autre, le consommateur pourra également composer des volets,  en sélectionnant lui‑même les services qu'il désire y inclure, sous réserve de la seule règle de prépondérance.

10698            Cette règle de prépondérance  (50 % + 1) devrait s'appliquer uniquement aux services optionnels à l'abonné ‑‑ à l'exclusion de ceux composant le service de base restreint ‑‑ et se retrouver tant au niveau des services offerts par l'EDR qu'au niveau de ceux reçus par l'abonné.

10699            Par ailleurs, notre modèle propose la suppression des règles de distribution et d'assemblage qui peuvent actuellement limiter l'autonomie de sélection de services des consommateurs.

10700            À titre exceptionnel, et en reconnaissance du caractère particulier de la radiodiffusion de langue française, nous suggérons l'adoption d'une règle obligeant les EDR opérant dans ces marchés francophones à offrir un volet comprenant tous les services spécialisés canadiens de langue française.

10701            Aucun consommateur ne serait obligé de s'abonner à un tel volet, mais tous les francophones qui le désirent en auraient la possibilité.

10702            Ainsi, tant les consommateurs que les EDR bénéficieront d'une autonomie et d'une flexibilité considérablement accrues.

10703            Tous les services canadiens de télévision spécialisée et payante analogiques et de catégorie 1 devraient avoir un droit d'accès au système de télédistribution.

10704            Et ce, pour de nombreuses raisons.

10705            Premièrement, parce qu'en retirant à ces services leur droit d'accès, le Conseil enlèverait du même coup aux consommateurs canadiens leur capacité de s'abonner à ces services.

10706            Chaque consommateur serait alors contraint d'exercer son choix à l'intérieur des limites que son EDR lui imposerait, ou de s'abonner à plusieurs EDR différentes pour espérer retrouver l'accès à l'ensemble des services canadiens qui lui sont actuellement offerts.

10707            Deuxièmement, parce que tous les services analogiques et de catégorie 1 ont été autorisés aux termes de processus compétitifs au cours desquels ils ont dû démontrer, à la satisfaction du Conseil, qu'il existait une demande pour leurs services, que celui‑ci allait contribuer de façon probante à la diversité de programmation offerte au public canadien, que les engagements proposés en matière de diffusion et de dépenses d'émissions étaient d'une ampleur appropriée eu égard à la nature du service, et finalement, que le respect de ces engagements était directement dépendant d'un accès garanti.

10708            Troisièmement, parce qu'à l'intérieur de la radiodiffusion privée canadienne, ce sont les services de télévision spécialisée et payante qui apportent la plus forte contribution à la programmation canadienne, aussi bien en termes de financement que d'auditoires rejoints.

10709            Ils fournissent, par exemple...

10710            En dramatiques, 70 pour cent des dépenses totales d'émissions canadiennes et 75 pour cent des heures totales d'écoute de ces émissions.

10711            En musique et variétés, 65 pour cent des dépenses et 80 pour cent des heures d'écoute.

10712            En documentaires, 75 pour cent des dépenses et 80 pour cent des heures d'écoute.

10713            Et en émissions pour enfants, 99 pour cent des dépenses du secteur privé.

10714            Quatrièmement, parce que la suppression de leur droit d'accès à la distribution aurait des conséquences économiques potentiellement désastreuses pour ces services, qui réduiraient d'autant l'importante contribution à la programmation canadienne que nous venons d'évoquer.

10715            Actuellement, plusieurs titulaires de services indépendants ‑‑ dont Pelmorex et Allarco, qui possèdent respectivement l'un des plus anciens et le plus récent des services avec garantie d'accès ‑‑ vous ont exposé les énormes difficultés qu'ils rencontrent dans leurs négociations avec les EDR.

10716            Une situation à laquelle tous nos services sont également confrontés, quel que soit la notoriété de leur marque, leur date d'entrée en service ou leur succès auprès du public.

10717            Nous n'osons pas imaginer ce qu'il en serait sans droit d'accès.

10718            À cet égard, il est important de prendre en compte la disparité de situation entre EDR et services facultatifs.

10719            Pour une EDR, supprimer un service individuel, même populaire, de sa liste  de quelques 400 services n'est pas susceptible d'entraîner une baisse considérable de ses revenus ou de sa clientèle.

10720            En revanche, pour un service de langue anglaise, la perte d'un seul des 5 grands distributeurs aurait pour effet de réduire sa base d'abonnés potentiels d'entre 900 000 et 2,3 millions de foyers.

10721            Et la perte de deux distributeurs se traduirait par une réduction de sa base d'abonnés d'entre 2,5 et 4,5 millions de foyers canadiens. Soit entre  23% et 42% de la base totale d'abonnés.

10722            Pour un service de langue française, la perte d'un seul distributeur, Vidéotron, entraînerait une réduction de sa base d'abonnés potentiels de 58 pour cent.

10723            C'est dire l'extraordinaire impact économique que la suppression du droit d'accès est susceptible d'avoir sur les services analogiques et de catégorie 1, avec toutes les conséquences que cela va entraîner sur la qualité du service et sa capacité de continuer de répondre aux attentes de ses abonnés.

10724            C'est dire aussi l'ampleur du déséquilibre que créerait le Conseil dans les rapports de négociation entre EDR et services de programmation.

10725            Les EDR pourront utiliser la menace du retrait pour obtenir un large éventail de concessions, allant de la réduction du tarif à la négation du droit de vérification des comptes en passant par la cession de minutes de publicité.

10726            Cinquièmement, parce que la suppression d'un droit d'accès rendrait inopérant tout processus de règlement de différends.

10727            Pour toutes ces raisons, nous sommes absolument convaincus que le droit d'accès des services canadiens au système de distribution canadien est essentiel à l'atteinte des objectifs de la Loi.

10728            MR. RILEY:  In its notice of public hearing, the Commission noted that one of its three primary objectives was to:

"... ensure a strong Canadian presence in the broadcasting system in the form of distinct and diverse Canadian programming and services."  (As read)

10729            MR. RILEY:  To this end, we strongly recommend maintaining the concept of a defined nature of service for Canadian services, and Canadian content and programming expenditure obligations specific to a given service, not a broad category.

10730            Astral fails to see how the proposals that suggest broad categories to and in which services might hopscotch could attain this objective of diversity.

10731            For example, each of the existing 30 specialty services that broadcast primarily dramatic programming are dedicated to a specific theme, genre, period or defined target audience such as science‑fiction, horror, romantic comedies, classic films, and what not.

10732            That is what creates diversity.

10733            On the other hand, sanctioning services to offer programming within every theme, genre, sub‑genre, category and sub‑category of dramatic programming in an attempt to reach a broad audience would only lead to redundancy and consumer confusion.

10734            Furthermore, this proposal would clearly benefit large broadcast groups that would be able to target high‑potential and popular niches in an effort to create similar services.

10735            Not only would this create a homogenization of services as a result of the inevitable gravitational pole to the middle, but it would be sure to result in skyrocketing of prices for high‑profile, foreign programming with absolutely no guarantees of diversity, and would most likely result in no more than a game of "musical chairs" amongst existing players vying for content.

10736            In addition, without a defined nature of service for Canadian channels, it becomes virtually impossible to authorize new foreign services.

10737            It is arguable that no foreign dramatic programming services could be authorized, since they would inevitably be in competition with over 30 Canadian services, each of which would be authorized to operate in every conceivable corner of this broad category.

10738            We also propose to maintain the current policy that restricts the authorization of foreign services that are, in whole or in part, competitive with a Canadian service.

10739            Moreover, the licensing process needs to be efficient but meaningful, and any new Canadian service resulting therefrom must have demonstrated that it will make a tangible and significant contribution to increasing the diversity of programming currently offered to Canadians.

10740            In return, they would be granted an access right.

10741            Johanne?

10742            MME SAINT‑LAURENT : Dans un univers de distribution extrêmement concentré et intégré verticalement, Astral considère essentiel que le Conseil adopte quelques mesures simples pour assurer des relations commerciales équilibrées.

10743            À cet effet, Astral propose que, en cas d'impasse dans les négociations, que les parties puissent accéder à un mécanisme de règlement de différends prévisible et efficace.

10744            Compte tenu de l'importance qu'est appelée à prendre la vidéo sur demande dans les habitudes de consommation des téléspectateurs, Astral considère également essentiel que le nouveau cadre de réglementation favorise l'accès des services canadiens de télévision conventionnelle, spécialisée et payante à la plateforme de VSD, tout en protégeant les droits de diffusion qu'ils ont acquis en mode linéaire.

10745            Le nouveau cadre devrait aussi pouvoir empêcher les services de VSD de devenir de facto des * services de programmation par abonnement +, canadiens ou étrangers, non autorisés, tout en reconnaissant que le modèle économique de développement de la VSD passe par l'accès à la publicité, y compris à la publicité dynamique insérée à l'étape de la distribution.

10746            Enfin, il devrait reconnaître que les EDR devront encourir des coûts significatifs pour assurer le plein déploiement de la VSD et des technologies d'insertion de publicité dynamique.

10747            Pour ce faire, le modèle que nous préconisons est le suivant...

10748            Lever les restrictions relatives à la diffusion de publicité dans les émissions offertes en VSD et autoriser les services canadiens de programmation à offrir des blocs d'émissions en VSD par abonnement provenant de leur programmation linéaire.

10749            Ainsi, les EDR titulaires des services de VSD devront négocier avec les diffuseurs linéaires canadiens pour obtenir les droits de diffusion de leurs émissions en VSD.

10750            En contrepartie, les diffuseurs devront négocier avec les EDR des ententes de partage de recettes générées par la VSD, de façon à ce que ces dernières puissent tirer des bénéfices de leurs investissements technologiques.

10751            Les témoignages que nous avons entendus plus tôt de Rogers, Telus et Cogeco semblent indiquer que ces EDR partagent notre vision et sont prêtes à ouvrer dans un tel cadre.

10752            André ?

10753            M. BUREAU : En terminant, nous répondrons aux deux questions du Conseil qui n'ont pas été abordées précédemment ce matin.

10754            Est‑ce que les entreprises de radiodiffusion en direct devraient payer un tarif de distribution ?

10755            Astral a pris connaissance des nombreux documents parfois contradictoires déposés par l'ensemble des parties à l'égard de la redevance de distribution pour les services conventionnels.

10756            Nous croyons que le Conseil détient toute l'information qui lui est nécessaire pour se prononcer sur la question.

10757            Nous demeurons toutefois préoccupés de l'impact économique que pourrait provoquer l'imposition d'une telle redevance sur le secteur des services discrétionnaires.

10758            Nous demandons donc au Conseil d'en tenir compte s'il devait décider qu'une telle redevance était requise.

10759            Finalement, quant à savoir si les EDR devraient avoir accès aux revenus publicitaires provenant des disponibilités locales, nous endossons la position que l'Association canadienne des radiodiffuseurs a présentée à cet égard.

10760            Monsieur le Président, nous croyons que le modèle que nous avons présenté permettra au système de radiodiffusion de continuer à se développer dans le meilleur intérêt de tous.

10761            Nous vous remercions de votre attention et nous serons évidemment heureux de répondre à vos questions.

10762            THE CHAIRPERSON:  Thank you very much for your presentation.

10763            On the last point that you made, Mr. Bureau, on the fee for services, essentially you take a neutral position just telling us to be leery of the fact of the effect that such a fee may have on the specialty services.

10764            You were here yesterday.  You heard me cross‑examine both Global and CTV, and there was quite a bit of talk about tying such a fee for service, should there be one, specifically to local services because local services, according to them, is where it hurts most.  They have an obligation to do it.  They are really the only part of the whole broadcasting system that has the obligation to provide local services, yet local services obviously, according to them, don't pay for themselves.

10765            If we made such linkage, do you think it would be beneficial to partially address your concern that a fee for service does not impact negatively on the subscription rate that specialty services obtain?

10766            MR. BUREAU:  I can see in your question the link that you are putting with our position on the caution we are suggesting here.

10767            I would have to ask permission to Sophie Émond to answer that question.  I promised I would not make a comment on the fee for carriage.

‑‑‑ Laughter / Rires

10768            MR. BUREAU:  She will stop me if I do something that she is not fully in agreement with.

10769            Mr. Chairman, I think that the question of the caution that we are proposing here has to do more with the position that has been taken by Quebecor in their initial filing where they suggested that they should give a fee for carriage but that that money should come out of the redevance that they are already paying to specialty services.

10770            We say we don't understand that.  We think that it is totally unfair to propose something like that.

10771            Of course, if they wanted to take it away from the margins that they are taking on the retail price of our services ‑‑ because, as you know, they charge 100 per cent of our wholesale rate to the subscribers.  If they want to take it from there, we don't care.

10772            But if they were to take it away from our wholesale price, we don't think it's fair.

10773            Now, if indeed there was a possibility that you could really measure how the fee that would be given to the conventional broadcasters would translate to a betterment of their local programming, maybe it would not affect us.  It is not the impact that we are mentioning here.

10774            The impact we are mentioning here is if they take the money away from us to give it to the conventional broadcasters.

10775            THE CHAIRPERSON:  Okay.  I take that as meaning as long as grosso modo you could live with this fee for services tied to local services, assuming we can assure ourselves that it indeed leads to an improvement of local services?

‑‑‑ Laughter / Rires

10776            THE CHAIRPERSON:  I'm not trying to put you on the spot; I'm trying to interpret what you said.

10777            MR. BUREAU:  I don't know, but I still have the feeling I am on the spot.

10778            Frankly, we have heard so many arguments in favour or against this fee for carriage that we feel we have enough to decide.  It was pretty smart yesterday to come up with that proposal that they would use that money to put it on the local side of their services.

10779            We are in favour of a better Canadian system, there is no question about that.  So whatever the means, we would gladly support something like that.

10780            Is it the right way to do it?  That is for you to decide.

10781            THE CHAIRPERSON:  Okay.  The other point I am not quite clear on ‑‑ and I read your submission last night.  In your original submission you made it that the present analog in Category 1 essentially covers the waterfront, and you suggested there would be a moratorium and we should not allow any further guaranteed access entry into that class.

10782            Is that still part of your submission?

10783            MR. BUREAU:  Well, I think that, Mr. Chairman, we have evolved in our thinking during the course of the proceedings here, because we have heard a number of proposals coming before you.  So we are trying to propose a model today that is slightly different from the one that we have filed earlier.

10784            I will ask Sophie to give a little bit more precision on that.

10785            THE CHAIRPERSON:  Okay.

10786            MS ÉMOND:  Our model, Mr. Chair, actually it was in looking forward for a new model.  We are not changing the fact that ‑‑ it is just actually naming the categories.  We are saying going forward in a new framework, you only have a single category of discretionary services.  So we are not calling them analog, Cat 1 or Cat 2 any more.  That was the only reason.

10787            But we are not changing, for example, the fact that these services obviously would still have access rights as we have presented in our oral this morning.

10788            THE CHAIRPERSON:  That I understand, but can there be additions to that category or not?

10789            MS ÉMOND:  Definitely.  We could license new services.  What we have proposed in our model was a streamline or a revised framework for licensing of new services, discretionary services, that what all each have to file an application and propose a distinctive nature of service to the existing ones.

10790            THE CHAIRPERSON:  So essentially the old Category 1, if you meet the old Category 1 criteria, you can get guaranteed access in the future for a new service?

10791            MS ÉMOND:  That's correct.  We suggested that the licensing criteria for these services could be similar to the ones that the Commission has used when licensing Category 1 services, but that obviously could be subject to discussion as to what exactly those criteria would be.

10792            Essentially our main preoccupation with the licensing was in light with the objectives we have mentioned in the oral presentation; that we think that the focus should be on having new services that do contribute and bring diversity and have some specific expenditures and Cancon requirements linked to that distinct nature of service.

10793            THE CHAIRPERSON:  Okay.  Thank you.

10794            MR. BUREAU:  To be clear, Chairman, we suggest that Category 2 be abandoned in terms of a possibility of access to the system and that we come to this new type of approach that would ensure diversity and ensure that whenever somebody has been licensed, they have a guaranteed access to the system.

10795            THE CHAIRPERSON:  Thank you.

10796            Len, I believe you have a host of questions for the panel.

10797            COMMISSIONER KATZ:  Thank you, Mr. Chairman.

10798            I want to come back and start I guess with your opening remarks this morning on page 3, where up on top you say, and I will read it:

"... en effet, le système de radiodiffusion dans son ensemble est en bonne santé financière..."

10799            MR. BUREAU:  Yes.

10800            COMMISSIONER KATZ:  I don't think we are disputing the fact that there is a strong and successful broadcasting system, but when you look at the components ‑‑ and one of the components obviously is the over the air marketplace ‑‑ we heard yesterday from both CanWest and CTV Globemedia that the over the air marketplace financial situation is somewhat impaired.

10801            You are a publicly traded company.  The results of the CRTC have indicated in the last two years that the return on investment, the PBIT for that component of the industry, is in the single digits, 4, 5, 6 per cent.

10802            If you took that business plan to a bank, would it be financeable today?

10803            MR. BUREAU:  Well, I don't know what would be the answer from the banks.  It is for them to answer.  I think that they have tested it by doing the acquisitions they have done.  They must have proven to the banks that they were a solid type and robust type of company to be able to borrow the kind of money they borrowed to acquire the services they just acquired.

10804            COMMISSIONER KATZ:  And presumably they made certain commitments on those commitments as well?

10805            MR. BUREAU:  I would imagine.  I would imagine, unless they bluffed with their bankers that they seriously convinced them that they were capable of doing what they were planning to do.

10806            So I think that they are ‑‑ we can say that other than TQS, who is in a separate situation, a more difficult situation, the others are in a position where we were a few years ago and where a number of entities were a few years ago.

10807            So I have a little bit of difficulty to look at them and find them in a difficult position ‑‑ I am trying to choose my words very carefully ‑‑ because I think they have shown that they have a vision for the future, that they believe in the future, that they are prepared to commit everything they have in fact for the future.  So great.

10808            COMMISSIONER KATZ:  Which in fact presumably they have in order to get the financing that they did.

10809            MR. BUREAU:  Yes.

10810            COMMISSIONER KATZ:  Okay.

10811            I want to come back to the issue you raised with the Chairman with regard to your concern that any decision that we make on fee for carriage does not impact the wholesale rates for your business.

10812            I guess coupled with that would be the impact on the consumer as well.

10813            MR. BUREAU:  Of course.

10814            COMMISSIONER KATZ:  That if in fact the BDU passes this thing through, it raises the cost to the consumer, all else being equal.  As a result, they may have a propensity to spend less on discretionary services.

10815            MR. BUREAU:  Yes, of course.  We have said that in our filings earlier.  We believed that there is some elasticity.  We have seen that over the years.  We have added so many new services, Canadian and foreign services.  They have added to the cable bill, the Internet, the telephony, everything, and it doesn't seem that we have reached the point where we cannot add anything more.

10816            So we are not saying that there won't be an impact.  We are saying there could be some impact; that people will try to say well, that's enough, I will choose a little bit less packages to be able to maintain my monthly bill at the same level.

10817            So there is that risk obviously.  But you have had before you so many studies to show you what is the potential elasticity or not in those situations to make the decision.

10818            COMMISSIONER KATZ:  One of your proposals is to have a unique Francophone package as well.  I think you are also in favour of having a smaller basic, if I understand you correctly as well.

10819            MR. BUREAU:  Yes.

10820            COMMISSIONER KATZ:  Would that not give those consumers that are price‑sensitive an opportunity to buy a smaller basic package and continue to maintain the discretionary services that they value rather than seeing their overall price go up as well?

10821            MR. BUREAU:  Obviously we believe that this is a way of ensuring that those people who would be interested in some local news and local services would get it through their small basic service and that if they want after that to go for sports programming in particular, or children's programming, they could buy either in a package or separately those services.

10822            So yes, the small basic will encourage people to continue maintaining their access to the specialty services.

10823            We say that in the French language market we believe that there should be the option to buy the entire Canadian programming services in French for the French market consumers.

10824            COMMISSIONER KATZ:  You also talk about preponderance on page 7 of your opening remarks this morning.

10825            Is that a single preponderance or is that a double preponderance scheme?

10826            MR. BUREAU:  Double.  So I will ask Sophie to be more precise.

10827            MS ÉMOND:  We followed yesterday some of the exchange about the fact, the discussions about the need; that if you have access, do you still need a double preponderance at the level of the subscribers and at the level of the services offered?

10828            In our case, first of all, as we indicated, access is key and obviously the preponderance as well at the level of the subscriber.

10829            What we maintain is the importance of also having a preponderance at the level of the BDU we believe is more compatible with the obligations or the Canadian policy that says that there should be a priority of distribution to Canadians.

10830            In addition, at the subscriber level, if suddenly you offer ‑‑ you have a menu of 500 foreign services and let's say you have 200 Canadian and because of the preponderance of the subscriber level, you could have some frustration not to be able to access, to be limited in your ability to choose.

10831            So we think it is better to work together with those double preponderance.

10832            COMMISSIONER KATZ:  Okay.

10833            I want to go back to your model.  I must commend Astral because they are one of the few players who appeared before us with a very comprehensive complete model that sort of covers everything off in a very succinct way.  So I commend you for that.

10834            You talked about the Cat 2s and the fact that you feel in the future going forward it may not be in Canada's best interest to continue with a Cat 2 model but allow the Cat 1s to come in.

10835            It raises a couple of issues from my perspective.

10836            The first one is stifling innovation and allowing a new player to come into the market as a Cat 2 and earn his stripes and work his way up as well.  You sort of have to come into the club at the same time as everybody else coming into the club, so to speak, and if you don't have the financial support and the wherewithal to meet all the obligations at a Cat 1 level, you can't enter the system.

10837            Do you have a comment on that?

10838            MR. BUREAU:  Well, yes.  I will ask John to make the comments on that.

10839            MR. RILEY:  Mr. Vice‑Chair, we started I guess with the overarching principle that what the ultimate goal for all of us should be is what we want to accomplish is to maximize incremental diversity in the most efficient and effective way.

10840            By the Commission's own admission the system that exists now with the Cat 2 doesn't seem to be achieving that goal.  If I recall correctly, there are some 200 applications per year almost, one per business day, and many of them, most of them for that matter, don't see the light of day.

10841            So in terms of generating innovation under those circumstances, it doesn't seem to be necessarily productive and we are all looking for what would be that way.

10842            In our view, the best way to do that would be to ‑‑ and as you said yesterday, sometimes you have to do a little bit of work up front for long‑term benefit.

10843            Our view would be that on a periodic basis the Commission would review applications.  It could be established what that periodic basis is.  It's not a question of somebody missing the boat at a particular time.

10844            On a periodic basis the Commission would review applications and those seen to provide incremental diversity to the system would be authorized.  In no way does that stifle innovation in any way.  It just better ensures ‑‑ that coupled with that access right, it better ensures that the hit rate, if you will, of the applications and those applications becoming services, which is the ultimate goal, it increases the probability of that happening as opposed to the existing system or the other model that has been discussed as well.

10845            COMMISSIONER KATZ:  But the hurdle just one up.  The entry‑level ante has just gone up to meeting that Cat 1 obligation, which is a far more serious and financially committed obligation than a Cat 2.

10846            MR. RILEY:  Well, in our view, that remains to be seen.  I don't think we were specifying that the precise rules that apply to a Cat 1 today are the levels.  The Commission could have the latitude in these cases to decide what is the appropriate rate at which that service, new service depending on availability of programming and on the level of commitment ‑‑ the Commission would have the flexibility to set those.

10847            We are not arguing that there is just one test and that's it and it's a high test, and if you don't need it then that's it.  The fact of the matter is that could be determined.

10848            In fact, in our view it might be appropriate, whether it is another process or part of this process, is to consider well what would be those tests.  How would we set those.

10849            I think it would be a misnomer to say that the it's the Cat 1 test today and that's it, and if you don't meet that test you can't get there.

10850            MR. BUREAU:  I think that the Commission and the industry at the time thought that it was a good opportunity to try and encourage people to come up with solutions with less burden of regulation, less heavy commitments and everything.  But when you see that of the 390 licences that have been given for Category 2, only 5 per cent of them are carried by the major distributors.

10851            We have to look at that and say what have we accomplished?

10852            And considering that we have in mind that we want to continue having the fantastic diversity that we have in the system, why not try and focus on that and make sure that those who will be licensed by the Commission will get access and will be carried by the distributors with a guaranteed access like the ones that exist for Category 1 in analog services.

10853            So then we will be able to measure the real improvement of the system instead of spending all the time that you and your colleagues at the staff level have had to spend to license these 390 licences that go nowhere.

10854            We believe that it is unfortunately a waste and it does not translate into the objective of having a real diversity, additional diversity in the system.

10855            So we are proposing a different model.

10856            MR. RILEY:  I guess the two points would be:  would probably maximize your time in a better fashion; and, number two, would likely result in a higher probability of diversity than what exists now.

10857            COMMISSIONER KATZ:  The fact that so many aren't licensed begs the question whether it is all within the realm of the person who has applied for the licence or is there an access bottleneck there as well?

10858            Are people being given the opportunity to put their programming on, or is there an opportunity for a better way of creating an access environment for them as well?

10859            MR. BUREAU:  I think that first of all the question of access is fundamental, because you have heard people that have guaranteed access and how difficult it is for them to materialize, to get there.

10860            We had one Category 2, Cinépop, that we had to negotiate for, I don't know how many months ‑‑

10861            MR. RILEY:  Two years.

10862            MR. BUREAU:  Two years to get access on the major Francophone distribution system.  Well, we may have had the strength of waiting for two years to get there, but even when we got there with a written contract, everything was agreed upon, and a few weeks before the launch we were told we don't have the capacity to take you on and the conditions we have accepted with you, we won't respect.

10863            So we had to threaten them that we would come to the Commission, and finally we got what had been agreed after two years of negotiation.

10864            So we feel that this is not an efficient way of bringing to the system the services that have been licensed by the Commission.  We believe that having a process that will ensure that it is bringing diversity, after that they should have guaranteed access.

10865            Guaranteed access is fundamental.  If they don't get that, look at the results at the present time.  Even those that have it, like Pelmorex, like Allarco, like us, have had so much difficulty having it respected.

10866            MR. RILEY:  If I may just add one thing, quite often the issue of access is wrapped in the notion that that this ‑‑ or the lack thereof; in other words, no guarantee of access is quite often wrapped in the cloth that this is the best way to ensure that one can respond to consumer interest.

10867            Recall that we are advocating the tiering and linkage rules disappear.  So if you look at the tools that a BDU has today or will have in the future, especially with the move now to digital ‑‑ before in an analog world there were certain technological restrictions on someone's ability to rendering package changes, but that is virtually gone in this stage.

10868            And with the absence of the tiering and linkage rules, the ability or tools available to a BDU to address consumer need, demands, shifts in interest, packaging, pricing, are ample; the complete freedom.

10869            So number one, those tools are and will be available more so, given that no one seems to dispute the notion of relaxing or disappearance of the tiering and linkage rules.

10870            As André pointed out, our own experience and what we would expect is the issue of lack of access is less about responding to consumer needs.  The tool will be there.  If the service is not popular, it can be shifted to a different package.

10871            If the service, frankly, is that bad, nature will take care of it.  No broadcaster can operate a service that only has two viewers.  There doesn't need to be a right to have no access.  It will effectively die on its own in any event.

10872            So our experience and our thinking is that a lack of access has nothing to do with responding to consumers but more so with respect to having absolute complete leverage in negotiations between the service provider and the BDU.

10873            COMMISSIONER KATZ:  After hearing what you said, a corporation with the brand and the experience and knowledge of an Astral having two years of difficulty to get on with the Cat 2, one can only imagine what other players are going through.

10874            MR. BUREAU:  Absolutely.  Absolutely.  And that is why we are saying at least let's be realistic and try to ‑‑ that whenever the Commission has spent time and effort to increase the number of services to be offered to Canadians, that they have a chance to be seen, to be watched.

10875            So let's look at the way to do it.

10876            Maybe they need to have a guaranteed access, and it will take a little bit less than two years probably; I don't know.  Allarco spent how many months before getting access and they are not there with many of the distributors yet.

10877            MR. RILEY:  I would like to add just one other thing, if I may, on access.  It is something we addressed as well.

10878            It seems that a lack of access would effectively render any dispute resolution mechanism, which it would seem from my reading that all parties agree that, depending on the fashion of that, there should be in existence some mechanism to do that.

10879            It would render it, in our view, completely meaningless.

10880            You asked the question, if a service doesn't have access, what right does it have to have a dispute mediated.

10881            For example, let's say there is a service ‑‑ whether it wants to launch or it is launched ‑‑ and the service says, "We need 35 cents for this to work, and we need to be in a package that has at least X number of subscribers."

10882            And the BDU says, "We will give you a nickel, and you will be on a standalone basis.  That's the best we can possibly do."

10883            Assume for a moment that those are the final positions, pending any final offer dispute resolution.  Likely they would be closer, but let's say that is the case.

10884            If one were to go to an arbitrator, and the arbitrator said, "You know what?  On balance, I see that the 40 cents" ‑‑ and whatever other material issues are at play ‑‑ "I rule in favour of the position of the programmer."

10885            The BDU would be free to say, "That's fine, but there is no right to carry.  There is no right to access.  There is no Commission policy that you must be carried, so you won, but I'm not going to carry you."

10886            To me, it completely disables the dispute resolution system.

10887            And if you don't have the standing, if you will, or the right to even get to your market, to let the market decide, you have frustrated the entire process.

10888            So it strikes us that, at a minimum, if a service is going to be licensed, especially under the model that we suggest, where there is a meaningful review, and where there are targets set on certain assumptions, there has to be a basic right to be carried.

10889            And it doesn't, in any way, frustrate or cripple the BDU or the public's ability to say no to that service, ultimately, so that it doesn't succeed.

10890            COMMISSIONER KATZ:  Let me take you to the next step then.

10891            The proposal is that there be a Cat 1 category, but we grandfather the Cat 2s for a period of time, either until the next licence renewal or until they migrate up to a Cat 1.

10892            Is there a risk of creating a secondary market for Cat 2s?

10893            Notwithstanding the fact that there are regulations in the CRTC that you can't sell an ongoing concern or a licence if it hasn't been activated, is there not a risk of suddenly creating a gold rush of Cat 2s that have been licensed out there, that people may want to get their hands on?

10894            MR. BUREAU:  I don't know about the English‑language market.  In the French language there are three Cat 2s.  One of them is Avis de Recherche, the other one is Cinépop.  It's not for sale.  It won't be for sale, now that we have access.

‑‑‑ Laughter / Rires

10895            MR. BUREAU:  And there are two in the hands of Videotron.

10896            So I would take away the Avis de Recherche, which is a special one, but the other two are in the hands of Videotron.  I don't think that they are susceptible to being acquired by anybody.

10897            So I don't think that this is a possibility, at least in the French‑language market.

10898            In the English‑language market, when you see that only a few of them have access to the five major distributors, it is a pretty little situation there.

10899            I think that I would suggest, in our minds, that the Category 2s that have been licensed remain licensed, so they go on like that.  Otherwise, if they were to be transformed, they would have to come back and meet different types of criteria.

10900            But we say that, for the future, looking at the future, we would stop this proceeding and we would probably, once a year, have a date for filing new applications for these new services, which would have to bring some diversity to the existing system.

10901            It could be done, possibly, once a year, and the Commission would come out with decisions and license those new services, and then they would have guaranteed access.

10902            COMMISSIONER KATZ:  You believe that those that have been licensed, but have yet to turn on, would still be grandfathered in this process.

10903            MR. BUREAU:  Those that have been licensed have a date of expiration.  If they don't launch before that date, that's it, they are gone.

10904            We have a few like that, and we know what is the date of expiration.

10905            So we assume that they will disappear from the list, that they will get to that date of expiration.

10906            COMMISSIONER KATZ:  I think, over the course of the period, we have extended licences for Cat 2s for one more term, as well.

10907            MR. BUREAU:  Yes.

10908            COMMISSIONER KATZ:  Would you see that being continued, as well, or just give them until the end of the first term, and that would be it?

10909            MR. BUREAU:  I think Sophie wants to say something.

10910            MS ÉMOND:  Just to be clear, I think we were grandfathering the Cat 2s because we don't want to create the situation where you cannot have a cut‑off date where you start everything from fresh.

10911            So, for practical reasons, we thought, there are Cat 2s that exist, so they should be able to continue under their licence, unless they prefer to change their status, with different Conditions of Licence for CPE and perhaps Cancon to be determined, and then they would move to what we would call the new Category 1 status.

10912            They would have, basically, the choice to decide.

10913            MR. BUREAU:  Mr. Vice‑Chair, we could possibly file some additional comments to your question in our written submissions.

10914            COMMISSIONER KATZ:  Certainly.

10915            MR. BUREAU:  Are we limited to 10 pages?

10916            THE CHAIRPERSON:  We will look at the rules at the end of the hearing.

‑‑‑ Laughter / Rires

10917            COMMISSIONER WILLIAMS:  We will take you to dispute resolution over this.

‑‑‑ Laughter / Rires

10918            CONSEILLER ARPIN:  Ce n'est pas moi qui préside.

10919            COMMISSIONER KATZ: ~~ There are certain decisions that I don't have the power to make, and that's probably one of them.

10920            I want to move on to the issue of VOD and SVOD and BVOD, which I found very instructive in reading your submission, because it clarified a number of issues for me.

10921            Before we actually get into those specific services, you mentioned in your opening remarks today that dynamic ad insertion is still some time off.  Can you provide us with some insight as to where that technology stands in your company?

10922            MR. BUREAU:  Yes.

10923            Pierre ?

10924            M. ROY : Je ne suis pas un spécialiste de la technologie, mais je crois que cette technologie‑là est plus ‑‑ elle réside plus chez les BDU, chez les entreprises de télédistribution, que chez les entreprises de programmation.

10925            Ce qu'on dit, c'est qu'on veut ouvrir la publicité au vidéo sur demande parce que c'est quelque chose qui va financer éventuellement cet accès‑là au consommateur, et éventuellement, la technologie se perfectionnant, permettre l'insertion dynamique de publicité.

10926            Je crois que Vidéotron ne semblait pas très chaud à l'idée parce que je crois que, d'un point de vue technologique, c'est assez dispendieux.

10927            Et donc, dans un petit marché, de rendre cette technologie‑là est peut‑être disproportionné par rapport aux revenus que ça pourrait générer.

10928            Donc, c'est une question ‑‑ une fois qu'on permet la publicité, de permettre cette chose‑là aussi, éventuellement, en fonction de l'évolution de la technologie, pour nous, c'est quelque chose qui devrait être naturel à permettre.

10929            COMMISSIONER KATZ:  Do you see it as an incremental revenue source or simply a displacement of existing revenues?

10930            M. ROY : On voit que le marché, la tarte publicitaire, l'ensemble des revenus publicitaires, en tous cas, dans le marché canadien et dans le marché québécois, entre autre, la tarte publicitaire n'augmente pas.

10931            Donc, c'est probablement plus un déplacement d'argent qu'un accroissement de ces revenus publicitaires‑là.

10932            Les gens qui écoutent moins la télévision linéaire vont écouter la télévision sur demande.

10933            Donc, ça n'affecte, d'une part, les cotes d'écoute et les parts de marché d'un côté. Ça déplace l'écoute du côté de la vidéo sur demande. Donc, les publicitaires suivent cette écoute‑là.

10934            COMMISSIONER KATZ:  So, the fact that you are going to have a more targeted sales offer to a customer would not necessarily increase the business at all?

10935            M. ROY : Moi, je pense que ça va plus répondre à des attentes des consommateurs qui veulent de plus en plus avoir accès à la programmation qu'ils veulent, quand ils le veulent, sur le média qu'ils le veulent.

10936            C'est vraiment pour répondre à des habitudes d'écoule de consommateurs qui sont en évolution, plus qu'une augmentation des revenus publicitaires.

10937            Évidemment, ce faisant, en donnant cette possibilité‑là, il y a des coûts technologiques qui sont encourus. Il y a des droits à payer pour ces utilisations‑là.

10938            Donc, les revenus publicitaires étant permis viendraient en partie amortir ces coûts et ces droits qui sont déclenchés.

10939            COMMISSIONER KATZ:  Okay.

10940            Astral is in the pay‑per‑view business, and I think I read that you were suggesting in part of your evidence that it is a transitory technology now, and you are moving on to VOD, and you are looking at VOD as a major business opportunity, as well.

10941            Can you spend a few minutes elaborating on where the Astral business plan is with regard to VOD today?

10942            MR. RILEY:  I would be happy to give you our experience.

10943            Our experiences in, I guess, utilizing the VOD platform have been very successful.  We have been leaders in that regard, and we think ‑‑ and I think there is general agreement within the industry ‑‑ that this is where, frankly, television is headed, in any event.  So it is a very appropriate discussion.

10944            We launched a number of years ago, with respect to The Movie Network, an on‑demand component of our offering.

10945            As you well know at this point, in any event, the VOD technology is something that cable can utilize.  It is problematic in satellite, but we have been working with our satellite BDU partners to have workarounds to that.

10946            Taking an example, let's say Rogers, we launched the service, and every TMN ‑‑ Movie Network subscriber had the ability, and does have the ability, to access a portion of our schedule at any given time.

10947            You could go on to The Movie Network, you could look at the five channels that are there and watch what is on the channel, or you could go into a menu and access some of our programming ‑‑ the same programming that is within our licence and within our window, you could go in and access it.

10948            So if you missed an episode or two of a favourite show that we are currently running, you could go in and see that, or you could pick one of our movies if you didn't see it on the linear service, or something on the linear service didn't appeal to you.

10949            That has been incredibly successful.  Over 75 percent of our subscribers have used the technology, notwithstanding that it is nascent, it is new, and there is always a period over which people must overcome hesitancy to use the technology.

10950            We have 3 million hits a month, on average.

10951            It has reduced churn for us.

10952            So it has been an entirely successful vehicle to add additional value to our subscription.

10953            I guess that is probably the best summation of where we are today and what the value of VOD is.

10954            We have also rolled that out with our mini‑pay service, Mpix, which shows older movies.  We have rolled that out, too, so subscribers to Mpix can do that.

10955            The underlying proposition is, if you become a Movie Network subscriber, or an Mpix subscriber, you have access, as a subscriber, to a portion of our titles at that time, as part of your subscription.

10956            And we see, frankly speaking, that that is the direction in which all services, and the industry will inevitably head.

10957            In fact, that is why we suggested in our oral presentation that it should be available to all services to move in that direction.

10958            And you can ask yourself the question, ultimately, at some point:  What happens to the linear channels?

10959            At a certain point people are paying the subscription, and we are finding, anecdotally, that people, once they become familiar with the use of the remote, will quite often go into our subscription basis.

10960            This is why we think it is essential that the issue of what is transactional VOD ‑‑ in other words, that provided by a cable operator ‑‑ and what is subscription video‑on‑demand ‑‑ in other words, what is an on‑demand element that comes with a programming service ‑‑ needs to be defined now.

10961            COMMISSIONER KATZ:  Yes, and I will come to that.  It is on my topics list, as well.

10962            MR. RILEY:  I'm sorry, I am trying to be efficient for the Commission.  If I answer all the questions, then we can go to lunch earlier.

10963            COMMISSIONER KATZ:  You are doing a good job.

‑‑‑ Laughter / Rires

10964            COMMISSIONER KATZ:  The good thing is, along the way, you are answering a lot of my questions, but I need some clarification.

10965            I think you mentioned that you are working with the satellite DTH folks on a VOD workaround, as well.

10966            I think we heard this week, or last week, that the BDUs see this as a strategic competitive advantage, because the satellite folks can't operate the service.

10967            Can you shed some light on what it is you are doing and where this thing is going?

10968            MR. RILEY:  You mean with respect to the workaround that I mentioned?

10969            COMMISSIONER KATZ:  Yes.

10970            MR. RILEY:  There are a number of workarounds ‑‑ the ultimate workaround I will get to in one second.  There are more, I guess, Band‑Aids, if you will, that could be used with the use of the PVR, et cetera.

10971            So there are ways to create I guess an on‑demand element, notwithstanding that you have I guess the situation with the cable.  Where we are really looking for it and it's not necessarily with respect to any particular kind of technology, frankly, is through broadband and that's where we think we can ultimately go.

10972            Another is if we can offer an SVOD element to our movie network subscription through a cable wire there is nothing stopping us from doing that through broadband and we have been in serious discussions with our suppliers and with all BDUs with respect to offering our service or a component or a facet of that in an online environment.  And that, in our view, is the ultimate work around so that virtually and literally every BDU will have the ability to do that.

10973            It is also why we think it is important that the model that we have given with respect to maintaining a strong system is essential.  I mean a number of the arguments that come forward with respect to why we need this hearing to produce changes are because the threat, if you will, of an unregulated or the broadband environment that the internet will render all of this meaningless.  We don't think that's the case.

10974            We think as we ‑‑ all of us in this industry have a strong foundation, then for us the broadband internet area is the logical extension for all of us.  And we are frankly working on that as we speak very diligently and quickly with all of our BDU partners.

10975            COMMISSIONER KATZ:  So it's no coincidence that all the BDUs are also ISPs in Canada?

10976            MR. RILEY:  Well, it's a happy circumstance, let's put it that way, because it allows the process to happen more efficiently.  But even if that weren't the case this is where everybody has to go.

10977            We have to claim ‑‑ the Canadian broadcasting system has to claim a part of that broadband territory and, you know, it's arguable the rule will be a little tougher in that environment.  And so to be able to do that you have to have a strong foundation.  If we have that then we can move in and get our piece of that.  Canada can get our piece of that.

10978            COMMISSIONER KATZ:  Okay.  I want to get right to that topic then about rights and SVOD rights.

10979            When you go in and buy programming in the States do you automatically negotiate rights for SVOD?

10980            MR. RILEY:  The answer is "yes".  I mean we have negotiated ‑‑ I mean rights come up all the time.  When we first ‑‑ when the opportunity to move into SVOD first presented itself of course many contracts didn't contemplate that.  And so we worked with our suppliers to say this is what we want to do, this is how it would work and we were able to make the suitable arrangements.

10981            COMMISSIONER KATZ:  Are there different rights carried with SVOD than with transactional VOD or do the rights come together?

10982            MR. RILEY:  No.  Any copyright holder ‑‑ it's in the best interests of any copyright holder to divide the copyright into every conceivable possible slice of a pie.  And so if you say we would like the right to do this the answer you always get is, "Well, that's a new right.  So you need to compensate me for that right."

10983            So for example today when we buy the pay television rights, when we buy the rights for the window or for a linear surface we also negotiate and acquire the SVOD rights, if you will or the right to show the programming that we are licensing on an on‑demand element.

10984            Quite separate from that BDUs are negotiating to acquire the transactional VOD rights.  So if you were to go to your local cable company you would ‑‑ in much the same way pay‑per‑view used to be VOD is obviously a logical evolution of pay‑per‑view and you have the BDU buying VOD rights and us buying, if you will, on‑demand rights to our window or linear rights.

10985            COMMISSIONER KATZ:  You are advocating as part of your submission here that the BDUs be allowed to negotiate TVOD, transactional VOD rights, but to not allow them to negotiate or to own SVOD rights as part of this proceeding.  Is that right?

10986            MR. RILEY:  Well, I guess before I answer that question you have to understand what ‑‑ the definition of SVOD rights.  Maybe I can put it the way we see it and you can tell me if that's correct.

10987            Right now the Commission licences services that have levels of ‑‑ certain levels of Cancon commitment ‑‑ well, every service has that and the logical progression for any programming service is to move them into more of an on‑demand environment.  So we need ‑‑ it's a logical extension of our service to acquire those rights.  So that's number one.

10988            Number two is we have no problem at all with transactional VOD, somebody buying the right to sell if you will souped up pay‑per‑view if you will that a person buys a movie, just sees it and buys it.  Where I think we think things are starting to go astray is that the ability to offer transactional VOD seems to be mutating into de facto specialty services, thematic services delivered on‑demand.  So if that's what you mean by the SVOD rights well, then yes, we don't think that's good for the system.

10989            COMMISSIONER KATZ:  Yes, what I was trying to say, I think, was if in fact SVOD is the future of linear broadcasting then what you're suggesting is we should look very carefully at the vertical integration that's taken place so far and recognize that it will be even more vertically integrated if we allow the BDUs to enter that space.

10990            MR. RILEY:  Yes, well ‑‑

10991            COMMISSIONER KATZ:  I don't want to put words in your mouth.

10992            MR. RILEY:  Yes, I would say it's less an issue of vertical integration than it is what is video‑on‑demand and what is, you know, a specialty service or where will it mutate?

10993            And I think that has to be a decision, maybe because obviously under video‑on‑demand the kinds of contributions and rules are far fewer than they are with respect to a linear service.

10994            COMMISSIONER KATZ:  Do you think that BDUs should be the only players in Canada that should be allowed to offer VOD platforms?

10995            MR. RILEY:  Compared to whom?

10996            COMMISSIONER KATZ:  Compared to any other licensee.  If you came to us today and said you want to enter the VOD space if we give you a licence, you want to put the equipment necessary for that into a headend, into a BDU whether it's satellite‑based or anybody else?

10997            MR. BUREAU:  Mr. Vice‑Chair, we already have a VOD licence.  We can't operate it.  We will have to have an agreement with distributors to do that and obviously they have their own and they are not enthusiastic about the idea that we would operate one on their own premises.

10998            So the fact is that we suggest that all broadcasters should get through a condition of licence that could be part of their licence, of all the licences, that they will have the right to do SVOD with their linear service.

10999            On the other hand, for the BDUs we say there are two aspects there.  One is the kind of programming that we could offer them so that they can sell it on their video‑on‑demand platform.  And the other part is the programming that they could buy directly themselves and offer it on the video‑on‑demand platform.

11000            And we are saying in that case we are not opposed to it but in that case we have to be careful, or the Commission should be careful that they do not transform a transactional type of video‑on‑demand into a subscription video‑on‑demand and become a de facto specialty service without being licensed for that.  And we have seen that happening in some cases in BDUs already where they acquire rights in the United States of a service that is not authorized here in Canada and they sell those programs on a weekly subscription basis or even the longer term type of agreement with them.  And in fact they have created a specialty service that is not licensed and not authorized in Canada here.

11001            And so we are saying we are not against the idea that they could have their own activity in video‑on‑demand.  That's not our view.  But we say at least they should not create parallel services non‑authorized, non‑licensed to come and be in competition with the ones that are going through the licensing process.

11002            COMMISSIONER KATZ:  And what's the remedy?

11003            MR. BUREAU:  The remedy would be to apply the rules that exist at the present time.  They are not allowed to do that.

11004            MR. RILEY:  Well, I think the remedy goes a little bit beyond that because if you look at the time the VOD decision was made there was discussion about, you know, is VOD just a one‑off, I want to watch this movie, I pay x number of dollars, I watch the movie and the thing is over.

11005            The Commission examined a number of suggestions in that regard and did say that:

"The Commission considers that it would be consistent with the nature of VOD services to permit the VOD services to offer programming packages where the total period during which the programming may be viewed does not exceed one a week."  (As read)

11006            And I should have started a little earlier.  It says:

"The Commission does consider that a time limit is appropriate."  (As read)

11007            MR. RILEY:  And then concluded that one week was the way to go.  So be it.  That was at the time the feeling of the necessary flexibility.

11008            But if you look ‑‑ and I think it was Vice‑Chair Arpin who had checked out some websites ‑‑ but if you look at, frankly speaking, the VOD offerings that are not ‑‑ they are transactional.  You do buy ‑‑ you can just buy a movie and whatnot.  But things like Howard Stern TV and Anime Network, there are at least five or six services now and if you look at the website the statement is that this particular on‑demand service is a weekly service which presumably is to match here.

11009            MR. BUREAU:  To conform.

11010            MR. RILEY:  To conform here ‑‑ thank you ‑‑ a weekly service $4.29 a week that is billed on a monthly basis.  So you know, come on; for all intents and purposes and I won't name it, but there is one BDU that hasn't even put the weekly service in, just the monthly.

11011            So in all regard, I think the Commission ‑‑ it's understandable that in a nascent technology we would say should there be some flexibility to allow this to grow rather than being too restrictive, but I'm not sure that this is what everyone would have intended.  And in the long run it's not beneficial for the system.  It's creating ‑‑ I think the expression was used ‑‑ essentially a parallel system.

11012            So the remedy, I think, is there needs to be a tightening and whether that's reviewed in some other process or this process, our view would be VOD needs to look a lot more like VOD and not a subscription service.

11013            COMMISSIONER KATZ:  Presumably this issue is endemic to the BDUs, to those that are vertically integrated, which is where the issue comes in I would imagine because those companies you are citing probably are all BDUs?

11014            MR. RILEY:  Yes.  I am sorry, I don't follow when you say it's ‑‑

11015            COMMISSIONER KATZ:  What you are looking at here are independents like yourselves who are offering services that are competing with the morphing that's taking place by BDUs who have the ability ‑‑

11016            MR. RILEY:  Yes.

11017            COMMISSIONER KATZ:  ‑‑ to offer these services and to move into that space?

11018            MR. BUREAU:  Yes.

11019            COMMISSIONER KATZ:  And that begs the question of dispute resolution, reverse onus, how do you deal with these types of disputes as well?

11020            and I want to sort of move it that way because I think at some point in time, and you have identified it in your submissions as well, there is a need for the Commission to look closely at those companies that have the incentive and the propensity to grant themselves an undue preference, if I can call it that.

11021            MR. BUREAU:  Well, I think that separate from the issue of granting themselves some favour or whatever we believe that video‑on‑demand should be regulated in a way that it doesn't allow the creation of non‑authorized, non‑licensed specialty services.  That should be clear.  There should be rules that are clear in that direction.

11022            Now, it will not ‑‑ it should not, in our view, go back to the dispute resolution mechanism.  It should be a clear indication of what VOD should be.  We understand that at the beginning.  We were all experimenting what it could be.  We see what is happening now and we see how rules can be ‑‑

11023            MR. RILEY:  They are morphing.

11024            COMMISSIONER KATZ:  Morphed.

11025            MR. BUREAU:  Morphed.

‑‑‑ Laughter / Rires

11026            MR. BUREAU:  Yes, that's the word, thank you.  Thank you.

11027            So I think that this is a separate issue.  I think ‑‑ we don't mind going into the other subjects but I think that this is a separate issue.  We have to deal with the video‑on‑demand regulatory approach and rules and then we can talk about whatever else you want, Mr. Chair, Vice‑Chair.

11028            COMMISSIONER KATZ:  No, those are all my questions that I have actually, Mr. Chair.

11029            Thank you.

11030            THE CHAIRPERSON:  Thank you.

11031            Michel.

11032            COMMISSIONER ARPIN:  Thank you very much, Mr. Chair.

11033            Bonjour, Monsieur Bureau.

11034            Je vais revenir à votre présentation orale et puis au début du premier échange que vous avez eu avec le président sur votre modèle de distribution des services de langue française dans lequel vous préconisez la formation d'un volet qui soit formé de tous les services francophones.

11035            Donc, si je comprends bien votre modèle, il comprendrait pour l'instant tous les services dits analogiques, tous les services de catégorie 1 et de catégorie 2 ?

11036            M. BUREAU : Oui.

11037            Johanne, voulez‑vous élaborer ?

11038            MME ST‑LAURENT : En fait, notre objectif est de donner la priorité aux services de programmation de langue française dans le marché du Québec.

11039            L'offre globale est extrêmement restreinte. Il y a une vingtaine de services.

11040            Et puis, si on prend ‑‑ on évolue dans un marché qui est extrêmement étroit aussi, avec présence de joueurs dominants.

11041            Donc, on pense qu'il est important que les consommateurs aient l'opportunité de souscrire à un volet qui comprendrait l'offre de tous les services de langue française.

11042            Sans aucune obligation, évidemment, mais à tout le moins une opportunité de pouvoir souscrire à l'ensemble des services que l'on souhaite.

11043            À un prix abordable, bien entendu.

11044            CONSEILLER ARPIN : Ce qui voudrait dire que pour l'instant ‑‑ parce que, si ma mémoire est fidèle, actuellement il y a un volet, un grand volet, qui comprend des services francophones et des services de langue anglaise.

11045            Il y a une deuxième volet qui comprend des services licenciés à la fin des années 1990 qui Historia, Séries+, Canal Z et Évasion.

11046            Et évidemment, vous avez des catégories 1 qui ont leur existence par eux‑mêmes et qui, comme ils ont tous été lancés à des dates différents, sont quasiment en position de * stand‑alone +, je présume.

11047            Et puis, la même chose pour les catégories 2.

11048            Donc, ce que vous préconisez, c'est qu'ils soient tous regroupés.

11049            Ça veut dire que, si le Conseil statuait dans le sens que vous proposez, certains services catégorie 1 et certains services de catégorie 2, voire même les canaux Historia, Séries+ et compagnie, bénéficieraient de ce regroupement‑là et se retrouveraient donc bonifiés au niveau du nombre d'abonnés.

11050            MME ST‑LAURENT : Je pense que ce qu'il faut prendre en considération, Monsieur le Vice‑Président, c'est que les distributeurs décident de l'assemblage des services, et ce ne sont pas les services qui en décident non plus que du prix.

11051            CONSEILLER ARPIN : Dans votre modèle, vous demandez au Conseil de faire cet assemblage‑là.

11052            MME ST‑LAURENT : Mais ce ne serait pas obligatoire pour le consommateur d'y accéder.

11053            C'est une offre qui regrouperait l'ensemble des services où le consommateur pourrait y accéder.

11054            Évidemment, c'est basé beaucoup sur notre expérience de lancement de chaîne.

11055            Il y a des distributeurs qui ont un ensemble de forfaits qui regroupent déjà tous les services francophones sous un chapeau, mais ce n'est pas la pratique de tous les distributeurs.

11056            Et puis, il arrive effectivement que les mises en marché ne favorisent pas la vente des services francophones dans le marché du Québec.

11057            CONSEILLER ARPIN : Est‑ce que vous consentiriez, pour votre propre service de catégorie 2, de revoir vos conditions de contenu canadien et de dépenses de programmations, puisque vous vous retrouveriez quand même à bénéficier de vous retrouver à parité avec les services analogiques et de catégorie 1 et distants ?

11058            M. BUREAU : Monsieur le Vice‑Président, je pense que Sophie a quelque chose à dire.

11059            MME ÉMOND : Peut‑être juste une clarification, Monsieur le Vice‑Président.

11060            On n'oblige pas l'abonnement.

11061            On parle dans l'univers numérique. Donc, où de plus de en plus il va y avoir énormément de flexibilité à l'abonné.

11062            Par exemple, au Québec, il y a des phénomènes dont ‑‑ je m'excuse, j'ai juste le terme anglais ‑‑ * pick a pack +. Choisir un bouquet à la pièce.

11063            Donc, tout ce qu'on dit, c'est que, dans cette offre‑là où il y a une multiplication de bouquets disponibles, on pense qu'il serait dans l'intérêt du système, des services et de l'abonné d'avoir au moins le choix de pouvoir accéder à ce volet‑là.

11064            Évidemment, on n'a aucune garantie que des abonnés voudront le prendre.

11065            Donc, on ne s'attendrait pas à ce qu'il y ait des obligations qui changeraient pour les services.

11066            CONSEILLER ARPIN : Dans le modèle actuel ‑‑ j'y faisais référence plus tôt ‑‑ vous avez un grand volet qui comprend une mixité de services anglophones et francophones.

11067            Il y a sûrement un risque financier important pour les exploitants de services francophones de se retrouver uniquement avec ce projet‑là de services francophones.

11068            Il n'est pas impossible, effectivement, que les anglophones que vous rejoignez sur le territoire du Québec optent pour ne pas souscrire à l'ancien volet ou même au volet francophone.

11069            Et donc, est‑ce que vous avez mesuré cet impact‑là ?

11070            M. BUREAU : Monsieur le Vice‑Président, il ne s'agit pas de changer les bouquets existants ou les offres existantes.

11071            CONSEILLER ARPIN : Non.

11072            M. BUREAU : Il s'agit d'ajouter une offre additionnelle dans laquelle les francophones du Québec pourraient avoir accès, s'ils le désirent, à l'ensemble des services francophones.

11073            C'est simplement une modalité. C'est un bouquet de plus.

11074            Mais cela n'empêche pas les bouquets existants de demeurer tels qu'ils sont.

11075            Alors, donc, l'impact des non‑francophones, il n'y en aura pas parce qu'ils vont continuer à se procurer les bouquets qui existent dans lesquels il y a des services francophones, comme vous le mentionniez.

11076            MME ST‑LAURENT : Juste pour ajouter, évidemment, dans le mode numérique, actuellement, il y a des forfaits qui contiennent uniquement des services francophones ou uniquement des services anglophones.

11077            Alors, c'est un ajout d'un forfait qui serait uniquement francophone et qui contiendrait tous les services francophones sans aucune obligation pour le consommateur d'y souscrire.

11078            CONSEILLER ARPIN : Sauf que, si je prends le grand Télémax 1 de Vidéotron, pour parler des choses ‑‑

11079            MME ST‑LAURENT : Qu'on connaît.

11080            CONSEILLER ARPIN : ‑‑ qui sont connues à la fois pour les entreprises de distribution et les exploitants, le fameux Télémax 1, il comprend une mixité de services francophones et anglophones.

11081            Il risque de créer une opportunité pour Vidéotron de démanteler son Télémax 1.

11082            Je ne sais pas si vous avez regardé cette perspective‑là.

11083            MME ST‑LAURENT : Il y a déjà d'autres alternatives, par exemple, chez Vidéotron, où les abonnés peuvent choisir cinq ou 20 ou 30 services de leur choix ‑‑ évidemment, selon les règles d'assemblage.

11084            Donc, je crois que les télédistributeurs ont déjà évolué vers des offres qui sont plus larges que ce que la technologie analogique favorisait, des forfaits qui étaient quand même plus contraignants, je pense.

11085            CONSEILLER ARPIN : Maintenant, ce volet francophone‑là que vous préconisez risque quand même d'être populaire auprès d'une couche importante de la population québécoise.

11086            Qu'est‑ce qui arrive si le Conseil  prend le modèle que vous nous préconisez et que le Conseil dans, dans l'avenir, attribue des licences aux nouveaux services avec des conditions d'accès ?

11087            Qu'est‑ce qui arrive à ces nouveaux services‑là ?

11088            Ils se rattachent à ce volet francophone‑là ?

11089            Donc, c'est une nouvelle forme d'option négative que vous ‑‑

11090            M. BUREAU : Non, non, non.

11091            On ne tombera pas dans ce panneau‑là.

11092            Monsieur le Vice‑Président, s'il y a des nouveaux services qui obtiennent une licence du CRTC, ils seront offerts par les distributeurs parce qu'ils auront un accès garanti dans une multitude, probablement, de bouquets.

11093            Mais entre autres, ils feraient partie de ce bouquet compréhensif qui contiendrait tous les services de langue française.

11094            Mais ce n'est pas une question de ‑‑ ce n'est pas du tout une question de * negative option +.

11095            CONSEILLER ARPIN : D'accord.

11096            MME ST‑LAURENT : Permettez‑moi juste d'ajouter.

11097            Il y a un distributeur, Bell ExpressVu, qui dans sa façon de vendre les services ‑‑ par exemple, les services francophones ‑‑ met de l'avant où les abonnés doivent choisir trois de quatre forfaits en français.

11098            Alors, inévitablement, il y a toujours un des quatre forfaits qui est mis de côté par la promotion, la façon dont l'offre des forfaits est faite.

11099            Alors, je pense qu'offrir dans le marché francophone un forfait qui inclurait tous les services francophones pourrait donner un avantage additionnel dans le marché francophone, un accès possible.

11100            CONSEILLER ARPIN : Les droits d'accès que vous préconisez, dont vous nous avez parlé ce matin, est‑ce qu'ils s'appliquent en SD, en HD ou dans les deux ?

11101            Ça fait partie des discussions qu'on a eues avec certains distributeurs ou ‑‑

11102            M. BUREAU : On s'attend à ce qu'ils s'appliquent à tous.

11103            CONSEILLER ARPIN : À tous.

11104            Donc, que le choix de l'exploitant soit uniquement du numérique standard ou du HD ou les deux ‑‑ parce que présentement je crois comprendre que vos services francophones sont offerts à la fois dans les trois technologies.

11105            M. BUREAU : C'est ça.

11106            CONSEILLER ARPIN : Et comme on ne prévoit pas l'octroi de nouveaux services en analogique, les règles existantes ne sont pas appelées à changer.

11107            Mais en numérique standard et en HD, donc, ce que vous préconisez, c'est le maintien du droit d'accès dans les deux formats.

11108            M. BUREAU : Oui.

11109            MME ÉMOND : Si je peux me permettre, Monsieur le Vice‑Président, en fait, on n'a pas précisé dans notre mémoire notre pensée.

11110            On pourra peut‑être le faire en phase finale.

11111            Évidemment, l'idée, c'est qu'en évoluant peut‑être qu'un jour tout le monde sera en HD et la question ne se posera plus.

11112            L'idée c'est que peut‑être dans la phase de transition qu'il n'y ait pas un service qui perde son accès s'il y a encore un environnement analogique, par exemple, pour que tous les services, donc, restent avec les mêmes droits et restent offerts.

11113            CONSEILLER ARPIN : D'accord.

11114            Dans la mesure numéro 10 ‑‑ je prends votre document en annexe où vous avez mis les mesures que vous avez mis de l'avant.

11115            La mesure numéro 10, qu'est‑ce qui vous empêche de le faire présentement ?

11116            Premièrement, première question, est‑ce que vous préconisez que le Conseil émette des licences pour des blocs de programmation ou est‑ce que c'est un système où le Conseil serait appelé à vous octroyer des licences ?

11117            MME ÉMOND : En fait, ce qu'on pensait, c'est que la façon probablement la plus simple de permettre ‑‑ dans notre modèle, donc, de SVOD ‑‑ l'idée étant que les services tant de télé conventionnelle, spécialisés et payants canadiens puissent donc offrir une partie de leur programmation linéaire sur la plate‑forme vidéo sur demande.

11118            Donc, on se disait que le plus simple, probablement, ce serait d'avoir par condition de licence une autorisation un peu comme dans le HD où on peut moyennant une condition de licence avoir la version HD du service.

11119            Donc, au moyen d'une condition de licence. Alors, pas une licence séparée.

11120            Mais étant donné que ce serait rattaché avec le service linéaire, c'est la façon la plus simple.

11121            CONSEILLER ARPIN : Parce que, présentement, vous pourriez vous entendre avec les distributeurs pour offrir ce type de service‑là.

11122            Est‑ce que vous n'avez jamais essayé de négocier ce type de condition‑là ?

11123            MME ÉMOND : Bien, nous le faisons en ce moment pour le service ‑‑

11124            CONSEILLER ARPIN : De télévision payante.

11125            MME ÉMOND : ‑‑ de télévision payante.

11126            CONSEILLER ARPIN : Mais je parle avec les services de télévision spécialisée.

11127            MME ÉMOND : Je vais laisser Pierre Roy répondre à cette questions.

11128            M. ROY : Jusqu'à maintenant, on ne l'a pas fait.

11129            Et ce qu'on précise, c'est que ces services, ces blocs d'émissions en VSD par abonnement, devraient n'être accordés qu'à des * broadcasters + qui ont une programmation ‑‑ en provenance d'une programmation linéaire.

11130            Alors, c'est une grande distinction, là.

11131            Et donc, éventuellement, quand on pourra négocier ces droits‑là, on pourrait effectivement, les ayants droit, négocier les droits des ayants droit.

11132            On pourrait offrir des blocs de programmation en abonnement.

11133            CONSEILLER ARPIN : Ce qui signifie, si je vous comprends bien, que l'entreprise de distribution ‑‑ parce que monsieur Riley a décrit un peu plus tôt comment les droits se négociaient.  Ils se négociaient tous à la pièce.

11134            M. ROY : Oui.

11135            CONSEILLER ARPIN : Selon votre modèle, l'entreprise de distribution ne pourrait pas aller négocier avec vos distributeurs directement des droits d'utilisation de blocs de programmation ‑‑

11136            M. ROY : Durant la fenêtre de nos droits, on veut avoir des droits exclusifs et pour cette application.

11137            CONSEILLER ARPIN : Ce que vous dites, vous mettez une contrainte qui vous favoriserait, qui forcerait finalement votre distributeur à ne s'entendre qu'avec vous.

11138            M. ROY : Oui, André.

11139            M. BUREAU : Pour les émissions sur lesquelles on a des droits ‑‑

11140            CONSEILLER ARPIN : De diffusion linéaire.

11141            M. BUREAU : Absolument.

11142            CONSEILLER ARPIN : Oui.

11143            M. BUREAU : Il faudrait éventuellement probablement payer pour ces droits.  Alors...

11144            CONSEILLER ARPIN : Oui, oui.

11145            Mais vous ne pourriez pas être court‑circuité par l'EDR qui voudrait avoir aussi ces droit‑là et qui les négocierait en parallèle avec vous.

11146            Vous, vous négocieriez le droit pour la diffusion sur votre service, et lui, aurait négocié en parallèle le droit de reprise.

11147            M. ROY : Parce que, si ce droit‑là lui aurait été accordé, ça viendrait faire une dilution importante de la valeur de nos services, de notre écoute, de nos revenus et tout ça.

11148            Donc, ça affecterait d'une façon importante.

11149            Et on doit s'entendre avec les BDU parce que c'est eux qui ont la plate‑forme technologique qui permet cette chose‑là.

11150            Alors, ils ont donc un avantage technologique.

11151            Nous, notre avantage, c'est les droits que l'on a sur nos programmations.

11152            Et donc, on pense que cette négociation‑là serait mieux encadrée si ça ne leur était pas permis d'être fait.

11153            M. BUREAU : Et Monsieur le Vice‑Président, on parle ici de VSD par abonnement, hein.

11154            CONSEILLER ARPIN : Par abonnement.

11155            M. ROY : Bien, oui.

11156            M. BUREAU : Pas transactionnelle.

11157            M. ROY : Non.

11158            M. BUREAU : OK.

11159            Alors, donc, le court‑circuitage, si jamais les règles sont claires vis‑à‑vis les exploitants de vidéo sur demande, ils ne pourraient pas l'offrir par abonnement.

11160            Alors, on parle ici, nous autres, d'une mesure de vidéo sur demande par abonnement.

11161            CONSEILLER ARPIN : Cette semaine, on a entendu des représentations de Torstar concernant certains problèmes qu'ils vivent, et ils ont mentionné l'existence de TATV lors de leur comparution.

11162            Et ils nous ont soulevé des questions relativement aux règles d'exemption qui existent actuellement en regard de ce type de service‑là.

11163            Ils nous ont demandé de réaffirmer ou de renforcer certaines de ces règles‑là.

11164            Je ne sais pas si vous avez eu l'occasion de prendre connaissance de ce que Torstar a soumis ou si vous préférez commenter sur leur proposition dans la phase finale.

11165            MME ÉMOND : Monsieur le Vice‑Président, effectivement, on a eu l'occasion d'en prendre connaissance.

11166            Premièrement, je pense que pour répondre ‑‑ vous aviez une question à savoir si de notre côté, TATV, nous avions des ententes signées avec les distributeurs.

11167            On en a, et avec Cogeco et Vidéotron.

11168            Et pour le détail, je pourrais juste vous dire que, sur les principes en général, nous sommes d'accord. Surtout avec notre position sur l'accès.

11169            On trouvait ça intéressant d'entendre les propos de Torstar.

11170            Incidemment, on n'a pas vécu les mêmes choses que Torstar, ce qui a été décrit, dans le cas de TATV.

11171            Et pour le détail de leur proposition, nous vous reviendrons en phase ultérieure.

11172            CONSEILLER ARPIN : Monsieur le Président, c'était mes questions.

11173            THE CHAIRPERSON:  Okay.

11174            I note we have been into this for an hour and a half.

11175            Several of my other colleagues want to ask you questions.

11176            So let us take a 10‑minute break and we will continue.

11177            MR. BUREAU:  Thank you.

‑‑‑ Upon recessing at 1032 / Suspension à 1032

‑‑‑ Upon resuming at 1044 / Reprise à 1044

11178            THE CHAIRPERSON:  Okay, Rita, I believe it is your turn.

11179            COMMISSIONER CUGINI:  Thank you, Mr. Chairman.

11180            Welcome back.  I just have a couple of follow‑up questions.

11181            One of them is on your access model.

11182            As you know, the BDUs who have been before us have said all that the current access rules do currently is actually stifle innovation and creativity when it comes to the programming services.  They may meet the regulatory test and they will get licensed, and even in your model they may meet the regulatory test and get licensed, but then essentially their job stops there.  They don't do as much market research, they don't have to demonstrate market demand, they don't have to wrap it in a pretty bow that convinces us to carry it.

11183            How do you respond to those comments by the BDUs?  Nicely.

‑‑‑ Laughter / Rires

11184            MR. BUREAU:  It's easy.  I think that we have to look at the picture, the global picture.  They are coming before you explaining that new entrants, new services, should meet with them first, get some form of an understanding on whether the service is a good one or not.  If we pass this test, then we should come to the Commission, go through the entire process, as we suggest ‑‑ not the Category 2, the full process ‑‑ and get or not get a licence.  But if we get a licence with guaranteed access, then we go to them and we start again the negotiation with them.

11185            And they don't want that.  They don't like that.  They say there is no reason why they should have a guaranteed access, and we should be the ones that know the market.  We can talk in the name of the consumers and decide whether we will carry that service or not.

11186            I mean, it is a travesty of the overall process.  In fact, why do we need a Commission in the middle of that is a good question probably.  Should we not just go to them and ask whoever they are can we please be carried by your service?  What do you want to know and at what price is it okay with you?

11187            I think that at some point there is a limit, and I believe that in some cases we are pretty close to that limit.

11188            I think that we come to the Commission, we work very hard to be able to convince the Commission that what we are presenting will bring something different, something that will add to the Canadian broadcasting system.  The Commission is expert in those things.  They know the markets.  They know what is happening in the overall system.  They can ask all the questions they want.  They can ask us to do additional work to make sure that the project is fully analyzed before the Commission.  Finally, the Commission makes a decision and then we would have to renegotiate again all those terms with the distributors.

11189            I believe that this is a little bit too much.

11190            I suggest that in the future ‑‑ that's why we say Category 2, we should stop going in that direction, and we should make sure that when the Commission grants a licence that it is a meaningful decision, and that starting from there we should be carried.

11191            MR. RILEY:  May I add something?

11192            To answer specifically the question you said, the response would be, nicely, there is absolutely no evidence to support the contention that access rights stifle innovation or result in unmotivated programmers. That is the answer.

11193            The reason for that is, you know, there has been some characterization ‑‑ I think there is one characterization that the Canadian broadcasting system almost resembles East Germany before the fall of the war as if we maybe licensed one channel in let's say the children's genre and we said that's enough, we don't need any more.  It is genre exclusivity, so be it.  Then of course the programming service was so comfortable with its access, with its one exclusivity, that it said you know what, let's just buy one program and stick it on air and run it all day long because it is a monopoly and we are guaranteed.

11194            I mean, this doesn't represent the picture of the Canadian broadcasting system in any way whatsoever.

11195            First of all, with respect to genre exclusivity, it is almost unfortunate nomenclature because we don't really have genre exclusivity.  We have defined nature of services.  This has allowed a significant ‑‑ it still allows targeted services, but it has allowed a significant degree of overlap.

11196            So competition for program ‑‑ we have lost many a program to another service, taking a look at let's say Family Channel in the children's area, to other services because there is sufficient overlap in those defined targets that permits that.

11197            Second, most of these services are ad supported so the only way they can grow is by having ‑‑ they are motivated to have good programming and audiences in order to grow their revenues.

11198            Third, when you are renegotiating a deal with a distributor with respect to your service, if your service is not performing, you can imagine the position that's ‑‑ even if your service is performing, you can imagine the position.  The distributors are obviously motivated to how programming costs be as low as possible.  It's natural.

11199            So if you come in with a weak service, you just exacerbate the problem in the attempts to lower it.

11200            I would suggest this.  The other day I took the opportunity to look at Time Warner offering in New York and look at Rogers offering in Toronto in terms of ‑‑ I just looked at sort of the general kids area.

11201            Rogers offers the following service ‑‑ let's call it the general area of kids.  The definition of the genre is obviously a moving target, but here is what we have in Rogers Toronto:  we have YTV; we have Teletoon; we have Family Channel, which has launched a multiplex called Playhouse Disney; we have Treehouse; we have Teletoon Retro; we have Discovery Kids; we have BBC Kids; and something that I think is general Baby First TV.

11202            So I looked at Time Warner in New York City and it has Nickelodeon, a relationship with YTV; Cartoon Network, a similar programming as Teletoon; Disney Channel; Family Channel; Noggin, which for all intents and purposes we might say is comparable to Treehouse; Boomerang, which is an offshoot of Cartoon Network and Teletoon Retro, a similar service.

11203            They have Discovery Kids; we have Discovery Kids.  We have BBC Kids; they don't.

11204            And in the American market there are some other family oriented, but by and large most of those are offshoots of the giant media corporations, so Disney has a Toon Disney, Viacom has its Nicktoons and whatnot.

11205            So it's not as if somebody else from the market has come in and said hey, let's launch an animation service.  It's the big guys launching offshoots of their services.

11206            So I guess if you could say that the Canadian market stifles competition with this access rule, the mere existence, to get to the market, to have the consumer decide your fate, I guess here if that contention is true, that access rights do result in stifling of innovation and unmotivated programmers, I guess the same must be true of the United States because the offerings are comparable.

11207            M. HOULE : Si je peux me permettre, pour répondre aussi à votre question, dans le marché francophone, s'il était vrai que les services, une fois qu'ils ont obtenu l'accès, se reposaient sur leurs lauriers, on peut dire qu'au fur et à mesure ou s'accroîtrait la concurrence leur part de marché aurait tendance a baisser.

11208            Or, si on regarde dans le marche francophone, les 17 services analogiques spécialisés et payants qui existaient en 2000 avaient une part de marché de 17 pour cent.

11209            Ils s'accaparaient de 17 pour cent de l'écoute des francophones.

11210            En 2006, les mêmes 17 services avaient une part de marche de 38 pour cent.

11211            Alors, j'imagine que, s'ils ont plus que doublé leur part de marché dans un univers de plus en plus concurrentiel, c'est qu'ils ne se sont pas reposés sur leurs lauriers, mais qu'ils ont fait des efforts de marketing et de recherche pour adapter et répondre aux besoins des consommateurs.

11212            COMMISSIONER CUGINI:  Well, thank you very much for your response.

11213            Mr. Riley, in your section of the oral presentation today you said:

"We strongly recommend maintaining the concept of a defined nature of service."

11214            But you also said:

"... programming expenditure obligations specific to a given service."

11215            You know that CanWest and CTV were here yesterday and what they suggested is that we group CPE by ownership group and allow the ownership groups to then decide how best to spend the money, even though each licensee within that ownership group would still have the obligation of the CPE, but then that money could be spent on other services within the ownership group.

11216            I just wanted to ask you if the statement "expenditure obligations specific to a given service" rejects the CanWest/CTV proposal or if you support it?

11217            MR. RILEY:  Well, first of all, that statement was intended to address the issue of the so‑called programming genre buckets or whatnot.  So that is what that means.

11218            COMMISSIONER CUGINI:  Yes.

11219            MR. RILEY:  So that's number one.

11220            Number two, with respect to whether it rejects that, I guess not necessarily so because ‑‑ although without having had the opportunity to really think about this, is that if, for example, we decided, the broadcasting system said, you know what, here is an area that is not addressed and there is a shortage here, this is a good idea, someone wants to launch a channel, a group does, and then says but wait a minute, we also have a sports channel, and sports channel rights are going through the roof and we really need to win these NHL rights.  Let's suck up all the revenue from this new channel we launched, that might be any given kids Channel, whatnot.

11221            If the proposal is that as long as it is spent, let us allocate it amongst the channels, I would tend to think you might end up with the circumstance that the revenue will be drawn to the channel that most needs to compete in the highest profile, most viciously contested area.

11222            So in my example if you had that sports channel, presumably all resources would go ‑‑ would be ‑‑ there is a danger that they get pulled there to make sure you win those NHL rights, to the detriment of, you know, whatever other channels you have in the stable.

11223            So put it this way, I just say that might be ‑‑ if that's what is contemplated, I would suggest that might be a risk and it might defeat, if you follow our model, the intention that, you know what, here is a new service, here is some diversity.  You have to fund it.

11224            Getting a channel ‑‑ plus I guess you could also end up in a situation where someone goes out and gets a whole bunch of channels, tries to arrange arrangements for the deals, then use all that revenue to support another channel.

11225            So put it this way:  I don't think it is compatible essentially with what we think is the appropriate way to add full diversity.

11226            But that is just off the cuff.

11227            COMMISSIONER CUGINI:  Basic service.

11228            You are not alone in your proposal for what should be mandated on basic.  Others have said and then allow the BDUs to add whatever they want to the basic service.

11229            Is that essentially your proposal as well?

11230            MR. BUREAU:  Well, as long as they will have as a separate offer something that their subscribers will have to buy, the small basic service.

11231            COMMISSIONER CUGINI:  Right.

11232            MR. BUREAU:  Then if they want to offer, in addition to that, an extended one, that's fine with us.

11233            COMMISSIONER CUGINI:  I will ask you the same question I asked Allarco:  Should they be able to put The Movie Network on basic if they so choose?

‑‑‑ Laughter / Rires

11234            MR. RILEY:  Yes.  In fact, that should be a mandatory order coming out of this hearing.  If you only do one thing at this hearing, that should be it.  For good measure, maybe Family Channel as well, too.

11235            I'm kidding of course, sort of.

11236            I would say this:  Even if The Movie Network had the opportunity to be carried on basic, the reality is, you know, pay movie service is kind of a special circumstance.  First of all, the nature and the window and the timing, the way it has evolved, it is carved out that there be almost this predecessor window to others.  So that would be problematic.

11237            It is a premium channel that is advertising free so you would never be able to monetize, you know, the benefits of being there.  Your cost structure probably wouldn't allow you to go onto a basic without the price of that escalating.

11238            Furthermore, pay has traditionally ‑‑ pay movies have traditionally had, in terms of its content, content that ‑‑ well now I guess maybe it is rendered somewhat moot by parental controls or whatnot, but it is uncut programming.

11239            So I think even if that right existed, for all practical purposes the likelihood of that happening is just this side of zero.

11240            COMMISSIONER CUGINI:  Thank you very much.

11241            Thank you, Mr. Chairman.

11242            THE CHAIRPERSON:  Michel?

11243            CONSEILLER MORIN : Oui. Bonjour.

11244            M. BUREAU : Bonjour.

11245            CONSEILLER MORIN : Je voudrais juste être clair sur la règle de prépondérance.

11246            Vous écrivez : * Cette règle de prépondérance, 50 pour cent plus 1, devrait s'appliquer uniquement aux services optionnels à l'abonné. +

11247            Et vous avez parlé tout à l'heure de double prépondérance.

11248            Alors, est‑ce que...

11249            M. BUREAU : Je vais demander à madame Émond de vous répondre, Monsieur.

11250            MME ÉMOND : Alors, monsieur le Conseiller, ce qu'on dit, c'est que le calcul de la prépondérance doit être fait au niveau des volets discrétionnaires.

11251            C'est‑à‑dire qu'on exclut dans le calcul le service de base minimal dont on a parlé.

11252            Alors, c'est * over and above +.

11253            Et au sujet de la double prépondérance, on dit que le test doit être rencontré, donc, au niveau de ce qu'offrent les entreprises de distribution aux abonnés.

11254            Donc, dans cette offre‑là, il faut qu'il y ait un ration de 50 pour cent plus 1 de services canadiens, et aussi dans ce que les abonnés peuvent avoir comme services, le volet qu'eux vont prendre, vont choisir.

11255            CONSEILLER MORIN : Donc, les consommateurs, d'une certaine façon, c'est une restriction sur les choix aux consommateurs.

11256            MME ÉMOND : Bien, c'est‑à‑dire qu'il y a une certaine ‑‑ ils choisissent quand même à l'intérieur de tous les bouquets.

11257            Ils peuvent choisir parmi une panoplie de services.

11258            Et effectivement, il y a quand même dans le système canadien de radiodiffusion, en vertu de la politique canadienne, une question de priorité aux services canadiens.

11259            COMMISSAIRE MORIN:  Mais, la prépondérance, est‑ce qu'on ne pourrait pas la voir à l'entrée du système, plutôt qu'au niveau des choix des consommateurs, du choix qui est offert aux consommateurs ?

11260            M. BUREAU : Vous voulez parler de... au niveau de l'offre ?

11261            CONSEILLER MORIN : Oui, au niveau de l'offre.

11262            M. BUREAU : Oui.

11263            Alors, nous autres, on croit que, s'il y a vraiment une question de priorité aux services canadiens, elle doit se traduire par la priorité ‑‑ la prépondérance, pardon ‑‑ 50 pour cent plus 1, au niveau de ce qui est acheté, de ce à quoi l'abonné souscrit, et aussi au niveau de l'offre, de façon à ce qu'on n'ait pas cette situation qui serait vraiment étrange à l'effet qu'on pourrait avoir 300 canaux américains dans l'offre et, admettons, 100 canaux canadiens de l'autre côté et qu'on donne l'impression à l'abonné qu'il y a une ‑‑ franchement, il devrait aller là où il y en a le plus.

11264            Il y a une question de perception tout autant qu'une question de direction de la part du gouvernement, de la part de la loi, pour nous dire : On devrait s'assurer ‑‑ on s'attend à ce que le consommateur reçoive chez lui une prépondérance de services canadiens.

11265            Et c'est vrai que ça peut ressembler à une forme de restriction. C'est vrai.

11266            Mais d'un autre côté, aujourd'hui, quand les gens peuvent acheter 50 canaux de télévision, s'ils sont obligés d'en choisir 26 canadiens et puis 24 étrangers, je ne pense pas que personne puisse se sentir lésé à ce point‑là.

11267            Il faut être réaliste. À un moment donné, il y a une limite.

11268            Je ne sais pas combien de signaux on peut vouloir examiner.

11269            Nous autres, on est un peu comme des malades dans ce domaine‑là. On veut tous les voir.

11270            Mais le citoyen, le consommateur normal, probablement que, pour lui, là, déjà, s'il prend le paquet de 30 ou de 40 ou de 50 canaux, il ne trouvera pas qu'il manque de choix.

11271            CONSEILLER MORIN : Mais Monsieur Bureau, vous êtes un ancien président du CRTC.

11272            M. BUREAU : Ah, boy !

‑‑‑ Laughter / Rires

11273            M. BUREAU : Oui, Monsieur le Conseiller.

11274            CONSEILLER MORIN : Je me demande si, après 40 ans de règlements, de protection, ce ne serait pas le temps de laisser le choix aux consommateurs, moyennant qu'à l'entrée il y ait une prépondérance parce que, selon la loi, on doit encourager le système canadien, bonifier le système canadien.

11275            Mais est‑ce que ça veut dire qu'on limite les choix des consommateurs canadiens ?

11276            M. BUREAU : Je pense qu'il y a plusieurs aspects à votre question qui n'ont rien à voir avec le fait que j'étais au Conseil avant.

11277            Évidemment, j'ai appris beaucoup pendant cette période‑là. Je suis un peu imbibé de certains principes, objectifs, et donc je ne peux pas en faire abstraction quand je vous répond, Monsieur le Conseiller.

11278            Mais d'un autre côté, je pense que, si on veut maintenir, assurer, l'évolution de notre système canadien de télévision, il faut faire attention.

11279            À un moment donné, quand on voit qu'il se développe des services nouveaux chez nos voisins du Sud, par exemple, si on se dépêche d'accepter, d'autoriser, des services étrangers pour ajouter dans la liste des distributeurs, on empêche peut‑être le développement d'un service canadien qui soit dans le même type que ce service étranger.

11280            C'est un aspect de l'affaire.

11281            Mais il faut garder en tête qu'on a réussi à développer contre toute attente des services spécialisés canadiens de valeur que les gens aiment, apprécient, et qui sont d'aussi bonne qualité que les services étrangers du même type.

11282            Alors, dans un premier temps, je dirais qu'il faut toujours avoir en tête qu'il faut y aller mollo du côté des services étrangers si on veut continuer à favoriser l'éclosion de nouveaux services canadiens.

11283            Deuxièmement, je pense qu'il faut être réaliste, que le nombre de services offerts est déjà abondant, très abondant.

11284            Et troisièmement, je pense qu'il faut essayer de comprendre l'objectif de la loi, qui est de dire que le service canadien devrait être prioritairement canadien.

11285            Ils n'ont pas dit de fermer la porte. Ils n'ont pas dit d'empêcher des choses. Mais je pense que c'est un des outils que le Conseil a utilisés jusqu'à présent et qu'essayer d'encourager la priorité aux services canadiens, que ça devrait continuer.

11286            CONSEILLER MORIN : Mais je reviens sur ça.

11287            Au niveau du consommateur ‑‑ on reviendra tout à l'heure au niveau de l'offre. Mais au niveau du consommateur, par exemple, Rogers nous a dit cette semaine que dans une ville aussi multiculturelle que celle de Toronto, 75 pour cent des canaux qui étaient offerts et qui sont choisis par les consommateurs sont des canaux canadiens.

11288            Alors, est‑ce qu'on a besoin de protection dans la mesure où on parle de canaux canadiens qui ont acquis leur lettre de créance, qui ont développé leurs créneaux, qui ont une étonnante variété qui a été saluée par l'Association des radiodiffuseurs comme dans pas un pays au monde.

11289            M. BUREAU : C'est vrai.

11290            CONSEILLER MORIN : Donc, alors, est‑ce que ce n'est pas le temps de dire : * Les consommateurs, vous avez le choix. On vous offre. Vous avez le choix. +

11291            M. BUREAU : Écoutez, ça marche. Ça marche.

11292            Et à l'heure actuelle, les initiatives canadiennes sont nombreuses, plus nombreuses que dans beaucoup d'autres pays au monde.

11293            On est probablement stimulé par le fait que nos voisins américains lancent des nouveaux services tous les jours et puis qu'il y en a chez nous qui disent : * Moi aussi, je vais faire ça. +

11294            Et donc, ça marche. On a réussi à créer ça.

11295            Si on n'avait plus de règles au niveau de l'entrée, comme vous le ‑‑

11296            CONSEILLER MORIN : Mais ce n'est pas ça que j'ai dit. Au niveau du choix aux consommateurs.

11297            M. BUREAU : Oui. Au niveau du choix aux consommateurs.

11298            CONSEILLER MORIN : C'est à ce niveau‑là, moi, que ‑‑ la prépondérance au niveau du choix des consommateurs, c'est qu'on offre aux consommateurs au moins 50 plus 1, hein ‑‑

11299            M. BUREAU : Oui.

11300            CONSEILLER MORIN : ‑‑ des canaux qui sont disponibles par l'entreprise de distribution.

11301            Est‑ce qu'on a besoins d'une telle règle de prépondérance au niveau du consommateur avec l'offre qui est déjà là, de tous les canaux canadiens ?

11302            M. BUREAU : Moi, il me semble qu'une règle qui a marché devrait continuer parce qu'à l'heure actuelle je ne pense pas qu'il y ait un Canadien qui trouve qu'il manque de choix.

11303            M. RILEY : Est‑ce que je peux rajouter quelque chose ‑‑

11304            CONSEILLER MORIN : Bien sûr.

11305            M. RILEY : ‑‑ en anglais, s'il vous plaît ?

11306            CONSEILLER MORIN : Oui, oui.  Allez‑y.

11307            MR. RILEY:  It will be faster.

11308            First of all, it is not just the mere offering of the services that is good enough.

11309            For example, if you were to say, begin with the premises:  "Look, fine.  We put you on the shelf.  But after that, can't we allow the consumer to just do what they want."

11310            Being on the shelf, as anyone that has sold a product knows, is not good enough.

11311            Packages of services that are not Canadian could be developed, and those could be marketed.

11312            One part of the equation is the mere right of existence.

11313            The next part of the equation is how it is marketed and how it is packaged.

11314            So, just being there is not good enough, number one.

11315            Number two is it seems a little, to me, like saying:  "You know, your whole exercise regime, your eating right, your training, has produced a fantastic, superior, healthy person, an athlete.  So isn't it time that we can stop eating properly, exercising and doing our training?"

11316            I mean, the fact of the matter is this system works because of those rules, and despite any characterization that these rules are overly burdensome.

11317            We accept that their finetuning in terms of how things are implemented is always a good thing to achieve, but any notion that this is some kind of clamp‑down system that doesn't allow choice is belied by the facts.

11318            The facts do not show that at all in any way whatsoever.

11319            There would be no reason for anyone, any system, that has achieved health through a certain manner of doing things to suddenly stop doing those things because it thinks that it has achieved its goal.

11320            You would lose all those benefits.

11321            M. BUREAU : I think it is also an encouragement for the distributors to make sure that they add the array of Canadian services if they want to satisfy their consumer as they say they want to.

11322            CONSEILLER MORIN : Mais quand je regarde ‑‑

11323            M. BUREAU : Ah, excusez‑moi de vous avoir répondu en anglais.

11324            CONSEILLER MORIN : Quand je regarde le portrait : CTV doit posséder à peu près 32 canaux, si j'ai bonne mémoire; Canwest, au moins une vingtaine; vous autres, vous êtes près d'une vingtaine; Corus, à peu près une dizaine.

11325            Et vous avez besoin d'être protégés comme ça au niveau ‑‑

11326            M. BUREAU : Non, non.

11327            Je pense que les règles qui ont été établies, d'abord, ne partent pas d'une décision unilatérale.

11328            Elles partent d'un consensus législatif qui a amené la création d'un système de radiodiffusion.

11329            CONSEILLER MORIN : Je vous ferai remarquer, Monsieur Bureau, et vous serai d'accord avec moi, que la Loi canadienne sur la radiodiffusion ne parle pas du consommateur.

11330            M. BUREAU : Ça, vous avez probablement raison. Je ne nie pas ça.

11331            Comme elle ne parle pas non plus des valeurs du marché et de ces choses‑là.

11332            Et on est assez intelligent pour comprendre que l'évolution des choses fait qu'il y a des éléments dont il faut tenir compte et dont on a peut‑être pas tenu compte dans une rédaction qui date déjà de X années.

11333            Mais je reviens au principe de dire:  * Il y a dans la loi suffisamment d'indications pour nous montrer qu'on doit utiliser les talents canadiens et qu'on doit s'assurer de contributions canadiennes.

11334            C'est l'obsession de cette loi‑là, et ça a marché.

11335            Ça nous a donné un service que ‑‑ je ne sais pas si vous avez eu l'occasion de rencontrer des visiteurs d'autres organismes de réglementation à travers le monde qui généralement viennent visiter le CRTC ‑‑ parce que c'est un modèle. Parce que notre système est devenu un modèle.

11336            Et effectivement, ils viennent voir comment ça fonctionne, comment on a réussi, nous, à côté des Américains, à se bâtir un système qui fait qu'il y a suffisamment d'espace pour nos talents créateurs qui fait que ça devient de la qualité, de la programmation de qualité.

11337            Mais si à un moment donné on les inonde, on laisse nos services être inondés complètement, c'est dangereux.

11338            CONSEILLER MORIN : Qu'est‑ce qui vous dit que les consommateurs vont choisir ces services‑là ?

11339            M. BUREAU : Moi, ce que je pense, c'est que, les consommateurs, à l'heure actuelle, on sait ce qu'ils choisissent en vertu des règles existantes. Et puis ça va bien. Ils ont l'air heureux.

11340            Je ne sais pas pourquoi ‑‑

11341            CONSEILLER MORIN : Est‑ce que l'ultime test ne serait pas de leur faire choisir, leur donner le choix à 100 pour cent ?

11342            M. BUREAU : C'est comme dire que, John Riley, avec ses deux yeux, il voit bien. Pourquoi est‑ce qu'on ne lui en mettrait pas un troisième ?

‑‑‑ Laughter / Rires

11343            M. BUREAU : Il verrait peut‑être plus.

11344            Je ne vois pas l'utilité. En toute humilité, Monsieur le Conseiller, je pense que ‑‑ je ne vois pas l'utilité.

11345            Je vois qu'il y a quelque chose qui fonctionne et puis je...

11346            Je ne sais pas si mes collègues ont des vues différentes. Peut‑être que mon * boss + a des vues différentes.

‑‑‑ Laughter / Rires

11347            THE CHAIRPERSON:  I think we have exhausted that particular topic.  Let us go on.

11348            CONSEILLER MORIN : Alors, maintenant, au niveau de la publicité ‑‑ pas de la publicité, pardon ‑‑ des tarifs d'abonnement.

11349            Vous avez parlé d'une situation où, au Québec, s'il y avait des tarifs d'abonnement, ça pourrait nuire à votre marché.

11350            On sait qu'au Québec, de toutes façons, c'est un joueur dominant qui en profiterait.

11351            D'autre part, ce joueur dominant n'est pas nécessairement en faveur des tarifs d'abonnement comme tels. Il préfère une formule où on négocierait le tarif d'abonnement.

11352            Mais évidemment, quand vous êtes seul, c'est difficile ‑‑ on est bien positionné pour le faire.

11353            Et vous savez ‑‑ et je ne vous apprendrez pas ça, à vous ‑‑ que le CRTC a dans son histoire traité le marché québécois comme un marché distinct.

11354            Évidemment, quand on parle des tarifs d'abonnement, dans le Canada anglais, ils n'ont pas, eux, 20 canaux spécialisés. Ils en ont 80 qui jouent des coudes contre les télédiffuseurs en direct.

11355            Ils ont toute la concurrence américaine.

11356            Bref, les conditions du côté anglophone sont bien différentes des conditions du côté francophone.

11357            Ma question est simplement celle‑ci : *?Est‑ce qu'il y aurait un sens à ne pas accorder de tarif de distribution au Québec si, d'aventure, évidemment, le Conseil décidait, compte tenu de la situation différente du marché québécois?

11358            Et je n'ai pas énuméré, sans doute, toutes les raisons, mais je vous en donne quelques‑unes.

11359            M. BUREAU : Le pire, c'est que je pourrais en ajouter.

11360            Mais je pense que, effectivement, le Conseil devrait être préoccupé de regarder les impacts et les besoins tels qu'ils existent dans les différents marchés, que ce soit le marché de langue anglaise ou le marché de langue française.

11361            Et vous avez des points de vue là‑dessus qui sont intéressants.

11362            Je pense que le Conseil doit surtout essayer de s'assurer que c'est vraiment une décision ‑‑ en supposant que vous accordiez des redevances ‑‑ qui va vraiment être dans le sens de fournir au système un nouvel essor pour pouvoir continuer à se développer.

11363            Est‑ce qu'il y aura des différences dans les conditions qui pourraient être imposées s'il y avait des redevances qui étaient accordées ?

11364            Est‑ce qu'il y aurait des conditions qui seraient relatives, justement, aux éléments différents du marché ?

11365            C'est possible.

11366            Est‑ce qu'il y aurait des conditions qui devraient être relatives aux situations où on a des entreprises intégrées et où effectivement ce n'est pas tout à fait la même chose que de négocier avec des entreprise ‑‑ pas des entreprises, mais des entités qui sont à * arm's length + ?

11367            Et il y peut‑être rien qu'une façon de le faire. Ce peut peut‑être être rien que d'avoir un tarif qui soit vraiment réglementé par le Conseil pour éviter qu'il y ait une espèce de possible conflit d'intérêt dans la discussion des négociations quand on a des entreprises intégrées.

11368            Mais de toutes façons, je pense que ce n'est pas une mauvaise idée que de regarder quelles pourraient être les conditions qui pourraient être différentes d'un marché à l'autre.

11369            Ça pourrait peut‑être aller même jusqu'à dire que, dans un marché, il y en aura et puis, dans l'autre marché, il n'y en aura pas.

11370            CONSEILLER MORIN : Hier, j'ai introduit la notion au niveau de l'ensemble de l'industrie des télédiffuseurs en direct que, si d'aventure le Conseil allait de l'avant avec l'octroi de tarifs d'abonnement ou de redevances, compte tenu de la conjoncture qui évolue extrêmement rapidement et puis qu'on ne sait pas ce qui va arriver dans trois ans ou dans deux ans, est‑ce que pour vous cela aurait un sens de ne pas geler ces redevances pour l'éternité parce que le modèle économique a été construit et le signal était libre et le Canada, s'il devait faire ça ‑‑ hier monsieur Asper nous a confirmé effectivement qu'il n'y aurait aucun endroit au monde où on aurait pour les télédiffuseurs, à la fois l'accès et la redevance.

11371            Alors, on s'engage dans un sentier tout à fait nouveau. L'avis du Conseil était de déréglementer. Enfin, d'ouvrir un peu le processus.

11372            Et là, on arrive avec de nouvelles règles pour les redevances.

11373            Alors, est‑ce que pour vous les redevances devraient être pour une période de sept ans ?

11374            Vous connaissez très bien l'industrie. Comment vous voyez ça ?

11375            Est‑ce qu'il y aurait des avantages à ce moment‑ci à considérer ça sur le plan un peu plus temporaire qu'une période de trois ans, pardon ?

11376            M. BUREAU : Il y a beaucoup de lois qui ont des * sunset clause +, qui ont des échéances et qui exigent que l'on revoit ces dispositions‑là pour voir si elles sont encore nécessaires, particulièrement dans les cas où on essaie de régler un problème qui vient d'arriver et puis qu'on ne sait pas exactement si c'est un problème permanent ou si c'est un problème temporaire.

11377            Alors, il y a ce mécanisme qui permet au bout de deux ans, trois ans, quatre ans, de revoir les dispositions pour voir si elles sont encore appropriées ou pas.

11378            Et le Conseil peut utiliser ça et peut considérer quelque chose comme ça. S'il n'est pas convaincu qu'il s'agit d'une situation permanente et définitive, il pourrait peut être considérer quelque chose comme ça.

11379            CONSEILLER MORIN : Je remarque que vous faites front commun avec Radio‑Canada pour l'établissement d'un service de base restreint entièrement canadien.

11380            Depuis le début de la semaine ‑‑ enfin, depuis lundi, la première journée d'audience ‑‑ j'ai introduit un modèle.

11381            Ce n'était pas la décision du Conseil, mais je l'ai fait par moi‑même et en mon nom. Peut‑être éventuellement que je le déposerai.

11382            Un modèle où le service de base, au lieu d'être restreint comme vous le proposez, minimal ‑‑ parce qu'on le sait et les différentes entreprises de distribution sont venues nous le dire ici, on sait que peu de clients, finalement, prennent le service de base, même au prix actuel, qui est déjà peut‑être plus élevé dans bien des cas qu'il ne le serait avec votre service de base restreint.

11383            Encore là, les consommateurs choisissent, et ils choisissent plutôt des assemblages qui sont plus importants que le service de base.

11384            Alors, évidemment, Radio‑Canada, pour eux, pourvu que leur service est sur le service de base, c'est bien parce que ça respecte la loi, et cetera, de Radio‑Canada et du CRTC et évidemment la Loi canadienne de la radiodiffusion.

11385            Quand vous proposez l'accès d'une façon générale au service canadien, c'est une chose.

11386            Mais l'accès au service de base, ça en est une autre.

11387            Et vous avez des moyens, vous, avec CTV, avec Corus, avec Canwest ‑‑ vous pouvez offrir beaucoup de services spécialisés, ce qui n'est pas toujours le cas des petits.

11388            Et mon système, enfin, d'après certains témoignages qui sont venus ici ‑‑ vous avez parlé de Pelmorex tout à l'heure, mais il y a aussi The Score qui est venu ‑‑ pour dire : * Bien, nous, on aimerait bien votre système de points parce qu'on n'est pas sûr que, si on donne les clés de la maison aux entreprises de distribution, on sera sur le service de base, alors que là, bien, dans ces cas, on y est ou on y est pas.

11389            Alors, le système de points que j'ai envisagé, c'était justement de reconnaître les points pour lesquels vous, comme ancien président, vous avez travaillé au CRTC : le contenu canadien, la programmation canadienne, moins le coût au consommateur du tarif qui est celui du CRTC, qui actuellement, évidemment, les tarifs de gros sont déréglementés, mais le tarif officiel du CRTC.

11390            Est‑ce que ce système‑là, même si certains de vos services n'y seraient pas ‑‑ et je regarde dans la liste ici que j'ai, et effectivement vous avez des scores très bas en contenu canadien et en programmation canadienne.

11391            Quand je regarde certains de vos canaux au Québec ‑‑ je l'avais ici ‑‑ Historia...

11392            Historia, je pense que c'est dans 40; VRAK, bien, c'est 35.

11393            Alors que, moi, je parle d'un chiffre qui, pour le Québec, pourrait être de 80, suivant cette équation‑là.

11394            Alors, est‑ce que ce ne serait pas bon pour le système canadien, qui met de l'avant le contenu canadien, qui met de l'avant la programmation canadienne ‑‑ je ne vous dis pas d'avoir un système exactement comme celui que je propose et puis, si je le propose, il sera déposé et puis vous verrez comment ça fonctionne et puis on pourra l'améliorer.

11395            Mais est‑ce que ce ne serait pas naturel d'avoir quelque chose qui dit à toute entreprise, la vôtre ou les plus petits:  * Si vous avez du contenu canadien, si vous avez de la programmation canadienne et puis vous ne coûtez pas trop cher, bien, vous avez bien des chances de vous retrouver sur le service de base. + ?

11396            Et ça, bien, on en aurait probablement un peu plus que vous proposez avec votre service restreint, mais les tests que j'ai faits montrent que, dans une ville comme Toronto, avec un seuil de 100, il n'y en aurait pas plus sur le service de base.

11397            Et ce serait toujours au Conseil de décider si on monte ou on descend la barre.

11398            M. BUREAU : Monsieur le Conseiller, la première des choses, c'est que j'espère que tout le monde a compris que, dans le service de base restreint, on n'y sera pas, nous autres.

11399            Alors, on ne demande pas, on ne propose pas quelque chose au Conseil pour essayer de se trouver une place plus favorable.

11400            On ne sera pas là parce qu'on n'a pas de télévision conventionnelle et puis on n'a pas encore de service pour le 9(1)h) et puis toutes ces choses‑là. Bon.

11401            Deuxièmement, vous avez dit ‑‑ moi, je vous ai entendu dire au cours des deux semaines que vous alliez déposer un document expliquant votre modèle, et je pense que, en toute honnêteté, j'aimerais bien le voir par écrit pour pouvoir le commenter de façon honnête, de façon complète, de façon juste.

11402            Je vous avoue que j'ai eu l'impression de le comprendre d'une façon, et puis une autre fois je l'ai compris d'une autre façon. Je ne veux pas me tromper, et on est encore en train d'en discuter pour voir qui a raison dans l'interprétation de ce modèle‑là.

11403            Si on pouvait l'avoir par écrit, si effectivement vous le déposez, si jamais le président nous donne le droit d'utiliser une demi‑page pour y répondre dans des notes, on va le faire. On va vous répondre à ce moment‑là.

11404            CONSEILLER MORIN : C'était simplement que, au niveau des considérations générales, parce que les trois points sur lesquels reposent le système, c'est le contenu canadien, la programmation canadienne et le prix au consommateur.

11405            C'est des variables de base.

11406            M. BUREAU : Oui. Ça, ce bout‑là, je l'ai compris.

11407            CONSEILLER MORIN : Non, non. Mais les équations peuvent être refaites et les pondérations peuvent être différentes.

11408            M. BUREAU : Oui, oui. Absolument. Si vous me permettez d'en prendre connaissance de façon précise, parce qu'à un moment donné vous avez ajouté un test de popularité.

11409            Vous avez dit : * On pourrait peut‑être ajouter un test de popularité.

11410            Est‑ce que je me trompe ?

11411            En tous cas, moi, j'ai fait le saut. Mais, en tous cas.

11412            Je voudrais être bien sûr qu'on sache exactement quel est le modèle pour pouvoir le commenter de façon honnête.

11413            CONSEILLER MORIN : Ce que j'ai dit c'est que peut‑être qu'il y a des canaux qui sont extrêmement populaires et qui ne passeraient pas le test avec ça.

11414            M. BUREAU : Ah, c'est possible.

11415            CONSEILLER MORIN : Comme RDS, qui, parce qu'il coûte trop cher, ne serait jamais sur le service de base.

11416            Merci, Monsieur le Président.

11417            THE CHAIRPERSON:  Thank you.

11418            M. BUREAU : Merci, Monsieur Morin.

11419            THE CHAIRPERSON:  A fascinating discussion we have had with you that raised all sorts of issues.  We will just revisit a couple of them so I understand correctly.

11420            First of all on preponderance, you are suggesting a double preponderance, but it is really a triple preponderance because the basic package is not part of the preponderance.

11421            So first of all, it has to be a basic package and then all the additional services.  Why?  You are one of the few interveners who do not count the basic package as part of the preponderance.

11422            MS ÉMOND:  It is actually an evolution of our model because when we initially submitted, we thought that in our view to have a meaningful presence of Canadian services in the system, we were actually questioning whether we shouldn't have a higher rate than 50‑plus‑one.  So we were suggesting going higher to 66.

11423            THE CHAIRPERSON:  Yes.

11424            MS ÉMOND:  So instead, we have revisited and we thought let's have the basic.  And then what's important is in those services where there is no full liberty of packaging, we just thought then it is 50.

11425            So that is why we have evolved.

11426            THE CHAIRPERSON:  Okay.

11427            Second, in your evolved model where in future everybody basically has guaranteed access and we have annual or biannual hearings to see whether somebody ‑‑ the Category 2s who are existing right now, you said they would be grandfathered.

11428            That I understand to be those who were actually being carried right now would continue to be carried on that basis according to whatever obligations they have right now.  Those who are not carried and who don't manage to get carried by the expiry of their licence date will basically fade away.

11429            And those are being carried right now at Cat 2s presumably have the option of trying to become a Cat 1, for lack of a better term, at one of these annual hearings that we have.  But of course that would mean increased obligation in terms of content and expenditure.

11430            Is that the model that ‑‑

11431            MR. BUREAU:  Yes, yes.  That is what we mean.

11432            THE CHAIRPERSON:  Now, you spoke earlier, Mr. Bureau, about impression and appearances, et cetera.  This whole scheme is very neat, very orderly.  We have a world where everybody at the end of the day, once we are through the transition period, everybody has guaranteed access; some of them mandatory access, the others at least guaranteed access and then consumers choose.

11433            That has really a bit of an air of going backwards, the future of yesterday, because suddenly there is no more choice.  There is no more creativity.  We become the gatekeepers.  We, the CRTC, each year hold a hearing and say:  Are you offering a service that Canadians should want or may want, et cetera?

11434            Why are we doing this and how can we justify that we are not becoming what we have terribly tried to avoid but it certainly looks like we are becoming the keepers of taste; what can come on to the system or not.

11435            We are basically saying this is a closed system.  The only way you can come up is come here and get a licence from us which will give you guaranteed access, maybe even mandatory access, but that is the only way you can come in, notwithstanding we are having a 5,000 channel universe or something like that, unlimited capacity.  Boom, we set ourselves up as gatekeepers.

11436            How do I deal with that impression?

11437            I know that's not what you want to create, but that is really the way it is going to be perceived and characterized.

11438            MR. BUREAU:  Maybe we were not clear enough in our presentation.

11439            We are not suggesting that the existing services would have to come back before the Commission every year.  We are saying for new services, we suggest that maybe instead of letting the door open and everybody could come in at their leisure and get involved into a process of licensing as we propose, that you could say once a year or twice a year, or whatever you feel it is appropriate, we will have a hearing to listen to the new applicants coming in with new ideas.

11440            I believe this is your role, being the gatekeeper.  We may disagree on that.

11441            I think that I prefer having the CRTC as a gatekeeper than others.

11442            THE CHAIRPERSON:  Yes, but our Cat 2, let's be honest right now ‑‑

11443            MR. BUREAU:  Yes.

11444            THE CHAIRPERSON:  ‑‑ is relatively a paper process.

11445            MR. BUREAU:  I know.

11446            THE CHAIRPERSON:  You get it.  Then it is up to you to sell yourself to the BDUs, whether they can carry you or not.  You are completely closing that option.

11447            MR. BUREAU:  Of course, because it doesn't work.

11448            I'm sorry, we should be clear.  We have supported this approach.  We have participated.  We have licences of Category 2, so we are not saying it is a total failure.  We are looking at the future and we are saying look at the volume of work that has been processed by your staff to come out with those hundreds of decisions of people that have now a licence but they can't get access and they can't get to be carried by any cable system or any distributor.

11449            So we say after those years, we believe that it would be appropriate to probably drop that form of access to the Commission and that form of ‑‑ because it doesn't work.  Only 5 per cent have been able to be carried.

11450            So we say it seems to us that it's not the appropriate way to ensure that there will be real new ideas coming up.  So we say why not try and establish a new way of licensing where the focus will be on the question of what sort of diversity do you bring to the system?

11451            THE CHAIRPERSON:  I understand your proposal.  I'm just putting myself into ‑‑ okay, I accepted the André Bureau proposal.  You are here a year later, 25 applications ‑‑

11452            MR. BUREAU:  Yes.

11453            THE CHAIRPERSON:  ‑‑ I'm looking at them, so one diversity.  Does this add to diversity or not?

11454            MR. BUREAU:  Plus Canadian ‑‑

11455            THE CHAIRPERSON:  That, by the way, is not exactly an easy term to define or to get consensus on.

11456            Then we say, yes, you are diverse, you can come in.  No, you are not diverse, you can't come in, et cetera.

11457            And what are we being perceived?  Clearly as the gatekeeper, but more than that, we are in effect dictating tastes.  That's how it's going to ‑‑ because isn't there a danger that that is exactly how it is going to be perceived?

11458            And that is certainly not what we want and that is not what you want.  I don't know how to measure diversity, how to characterize something as new and diverse and something as no, that is not diverse.

11459            Give me the criteria.  How would I do this?

11460            MR. BUREAU:  Ah!  We are suggesting this approach, this licensing model, and we said that we could come back on some other occasion to discuss exactly how it could work.  But we say we have to recognize that the system of the Category 2 has not produced the results that everybody intended.

11461            So we are saying let's try something else, which will be based on the diversity of the choice.

11462            So yes, somebody will have to say yes or no, but I would rather see you say yes or no than somebody from other parts of the country.  I feel that you are responsible for the system as a whole while he is not.

11463            THE CHAIRPERSON:  If you are meaning whether it should be us or the BDU, I agree with you, but hopefully it should be the Canadian viewer who makes that decision.

11464            MR. BUREAU:  Well, of course at the end of the day they will, because if they don't agree with your choice and the service doesn't produce audience, it will be killed at some point.

11465            How many have been killed since the Commission has exercised this gatekeeper role in choice or taste master?  How many?  One?

11466            THE CHAIRPERSON:  I don't know.

11467            MR. BUREAU:  One?  The Health Service.

11468            THE CHAIRPERSON:  You know better than me.

11469            MR. BUREAU:  The Health Service which lasted one day on the air?

11470            THE CHAIRPERSON:  Okay.

11471            Mr. Riley, you wanted to add something?

11472            MR. RILEY:  Yes.  If I may, I would just add ‑‑ and André touched on that point ‑‑ that we think that the model we propose ‑‑ and you hit it on the point actually ‑‑ is all anyone should be seeking and what we should all be seeking is for the consumer to have the right to determine our fate.

11473            In your characterization of the current process with the Category 2, you said it's mostly a paper process and then it's up to you to sell yourself to the BDU.

11474            That's not what we want.  We don't think that ensures the greatest amount of diversity.

11475            Sure, under our model it does require a little upfront work, but we can discuss this about how you do that in terms of having the process and what are the thresholds or factors that apply.

11476            But I think at a minimum if the Commission's goal ultimately is to ensure innovation and diversity, at least give those that have those ideas the right to get to the market.  Remember, we are also saying there are no tiering and linkage rules.  So it's like let us get to the shelf and then if the consumers say, you know what, we don't need an archery channel, thanks very much, then that will take care of the archery channel.

11477            Also, getting access just means you have the right to get on air to be distributed.  After that point, in terms of the packaging and marketing, which are fundamental ‑‑ in our view, just getting that right to get onto the shelf is, we believe, just the bare minimum.

11478            The real action, the real I guess factor which will determine the success or not is the marketing and packaging obviously coupled with whatever that fee may be.

11479            So what we are saying is, I mean obviously you have to pick one model or another.  There is this one; there is this option.  We are saying your fundamental goal to give that opportunity for innovation to those whatever seeds they may be to flower, we think you have a higher chance of success of achieving that if you allow one to at least fail in front of the consumer as opposed to not even getting that opportunity.

11480            I think everyone in the industry is prepared to accept that and just getting on there ‑‑ any notion that just getting onto the system means after that everyone lies back and reaps the rewards is just not the case.

11481            In fact, just one last thing.  We have had plenty of great ideas that we have looked at from a market plan and said, do you know what, we don't think this is going to work.  We have taken it upon ourselves to have conversations with the BDU.  They are the seller, they are extremely important in the process.

11482            So you have to remember there have been many great applications or many great ideas or innovation where people have said I don't think this will work.  But once you cross that threshold to where you are providing something that is diverse, let's let the consumer dictate whether or not we succeed.

11483            That's all the model asks for and we only suggest that this model will probably produce a higher probability of that happening than the existing model or any other model that has been proposed.

11484            MR. BUREAU:  Mr. Chairman, the model that we have proposed is not a perfect model by far.  We are not suggesting it is the only model.  We are saying one is not producing the results that we all hoped it would, and we are trying to propose something for discussion, for analysis.

11485            There may be other models to look at and we don't pretend that this model is the only one, of course not.

11486            THE CHAIRPERSON:  Let me ask you a few questions about the arbitration model that you put in.  None of my colleagues have touched upon that.

11487            First of all, why is an arbitration model necessary at all?  Why couldn't we just have an expedited and a streamlined dispute settlement process by the Commission?

11488            Why do you feel there should be an arbitration?

11489            Obviously if you and a distributor want to go to arbitration, nothing stops you from doing that right now.  But presumably I assume we are talking mostly about issues which arise as a result of application of the CRTC policies or regulations, et cetera.

11490            Why do we want to bring in an outside arbitrator?  Why would this not be done through a streamlined improved CRTC process?

11491            MR. BUREAU:  Well, we believe, Mr. Chairman, that the guaranteed access doesn't solve all of the problems and that we need a way of making sure that it is resolved somewhere.

11492            We have asked somebody that we have a lot of respect for, Mr. Hank Intven, to look into it and come up with some suggestion.  These are not our suggestions.  These are his suggestions and we have invited him here.  I'm very glad that you are asking that question.  It will give him the opportunity to earn what we are paying him today.

11493            So Hank...?

‑‑‑ Laughter / Rires

11494            MR. INTVEN:  Thank you, Mr. Bureau.

11495            Mr. Chairman, I think the reasons are fairly straightforward.

11496            The Commission has tried all types of dispute resolution mechanisms of its own, from the Part VII mechanisms in the telecommunications area to a whole variety of mechanisms in the case of broadcasting, and the fact is they are all quite time consuming.  They require a heavy engagement of Commission resources and a lot of time, which frankly is not required in I think a lot of the cases where there are essentially commercial issues to be determined as between distributors and broadcasters.

11497            So what we did is tried to come up with a process that would enable several tracks, one of which would be a rather fast track to deal with essentially commercial disputes through final offer arbitration.

11498            To answer your question why, I think the answers are:  one, it is more efficient.  We have suggested very strict timetables which I think can be adhered to because they don't use Commission resources.  The Commission will establish these timetables.

11499            Second ‑‑ and I think this is very important ‑‑ final offer arbitration establishes very different incentives for resolution of a dispute than does a Commission process.  It encourages both parties to come up with offers that are realistic and, as we would like to say, in the market, concepts that they could live with and that a neutral party is likely to select from one or the other.

11500            It doesn't require the Commission, who when all is said and done, no matter how well it does its homework, will know less about the details of the business than the players actually in the business.  So it doesn't require the Commission to substitute its judgment for the judgments of the two market players.

11501            I think that is another advantage of arbitration.

11502            Well, I think those are the main ones really:  good incentives; efficient.

11503            And finally, it is very objective and fair.  It can be utilized by both parties.  In many cases the BDUs will have more bargaining power but, as we have heard from Bragg Communications and others, in some cases the small BDUs will have less power.  So both sides can use this in an objective fashion.

11504            We think those are all reasons that it is preferable for Commission determination.

11505            THE CHAIRPERSON:  Maybe I read your proposal too fast, but I thought you had three alternatives:  final offer arbitration; what I would call sort of general arbitration trying to find the best solution; and an expedited Commission process if it should involve a policy.

11506            By offering three options, don't you automatically invite disputes as to which one of the avenues is the proper one that should be followed, whether the dispute falls into Category A, B or C?

11507            MR. INTVEN:  Well, it is in the nature of the Commission's role as a decision‑maker to make decisions, and I think that with experience particularly it should be fairly simple to make a classification, within five days, as we are recommending, as to whether something is essentially a commercial dispute that can be easily handled by final offer arbitration, or whether it is something that has more issues and therefore is better subject to another form of arbitration, or whether it is a policy issue.

11508            To the extent that initially the Commission ‑‑ there may be a few growing pains.  The Commission may initially be uncertain as to which category it would go into and therefore may prefer to make some policy decisions in a few cases at the outset.

11509            But certainly with experience, as it learns more about the disputes that arise, I think it should be fairly easy to make a fast‑track decision within the five days.

11510            THE CHAIRPERSON:  Well, I thank you for your proposal.  It is obviously very thoughtfully thought out and carefully crafted and it i ‑‑ like always, I like submissions that give us a concrete product so we can comment.  It is much easier to deal with these rather than dealing with them in the abstract.

11511            So we will certainly look at it very carefully.

11512            You were here yesterday or the day before ‑‑ I forget, the days seem to merge into each other ‑‑ when TELUS was here and talked about NPVR, which is network PVR.

11513            First of all, I had never heard the expression before TELUS mentioned it.

11514            Second, the way they explained it to me, there were two things that caught my attention.

11515            Number one, they said it is actually working right now already in the U.K., I believe.  Second, the way they suggested is that the distributor in effect has all the programming that it puts on its own computer at home.

11516            If you could find a mechanism that through the remote at the customer's the customer can actually get to the computer and watch either for a specific period, for months or for a week or so, everything that was on there and could in effect use the existing linear schedule, run backwards and watch whatever they want, or there could be a search function and they could find ‑‑ that in effect you could have the entire program on a video on demand way offering alternative to the normal linear programming.

11517            It struck us that certainly if you could do that, if you could combine that with ad insertion or ad substitution, et cetera, you are in effect bringing the whole broadcasting system one gigantic step closer to the Internet and giving it the functionality of targeting consumers, specific consumers, getting the ads there, because you know that consumer at that point in time wants that show and you know who the consumer is, et cetera, and could in a large way prevent the migration of advertising as we have seen it from traditional broadcasting to the Internet.

11518            What TELUS suggested, they want to work on that.  That is sort of the end goal where they want to go and they see themselves exploiting that.  You would be on a shared basis with broadcasters and in effect dynamic ad insertion or targeted advertising, all of that, and they are clearly working on that, and that's where they want to go.

11519            Are you working on this?  Do you see that that is the right way to do that?

11520            Obviously we had not even thought of it until yesterday or the day before.

11521            But since you are looking prospectively, is this something we should address and in effect should we work towards a rule which suggests this mandatory sharing that TELUS is talking about?

11522            MR. BUREAU:  Mr. Chairman, first of all, I am amazed at your capacity to understand these issues very quickly.  I have looked at you during the exchange you had at that moment, and I must say that I'm a little bit at a loss to understand all the ramifications of what was presented there.

11523            I believe we are working on some aspects of things like that.  I don't think we are working directly with TELUS or that we have been presented this model, this technology.

11524            Have we, John?

11525            MR. RILEY:  I don't know precisely the answer to that question.

11526            THE CHAIRPERSON:  I may have misunderstood it.  I gave you my interpretation of what I understood.  Maybe TELUS meant to tell me something totally different.

‑‑‑ Laughter / Rires

11527            MR. RILEY:  But just so I understand, when you say you are working on it, are you referring to ‑‑ because you emphasize the ad insertion as perhaps a way almost of repatriating whatever might be lost.

11528            Is your ‑‑

11529            THE CHAIRPERSON:  Well, there are two aspects.

11530            MR. RILEY:  Yes.

11531            THE CHAIRPERSON:  First of all, as TELUS explained it, you don't have to constantly update your PVR, et cetera.

11532            MR. RILEY:  Right.

11533            THE CHAIRPERSON:  In fact, the network has a PVR for you, et cetera.

11534            But also because they control it, they can refresh it, let's say.

11535            MR. RILEY:  Right.

11536            THE CHAIRPERSON:  At the very least they can refresh it.  They can change the ads.  They can also then ‑‑ it doesn't take a genius to figure out you can also go then to dynamic ad insertion and targeted advertising.

11537            MR. RILEY:  Right.  Well, I would say this.

11538            We demonstrated, as my example of The Movie Network on demand and Pics and Family, because we have to mention Family as well too.  So we are always interested in any way that new technology can address consumer wants and needs.  It has been valuable to us and we support that.

11539            I would say we may not be that far along.  We support going in that direction.

11540            The only thing we caution and we have said, too, is we always have to be aware of what the ramifications of that are and to ensure as we move forward that the suitable contributions are being made.

11541            In other words, there would be no point in it if it is something that undermines the contributions that the services today are making.

11542            We found TELUS, in our discussions with them, to be a very good partner.  They are open.  So we would certainly pursue that.

11543            But we would want to see, obviously as we move from the linear world to on demand, just to make sure, as we brought up with the SVOD/VOD dichotomy, we make sure that when we make these steps there is something that is net beneficial to the system.

11544            THE CHAIRPERSON:  Yes.  The SVOD issue versus linear and this one.  They are the second cousins.  They are all in the same area.  TELUS' attitude may be quite different as some other BDUs who are vertically integrated and have their own specialty channels, et cetera.

11545            MR. RILEY:  Well, two things are going to happen.

11546            One, when I get back to the office, someone goes I told you about this.  Why couldn't you remember it?

11547            Or number two, we will be phoning TELUS.  So it's either way.

‑‑‑ Laughter / Rires

11548            THE CHAIRPERSON:  And number three, as we said, there will be an opportunity for you to make further written submission.  I would like you to specifically address, you and everybody else:  (a) the NPVR issue; and, second, the issue that you highlighted today, Mr. Bureau, the whole issue of SVOD and linear service.  Where is the delineation?  Where does one stop?  How should we treat that?

11549            I think today's discussion has shown us this is clearly going to be an important issue and we have to put some clarity and finality to it.

11550            So in submissions we will ask everybody ‑‑ and I am just mentioning it today now ‑‑ to address that point.

11551            MR. BUREAU:  We shall.

11552            THE CHAIRPERSON:  Well, thank you very much for your intervention.  I think those are all our questions for you today.

11553            Thank you.

11554            MR. BUREAU:  Thank you very much.

11555            THE CHAIRPERSON:  Let's take a five‑minute break before we see the next intervener.

‑‑‑ Upon recessing at 1152 / Suspension à 1152

‑‑‑ Upon resuming at 1202 / Reprise à 1202

11556            THE CHAIRPERSON:  Madam Secretary.

11557            THE SECRETARY:  I would now invite the Coalition of Canadian Audio‑Visual Unions to make their presentation.

11558            Appearing for the Coalition is Mr. David Hardy.

11559            Please introduce your colleagues, after which you will have 15 minutes for your presentation.

PRESENTATION / PRÉSENTATION

11560            MR. HARDY:  Mr. Chairman and members of the Commission, my name is David Hardy and I am the Business Agent representing NABET 700 CEP.

11561            Before starting our presentation today, I would like to take a moment to introduce to you our panel and the organizations that they represent.

11562            From your far left to your right, they are:  Stephen Waddell, National Executive Director of ACTRA; Kim Hume, Director of Public Policy and Communications for ACTRA; Kelly Lynne Ashton, Director of Policy of the Writers Guild of Canada; Maureen Parker, Executive Director of the Writers Guild of Canada; Monique Lafontaine, General Counsel and Director of Regulatory Affairs of the Directors Guild of Canada; Brian Anthony, National Executive Director and CEO of the Directors Guild of Canada; and on my left, Peter Grant of McCarthy Tétrault, outside counsel to the CCAU.

11563            Mr. Grant is also the author of a paper attached to the CCAU's October submission, and can speak to that proposal, as well as to any other legal issues.

11564            This proceeding is tremendously important for the creative community.  If the Broadcasting Act were revoked and pure market forces were allowed to prevail, as some BDUs appear to prefer, we would not have a Canadian broadcasting system, and the first category of programming to be harmed would be the hard‑to‑finance programming like Canadian drama, which is so important to the system, yet so vulnerable.

11565            The approaches we are taking reflect a central concern that our broadcasting system needs more attention paid to, and more money directed into Canadian dramatic programming.

11566            The Broadcasting Act has not been revoked.  In terms of the situation of the pay and specialty sector, we think that the current regulatory framework has worked relatively well.  We are very concerned with the efforts of the BDUs to roll back this progress and to propose major changes, with potentially disastrous consequences to the Canadian broadcasting system.

11567            So we are here to implore you to maintain the basics of the current system.

11568            The suggestion that the Commission has to deregulate in the face of the unregulated internet market was particularly ill‑supported.  The Commission will have a chance to look at the impact of new media later this year, but there is no evidence at this stage that the internet forces you to deregulate traditional media.

11569            Indeed, to the extent that the internet poses an issue for the system, BDUs and broadcasters are learning how to turn it to their advantage anyway.

11570            BDUs are very profitable.  Commission statistics show, in 2007, cable operating profits of 23 percent.

11571            Those figures also show that their internet services generated operating profits of 67 percent.

11572            BDUs have been able to use the backbone built by broadcasting to enrich themselves by selling internet services.

11573            Clearly, BDU‑owned ISPs, as well as broadcasters are becoming savvy about the magic of streaming and alternate revenue sources.  As these begin to impact the revenues of the parties in the system that have Canadian content obligations, we need to determine how best to ensure that the appropriate contribution is made.  We do not need a complete dismantling of the system.

11574            With that as background, I will now speak briefly about each of your five questions.

11575            Your first question asked:  What should be the size of the basic package?

11576            Today, the basic analog tier is fairly large, although very few cable subscribers limit themselves to those services.

11577            Our belief, to answer your question, is that we have seen no evidence that the size of the basic tier should be handled in any different manner than in the past.

11578            Your second question asked whether there should be guaranteed access for certain Canadian pay and specialty services; and, if so, which ones and on what terms.

11579            Here our position is that the analog and Category 1 pay and specialty services that have access rights today should continue to have guaranteed access to BDUs, although BDUs could be given a right to apply to change a particular service's status.

11580            I will ask Stephen Waddell to comment further.

11581            MR. WADDELL:  If the Commission were to drop the must carry requirements for the analog and Category 1 pay and specialty services, this would fundamentally shift the balance of power in favour of the BDUs.

11582            For any services without guaranteed access, BDUs will simply extract more onerous terms, in particular, lower affiliation payments, and a piece of the ad revenue, if the Commission will permit them to take advantage of local avails on Canadian specialty services.

11583            There can be no doubt that this will, in turn, result in far fewer dollars in the system for Canadian programming.

11584            Guaranteed access is particularly important for those pay and specialty services that exhibit and finance Canadian content programming in the genre that is most difficult to finance, namely, Category 7 drama, including children's programming and animation.

11585            In the CCAU's view, the current access rules should be maintained.  There is a quid pro quo.  The services that get such access must be required to contribute significantly to Canadian content, both in terms of scheduling and in terms of Canadian programming expenditures, or CPE.

11586            The CPE contribution is absolutely essential.  Programming undertakings should continue to have their CPEs raised according to their PBIT levels at renewal time, although the Commission will need to plug obvious loopholes, such as the use of management fees to artificially shrink reported profit levels.

11587            It is also important to stop the pay and specialty broadcasters from counting CTF licence fee top‑up money toward their CPE, as they spend it on themselves.

11588            An average of more than $30 million per annum is lost to the system because of this policy.  With pay and specialty renewals coming up, now is the time to revoke this practice.

11589            The Commission should also focus on the Category 2 services which started life with low introductory Cancon rates.  Some of them could, and should now be obligated to begin making CPE expenditures.

11590            I will now ask Monique Lafontaine to address the issue of genre protection.

11591            MS LAFONTAINE:  Thank you.

11592            Over the years, genre protection has enabled the CRTC to license diverse, economically viable services, each with a maximum contribution to Cancon.  So we think that genre protection should be continued for all analog and Category 1 pay and specialty services, both as against Canadian and foreign competitors.

11593            However, we do see some room for flexibility here.

11594            In that regard, we don't see the idea of five or six broad genre categories to be practical.  However, the CRTC could open the door to services that wish to compete in a genre if they can make a sufficient case at a public hearing.

11595            In other words, the Commission could permit a broadcaster to come forward and argue that in a particular genre it is time to allow some competition.

11596            This is exactly how Allarco ended up with its general interest pay licence.

11597            However, the CCAU proposes that these exceptions should be subjected to full public scrutiny, and the challengers should at least have to prove the following:

11598            (a)  a sufficient supply of distinct programming content within the genre;

11599            (b)  matching or higher CPE and other obligations;

11600            (c)  consumer demand; and

11601            (d)  no self‑dealing.

11602            In addition, the CCAU does not think that BDUs or Canadian consumers should be stuck with an underperforming service just because it occupied a genre first.

11603            Picking up on a suggestion made by Commissioner Cugini earlier in this proceeding, we have no problem with allowing a BDU to be able to apply to the Commission at the licence renewal of a service to change its status if it was not contributing to meeting the objectives of the Broadcasting Act.

11604            But what is common about both of these recommendations is that the Commission remains in charge.  BDUs should not be given life‑and‑death power over services that contribute to the objectives of the Act.  That power should be in the Commission's hands only.

11605            Genre protection with respect to foreign services is even more crucial.  In our view, the criteria for the admission of foreign services to Canada should remain unchanged.  Their contributions are minimal, they siphon viewers from licensed Canadian services, and they are notoriously difficult to eject, should they change genres.

11606            Let me turn now to your fourth issue, namely, fee for carriage.

11607            The CCAU continues to have major concerns with the English‑language OTA sector, where their chronic underspending on Canadian drama needs to be addressed.

11608            That will be, hopefully, front and centre at the OTA renewal hearings next year.

11609            We heard yesterday from CTV and Canwest that they want fee for carriage to be used to support local programming only, and, in particular, local news.

11610            In our view, this is a self‑servicing proposal that ignores the real problem in the system.

11611            Local news is not a threatened category of programming.  Viewers around the world always prefer local news sources to foreign news sources.

11612            In Canada, we all receive the U.S. supper‑hour newscasts from ABC, CBS and NBC, but few viewers watch them.

11613            The reality is that when Canadian broadcasters do news programs, they compete only with themselves, not against Hollywood.

11614            The situation is quite different for entertainment programming like drama and comedy.  In that category, unlike the situation with news, we have to compete with the best that Hollywood offers.

11615            There is a reason why the CRTC calls drama priority programming, and it used to call it under‑represented programming.

11616            Drama is the kind of programming that no private broadcaster will support, unless they are forced to do so by regulation.

11617            The broadcasters' request for fee for carriage turns this priority on its ear.  Instead of using the money to help the kind of programming that most needs help, they want to put it into the kind of programming that least needs help, where they face no competition from Hollywood, where they only compete with themselves, where they already benefit from basic carriage, where they have sole access to local ad revenue, and where they will spend all the money on their own facilities.

11618            We think this is completely self‑serving.  It ignores the real problem in our system, namely, competing with Hollywood on the hardest to finance category, Canadian drama.

11619            If fee for carriage is to be approved, the revenue should be earmarked to support Canadian drama programming.  That is where the funding problem is.

11620            The fifth question posed by the Commission was whether the BDUs should have access to advertising revenues from on‑demand services or local avails.

11621            I will ask Maureen Parker to speak to this, as well as the whole question of what contribution BDUs should make to the system.

11622            MS PARKER:  Thank you.

11623            With regard to local avails, the CCAU supports the concept of monetizing the local avails from foreign specialty services, provided that at least 50 percent of the resulting revenue is earmarked to create more Canadian dramatic productions ‑‑ for example, through increased funding of the CTF.

11624            With respect to advertising in on‑demand services, you have heard our concern that BDUs are lined up to receive all of the benefits from the proceeds, without any balancing responsibility to the Canadian broadcasting system.

11625            If the Commission is going to go the route of allocating a great deal more power to the BDUs, then allowing them to advertise on VOD would be one of the ways to allow more money into the system.

11626            The CCAU could support that, provided that, again, a significant portion of the new money went to the CTF.

11627            The BDUs are asking for a lot of deregulation in this proceeding, but there needs to be increased contribution from that sector, not less.  The BDU contribution level is a modest percentage, established as competition was being introduced in the mid‑1990s, at a time when cable profitability was a subject of concern.

11628            It no longer is.  BDUs have exhibited steady growth and large profits.

11629            With respect to both video‑on‑demand and pay‑per‑view, for example, the Commission should explore whether the introductory CPE rate of 5 percent should be increased to 10 percent, or some other number.

11630            That percentage was introduced when those services were in their infancy, and it seems to the CCAU that they should certainly make a greater contribution.

11631            Similarly, we have suggested that the 5 percent BDU contribution to Canadian programming be increased to no less than 6 percent.

11632            In conclusion, therefore, we would answer the Chairman's five questions in the following manner.

11633            Number one, we have seen no evidence that the size of the basic tier should be handled in any different manner than in the past.

11634            Indeed, a recent Pollara poll suggested that nearly two‑thirds of the respondents are satisfied with pricing, and that the same percentage is satisfied with programming packages.

11635            Number two, analog and Category 1 pay and specialty services should continue to have guaranteed access, although BDUs could be given a right to change a particular service status at licence renewal.

11636            Guaranteed access is particularly important for those services that fund Canadian dramatic productions.

11637            Number three, genre protection should be continued for all analog and Category 1 pay and specialty services, both as against Canadian and foreign competitors.

11638            However, the CRTC could open the door to Canadian services that compete in a genre if the new player can justify this at a public hearing.

11639            Number four, fee for carriage should only be approved if the resulting funds are directed to the creation and presentation of Canadian dramatic productions.

11640            Number five, if the Commission is going to grant BDUs more rights, like the ability to sell advertising, then with that comes the responsibility to step up and contribute more to the Canadian broadcasting system.

11641            Mr. Chairman, members of the Commission, we are concerned about deregulation being the central focus of this hearing, and the disregard of some key players to the cultural policies and goals articulated in the Broadcasting Act.

11642            It is your mission to achieve those goals, and, in our view, that should be paramount in all of your deliberations.

11643            We thank you for the opportunity to participate in this proceeding, and, of course, we would be pleased to answer any of your questions.

11644            Thank you.

11645            THE CHAIRPERSON:  Thank you very much.

11646            First of all, let me clarify, you are talking about deregulation.  It is not as if you are saying that we want to deregulate the system.  We have said, quite clearly, that we want to make sure we have smarter regulation, more effective regulation, to only regulate when necessary.

11647            So it is not a question of deregulating for the sake of deregulation, it is a question of regulating more effectively.  That is really what you are talking about, in the areas where it is needed.

11648            Secondly, let me ask you a question on fee for carriage.

11649            First of all, yesterday, CTV and Global talked about local programming, not local news.  You sort of seem to equate the two as being the same.

11650            They actually went to quite some length in their presentation to talk about local programming.  Clearly, local news is part of it, but it is not all of it.

11651            Secondly, that was their suggestion.

11652            I have heard several intervenors ask ‑‑ as I see it, two of the large burdens, in terms of financing, that we place on over‑the‑air is local programming and drama, both of those, et cetera.

11653            I ask people:  Should it be earmarked?

11654            I have asked several times:  Should it be earmarked, that the proceeds that come should be (a) incremental, and should be used for such things as local programming and drama?

11655            Would your position change at all if we implemented something along those lines?

11656            MS PARKER:  Monique will give a first go at this.

11657            MS LAFONTAINE:  Certainly what we would be very pleased to see is some or all ‑‑ a significant portion ‑‑ something for drama.  As we have stated in the past, there is a significant lack of support by the OTA broadcasters for drama.

11658            So, if there was an earmarked portion ‑‑ and I am not sure what the Commission is thinking, but if between CTV and Canwest they had $150 million and we saw $100 million going to drama ‑‑ and my colleagues could also speak up, but I don't know that there would be that much dissatisfaction with that kind of Commission regulation.

11659            Of course, we also agree that it must be incremental to existing ‑‑

11660            THE CHAIRPERSON:  No, I am just talking about concepts, not numbers.  The whole idea is, the two areas, according to their submission, that are financially the most difficult for an OTA to live up to are local programming and drama.

11661            Sure, some specialties have drama obligations, and others don't.  Therefore, taking them at their word for the time being, any earmarking addressing those two areas would, I gather, partially at least, answer your concerns.

11662            MS LAFONTAINE:  Referring back to the presentation of yesterday, we found it very unacceptable, the proposal that they have put forward, which is for all or ‑‑

11663            They have put nothing on the table for drama ‑‑ and I appreciate that that is not necessarily what the Commission will do, but just coming back to that presentation ‑‑ and that it must go to local.

11664            Our view on local is that, yes, it is an important component of the broadcasting system.  We want diversity and so on, but it's not a troubled genre of programming.

11665            In terms of competing with the Hollywood content, yes, they have to do it, but that is one of the raison d'être of these services.  It is what allows them ‑‑

11666            They have to do their local programming, but, in turn, they are made available across the country.  They get ad revenues as a result.

11667            And we also know that local news can make money for them.  That comes from the Nordicity Study that CBC filed.

11668            So we find it quite disconcerting that, with a $150 million proposal, they see that it all must go to this type of programming, which we don't see as troubled as drama.

11669            MR. WADDELL:  Mr. Chairman, I wonder if I could make a couple of comments in response.

11670            Number one, if the money is used ‑‑ the money in terms of fee for carriage, if it is determined by the Commission to be for local programming, we would hope, in terms of subsidizing the over‑the‑air broadcasters in local programming, that that would free up money for drama production.

11671            That would be a virtuous result.

11672            The other point being that, as you rightly pointed out, they said local programming, but that could also include drama and comedy.

11673            Some of us are old enough to remember that drama and comedy used to be produced by some local television stations.  "The Littlest Hobo" was done by Glen‑Warren Productions out of CFTO, just to go back a few years.

11674            Perhaps we can return to the day in which drama and comedy might be produced by local broadcasters, as well.

11675            MS PARKER:  We talked at length about local programming, as well, because we all like local programming.  We like our local news, we like our community events, but I think the key thing to remember ‑‑ because I also was here yesterday ‑‑ is that we aren't competing with the Buffalo services.  If you have an option to watch what you are offered, you are going to watch local.

11676            I have to admit that I don't truly understand why they can't afford to do their basic service, why they can't afford that primary core responsibility, and I am sure that, at some point, some financial evidence will present itself as to why they can't afford to run local programming efficiently, and make some money on it.

11677            I guess what we are saying today is that, if you are considering fee for carriage, we are urging you to look at sharing that money among those categories of production and programming that need it, and we feel that over the years we have certainly made the case about drama.

11678            I listened very clearly to Mr. Asper saying yesterday that he had only increased his foreign spend on drama by 4.6 percent from the previous year.

11679            We looked at that number cumulatively last night, and over the last eight years he has actually increased his foreign spend by 67 percent, while decreasing his spend on Canadian drama by 42.

11680            Spending on Canadian drama on the OTAs is at an all‑time low.  Your own stats and your own reports are telling you that.

11681            So when we are looking at fee for carriage, we are looking to ensure that it will bring something extra to the system, and not just cover what we consider to be their core services.

11682            THE CHAIRPERSON:  Yes, I understand that.

11683            You are making all sorts of statements as absolute truths; they are not.  They are not in some of the evidence that we have received.

11684            For instance, you said that local news pays for itself.  In this very room, Citytv, when it was purchased by Rogers, pointed out that their news service in Vancouver was discontinued because, after 14 years of trying to make it profitable, they hadn't succeeded.

11685            It's not that simple.  I am not suggesting ‑‑

11686            I have no idea what the reason was in Vancouver.  There may have been an ineptitude, et cetera.

11687            You are saying that local news is profitable, and that is not quite the evidence that we have been presented.

11688            But, again, I get your main point, which I think is, clearly, something that we have to take into consideration.  If there is a fee for service, should it be earmarked, and earmarked for what.  Obviously, it should be earmarked for those parts of the broadcasting system which are underserviced right now, or under‑represented.

11689            Rita, I believe you have some questions.

11690            COMMISSIONER CUGINI:  Thank you, Mr. Chairman, and good afternoon to all of you.

11691            I will just follow up with a couple of questions about your position on fee for carriage and its relationship to local.

11692            Based on what you just said, Mr. Waddell, that you would hope that it would free up money for drama, let me ask you this:  Are you saying that if we approve fee for carriage, and we impose a requirement that it be spent on local programming, that it be conditional upon increased spending on drama?

11693            MR. WADDELL:  Commissioner, that would be something we would hope for.  But, if that were not the case ‑‑

11694            As I said in making a point to the Chairman, that would, in fact, free up revenues that could be used and dedicated to drama.

11695            Of course, we go back to our main point, that we would ask the Commission to reinstate the expenditure in content requirements with respect to drama on the over‑the‑air broadcasters.

11696            As you know, we would like to see that expenditure requirements be pegged at 7 percent of ad revenues, and that content requirements be reinstated at two hours per week in prime time.

11697            COMMISSIONER CUGINI:  I just wanted to make sure that the Coalition would support a fee for carriage that wasn't conditional upon anything else.

11698            MS PARKER:  No.  We don't, actually, support that.

11699            We do want to ensure that there is some money given to drama from fee for carriage.

11700            We do understand that if some of that money is shared with local programming, that might free up more money for drama, but we do believe that, if you are thinking of introducing fee for carriage, there should be some balance to that, it should be incremental, and it should also go to dramatic production.

11701            COMMISSIONER CUGINI:  Okay.  Thank you very much.

11702            MS LAFONTAINE:  If I could add to that, if the fee for carriage is only to be earmarked for local, for example, then our position is that there must be another regulatory requirement in place for drama; that we don't just sort of hope that, since they have more money in their pocket, they just might spend money on drama, because we know that they will not unless there is a regulatory requirement in place.

11703            So if there isn't one on fee for carriage, which we believe there should be, there has to be something else somewhere.

11704            COMMISSIONER CUGINI:  Thank you.  It is clear to me now.

11705            Your position on the basic service ‑‑ over the last couple of weeks we have heard that it does go to affordability, and if we limit the mandated number of services that should be on basic, then this will give an opportunity for Canadians to have more choice as to what they can add to their cable bill, essentially, and to their DTH bill.

11706            In other words, you have a smaller basic, it is more affordable, it will give Canadians more choice as to how much they want to spend, and on how many services.

11707            How do you respond to that?

11708            MS LAFONTAINE:  Our position is that there has been no evidence that such a model is necessary.

11709            As I say, there is no evidence that the consumer wants this smaller package and this ‑‑

11710            COMMISSIONER CUGINI:  Choice.

11711            MS LAFONTAINE:  Yes, exactly.

11712            What we have heard, and our position, is that the system ‑‑ just to echo what Astral was saying earlier ‑‑ the system works well.  There is diversity in the system, consumers are relatively happy with what they are getting.  We don't see that reducing the size of basic that there is any ‑‑ there is no evidence that basic should be reduced.

11713            MR. WADDELL:  I am sorry, could I?

11714            COMMISSIONER CUGINI:  No, please go ahead.

11715            MR. WADDELL:  I hold up the Pollara poll which we conducted with French‑Canadian broadcasting and Writers Guild and Stornoway Communications, and this poll which I think has been tabled with the Commission and it shows that consumers by and large are satisfied with their cable packages.  And so, you know, where is the need, where is the consumer demand for change here?

11716            You know, certainly as a consumer myself, I subscribe to both cable and satellite and you know they are ‑‑ I think the basic package is adequate as it stands.  It should be maintained as it stands and I don't see the need for reduction other than again to give the cable and satellite companies the opportunity to increase fees.

11717            So I don't see how consumers will benefit in that regard.  Thank you.

11718            COMMISSIONER CUGINI:  Your recommendation that Category 2 services have a CPE requirement, should that be in exchange for anything?  Should that be in exchange for guaranteed access for example?

11719            MS LAFONTAINE:  I think that's an interesting question and I think that if they are ‑‑ if there are increased regulatory obligations placed on them that there should be a quid pro quo for it.

11720            MS PARKER:  And we just wanted to note, Commissioner Cugini, that some of the Category 2s now are receiving money from the CTF and therefore we think if you are receiving money from the system you should be putting back into the system.

11721            COMMISSIONER CUGINI:  So it would be enough to impose a CPE for Category 2 services to get guaranteed access in your model but not necessary to increase their Canadian content exhibition from 35 percent to something?

11722            MS LAFONTAINE:  No, I think what we would probably do is ‑‑ and perhaps we could provide more details about this in a written submission and what exactly the licensees should be contributing to in order to get that in exchange for the access.

11723            COMMISSIONER CUGINI:  Fair enough.

11724            MS LAFONTAINE:  And also, you know, it's based on our PBITs and so on.  But essentially you know they are up and running now, and as Maureen was saying they are benefiting from the system and they are capable.

11725            That has been the Commission's manner of, you know, treating the CPE over the years is once ‑‑ you know the better you do the more you contribute.

11726            COMMISSIONER CUGINI:  Okay.

11727            On the issue of genre protection you do maintain that it may be time for some competition and you give us the four elements that would grant such a competitive licence, and you say:

"...matching their higher CPE and other obligations..."  (As read)

11728            COMMISSIONER CUGINI:  Should that be from the ground running or do you see it as something that could be phased in over the first licence term or the first five years of a licence?

11729            MS PARKER:  Well, we might have to develop a fuller position on this.  And what we would hate to see is the service that is contributing to Canadian programming be replaced with one who is contributing at it to a lesser extent.

11730            But that said, that you know I think that we would have to look at that as a whole package and that's why there are four criteria.

11731            COMMISSIONER CUGINI:  Because I think that one of the criticisms, let's be frank would be, well, what you are doing here is you are stifling diversity.  You are only therefore allowing ‑‑ by only allowing the established players to be able to come up with matching or higher CPE.  By introducing competition this is the criteria that you use.  You aren't giving an opportunity for new entrants into the Canadian broadcasting system.

11732            So it's in that context that I would like you to develop that idea further in your reply.  Okay, thank you.

11733            Thank you for helping me to develop further the suggestion that I had made on the "can remove" proposal but you say at the licence renewal of a service and, you know, if BDUs are listening to us now I can just imagine them saying, "Great, it's going to take seven years, eight years, maybe nine years for me to be able to get rid of a service."

11734            And you also say that "If it's not meeting the objectives of the Broadcasting Act" and they are probably in their offices saying, "What if it's not meeting market objectives?"

11735            MS PARKER:  We do think that services should have the opportunity to have a bad year and a good year and so you need to look and do that assessment over a period of time.

11736            We do think that licence renewal is fair because in essence that service has signed a contract.  They have been granted that area of responsibility, that area of broadcasting services for a period of time.  Now, of course, if the Commission in its wisdom saw that there was some serious reason to reopen that, I think we could be open to looking at extraordinary cases where it happens prior to licence renewal.

11737            COMMISSIONER CUGINI:  Okay.  Those are all my questions for the moment.  I know that each of you are coming up after lunch today. so we will have an opportunity to further develop some of your suggestions.

11738            And I will hand it back to the Chair at this point.  Thank you.

11739            THE CHAIRPERSON:  Michel.

11740            COMMISSIONER ARPIN:  Thank you, Mr. Chairman, and I will also have only one question because obviously you are, except CEP who is only coming next week you are all coming up this afternoon.

11741            But yesterday when Global and CTV came alone they said that the money from fee‑for‑carriage should go to the local station rather than the network because the broadcasting rights belong to the broadcaster in its local market.  So that's why they have to allocate it towards local production.  That was the base of their argument.

11742            Now, I have heard what you have read in here and your submission, but I know also that the CEP is currently making a request to the Commission to ‑‑ who has made a request to the Commission because they are appealing it, appealing our response, answer to it ‑‑ that Global should do more in regards to local news and towards local programming.

11743            And so the union promotes local news.  Isn't there a contradiction?  CEP promotes local news and you are promoting drama.  Among yourselves how are you managing that, those differences?

11744            MR. WADDELL:  Well, I think we have responded, Commissioner, on that point.  We are not suggesting that if the Commission decides ‑‑

11745            COMMISSIONER ARPIN:  I heard you introducing a nuance at some point in time, yes.

11746            MR. WADDELL:  Nuance, if the Commission decides that the broadcasters are right and that local programming needs support so be it; that's good.  We would hope therefore that the revenues that are then freed up by the subsidies that would be provided by fee‑for‑carriage would be devoted to drama.

11747            And that's our simple point, Commissioner.

11748            COMMISSIONER ARPIN:  But they won't be able to do drama in each of the markets.

11749            MR. WADDELL:  Well, they used to.  You know, some of us go back and remember CKAY, CFCF, CFTO all produced local shows, drama, variety and comedy shows.  Let's go back to those days, sounds great.

11750            COMMISSIONER ARPIN:  But you also have the Kamloops, the Prince George, the Dawson Creek TV stations as well.

11751            MR. WADDELL:  M'hm.

11752            COMMISSIONER ARPIN:  Were they doing comedy and drama?

11753            MR. WADDELL:  Well, no, not to the extent that they could do, obviously only in the larger markets where it could be afforded.

11754            COMMISSIONER ARPIN:  Yes.

11755            MR. WADDELL:  But the main point being that ‑‑ and of course CEP is part of our coalition and a respected member of this coalition and we support their position as they support ours.

11756            MS LAFONTAINE:  If I could just ‑‑ I think Peter Grant would like to add something.

11757            MR. GRANT:  Just a matter of the accounting system, Mr. Vice‑Chairman, for many years local stations have in fact booked the amortized portion of the cost of drama that is associated with their station as compared ‑‑ for example, when Global Ontario would buy Traders they would then sell Traders as it were to their Winnipeg affiliate, to the Vancouver affiliate and so forth.

11758            And therefore if you looked at the financials of each of these individual stations ‑‑ and they would be filed separately of course ‑‑ you would see an element in there for drama, but it was in fact national drama purchased at a national level by Global and then allocated among the stations.  And because drama is such an expensive category of course, even local drama is generally tried to be amortized nationally by placing it on the other stations.  And if it is placed then, the Commission rules in Public Notice 9393 do require that it be allocated among the stations in regard to their territory.

11759            So if you went back into the system you could very easily have it that the fee‑for‑carriage, although it would be accounted for in the accounts filed by individual stations, it could be applied for or applied to and counted towards drama expenditures that they are bearing as a portion of a national purchase of a program.

11760            COMMISSIONER ARPIN:  Thank you, Mr. Chair.  That was my only question.

11761            MS PARKER:  I'm sorry.  I just want to sum up so that we are ‑‑ that you have a final statement from us.

11762            I think that we need to just make our point one more time that with respect to fee‑for‑carriage if the Commission in its wisdom decides to go forward with that, we do want to see a percentage of that allocated to dramatic programming.  If that is not your decision for what other reason, we could only accept that if you came in with expenditure requirements in the next round of hearing for over‑the‑airs.

11763            And we know that you can't tie these two together, but we are not in a position after waiting eight years to see some turnaround in terms of drama saying that we will wait and see.  That's just too tenuous a position for us.

11764            So we just wanted to make it clear that if you were going to introduce this we really feel that drama has some dire needs as well.

11765            THE CHAIRPERSON:  Len.

11766            COMMISSIONER KATZ:  Thank you, Mr. Chairman.  I have one question.

11767            On page 11 of your testimony this morning you indicate towards the bottom that instead of using money to help the kinds of programming that needs most help, the broadcasters want to put the money to the kind of programming that needs the least help where they face no competition in Hollywood.  Yesterday, Mr. Fecan was asked a question about the disproportionate amount of expenditures going to U.S. programming versus Canadian programming.  His response was:

"They are investing money where it is most profitable and then through simultaneous substitution the money comes back into the Canadian system."  ("As read)

11768            COMMISSIONER KATZ:  Do you have any comments on that?

11769            MS PARKER:  Yes, we have plenty of comments on that.

‑‑‑ Laughter / Rires

11770            MS PARKER:  I am sorry, you know, we all get so excited with that question you will have to just bear with us.

11771            Yes, you know, again as I had just said, we have looked at the spending over a period of time.  The system is out of whack.  We don't disagree that they need to invest in American programming because it does drive ad revenue which is reinvested back into the system.  We understand that.

11772            But the system over the last couple of years has gotten out of balance whereas ‑‑ you know we used to see a ratio of 5 percent of that spend on American to one Canadian production.  It's now almost 13 to 1 and, as I said a little earlier in this, Mr. Fecan ‑‑ no, I think it was Mr. Asper said yesterday that they are really not blowing their brains out with their spending in California or in Hollywood because they have only increased that by 4.6 percent last year.  But you need to look at that over a period of time.

11773            And so over the last eight years they have actually increased their spending on foreign by 67 percent, while decreasing their spend on Canadian drama by 47 percent.

11774            So what we are looking for is some balance because right now it's just completely out of whack.

11775            MS LAFONTAINE:  I would also like to add ‑‑ to respond to that question.

11776            The last figures that we have access to that give us a breakdown of what the OTA broadcasters are spending on drama in the English language is 2006.  And in that year they spent about $640 million on U.S. or foreign programming, most of which was U.S. drama, so $640 million.  And then that same year they spent $40 million, a total of $40 million on Canadian drama; $20 million of which were transfer benefits.

11777            So effectively for the privilege of having that licence ‑‑ those licences ‑‑ they spent $20 million on Canadian drama.  That's what the $640 million investment allowed them to do, support $20 million.  And that probably works out to you know, give or take, 20 hours of drama for the year 2006.  What we know about local is that CanWest and CTV have to broadcast a little under 40 hours in a week.

11778            So that's why we say drama is much more in need of regulatory measures than the local.

11779            COMMISSIONER KATZ:  Thank you.

11780            MR. WADDELL:  If I could add, television is a visual medium and I will use a prop.

11781            Here is the broadcast schedule for CTV for the week of February 18th to the 24th.  The blue is American programming and the red is Canadian.  I think that says it all, Mr. Chairman.

11782            Thank you.

11783            THE CHAIRPERSON:  Thank you very much.  I think that those are our questions for you.

11784            And we will break now for an hour for lunch, Madam Secretary.

11785            MS PARKER:  Thank you.

‑‑‑ Upon recessing at 1245 / Suspension à 1245

‑‑‑ Upon resuming at 1348/ Reprise à 1348

11786            THE SECRETARY:  We will now proceed with the next four intervenors, Alliance of Canadian Cinema, Television and Radio Artists, Directors Guild of Canada, Writers Guild of Canada ainsi que l'Union des artistes et SARTEC.  We will hear each presentation which will then be followed by questions by the Commissioners.

11787            We will begin with the presentation of ACTRA.  Mr. Richard Hardacre is appearing on behalf of the intervenor.

11788            Please introduce your colleagues after which you will have 10 minutes for your presentation.  Mr. Hardacre.

PRESENTATION / PRESENTATION

11789            MR. HARDACRE:  Thank you, Mr. Chair, Vice‑Chairs, Commissioners and CRTC staff.

11790            My name is Richard Hardacre.  I am a professional actor.  I am the President of the Alliance of Canadian Cinema, Television and Radio Artists.  And it's a pleasure, I must say, to see you all once again.

11791            Also speaking for ACTRA today are two of Canada's best known and acclaimed performers, Rob Wells, leading actor and writer of the popular television series, The Trailer Park Boys and Julie Stewart, award‑winning actor, star of the Canadian drama series, Cold Squad.

11792            Supporting us are ACTRA's National Executive Director Stephen Waddell, Kim Hume, Director of Public Policy and Communications; and way over there Peter Grant of the law firm McCarthy Tétrault.

11793            ACTRA is a member of the Canadian Coalition of Audiovisual Unions and fully supports all of its positions.  ACTRA and CCAU believe the Commission can take measures in this process that will improve our broadcasting system, particularly for drama and for diversity.  We are asking the Commission to do the following:

11794            Maintain Canadian programming and spending and exhibition requirements on pay and specialty TV services and increase them for the more successful services;

11795            Maintain the current rules to support a strong Canadian pay and specialty sector to enable these services to meet their spending requirements;

11796            Remove the ability of specialty and pay licensees to use Canadian Television Fund licence fee top‑up monies to reach their Canadian programming expenditure targets;

11797            Increase BDU contributions to Canadian programming to at least 6 percent of their revenues;

11798            Impose appropriate Canadian programming expenditure requirements on Category 2 services at their licence renewal times;

11799            If fee‑for‑carriage we say then fees for drama;

11800            In addition to these proceedings, require conventional broadcasters to spend 7 percent of their ad revenue on Canadian drama and;

11801            Finally, require increased disclosure of financial information.

11802            Those are the key changes we would like to see in your decision.

11803            The gap between Canadian drama and foreign programming spending is just getting worse.  Canadian English drama spending by the private over‑the‑air broadcasters has dropped to $38 million, as you have heard, while the foreign drama spending is up to over half a billion dollars, 13 times more spending on foreign dramatic programming than on Canadian.  We must not repeat that disaster on the cable and specialty side.

11804            Rob and Julie will now speak about their firsthand experiences, and then I will conclude quickly by responding to the Chair's five questions.

11805            MR. WELLS:  Thank you.

11806            You have heard many times from ACTRA we need more Canada on TV.  I'm an actor, I'm a writer, I have a family to support and fortunate I am to be able to make a living from my art.

11807            Trailer Park Boys airs on specialty channel Showcase.  We have had seven seasons and right now we are writing a sequel to our feature film.  Our show provides steady work for over 80 people and has proved to be a big hit with Canadian audiences.  I feel very fortunate.

11808            Trailer Park Boys wouldn't have happened without the CRTC rules that require specialty channels to support and schedule Canadian programs.  There are some great Canadian dramas on TV but there aren't enough of them, especially on the over‑the‑air broadcasters.

11809            And you know we need more ‑‑ sorry ‑‑ we need a lot more opportunities for artists to tell thousands of other Canadian stories.  Even the Commission has recognized there needs to be a diversity of voices in our broadcasting system.

11810            The major changes you are proposing in this process are, as you pointed out to the CCAU this morning; lighter regulation and increased reliance on market forces.  But the end result will be less work for Canadian artists and fewer Canadian programs for Canadian viewers.

11811            The Commission has recognized and your own experts, Dunbar and Leblanc, acknowledged that Canadian‑made homegrown drama is the hardest to finance, the most difficult to produce and so we are not seeing enough homegrown drama on television.

11812            In questioning the Commission has asked whether audiences want more drama on TV and by the Commission's own reports, drama continues to be the most watched foreign programming.  That's why our private broadcasters spent a half billion dollars last year to buy the top U.S. shows.

11813            And what we want is for Canadians to have a choice.  With all the money in the system it's surely not too much to ask that Canadians be able to watch a Canadian drama, is it?

11814            I mean the Commission itself has recognized we have a problem when it comes to drama.  In its notice 2003‑54 the Commission said, and I quote:

"Canadian drama should be a cornerstone of the Canadian broadcasting system."  (As read)

11815            MR. WELLS:  I don't think we will watch the reruns of the 2005 version of the reality show Canadian Idol anytime soon but Julie's show, Cold Squad, still run on Showcase.  You can watch it tonight actually if you want.  It's on at eight o'clock.  The rules on the cable and specialty side are working in terms of drama.  That show is a prime example.

11816            Canadian dramas are on the air and the pay and specialty channels spend money on Canadian drama, as you can see from the figures in Peter Grant's paper, and they do it because you tell them to as part of their licence.

11817            Canadian programming expenditures and exhibition requirements are working and we can't afford to have them relaxed or lifted, as they were in the conventional channels where we have seen drama disappear from primetime.

11818            Trailer Park Boys has opened doors for me and my co‑stars, our producers, directors and other writers but if the CRTC changes the rules and the channels can put more U.S. shows on their air instead, not only will Canadian creators be out of work, our country will lose its capacity to tell stories, all because some show that has already recouped its budget in the U.S. market can be bought for less than it costs to produce a Canadian show.

11819            Removing genre protection, reducing access to a core of services, moving to a preponderance model will have consequences equally severe as removing exhibition and expenditure requirements for conventional broadcasters.

11820            Spending on Canadian TV drama anyway you measure it is now only half what it was before the CRTC relaxed those rules.  Please don't import the drama disaster from the conventional side onto the specialty side.  It just takes too long to fix.

11821            Over to you, Julie.

11822            MS STEWART:  Thank you.

11823            Hello.  I was lead actor on the TV show Cold Squad which ran for seven seasons on CTV.  Now, you may or may not know the story of that show's demise but we feel that it illustrates in part the danger of less regulation.

11824            In the summer of 2003 while we were shooting our final season, our seventh season which in fact was initiated by CTV because Canadians were watching that show in such great numbers, CTV bought an American show called Cold Case which had already been widely recognized to be a thinly‑veiled copy of our show.  Their claim was that they were going to cross‑promote the shows and try and build our audience.  To that they said okay.

11825            What ended up happening that fall, however, was Cold Case appeared on CTV's fall lineup and Cold Squad was shelved for an entire year.  February 2004 they cancelled Cold Squad, a good eight or nine months before anybody in Canada even had a chance to see a single episode of our final season.

11826            So there you go.

11827            In the hearings so far you have asked those before you to recognize that technology is having an impact on the broadcasting system.  ACTRA understands that the landscape is changing.  In fact, a decade ago ACTRA came to the Commission and said it was time to write new rules for the digital universe.

11828            In these hearings cable has raised fears that consumers will leave the regulated system for the unregulated system and they say they need less regulation in order to satisfy their customers.  We dispute these claims from experience and from the public polling we did with our partners.

11829            Canadians are satisfied with their services and there is simply no evidence that they will desert cable even with a price increase.

11830            The Commission has indicated it will be looking at the issue of new media very soon and ACTRA looks forward to participating.  We will be calling for appropriate regulations to the internet.  We must ensure that web‑based broadcasting and those distributing it make appropriate contributions to the system including to production.  At the moment there is a giant loophole where broadcasters and distributors are required to do certain things on the broadcasting side but are free to do whatever they like on the internet side.

11831            Now, we want to bring the Commission to the expectations of Canadians and in preparation for these hearings we commissioned a public opinion poll and what we found was this:

11832            Canadians trust the CRTC.  The CRTC is viewed as the guardian of our cultural trust on television and when you roll the government into the numbers we get to almost 7 in 10 Canadians, 67 percent expect you to preserve Canadian content on TV.  Only 8 percent trust the cable and satellite companies to do the same.

11833            Canadians want Canadian programming available to them and a majority oppose replacing Canadian shows with foreign programming.  A firm majority of Canadians oppose replacing drama programming with foreign content.

11834            Another relevant finding is that Canadians are not aware that big changes are being considered.  As of March 2008 83 percent were not aware of these hearings.

11835            Canadians believe that less regulation will have negative economic and cultural consequences.  Almost three‑quarters, 74 percent believe that less regulation will reduce choices of Canadian programs on TV.

11836            9 in 10 Canadians; 88 percent think it's important to have regulations and incentives to ensure the continued presence of independently‑owned broadcasters on their cable and satellite lineup.

11837            We stand at a crossroads for Canadian culture on the small screen.  If the ecosystem of the CRTC regulations is dismantled it will be the death knell for Canadian culture and our sovereignty.  Scarce financial resources will be diverted out of the hands of Canadian creators and our broadcasting system.  This poll shows Canadians won't support less regulation.

11838            And back to you, Richard.

11839            MR. HARDACRE:  Thank you.

11840            At the start of these hearings the Chair asked five questions.  What should be the size of the basic package was one.

11841            The size of the basic package is not ACTRA's central concern at this hearing.  We think the current system works reasonably well and we argue for keeping genre protection and access rules and maintaining distribution and linkage rules.  These rules help ensure that we have a diversity of services and programming in our system.

11842            Number two, should there be guaranteed access for certain Canadian specialty and pay services?  Which ones and on what terms?

11843            Well, ACTRA believes that all the analog services and Category 1 digital services should remain must carries.  However, if the Commission disagrees at a minimum those services that are airing significant amounts of Canadian drama in our opinion, including children's and animation programs, these are the channels that should have guaranteed access.  In general, services with high Canadian programming expenditure and exhibition requirements should receive preferential treatment.

11844            We also wish to point out that preponderance would not achieve the Broadcasting Act's requirement of maximum use of Canadian creative and other resources.  In fact, it would reduce the number of Canadian channels from what we now have and relegate Canadian content programming to a minority.

11845            Number three, should there be any type of genre protection for guaranteed services?  Yes.  Eliminating protection among Canadian services would lead to homogenization of schedules since everyone would chase the audiences that are most valuable to advertisers.  In addition, significant overlap or competition would have negative consequences for drama programming as it is the most expensive.

11846            Should there be fee for carriage for over the air broadcasters; if so, how much and on what terms?

11847            Well ACTRA's position is clear.  If fee for carriage, then surely fees for drama.

11848            Number five question was:  Should BDUs have access to advertising revenues from on‑demand services or local avails?

11849            First of all, cable and satellite companies don't appear to need new revenues.  BDUs had revenues of more than $8 billion last year.  What they are in need of is rules that require them to make additional contributions to the system.  Therefore, we suggest their 5 per cent contribution should move to at least six.

11850            Those are ACTRA's responses to the Chair's five questions.

11851            To conclude, we need more Canada on television, not just because it is an important economic sector, which it surely is, and not just in the interest of creators, our actors, our writers, our directors, our crew and producers.  We need more Canada on TV for our sense of a nation, ourselves as a nation, for our cultural sovereignty, our Canadian audiences.

11852            Do not import the drama disaster that has afflicted us from the conventional side onto the specialty side.  We are still trying to fix that catastrophe a decade later.

11853            Canadians look to the CRTC to regulate the system to ensure they have access to our stories and to our creativity.  They trust the Commission to do so.  Frankly, so do we.

11854            Thank you very much.

11855            THE SECRETARY:  Thank you.

11856            I would now invite Directors Guild of Canada to introduce their representatives and proceed with their 10‑minute presentation.

PRESENTATION / PRÉSENTATION

11857            MR. ANTHONY:  Good afternoon, Mr. Chairman, Commissioners, Commission staff.  My name is Brian Anthony and I am the National Executive Director and Chief Executive Officer of the Directors Guild of Canada.

11858            The DGC is a national labour organization representing key creative and logistical personnel in the film and television production industries with over 3,800 members.

11859            With me today are Alan Goluboff, President of the Guild, and Monique Lafontaine, our General Counsel and Director of Regulatory Affairs.

11860            Before proceeding further, Mr. Chairman, I would like to take a moment to recognize and thank Alan Goluboff for his work as DGC President.  Alan's term as President of the Guild expires at the end of this month.  Over the last eight years, Alan has tirelessly served the Guild and its members.

11861            We wish him all the best for the future and know he will remain as committed to the improvement of the Canadian television and film production sector as he has over the past eight years.

11862            Turning to the issues at hand, we are very pleased to appear before you to provide our comments in this important public hearing.  A number of the proposals currently before the Commission could have a far‑reaching impact on the Canadian broadcasting system, for better or for worse, if implemented.

11863            The DGC believes it is important for the Commission to undertake policy reviews in order to ensure that Canadian broadcasting undertakings are doing their utmost to achieve the policy objectives of the Broadcasting Act.

11864            It has been more than 10 years since the last major BDU review.  Given the changes that have taken place in the broadcasting industry since then, this proceeding is timely.

11865            That said, among the many interveners who have appeared before you in this hearing are four major BDUs.  This licensees are calling for extensive regulatory changes that would result in significant benefits to distribution undertakings.  These changes include the elimination of access and genre protection rules for discretionary services, as well as greater sources of BDU revenues, such as advertising on VOD and local avails.

11866            The BDUs, however, have made virtually no proposals to increase their contribution to the system in exchange for such profitable regulatory or deregulatory measures.

11867            Moreover, we note that no meaningful empirical evidence has been put forth that supports the notion that access and genre protection rules must be eliminated in order to keep Canadian subscribers within a regulated broadcasting environment.

11868            If our system is to continue to thrive, even for the advent of new media services, a number of key regulations continue to be relevant and necessary.  We urge the Commission not to allow the pendulum of deregulation to swing too far in favour of the BDUs.  This in all likelihood will result in a diminished broadcasting system for Canada.

11869            I now turn to Monique Lafontaine and Alan Goluboff, who will provide our responses to the five key questions posed by the Commission at the outset of this public hearing.

11870            Monique...?

11871            MS LAFONTAINE:  Thank you, Brian.

11872            The first question asked related to the appropriate size of the basic package.  In our view, it should remain as is.  We have seen no evidence that supports changing the size of the basic package at the present time.

11873            The second question asked by the Chair on day one of the hearing related to access rights and whether any discretionary services should be provided with guaranteed access.

11874            We strongly believe that the access rules must remain in place for all existing Canadian analog and Category 1 specialty and pay services.  This is a key regulatory measure that has served Canadians and the Canadian broadcasting system well.  The access rules have ensured that Canadians can tune into a broad range of strong Canadian programming services which in turn have made significant contributions to Canadian programming over the years.

11875            We have been monitoring this hearing from a distance and are very concerned about the BDUs' proposal for the elimination of the access rules and the rationale that they have provided in support of this request.  In essence, the BDUs are asking the Commission to provide them with all of the authority to determine which discretionary services Canadians are to receive in their homes, yet there is no evidence on the public record that shows that the elimination of this rule is necessary for the continued success of BDUs.

11876            In fact, what we did hear from both the Rogers and Quebecor was that the elimination of the access rules will not result in the loss of any programming services brought to Canadians.  They both stated that it is very difficult to remove a programming service once subscribers begin receiving it.

11877            Quebecor went as far as to say that access rules are essentially irrelevant, yet when asked, Rogers indicated to the Commission that their first priority for deregulation is the elimination of the access rules, thereby indicating that this is more important to them than VOD advertising and the deregulation of local avails, which they value at $65 million per year.

11878            DGC seriously questions why a rule that is ostensibly irrelevant to the BDUs is also number one on Rogers' wish list of regulations to be eliminated.

11879            Rogers and Quebecor also maintained during this hearing that the Commission should eliminate their access rules in order for Canadian discretionary services to improve their services to Canadians.

11880            While we recognize that there is always room for improvement for any media service, the discretionary services and the regulatory regime that governs them have been a success story.  There is no evidence in this proceeding that Canadians are dissatisfied with the quality of the services provided by Canadian discretionary services, nor that they are in great need of significant improvement.

11881            The Commission also asked whether there should be continued genre protection for programming services.  This is another key regulatory measure that must remain in place.  If genre protection is eliminated, we are very concerned about the morphing of services towards a few popular genres.  We also foresee smaller players being squeezed out or snuck up on as, to use Rogers' language, as the players take over a particularly ‑‑ as the larger players, excuse me, take over a particularly successful niche genre overnight.

11882            For the record, we also believe that the existing genre protection rules as they relate to foreign programs or programming services should also be maintained.

11883            Alan...?

11884            MR. GOLUBOFF:  Thank you.

11885            The fourth question the Commission asked was whether there should be a fee for carriage for OTA services.

11886            The DGC was extremely disappointed with the discussion that took place at the hearing yesterday on this issue.  CTV and CanWest have essentially asked the Commission to amend the regulations to allow them to increase their annual revenues by $295 million, yet they are not prepared to dedicate a penny of that money to original Canadian drama.

11887            This to us is completely unacceptable.

11888            The DGC supports the notion of a fee for carriage for OTA broadcasters.  Revenues generated from such a fee must, however, be tied to the support of original Canadian drama.  We do not support a fee for carriage that might well simply drop to the private OTA broadcasters' bottom lines.

11889            The final question asked related to whether BDUs should have access to advertising revenues from on‑demand services or from local avails.

11890            In order to adjust to the changing media environment, the DGC supports the notion of new ads being placed on VOD services.  We also support the CCAU and the CFTPA's proposal for the Commission to consider increasing the level of support of the VOD and pay per view services to independent production funds from 5 per cent to perhaps 10 per cent of gross revenues.

11891            These changes will help keep pace with the times and ensure that Canadian programming is adequately supported by VOD and pay per view services.

11892            As for local avails, DGC supports amending the Commission's local avails policy as a potential for new sources of revenue for BDUs.  Any deregulation of this policy must, however, be tied to Canadian programming.  A good starting point would be to direct 50 per cent of the revenues generated from the local avails to the Canadian Television Fund.

11893            It order to improve the Canadian broadcasting system, the DGC also makes the following additional recommendations.

11894            One, eliminate the CTF licence fee top‑up rule which provides an unnecessary credit to discretionary services in meeting their CPE requirements.  Last year alone the top‑up rule resulted in $45 million lost to the system.

11895            And two, increase BDU contributions to Canadian programming from 5 per cent to at least 6 per cent.  The 5 per cent contribution was established in the 1990s and the BDUs are well overdue for an increase.  An increase to 6 per cent would result in about $55 million additional for Canadian programming each year.

11896            The Commission has the formidable task within its public hearing of ensuring that Canada's broadcasting system continues to prosper.  It is our strong view that while it is time to make some constructive changes to the regulatory regime, it is most definitely not time to eliminate key measures that have served the entire system well.

11897            This hearing also provides the Commission with a terrific opportunity to increase the level of support within the system for the creation of high quality original Canadian programming.

11898            Given the challenges that the production community has faced since the release of the 1999 Television Policy and the need for a broad range of Canadian programming on television, we respectfully urge you to do so.

11899            We thank you for the opportunity to provide these comments.

11900            I would also like to thank Brian for his kind words earlier in the presentation.  It has been a privilege serving the DGC and appearing before you over the past eight years.  I have participated in many CRTC hearings over the years.  I am hopeful that appropriate measures will remain in place to ensure that Canadians will indeed be able to watch the best of the best Canadian programs on television well into the future.

11901            Thank you.  We would be happy to respond to any of your questions.

11902            THE SECRETARY:  Thank you.

11903            I would now invite Writers Guild of Canada to introduce their representatives and proceed with their 10‑minute presentation.

PRESENTATION / PRÉSENTATION

11904            MS PARKER:  Hello again and thank you.

11905            I am going to go a bit off script to just keep it down, so you will just notice that it is not perfect.

11906            Good afternoon, Mr. Chair, Members of the Panel, Commission staff.  My name is Maureen Parker and I am the Executive Director of the Writers Guild of Canada.

11907            To my left is Rebecca Schechter, show runner of Little Mosque and President of the Writers Guild of Canada; and Graeme Manson on my right, screenwriter and head writer of the Showcase series Rent a Goalie.

11908            Also with us today is my colleague, Kelly Lynne Ashton, Director of Policy at the Guild.

11909            The Writers Guild of Canada is a national association representing more than 1,800 screenwriters working in film, TV, radio and digital production in Canada.

11910            There are three issues that we wish to address in our presentation:  they are genre protection; the appropriate expenditure requirements of discretionary services; and the appropriate expenditure requirements of BDUs.

11911            We will also briefly address the Commission's five questions and we will be happy to answer them in more detail during questions.

11912            Before we focus on these issues, we would like to clearly state our overall aim in these hearings.

11913            We are here to ensure that the primary goal of the Broadcasting Act is upheld, namely ensuring that each element of the Canadian broadcasting system makes an appropriate contribution to the creation of Canadian programming and to the predominant use of Canadian creative resources.  There are many contentious issues at play in this hearing, pitting BDUs and broadcasters against one another.

11914            The WGC and those of us who want the choice of high‑quality Canadian programming are caught in the middle.  Equally important, we want to ensure that any new revenue streams approved by the Commission are tied to an appropriate contribution to the funding of Canadian priority programming.

11915            On each occasion that the WGC has appeared before this Commission we have made the case for drama expenditure requirements.  We have shown that revisions to the OTA policy in '99 removing drama expenditure requirements from OTA broadcasters resulted in a substantial decline in spending on Canadian drama.

11916            Right now, even including the approved benefits packages, the OTAs are only spending 2.3 per cent of their ad revenue on Canadian drama, while spending 12 times as much on foreign drama.  Luckily, this decline has been somewhat offset by the Canadian programming expenditure requirements on the discretionary services.

11917            In 1999 there were 12 one‑hour drama series with a total of 186 hours of programming spread amongst CTV, CBC and Global.  The one hours dropped to five series and only 66 episodes the year after changes in the OTA policy.

11918            As of 2007, for the first time since '99, we are almost back at the same number of one‑hour drama series.

11919            I'm sorry, I have lost my spot there.

11920            However, due to shorter episode orders, only 127 hours were produced.  That is 59 fewer hours.  If you remove the discretionary broadcasters from the list, you will only have eight series with 98 hours of programming.  That means that the OTAs are airing half as much one‑hour drama as they were in 1999.

11921            It is clear from the evidence that without regulation, broadcasters will not spend money on Canadian drama.

11922            Other interveners have been asked if there is really a need for Canadian drama.  Do Canadians want it?

11923            That's like asking clothesmakers if there is really a need for pants.  People buy pants and people want dramas.  Storytelling is just as fundamental to leisure time as pants are to a wardrobe.

11924            This question has two parts.

11925            Do people want to watch drama?  Of course.

11926            In fact, the CRTC's 2007 Broadcast Policy Monitoring Report shows that drama is the most viewed category of programming broadcast by English‑language services.

11927            So do people want Canadian drama?  Why are we the only nation that repeatedly asks itself this question?

11928            In Europe, in England, in the U.S., in India they take it as a given that people want to see stories about their culture, their communities, their world.  Why can't we do the same and spend our energy figuring out how to get those stories made and aired by our Canadian broadcasters?

11929            Graeme...?

11930            MR. MANSON:  Thank you.

11931            The entire premise of this hearing asks us to justify our current system rather than challenging us to improve it, and so I justify.

11932            The Canadian programming expenditure requirement for most discretionary services is a good and necessary thing.  We can see that the discretionary services are doing a great job with their CPE.  There are flaws such as the inappropriate deduction of management fees and the inclusion of CTF licence fee top‑ups as part of their expenditure requirement.

11933            But despite these flaws, the discretionary services have become a major supporter of Canadian drama, with series like Regenesis, Durham County, Trailer Park Boys, and my show, Rent‑A‑Goalie.

11934            What we would like to see is longer episode orders for these shows, which is dependent upon a stable and healthy revenue flow.

11935            For the most part, discretionary services commission shorter episode orders than the OTA.  My show this year was only licensed for eight episodes.  A normal U.S. season order, on the other hand, is up to 26 episodes.

11936            Shorter orders offer obvious storytelling challenges to grabbing and keeping our audience.  They also create numerous production difficulties.  For example, you can't lock down your cast for future seasons because the cost of optioning their services for a short run is far too high.  And you have to amortize production costs such as set builds over only eight episodes instead of 26 or a longer run.

11937            Short orders are only one of the factors standing between us and our audience.  We don't have big enough budgets.  We don't have large enough promotional budgets for promotion and we are slotted in and around the monstrous U.S. schedule.  But that doesn't mean that we should give up our right to watch high‑quality Canadian stories on television.  That's why we have the Broadcasting Act.

11938            As for genre protection, we feel strongly that both the Canadian broadcasting system and the Canadian consumer require it.  As other presenters have stated, without domestic genre protection, broadcasters will gravitate to the bland middle ground.  Remove genre protection altogether and broadcasters who licensed programming to air on any channel they own will air it across every channel they own to reduce the cost of programming and increase their profits.

11939            If granted weakened genre definitions such as drama, lifestyle or sports, there is a risk that broadcasters will still reduce their costs by creating overlapping programming schedules.  There would then be fewer slots available for original programs.

11940            The Writers Guild lodged a complaint with the Commission about this very practice when The History Channel breached its terms of service by airing CSI New York.  This breach was especially disturbing when you look across the dial and realize that everywhere you turn, you see CSI:  on CBS, on CTV, on A&E, on Showcase, on Spike and then on History.

11941            We understand the Commission's frustration with the many complaints it receives about breaches of service.  Having participated in a complaint, we know just how much work they entail.

11942            However, genre protection is an admiral goal.  It provides us with a rich, diverse niche programming.  So don't get rid of the rules just because they are difficult to enforce.  If the Commission had the ability to levy fines and other penalties on those who breach their responsibilities, it would be much easier to enforce obligations and we strongly suspect prevent future infractions.

11943            Thank you.  On to you, Rebecca.

11944            MS SCHECHTER:  Thank you, Graeme.

11945            Foreign genre protection is absolutely essential, so much so that even BDUs such as Rogers and Bell support maintaining those protections as essential to a strong Canadian broadcasting system.

11946            U.S. broadcasters have deep pockets.  For example, if the U.S. channel History TV was allowed into Canada, it would snap up North American rights to all of its programming instead of just U.S. rights, leaving few programs for the Canadian History Channel to buy.

11947            Canadian services need to buy foreign programming at lower prices than it costs to acquire domestic programming because that is how they make their money.  So removal of foreign genre protection is a disastrous business model for the Canadian discretionary services.

11948            We have to ask, though, before we move on, why are we even considering removing or weakening genre protection?  Who has asked for this?  Why is it necessary?

11949            Canadian viewers already have access to 97 per cent of the top 200 U.S. cable programs.  What are they missing?

11950            BDUs are throwing out specious arguments when they try to convince the public that they are missing something.  Do they need HBO?  No.  Almost every HBO series is already available on TMN and Movie Central.

11951            Should we risk the viability of the Canadian broadcasting system because some BDUs want to improve their already healthy bottom line?

11952            The analog specialty channels and pay channels, which were first licensed by the Commission, are for the most part doing very well.  Subscriber revenues and advertising revenues are increasing.  This is why the Commission decided to adjust their CPEs in the last round of licensing, to better reflect their enhanced PBIT levels.  This is why we want to ensure that the Canadian broadcasting system as a whole does not negatively impact their ability to earn revenue and therefore meet their CPE obligations.

11953            Is every service making an appropriate contribution to Canadian programming?  We don't think so.

11954            The Category 1 digital channels and pay channels have different and lesser exhibition and CPE requirements than the analog specialty services.  The Category 2 digital channels have no exhibition and CPE requirement.  Pay per view and VOD have low exhibition requirements and no CPE.

11955            The Commission structured these licences this way to help these services get off the ground based on existing market conditions.  A lot has changed since then.  Many of these services are now very profitable.  Market conditions have also changed.

11956            For example, the pay movie services, TMN and Movie Central, now broadcast many popular television series from U.S. cable stations and original Canadian series like Slings and Arrows and Durham County.  TMN and Movie Central could now easily commission enough Canadian drama to fill a higher exhibition requirement in CPE, and they should.

11957            As the Canadian broadcasting system has developed and evolved, we need to look at all of the underlying licensing assumptions to determine if they are still valid.

11958            Similarly, the 5 per cent BDU contribution to Canadian programming needs to be reviewed.  It was developed in the mid‑90s.  We just suggested as part of the CCAU that no less than 6 per cent would be an appropriate contribution to Canadian programming.

11959            BDUs earned $4 billion in subscriber revenue last year with operating margins of 23 per cent.  They can afford to put more money into Canadian programming and we need it.

11960            Thank you.

11961            MS PARKER:  Briefly, now we would like to address the five questions that the Commission has been asking each intervener.

11962            Number one, the basic package.

11963            We don't want the BDUs to be able to decide what services Canadians are able to watch.  We prefer that you do that.

11964            Two, the WGC believes that there is no need to change the access rules.  There has been no convincing evidence presented to justify such a significant change.

11965            Three, genre protection is an essential element of the Canadian broadcasting system, both domestically and against foreign services.  Again, we do not see a need to revise this policy.

11966            Number four, should the Commission determine that the fee for carriage for OTA services is an appropriate policy, then the WGC recommends that a significant proportion of those fees be allocated to Canadian drama.  While the WGC fully supports the need for local programming, we believe this is a basic service of any OTA network and should not require special assistance without clear evidence of need.

11967            Number five, should the Commission determine that new revenue opportunities on VOD advertising and local availabilities be granted to BDUs, then at least 50 per cent of those revenues should be allocated to the CTF.

11968            Thank you for your time.

11969            THE SECRETARY:  I'm sorry.

11970            J'invite maintenant l'Union des Artistes et SARTEC à faire leur présentation.

11971            S'il vous plaît vous présenter.

11972            Après quoi, vous aurez 10 minutes pour votre présentation.

PRÉSENTATION / PRESENTATION

11973            M. LÉGARÉ : Monsieur le Président, Madame et Messieurs les Conseillers, bonjour.

11974            Je m'appelle Yves Légaré. Je suis le directeur général de la Société des auteurs de radio, télévision et cinéma.

11975            Je suis accompagné d'Anne‑Marie Des Roches, directrice des affaires publiques de l'Union des artistes.

11976            Nos présidents nous prient de les excuser. Ils avaient des engagements qui les empêchaient d'être présents, dont monsieur Legault qui est au théâtre ce soir.

11977            Au cours des deux dernières années, nous avons eu à plusieurs reprises, l'occasion de nous prononcer sur l'évolution du système canadien de la radiodiffusion, notamment sur les façons les plus efficaces d'atteindre les objectifs de la Loi, tout en nous assurant que tous les intervenants aient les ressources nécessaires pour prospérer, que tous soient responsables du succès de la télévision, que l'ensemble des joueurs contribue à notre culture audiovisuelle et que tous aussi puissent développer leurs entreprises.

11978            Oui, il faut l'avouer, l'équilibre est fragile. Les joueurs très nombreux ont souvent des objectifs divergents.

11979            Mais l'objectif est de continuer à raconter et à écouter nos histoires et ainsi enrichir notre patrimoine culturel commun.

11980            Depuis des années donc, nous venons vous parler de contenu canadien et des émissions dramatiques et de la façon la plus appropriée de nous assurer de l'avenir de notre télévision.

11981            Les dramatiques demeurent en effet la pierre angulaire dans notre système de radiodiffusion.

11982            Pourtant, leur situation n'est pas toujours rose.

11983            Si dans le marché anglophone on parle depuis longtemps de crise des dramatiques, dans le marché francophone, leur financement pose des problèmes sérieux, qui vont au‑delà de ce que d'aucuns ont appelé la crise des * séries lourdes +.

11984            Parce que les forces du marché favorisent la diffusion moins coûteuse au détriment de la fiction et parce la multiplication des canaux n'a pas eu comme corollaire une multiplication de l'offre en fiction locale, les dramatiques originales de langue française voient leur présence dans notre paysage audiovisuel se restreindre.

11985            C'est pour cela que le marché francophone a besoin de soutien accru pour exprimer notre culture par la diffusion de séries dramatiques originales de langue française de qualité sur l'ensemble des chaînes.

11986            Il faut trouver des solutions, et la réglementation demeure, dans ce cas, un outil essentiel.

11987            C'est pourquoi, dans le contexte où les diffuseurs généralistes demeurent les principaux déclencheurs de ces émissions, nous sommes en faveur des redevances sur la distribution des services de télévision traditionnels à la condition que ces redevances servent à accroître la production et la diffusion d'émissions prioritaires.

11988            Vous avez lu nos interventions.

11989            Nous tenterons maintenant de répondre aux questions soulevées dans le cadre des comparutions à cette instance.

11990            Le  Conseil a proposé que le service de base numérique soit constitué d'un bloc de services canadiens limité aux services de télévision en direct locale, aux services de programmation éducative et à des services obligatoires, comme la Chambre des communes, par exemple.

11991            D'autres ont parlé d'inclure RDI et TV5 sur le service de base.

11992            L'UDA et la SARTEC croient que, dans la mesure où les télédiffuseurs généralistes obtiendraient des redevances sur la distribution de leurs services, pareille approche contribuerait à ne pas hausser indûment la facture des consommateurs.

11993            De plus, puisque les redevances serviraient à produire des émissions canadiennes de qualité, tout le monde y gagnerait.

11994            Toutefois, il serait essentiel que tel qu'il l'a récemment annoncé, le Conseil réglemente les tarifs de gros pour les services de programmation avec garantie d'accès.

11995            Une  intervention du Conseil à l'égard des services à accès garanti assurerait ainsi un financement stable à ceux qui contribuent le plus au système canadien de la radiodiffusion.

11996            L'accès garanti devrait d'ailleurs favoriser les canaux les plus performants en termes de dépenses et de diffusion d'émissions canadiennes originales de langue française, particulièrement dans les catégories prioritaires et qui offrent une diversité dans le système et un haut niveau de contenu en haute définition.

11997            Enfin, le Conseil doit s'assurer qu'il n'y ait pas préférence indue accordée à un service dont l'entreprise de distribution est propriétaire.

11998            La proposition du Conseil à l'égard de l'inversion de la preuve pour les plaintes de préférence indue nous apparaît adéquate.

11999            Anne‑Marie ?

12000            MME DES ROCHES : Notre volonté de privilégier les services offrant un haut niveau d'émissions prioritaires, comme les émissions jeunesse, les documentaires de longue durée, les dramatiques, explique également notre position en faveur du maintien de l'exclusivité par genre.

12001            Si pour les services de nouvelles ou de sports, la concurrence a peut‑être moins de conséquences, elle risquerait pour les services en cause de les fragiliser et de contribuer à une réduction des émissions locales offertes.

12002            Ici, * locales +, on l'entend dans le sens d'émissions canadiennes.

12003            Le Conseil devrait donc y aller délicatement dans ce sens.

12004            En ce qui a trait aux services étrangers, ils ne contribuent guère au système canadien de la radiodiffusion.

12005            A contrario, lorsqu'un service canadien acquière une émission étrangère, les revenus de cette émission sont réinvestis dans le système.

12006            Pourquoi alors favoriser la distribution de services étrangers si cette concurrence affaiblit des services canadiens qui contribuent au contenu national ?

12007            La divulgation des données.

12008            Nous nous sommes prononcés à ce sujet dans le cadre de l'avis public 2008‑6 avec nos collègues de l'APFTQ, de l'ADISQ et d'autres associations du milieu francophone, et croyons que la transparence est d'intérêt public.

12009            Il faut divulguer les résultats financiers et les dépenses d'émissions canadiennes de chaque service facultatif individuel, comme c'est le cas présentement.

12010            Les mêmes genres de données doivent être publiées pour chaque entreprise individuelle de télévision en direct, privée et publique, et pour chaque entreprise de distribution de radiodiffusion.

12011            Le paysage audiovisuel canadien a subi et subira encore de profondes transformations.

12012            Il est important d'assurer la présence d'un contenu national de qualité si nous voulons maintenir la richesse de notre système de radiodiffusion.

12013            Or, cela ne peut se faire sans l'attribution de ressources financières adéquates, lesquelles devront servir à maintenir l'équilibre au sein du système et assurer la pérennité voire l'enrichissement du contenu.

12014            Pour les télédiffuseurs généralistes cela signifie qu'en échange des redevances, ils auront à accroître leurs engagements aux émissions prioritaires, tant en nombre d'heures, qu'en dépenses en programmation canadienne.

12015            Dans le marché francophone, cela signifie la production de dramatiques de qualité, originales de langue française.

12016            Pour les services spécialisés avec garantie d'accès, cela implique un engagement de leurs revenus dans le contenu canadien, ainsi qu'un niveau de diffusion significatif de contenu canadien original de langue française.

12017            Nous ne croyons pas que les services spécialisés doivent obtenir une plus grande souplesse en ce qui a trait à la publicité.

12018            Enfin, pour  les entreprises de distribution de radiodiffusion, une augmentation minimale de leur contribution au Fonds canadien de télévision (de 5 à 6 pour cent) permettrait, comme nous le mentionnions précédemment, d'assurer également la présence accrue de contenu canadien sur les nouvelles plateformes de diffusion.

12019            J'espère que vous apprécierez ces quelques commentaires en réponse aux questions soulevées par vous, et puis nous sommes disponibles pour répondre à vos questions.

12020            THE CHAIRPERSON:  Thank you very much for your presentations.

12021            Suddenly consensus among you.

‑‑‑ Laughter / Rires

12022            THE CHAIRPERSON:  I detect very little difference from one to the other.

12023            ACTRA, in your submission you say on page 7 when you talk about preponderance:

"It would not achieve the Broadcasting Act's requirement of maximum use of Canadian creative other resources.  It would reduce the number of channels from what we have now and relegate Canadian content programming to a minority."  (As read)

12024            We have heard about preponderance now for a week and a half and there are sort of three different ideas flying around.

12025            One of them says preponderance of channels offered.  One of them says preponderance of channels received by each individual subscriber.  And one of them is double preponderance; you have to have a preponderance both of offering and of received.

12026            There is a fourth variety that says that's true but that is all over and above the basic package.  You don't include the basic package in the preponderance.

12027            Is your position the same regardless of which model of preponderance we adopt?

12028            I'm not quite sure why, for instance, when you talk about a preponderance of channels subscribed to by each person why that would necessarily lead to what you call a reduction in the number of Canadian channels and relegate Canadian content programming into minority.

12029            ACTRA made this comment but all of you basically echo it.  So anyone of you please feel free to answer.

12030            MR. HARDACRE:  ACTRA will answer first.

12031            Mr. Waddell, please.

12032            MR. WADDELL:  All right.

12033            The point that is made ‑‑ and it didn't come across in the oral presentation because of time; we cut down our presentation because of time ‑‑ is that, you know, there are already lots of foreign shows on these channels and as a consequence the Canadian content would be relegated to a minority.

12034            So I mean that is our basic point, Mr. Chairman.

12035            If anyone else wants to comment.

12036            MS LAFONTAINE:  From the DGC's perspective, as I was saying earlier on the CCAU panel, we believe that the current regime across the board has worked well in terms of the basic package, discretionary services, linkage, carriage linkage.  So that is our position.

12037            However, we do appreciate that the CFTPA has put forth a proposal of 66 per cent preponderance and then there is that double‑double, not double‑double.

12038            So as I say, our position is status quo.  However, if the Commission were to go beyond status quo, our position is 66 per cent and it would be provided or delivered, distributed and received, yes; double‑double.

12039            THE CHAIRPERSON:  I am trying to understand the rationale.  I understand what your goal is.  Obviously you want to maximize the Canadian production, Canadian drama.

12040            If any of those rules, as I say, the rule, one is probably most favourable to you, you don't count ‑‑ the basic stands on its own, so basic is not counted.  And you then say basic plus a preponderance of both offering and received by the subscriber.

12041            Why would that necessarily weaken your position or is it the status quo?  It might actually further increase ‑‑ I don't see the rationale why that proposal by the BDUs would automatically be antagonistic to your aims.

12042            MS LAFONTAINE:  Well, I mean, the issue is how many services are going to get dropped at the end of the day under the new regime?  And it is likely, with the 50‑plus‑one, that we will see some services or we will see less of a Canadian presence within the regime than we see now, because we are far beyond a 50‑plus‑one at this point.

12043            So that is our rationale for not supporting the 50‑plus‑one.

12044            And our rationale for supporting what we have now is that, again to echo Mr. Bureau, the system has worked well.  The system has two eyes.  It sees well and we don't know why we need to add a third eye because we are getting a diversity; we are getting a broad range of services.  So we don't see that it needs to be rejigged.

12045            MS PARKER:  Just to add on that, which I am sure is very obvious to you, of course what we care about is the CPE which goes with the Canadian services.  That of course is our lifeblood.

12046            You heard today from all of the writers and the actors and so forth that we need that level of revenue in the Canadian system to do the dramatic and priority programming that we are doing today.

12047            So less access, less ‑‑ and I actually listened to what you were saying to the CFTPA:  Did it matter whether it was offered and received?  And I could see that we have some thinking to do on the offer/receive end.

12048            But we do support the CFTPA's 66.

12049            Our main position is we like the way it is working and we need the CPE that comes with those services in order to keep up the minimum levels of content that we have.

12050            LE PRÉSIDENT : OK.

12051            Deuxièmement, l'UDA et SARTEC, vous êtes les seuls qui ont adressé le thème de divulgation des données.

12052            Est‑ce que votre position est partagée par vos collègues ?

12053            MME DES ROCHES : On ne s'est pas parlé de ça particulièrement.

12054            LE PRÉSIDENT : Non, non.

12055            Vous l'avez mentionné dans votre ‑‑

12056            MME DES ROCHES : Oui, mais on l'a fait dans un autre ‑‑ avec l'ATFTQ, l'ADISQ, l'ASPAQ et d'autres organisations du Québec.

12057            On avait déposé des déjà des dossiers.

12058            Je pense que c'est sensiblement la même chose. Mes collègues ‑‑ on en a parlé souvent ‑‑ désirent la transparence et ils pensent aussi que c'est dans l'intérêt public de dévoiler les données de façon plus spécifique.

12059            THE CHAIRPERSON : Michel, you have some questions ?

12060            COMMISSIONER ARPIN:  Thank you, Mr. Chairman.

12061            En fait, sur la divulgation financière, la question était posée pour les entreprises de distribution dans le cadre de ce processus.

12062            Alors, je sais que dans votre présentation orale vous avez couvert l'ensemble des autres joueurs.

12063            Mais dans le cadre de ce processus‑ci,  l'avis public demandait aux gens de se prononcer sur la divulgation financière.

12064            I want to get back to preponderance.

12065            As Ms Lafontaine just said, in a 500‑channel universe, if I am going at 50 per cent at the offering, it means 250 Canadian services.

12066            Do you think Canada could at this time support 250 different Canadian services on BDUs?

12067            MS LAFONTAINE:  I'm sorry, I'm not quite sure what you mean by support.  Does the market support 250?  Do the viewers support 250?

12068            COMMISSIONER ARPIN:  At some point in time somebody will have to pick this one and that one obviously.  And in order to maintain the entrance point, the BDUs will have to make sure that they have even more than 250, at least 251 in a 500‑channel universe.

12069            And by the way, Rogers is already at 525, according to a number that the CAB has floated during this proceeding.

12070            So it means that we are talking here, for the sake of discussion, 251 Canadian services are at the offering point.  That doesn't mean they will be subscribed to, but the BDU will have the responsibility at all times making sure that he has in his offering 251 Canadian services of all kinds.

12071            Do you think this country has the capacity to make sure that at all times the BDUs will be able to sustain an offering of 251 channels?

12072            MS LAFONTAINE:  Well, as I say, if you are asking me can Rogers carry 251 channels, 251 Canadian channels within a 500‑channel universe...

12073            COMMISSIONER ARPIN:  Yes.  What I'm trying to ask you is the following:  If Rogers is to offer 500 channels of all kinds, according to your own scenario 251 of them will have to be Canadian.

12074            MS LAFONTAINE:  The scenario is that 66 per cent of 500 actually.

12075            COMMISSIONER ARPIN:  No, no.  Your scenario was ‑‑ no, that is the CFTPA, but that is only at the subscriber level.

12076            You have a double preponderance.  The first preponderance level is 50 per cent offering, which means 251 services.  The second preponderance is obviously what the subscriber takes.  If he takes only 50 services, it means that he is going to get 26 Canadian and 24 foreign.

12077            MS LAFONTAINE:  Right.

12078            COMMISSIONER ARPIN:  If he follows totally that route.

12079            Now, we have been told here by numerous BDUs so far that the take‑up rate is somewhere around 75 per cent, while there is currently no control on the number of signals that they have to provide.

12080            MS LAFONTAINE:  Well, I mean, a couple of things and I will have Peter Grant jump in.

12081            Our view is that there should be not 50‑plus‑one but a preponderance of 66.  We do take the CFTPA's position and we think that ‑‑

12082            COMMISSIONER ARPIN:  But the CFTPA position has nothing to do with the offering.  You have the double ‑‑ you have the double preponderance.  That is why I'm asking you the question.

12083            If you now move towards the CFTPA proposal which is two‑thirds, it is the same one as the CBC, then I have no further questions because that means you have dropped your request that the BDUs offer 250 per cent and more of Canadian service.

12084            MS LAFONTAINE:  In our view, there needs to be both a supply ‑‑ essentially the supply and the demand, because if we leave it to ‑‑ if we just have it on the demand side, then it leaves it open to the BDUs to perhaps ghettoize services.  They won't package them as nicely.  They won't promote them as well.

12085            This proposal that we have mirrors what the Commission determined in the satellite radio decision that related to Sirius where the Commission dealt with both the supply side and the demand side of the content.

12086            COMMISSIONER ARPIN:  Except in the instance of the satellite radio, supply and demand is exactly the same number, because you subscribe to XM and you get all the services that they have, not one less, not one more.

12087            MR. WADDELL:  Let me jump in here.  Give us the chance.  Give us the opportunity, all right.  We don't have the chance, we don't have the opportunity.  Most of those channels are now running "Law & Order" and "CSI".  How about running some Canadian programming?  How about putting some money into the system?  How about the ‑‑

12088            COMMISSIONER ARPIN:  Oh, I'm coming to that.

12089            MR. WADDELL:  Okay.  But the issue  is financing, right?  We have the talent, it is right here in this room.  And you give us the chance, you give us the financing, you give the producers the money, we are going to produce programming that will fill those 251 channels, Mr. Vice Chair.

12090            MS LAFONTAINE:  I would just like to pass it over to Peter.

12091            MR. GRANT:  I will just add one other thought, Mr. Vice Chair.  Currently of course the number of Canadian services that are now able to be carried is almost 200.  If you include the separate services, which I think he would be entitled to, all of the various version of the Globals and the CTVs and the CBCs across the country that are carried as distant signals, so there is in fact quite an offering of Canadian.  It has been augmented of course by the introduction of all the ethnic services.  And the ethics actually, to be fair to the system, there is a point to be said about the ethnic services because they are obviously in a kind of a category of their own where you can imagine that as long as you are protecting the vulnerable Canadian ethnic services offering a wide variety of foreign services that are not in English, these are not Hollywood coming in, this is a different kind of diversity, I put that in a different category.  So I have some sympathy with what you have described and I take your point that the CFTPA position dealt with subscriber taking as opposed to the BDU offering.

12092            COMMISSIONER ARPIN:  So my question to all of you:  Do you agree with Mr. Grant's approach to the issue, that we remove from the calculation all the third language foreign services which, as he says, are not Hollywood driven?

12093            You don't need to respond now, you have an opportunity to respond in a couple of weeks.  But I will ask you to give some consideration to that issue because obviously it could turn out to be very meaningful for the BDUs.

12094            Now, you all spoke about fee for carriage here, but nowhere did I hear anything about the CBC.  You have CTV Global yesterday that said no fee for carriage for CBC; you have Quebecor who came who says even as a BDU they agree with fee for carriage, but not for the public broadcasters.  By public broadcasters they were including the educational broadcasters.

12095            Do your organizations have an opinion on that?  Any one of you could answer.

12096            Monsieur Légaré ?

12097            M. LÉGARÉ : En ce qui concerne la SARTEC et l'UDA, à tout le moins, on n'a aucun problème à ce que des redevances soient attribuées à Radio‑Canada ou à Télé‑Québec.

12098            Ce qui fait, dans le fond, le motif pour attribuer des redevances, c'est la contribution au système canadien de radiodiffusion, et particulièrement aux émissions prioritaires, aux dramatiques.

12099            Donc, dans la mesure où Télé‑Québec et Radio‑Canada contribuent et contribueraient davantage avec l'octroi de redevance, on ne s'oppose pas.

12100            Donc, on est favorable.

12101            MS PARKER:  We echo that.

12102            MS LAFONTAINE:  DGC as well.

12103            MR. HARDACRE:  Yes, ACTRA is fully supportive of that.  We want to see more Canadian work on broadcasting in general.

12104            COMMISSIONER ARPIN:  Now, CBC/Radio‑Canada came with their own formula which was based on drama expenditures by over‑the‑air broadcasting which they said added up to $191 million and they split that amount by the number of BDU subscribers and they arrived at a number of dollars, $53 per household as a fee for carriage.  As they said, all the money collected will then have to get back also into financing drama, that the members that you do represent are probably supportive of that view of the CBC.

12105            But do you think $1.53 per subs for the whole system will suffice, which means that it will raise $191 million for the whole country?

12106            MS PARKER:  We have heard some different fees bandied around today, we heard $150 million, we have heard $191 million, and we haven't had the opportunity to consider that as an overall monetary package.

12107            Our basic position is if there is fee for carriage we do want that to go to the under served category of drama.

12108            So we do support the CBC in that sense.  As I recall, the CBCs position was that that current rate would only allow them to do what they are doing now and that would cover any future services, so I think that we would have to give some thought to growth and future programming, so we would like the opportunity, certainly the Writers Guild, to think about that and get back to you on that one.

12109            COMMISSIONER ARPIN:  I will add to that and I want you to ‑‑ how much money ‑‑ because you ask that we remove the fee top up.  You ask to increase from 5 to 5 per cent  and the contribution of the BDUs and the Directors Guild says that it is worth $55 million.  By the way, for the fee top up they said it was $45 million.  You have asked that tangible benefits ‑‑ you didn't say it today, but it is in your own submissions, that at least a portion of tangible benefits be appropriated to go to a fund, which is not mentioned but I will guess is the CTF, and you have a long list of places that ‑‑ well, local avails, 50 per cent of the local avails.

12110            Have you figured out how much money ‑‑ I don't think you have figured out how much money it means because Ms Parker just said that you haven't done that calculation.  I'm trying to ‑‑

12111            MS PARKER:  No, I think I understand your point.  You want to put a total on that.

12112            We at the WGC have not done that.  We have given some thought to the CBC's proposal.  Obviously we heard it for the first time last week as well, so we need to consider and see how best the under represented categories are served and what is a realistic and given ask.

12113            I mean obviously some things it would be very difficult to put a figure to.  I know that we have put a figure to licence fee top ups and management fees, but we will have to do our best to put that together for you.

12114            MS LAFONTAINE:  The DGC will do the same.

12115            But I would like to state for the record that we thought that the CFTPA's presentation last week was very interesting where they proposed an increase to the system to double the amount of original Canadian programming that is done on an annual basis from roughly 200 and they are proposing that it go up to 400, so an extra 200 hours.  So it would be to finance that.

12116            I also appreciate that the CFTPA has gone beyond that and they propose a total of 300 hours.

12117            DGC will get back to on that, but as a starter I think that the 200 hours original is an interesting proposal and the funding to be sought within the system for that.

12118            MR. HARDACRE:  Mr. Vice Chair, I would just like to respond on behalf of ACTRA as well.  We would like to give you a technical response on this.

12119            We appreciate that you were looking for ‑‑ you see in front of you some proposals that look like a very vast menu of revenue sources.  ACTRA will endeavour to put some dollars to that, but I want to just make a comment on another kind of total.

12120            I am an actor.  I represent not only Rob and Julie in front of me here, but 21,000 members of ACTRA.  We have a different kind of total that we are concerned about.  We are concerned about the total of the perspective of all of the artists in this country.

12121            There will be technical answers to your questions, we appreciate your need to know that as a Commissioner, as a Commission in total, but we want to express that we want to do our utmost, and we hope that the Commission does its utmost, to achieve greater opportunity for employment for Canadian artists.  That is what our endeavour is all about.

12122            We enter this room where there have been many, many experts from the BDUs and the broadcasters, they bring their financial experts with them, my duty has been, as President of ACTRA, to become aware of these issues and to inform myself as much as I can, but my principal job is to be an actor and I don't know many people that come from the broadcasting industry or the BDUs that actually understand what it is to be a writer or a director or an actor.

12123            So mine is a philosophical comment, please forgive me, but we have a different total we are concerned about:  We are concerned about employment.

12124            Thank you.

12125            MS PARKER:  Just in ‑‑ I'm sorry.

12126            COMMISSIONER ARPIN:  I hear you well, Mr. Hardacre ‑‑

12127            MR. HARDACRE:  Thank you.

12128            COMMISSIONER ARPIN:  ‑‑ but the thing is that ACTRA doesn't represent only actors, it represents hosts, performers and all types and the system has to provide opportunities for all the other types of service I think.

12129            MR. HARDACRE:  Thank you.

12130            COMMISSIONER ARPIN:  Those who are hosts responsible for a magazine show are also your members.

12131            MR. HARDACRE:  Yes, some.

12132            COMMISSIONER ARPIN:  Some.  Well, so it means you still have some ‑‑

12133            MR. HARDACRE:  Some organizing to do.

12134            COMMISSIONER ARPIN:  ‑‑ some work to do.

12135            MR. HARDACRE:  Some organizing to do still.

‑‑‑ Laughter / Rires

12136            COMMISSIONER ARPIN:  But what I am trying to convey ‑‑ obviously I understand very well why you are pushing for drama first, it is employment for the writers, it is employment for the directors, it requires more talent than a magazine or a talk show where the host receives people from ‑‑ so that I understand very well.

12137            But when I did ask the CFPTA ‑‑ and I know that you both, ACTRA and the Directors Guild, referred to my question to CFPTA ‑‑ what kind of evidence, other than saying that the shows are watched, what kind of evidence do you have that Canadians want to see more drama, more Canadian drama, than they are currently seeing?

12138            MR. HARDACRE:  Excellent question, Mr. Commissioner

12139            COMMISSIONER ARPIN:  No, no.  The Pollara survey didn't ask specifically that question.  It is more a total ‑‑ it was much more specific towards the drama question.  Because you are coming here all the time, pushing for drama, you are not pushing for other forms of Canadian program, you are pushing for drama.  I heard ‑‑

12140            MR. WADDELL:  That's where the problem lies.

12141            MS PARKER:  If I could jump in on that?

12142            COMMISSIONER ARPIN:  I heard Ms Parker saying that ‑‑

12143            MS PARKER:  Pants.  We say pants.

12144            COMMISSIONER ARPIN:  ‑‑ it's like asking a question about wearing pants.  I wrote in my notes I could wear a skirt ‑‑

‑‑‑ Laughter / Rires

12145            COMMISSIONER ARPIN:  ‑‑ if I was Scottish.

‑‑‑ Laughter / Rires

12146            MS PARKER:  You  can wear a skirt, too.  Whatever you like.

12147            UNIDENTIFIED SPEAKER:  Who knows what we are wearing under there.

12148            MS PARKER:  We think it is bigger than just providing employment for our members.  Of course up here we all work for unions, we run unions, we have union members with us, but it's bigger than that.  What we are trying to say is that this is the social fabric of our nation.

12149            We did hear you ask that question about drama to other participants and we thought a lot about it.  In fact, that's how we came up with the pants line, because we discussed it during one of our board meetings.  Yes, that is what we do during our board meetings.

‑‑‑ Laughter / Rires

12150            MS PARKER:  But we feel that it really is just intrinsic to the social fabric that we have stories available in our country that reflect our own values, our identity.  We feel that if all we do is import and watch stories from other countries that we lose our own sense of place.

12151            So it is bigger than us just up here as union leaders and members, it really is that we think we are providing and we are fighting for a critical piece of Canada and our sovereignty.

12152            So you have your own evidence.  Your own broadcasting report in 2007 said very clearly that drama is the most watched form of programming.  Now, that did include foreign and they did include domestic.

12153            But what we say to you is that if Canadians aren't provided with the opportunity to watch their own drama, for whatever reason, lack of access, lower budgets, hidden in the schedule, no promotion, then they will of course watch foreign drama, because at heart what they want are stories.

12154            And that's what we are here to tell you today, that ‑‑ and that's what we have been here talking about for the last eight years.

12155            Just in closing, in terms of what we need in the system, we think that that's a very valid question and we have spent some time looking at the CFTPA's proposal which is very interesting.  We haven't yet shared it with our colleagues from SARTEC and UDA, so we will do that.

12156            I know the number that they are looking at is $300 million, and doubling the hours of drama in the system.

12157            We will get back to you by virtue of a written submission in terms of what we need in terms of health and what the entire package would look like.

12158            MR. HARDACRE:  Mr. Vice‑Chair, if I could jump in with the Pollara poll ‑‑ 78 percent think it is important to have Canadian drama on television.  That was the result of the poll.

12159            But your point is well taken.  It is also important to have Canadian public affairs programming, Canadian news, Canadian sports and so on.

12160            You know what we need?  We need more Canada on TV.  That is what we are here to tell you.

12161            Thank you.

12162            COMMISSIONER ARPIN:  Ce n'est pas un enjeu dans le marché francophone.  Il faut bien entendre.

12163            Mais ma question portait uniquement sur le secteur de langue anglaise.

12164            Je peux bien entendre votre opinion, mais ce n'est pas ‑‑ la problématique est tout à fait différente dans le marché francophone.

12165            M. LÉGARÉ : Mais vous avez soulevé la question en parlant des demandes que nous faisions et de l'incidence financière que ça pouvait avoir.

12166            COMMISSIONER ARPIN:  Ah, d'accord.

12167            M. LÉGARÉ : C'est sûr qu'au Québec historiquement les dramatiques ont toujours eu un succès énorme, et c'est la pierre angulaire du système de radiodiffusion.

12168            Mais ce qu'on vient dire au CRTC depuis quelques années, c'est qu'on a un sous‑financement chronique qui fait que les dramatiques sont en train de plonger.

12169            En 2006, on vous avait démontré que le budget moyen de 493 000 était passé à 386 000 en un an. Et ça, c'était des chiffres qui dataient.

12170            Je pense qu'avec la crise des séries lourdes c'est encore plus bas.

12171            Donc, avec de moins en moins de moyens, on est obligé, justement, d'attirer le public face à une concurrence en termes de genres de produits, et cetera, qui est très grande et face aussi à une multiplication des canaux.

12172            C'est‑à‑dire, on vous a également démontré que, par exemple, en séries jeunesse, les canaux spécialisés qui en font s'alimentent beaucoup avec des productions canadiennes anglaises, s'alimentent beaucoup avec des productions étrangères, mais la production locale de langue française est très peu présente.

12173            L'exercice pourrait également se faire au niveau des émissions dramatiques. Pensons à Séries+.  Séries+ diffuse une série locale aux deux ans, ou du moins produit une série locale aux deux ans.

12174            Donc, même dans une situation où le succès historique est incontestable, l'absence de financement adéquat fait que nous sommes en train de perdre pied et d'être de moins en moins présents au marché.

12175            Il y a cinq ans, je vous aurais dit : * Neuf des émissions les plus écoutées au Québec sont des dramatiques. +

12176            Aujourd'hui, on vous dirait : * Deux des émissions les plus écoutées au Québec sont des dramatiques. +

12177            Les émissions, je dirais, de concept américain, même si c'est de langue française, ont prise la * pole position +, et ils mettent beaucoup de moyens pour ça, alors qu'on se retrouve avec des budgets de moins en moins importants à tourner des * show + dans des conditions plus difficiles face à une concurrence énorme.

12178            Les besoins, donc, de financement sont là. Les demandes veulent répondre à ces besoins de financement.

12179            MME DES ROCHES : Quand on parle de ça, parce que je regarde mes jeunes, s'ils regardent VRAK, ils vont regarder ‑‑ les émissions dramatiques qu'ils regardent, c'est des émissions étrangères ou des émissions canadiennes de langue anglaise.

12180            Les dramatiques aux services spécialisés pour la jeunesse se font très rares. On a des émisssions pour la jeunesse, mais ce ne sont pas des dramatiques.

12181            Ce qu'Yves discutait tout à l'heure, on avait Le banquier, Occupation double, Bloopers, Tout le monde en parle, nous, avec le succès qu'on connaît depuis des années en dramatique, si la tendance se maintient, on est en train de se perdre.

12182            Mais ça va probablement empirer le côté anglophone.

12183            C'est que, si nous on est les précurseurs et puis on est solides et puis on dit: * Regardes, ça a du succès. +, imaginez qu'est‑ce que ça va faire, le manque de financement et le manque de ressources au Canada anglais.

12184            Ça va amplifier le problème pour nous.

12185            Alors, on va juste empirer. On va aller les rejoindre, finalement.

12186            MS LAFONTAINE:  I would also like to respond to your question, Vice‑Chair Arpin, in terms of the demand.

12187            Just to pick up on what Maureen was saying, what we know is that the reason that Canadians, for the most part ‑‑ the significant reason people tune in to watch television is to watch drama.

12188            Trina McQueen, at the last CTV licence renewal hearing, said that most of the viewing to television is in the dramatic genre.  This is what people love to see on television.  In general, folks love a good story.  They love an imaginary story, and that is what they want from television.

12189            So we know that that's why they tune in.

12190            We also know that when Canadian programs are properly scheduled and promoted, Canadians watch them.

12191            We have submitted filings in the past where we have given you names of shows, and you have the data, but just as examples ‑‑ "Due South", "Da Vinci's Inquest", "Corner Gas", "Degrassi", "Little Mosque", "The Rick Mercer Report", "Air Farce", "The Tudors", "The Guard", "The Border", "Trailer Park Boys".

12192            Canadians watch Canadian drama.  There is a demand for it, and there is a need for it in the system.

12193            That is why, I believe, we have a regulator, to ensure that there is a diversity of programming on television, and that diversity includes drama.

12194            MR. GOLUBOFF:  If I might, it is not only about jobs.  I don't think that any of us represent people who are in the world we are in because of just the job.  It is much more than just the job, the work we do, whether we are writers, whether we are directors, whether we are performers.  It is not just about jobs.

12195            We all believe ‑‑ I think we all firmly believe that we have something valuable to contribute to the Canadian society.

12196            And statistically ‑‑ we could go on and on and on about the statistics that prove that Canadians wish to see Canadian stories on their own screens, reflecting back their own lives.  I firmly believe that, and we are the contributors of that.  We are part and parcel of those that put together those programs, along with the independent production community.

12197            It is our community that is presenting those stories back to ourselves, and to Canadians that want it.

12198            We don't do it just because it is a job.  There are less troublesome, less painful, less demanding jobs out there, believe me, than any of the jobs amongst the thousands of people that we represent.

12199            It is a struggle to work in the environment we are in, and we accept that going in.  I am sure that most of us will pass that on to anybody that follows behind us.  You don't come into the world of film and television for the easy life.  Though that may be the perception from outside, it is certainly not that.

12200            All we are saying is, within the grand scheme of the millions and millions and millions of dollars that are generated by the BDUs and by the over‑the‑air broadcasters, there should be a portion of that ‑‑ a fair and equitable portion of that that is set aside, that is put toward the production of uniquely Canadian drama, Canadian programming.

12201            And drama does not necessarily exclude comedy.  Drama is a broad range of programming.  Generally, we think of drama as scripted programming, but there are other kinds of programming that are less scripted and just as valuable to the system, and just as much in demand by the Canadian public.

12202            The Canadian public deserves, and I believe it is the Commission's responsibility to make sure that Canadians have the opportunity to pick and choose, to be able to turn on their televisions and choose when they want to see Canadian programming that reflects who they are.

12203            We are just the providers of that, but the gatekeepers ‑‑ and I have heard that term over and over again ‑‑ we are not the gatekeepers.  We are the providers of the programming that we wish to make available to Canadians, and we believe, through the work that we have done, that Canadians want this stuff, good or bad.

12204            And Canadians are willing to watch bad Canadian programming just as much as they are willing to watch bad American programming, it is just that there is ten times as much bad American programming out there.

‑‑‑ Laughter / Rires

12205            MR. GOLUBOFF:  And the bad programming compensates all of us the same amount.  It is nicer to work on critically acclaimed programming, but, statistically speaking, most of us don't work on critically acclaimed programming.

12206            It is about shelf space, in our view.  We want shelf space out there.  We want Canadians to be able to flip on the television at any time, 24 hours a day, any station they want, and find a piece of Canadiana on that programming.

12207            To echo Stephen, there needs to be more Canadian on television, period.

12208            Thank you.

12209            COMMISSIONER ARPIN:  You are asking that the BDU contribution be increased from 5 to 6 percent.  Being a percentage of revenue, since their revenues have been increasing year after year, there is already an automatic increase to the various funds they are financing.  By adding another percentage point, isn't that a double whammy?  You want to collect twice?

12210            MS LAFONTAINE:  We believe that this is very consistent with the Commission's approach to CPE and contributions to Canadian programming over the years.

12211            When the Commission renewed the specialty services in 2004‑2, it set out the steps there ‑‑ if your PBIT increased by this much, your CPE would increase by that much.

12212            This proposal is consistent with the approach the Commission has taken over the years to contributions to Canadian programming.

12213            COMMISSIONER ARPIN:  On licence fee top‑up, I guess you are expecting ‑‑ if the Commission were to remove the licence fee top‑up from the financing of the CPE, could the Commission expect to receive applications to reduce the percentage of CPE for an equivalent amount?

12214            MS LAFONTAINE:  I suspect you will receive such applications by the licensees.

12215            COMMISSIONER ARPIN:  And what should we tell them?

12216            MS PARKER:  We think that this is an anomaly.  We understand that it was brought about when these services were first licensed, but these are mature services, and this is public money, and I certainly don't understand why they get to count it against their bottom line.

12217            COMMISSIONER ARPIN:  The thing is, obviously, the current CPE is adjusted, and it takes that factor into consideration.

12218            MS PARKER:  We hope, if you do make that decision and you are asked to reduce their CPE contribution, that you decide not to do that.

12219            They are looking for more money.

12220            COMMISSIONER ARPIN:  My question is addressed to you, Ms Parker, because it is in your submission, where you deal with tangible benefits, and you refer to the fact that, in the case of radio, the Commission has made the determination that part of the funding ‑‑ the tangible benefit goes to Musique Action/FACTOR.

12221            My question to you is, which portion of the tangible benefit ‑‑ and I guess your suggestion is that the money be sent to the CTF.  Which portion of the 10 percent should go to the CTF?

12222            In the case of radio, it's one‑third that goes to Musique Action/FACTOR.

12223            It is on page 8 of your written submission.

12224            MS PARKER:  It was part of my CCAU submission this morning, actually, as well.

12225            To be totally honest with you, I am not particularly sure about which portion.

12226            Peter?

12227            MR. GRANT:  I guess I can talk briefly, Mr. Vice‑Chair.

12228            The ground rules for radio, of course, as you say, have 1 percent going to Musique Action or FACTOR, and 3 percent going to the Radio Star Program that the CAB administers.

12229            So, in a sense, 4 points out of ‑‑ 5 points out of the 6, I guess it is, end up being applied by funding administered by an agency to support the production.

12230            So, on that basis, it wouldn't be just the amount going to FACTOR and Musique Action that could be used as an analogy.  So I think, on that basis, you could imagine that, if there was to be a transfer benefit applied to BDU transfers, something in the order of 50 percent or more could be applied in this way.

12231            COMMISSIONER ARPIN:  Thank you for your reply, Mr. Grant.

12232            My final question is in the same section of the Directors Guild submission, which is entitled "Maintenance and Increase of Transfer Benefit".

12233            Item No. 4 considers the requirement that a portion of the transfer benefit be spent on new media production, and you don't say that it is related to any broadcasting activity.

12234            What you are asking us to do is to move out of the broadcasting system, or, at least, the programming system, money for new media.

12235            Is that how I should read your submission?

12236            MS LAFONTAINE:  As has been the case for other intervenors, I would say that position has evolved.

12237            And in terms of contributions to new media, I think where we had left things was that money within a regulated world at this point in time should just all be directed to content within the regulated world.

12238            And perhaps we can deal with the new media issue at the new media hearing that is upcoming.

12239            CONSEILLER ARPIN : Ma dernière, dernière question est en français parce qu'elle provient du mémoire de la SARTEC et UDA.

12240            Elle découle de vos paragraphes 12, 15 et 16, où vous dites que la loi ne contient pas d'objectif de simplification des règles, mais vous semblez d'accord malgré tout qu'on procède à une révision, mais vous y voyez des embûches, particulièrement dans le cas du marché francophone où seulement trois des cinq services de catégorie 1 ont été lancés et seulement trois services de catégorie 2 sont en opération.

12241            Selon vous, quels sont les principales embûches et comment les résoudre ?

12242            MME DES ROCHES : La principale embûche, Monsieur le Vice‑Président, c'est l'étroitesse du marché.

12243            Quand on regarde, par exemple, l'exclusivité par genre, ça vient vite une concurrence dans le marché francophone dans le genre.

12244            On prend, par exemple, Canal Vie, là, TVA. Quebecor vient de sortir son canal catégorie 2, Chez soi, je crois.

12245            C'est un peu plus ‑‑

12246            CONSEILLER ARPIN : Les idées de ma maison.

12247            MME DES ROCHES : Les idées de ma maison, c'est ça. Je me suis trompée de magazine, là.

‑‑‑ Laughter / Rires

12248            CONSEILLER ARPIN : Parce que, Chez soi, c'est ‑‑

12249            MME DES ROCHES : C'est un autre propriétaire, je pense.

12250            CONSEILLER ARPIN : Oui. Premièrement, c'est Transcontinental.

12251            MME DES ROCHES : C'est ça.

12252            CONSEILLER ARPIN : Mais au niveau des magazine. Mais Astral avait un projet qu'ils n'ont pas mis encore, de catégorie 2, pour lequel ils ont eu une licence, qui s'appelait Chez moi.

12253            MME DES ROCHES : La principale embûche, c'est le fait que, si on met plus de concurrence dans le marché francophone, on affaiblit les joueurs existants.

12254            Les joueurs ‑‑ en ce moment je pense qu'il y a eu quand même une certaine force. Les canaux spécialisés fonctionnent assez bien.

12255            Les services de catégorie 2, on n'a pas le marché pour les lancer.

12256            Donc, c'est vrai que les solutions ne sont pas les mêmes, les embûches ne sont pas les mêmes que du côté du Canada anglais.

12257            Nous, on ne veut pas que vous déréglementiez juste pour le plaisir de déréglementer.

12258            Cela étant dit, on s'est montré ouvert aujourd'hui question de prépondérance ou du service de base petit.

12259            On est prêt à écouter les changements et puis on est prêt à regarder les changements s'ils sont nécessaires, dans la mesure où ils ne feront pas en sorte d'affaiblir les joueurs existants, qui contribuent très bien au système de la radiodiffusion.

12260            Les embûches sont là. C'est que c'est extrêmement fragile. Si on touche à une des cartes du château de carte, le reste peut s'écrouler.

12261            En enlevant un règlement, il faut vraiment s'assurer qu'on a un autre filet de sécurité pour palier à ça.

12262            On parle de : * Si vous êtes pour déréglementer, parfait. On comprend qu'il y a beaucoup de réglementation. Il faut y aller de façon très délicate en français, s'il vous plaît. +

12263            CONSEILLER ARPIN : Merci, Monsieur le Président.

12264            THE CHAIRPERSON:  Michel, I believe you have some questions.

12265            CONSEILLER MORIN : Oui, bonjour.  Merci, Monsieur le Président.

12266            Récemment, enfin pendant ces audiences, et je pense aussi pendant celles du Fonds canadien de télévision, l'Association canadienne des radiodiffuseurs a comparé le Canada à la Californie et le Québec à San Francisco.

12267            Vous savez que le CRTC peut traiter sur une base différente les deux marchés. C'est reconnu dans bon nombre de décisions. Le marché québécois et le marché du reste du Canada.

12268            Est‑ce que les redevances ou enfin les tarifs d'abonnement sont indiqués, même pour soutenir les séries lourdes actuellement ?

12269            On a des joueurs importants. On a Radio‑Canada qui a un budget de 1,5 milliards, dont 339 millions à la publicité.

12270            On a Astral. Vous venez de dire que c'est un très bon joueur. Ça a vraiment augmenté la diversité dans le système.

12271            Enfin, on se demande souvent, par les propos, si on n'a pas trop créé, finalement ‑‑ si le CRTC n'a pas trop créé la demande, quoique, au Québec, on a une vingtaine de canaux sépcialisés.

12272            Du côté anglophone, ils en ont plus de 80.

12273            Et on a finalement Quebecor, qui fait l'envie souvent des autres télédiffuseurs au Canada ou des entreprises de distribution parce qu'il porte les deux chapeaux.

12274            Donc, on a trois gros joueurs très puissants. Et puis là, on arrive avec l'histoire des tarifs d'abonnement.

12275            Alors, je vous demande, compte tenu du marché québécois, compte tenu des succès malgré les dramatiques que vous soulevez et malgré peut‑être un certain recul à ce niveau‑là, est‑ce que vraiment pour le marché québécois c'est nécessaire ?

12276            Est‑ce que vous pensez aux consommateurs quand on parle de tarifs d'abonnement ?

12277            Est‑ce que, si on posait la question dans un sondage : * Pour 1,50 dollar par mois... +

12278            Est‑ce que vous pensez qu'au Québec, qui, après la Catalogne, semble l'endroit à travers le monde où les gens se rassemblent le plus devant leur écran de télévision ‑‑ est‑ce que vous pensez que si on demandait aux Québécois francophones 1,50 $ par mois à tous les clients des entreprises de distribution que la réponse est ‑‑ pour l'encouragement des dramatiques spécifiquement, qui connaissent une crise...

12279            Au niveau des dramatiques et au Canada anglais, je regardais les récentes cotes d'écoute. Je pense que, CBC, c'est le hockey, le curling, et puis CTV, Michel, monsieur le vice‑président, pourrait me corriger là‑dessus, il y a deux canaux qui l'emportaient.

12280            Alors, est‑ce que vraiment, on peut demander aux consommateurs, en plus des factures ‑‑ et on sait qu'au Québec on paie les taxes les plus élevées en Amérique du Nord.  On peut le répéter ici.

12281            Est‑ce que vraiment, pour le Québec ‑‑ je ne parle pas du Canada anglais.

12282            Pour le Québec, est‑ce que, les tarifs d'abonnement, vous êtes prêts à vendre ça au niveau des consommateurs avec tous les appuis nécessaires ?

12283            MME DES ROCHES : Presentement, j'entendais Quebecor cette semaine, que personne ne prend le service de base au Québec. La très, très, très grande majorité prend le service Télémax Plus pour Vidéotron.

12284            Je regarde la base chez nous. Elle est bien.

12285            J'ai pris Cogeco à Trois‑Rivières. Ça inclut quand même RDS, Musique Plus, VRAK et cetera.

12286            Je pense qu'il y a des demandes pour le service.

12287            En rapetissant le service de base ‑‑ parce qu'on parle des services de télévision généraliste.  Si on le rapetissait, ils pourraient charger moins cher pour le service de base, y inclure les redevances pour les télévisions généralistes.

12288            De toutes façons, il y aurait une garantie d'accès pour les services de catégorie 1.

12289            Puis au Québec, et c'est là qu'est la différence peut‑être entre le Canada anglais et le Québec, les services de catégorie 1, services spécialisés, pourraient probablement passer le test de diversité de haut contenu canadien, et cetera.

12290            Il y en aurait peut‑être une couple qui, en termes de dramatiques, seraient un peu plus délicates.

12291            Mais en général, la très grande majorité des services québécois seraient, de toutes façons, garantis d'accès dans le noyau dur dont l'accès et le tarif peut‑être ‑‑

12292            CONSEILLER MORIN : Le noyau dur, ce n'est pas le service de base ?

12293            MME DES ROCHES : Non, non, non.

12294            Mais de toutes façons, il n'y a personne qui ne prend que le service de base.

12295            Et le service de base, comme c'est là, ce qu'on voit, c'est que ceux qui sont encore avec les oreilles de lapin ‑‑ parce que le Québec encore est celui qui a le plus bas taux de câblage au pays.

12296            Donc, ceux qui doivent faire le passage de l'analogue au numérique vont être capables de le faire sans que ça leur coûte une fortune et ils pourront tout de même avoir un bon noyau de contenu canadien chez les services francophones.

12297            Ça, c'est l'avantage qu'on a, nous autres.

12298            Pour le consommateur, je ne pense pas que ça coûte beaucoup plus cher d'avoir des redevances.  Ils vont avoir une plus value, je pense.

12299            Il va y avoir plus de dramatiques qui vont être produites. Il va y avoir plus d'émissions.

12300            Ça ne changera pas la popularité des émissions comme La poule aux oeufs d'or.

12301            Tu sais, il y n'y a pas beaucoup de changements là‑dedans.

12302            La déréglementation du service de base et de l'accès du noyau dur, au Québec, je vais vous l'avouer, ça ne change pas grand‑chose parce qu'il y a une très grande demande pour ça et on a un bon rapport qualité‑prix.

12303            M. LÉGARÉ : On ne veut pas non plus se prononcer à savoir si le public accepterait 1,50 $, 2,00 $, 1,00 $, et cetera.

12304            On pense cependant qu'il y a une adhésion du public aux dramatiques que nous faisons.

12305            Lorsque certaines dramatiques sont menacées de disparaître ‑‑ je pense à Tout sur moi, recemment ‑‑ il y a quand même une réaction. Vice caché aussi. Une réaction du public.

12306            Donc, les gens sont intéressés à ce que ça se continue.

12307            Le problème, c'est que les canaux spécialisés n'en font pas beaucoup et ils ont pourtant accès à des redevances d'abonnement.

12308            Et ceux qui en font, ce sont les télévisions généralistes.

12309            Avec TQS qui est en difficulté financière ‑‑ TQS avait quand même une offre de deux dramatiques par semaine, à tout le moins ‑‑ c'est déj< une perte là‑dessus.

12310            Est‑ce que TQS va être capable de faire d'autres dramatiques ?

12311            Et on voit donc que, pour les télévisions généralistes, il y a cette difficulté financière‑là.

12312            TVA, bien sûr, n'est pas en position nécessairement fragile. TVA est rentable.

12313            Mais la rentabilité de TVA par rappport à la rentabilité des canaux spécialisés descend. Celle des canaux spécialisés a tendance à augmenter.

12314            Or, TVA, comme Radio‑Canada, comme Télé‑Québec aussi, en émissions pour enfants, sont des contributeurs importants au niveau des émissions sous‑représentées.

12315            Et il faut, par des redevances d'abonnement, insuffler, peut‑être, le financement nécessaire à ce que ça se continue.

12316            CONSEILLER MORIN : Et si ces redevances d'abonnement n'allaient pas aux dramatiques, est‑ce que votre position est que ‑‑

12317            M. LÉGARÉ : Il est évident que notre position est reliée à ce que ces redevances doivent aller aux dramatiques.

12318            Donc, elles n'auraient pas nécessairement ‑‑ les diffuseurs traditionnels n'auraient pas le soutien qu'ils reçoivent de nous aujourd'hui s'ils souhaitaient mettre cet argent‑là ailleurs.

12319            CONSEILLER MORIN : Vous parlez de 100 pour cent des redevances qui iraient spécifiquement aux dramatiques ?

12320            MME DES ROCHES : On parle d'émissions prioritaires.

12321            CONSEILLER MORIN : De prioritaires.

12322            MME DES ROCHES : Mais surtout des dramatiques parce que ‑‑ mais il y a quand même, monsieur

12323            Arpin le disait tout à l'heure, nous, comme ACTRA, on représente des chanteurs aussi. On représente des narrateurs.

12324            Mais ce n'est pas une question d'emploi non plus. Je pense que c'est important d'avoir une diversité de types de programmation.

12325            Et tout ce qui est offert par les télédiffuseurs généralistes présentement, on n'a pas à juger du bon goût ou de la popularité.

12326            Ce qu'on se dit, par exemple, c'est : * Là où ça compte, les documentaires de longue durée qui nous ressemblent, qui parlent de ce que nous sommes, les dramatiques, les émissions de variété, les émissions de musique, oui, ce sont des choses qui pour nous sont importantes aussi. +

12327            Donc, oui, les dramatiques, c'est notre ‑‑ c'est la priorité des priorités, si vous voulez.

12328            Mais pour le reste, oui, effectivement, il y a du travail à faire aussi.

12329            CONSEILLER MORIN : Mais vous n'avez jamais demandé par un sondage spécifique sur un montant mensuel qu'est‑ce que le public en pensait ?

12330            MME DES ROCHES : Les sondages, on les a régulièrement, au Québec.

12331            Puis quand on regarde les réactions ‑‑  Yves en parlait ‑‑ quand on regarde les réactions de Tout sur moi, de Vice caché, de Un homme mort, chaque fois qu'il y a eu une dramatique qui est partie, ça a été le tollé.

12332            Et les gens sont attachés à leur...

12333            Quand Annie et ses hommes va se terminer, pas par manque d'argent, mais parce que les auteurs sont tannés ‑‑ il y a rumeur, elle se termine ‑‑ c'est vraiment la catastrophe.

12334            Alors, on a juste à lire les journaux. Pas parce qu'il n'y en a pas. C'est parce que les auteurs n'ont plus rien à dire ou ils doivent travailler sur d'autres projets.

12335            Donc, je pense que ces sondages‑là c'est suffisant. Ce sont nos sondages.

12336            CONSEILLER MORIN : Merci.

12337            THE CHAIRPERSON:  Ron, you had one question.

12338            COMMISSIONER WILLIAMS:  Yes, Mr. Chairman.

12339            Good afternoon, Mr. Wells.

12340            In your comments you said the Trailer Park series employs 80 people.

12341            Are these all fulltime jobs?

12342            MR. WELLS:  When we are shooting, yes, it is up to 80.

12343            And off‑season, I would say it is probably 25 fulltime, I guess.

12344            COMMISSIONER WILLIAMS:  Twenty‑five (25) fulltime.

12345            MR. WELLS:  Yes.

12346            COMMISSIONER WILLIAMS:  You must be a very, very good actor because you are such a gentleman in real life.

‑‑‑ Laughter / Rires

12347            COMMISSIONER WILLIAMS:  I have watched several of your shows, and Mr. Wells, or Ricky, if I may, it is late Friday afternoon, two thirds of the way through a long and very serious public hearing...

12348            On your website, robbwellstv.com, under the Trivia heading, it states :

"Whenever Robb Wells and his fellow Trailer Park Boys actors make official public appearances they always stay in character."

12349            This proceeding is not only official, but it is public, and you are appearing.

‑‑‑ Laughter / Rires

12350            COMMISSIONNER WILLIAMS:  So I wonder, for the benefit of those of us that have not viewed your entertainment programming, if you would very briefly go into character perhaps by describing some of these 80 jobs that are created.

12351            MR. WELLS:  Describing them, sorry?

12352            COMMISSIONER WILLIAMS:  I will tell you what, you can go into character any way that you feel comfortable, or not.

12353            MR. WELLS:  Am I allowed to swear or...

‑‑‑ Laughter / Rires

12354            THE PRESIDENT:  We are on CPAC.

‑‑‑ Laughter / Rires

12355            MR. WELLS:  Yes, I guess I better not get too far into character here.

12356            All right.  You kind of put me on the spot here and I'm not even exactly sure what you were asking for, sorry?  See I am being stupid right now so I am in character.

‑‑‑ Laughter / Rires

12357            COMMISSIONER WILLIAMS:  Just to add a little bit of lightness to our hearings because he was second‑last ‑‑

12358            MS PARKER:  And he needs his writer.

12359            COMMISSIONER WILLIAMS:  He needs a ‑‑ but he is a writer.

12360            Anyway, it's not mandatory, of course.  I just thought you might want to ‑‑

12361            MR. ANTHONY:  I think, Mr. Chairman, it would be contrary to public policy were he to do that.

‑‑‑ Laughter / Rires

12362            MR. WELLS:  I guess I am probably pretty red right now, am I?

12363            THE CHAIRPERSON:  Let's not put him on the spot.

12364            Well, all it was my colleague was paying a compliment to your acting abilities.  I think that those are all the questions for you.

12365            We have all been talking about money and how to do it, et cetera, and one of you said it very clearly, we all want to see more ‑‑ you want to see more Canada on Canadian broadcasting; so do we.

12366            What we are talking about is the means of getting there and various things have been put to us by various proponents.  You have a very clear consensus opinion.  As you know, the BDUs come from a different ‑‑ the broadcasters again and for us to choose.

12367            But all that being said, don't doubt for one second we all share the same goal; more Canada on Canadian broadcasting.

12368            So thank you very much.  That's the end of our questioning for you.

12369            Because Passover is coming let's go right away into the next intervenor so our colleague, Mr. Katz, can go to Toronto on time.

12370            THE SECRETARY:  I would invite Only Imagine Inc. to come forward to the presentation table.

‑‑‑ Pause

12371            THE CHAIRPERSON:  Okay.  One of my colleagues is missing but another one has to catch a plane so try to find a middle ground here.  Let's start with ‑‑ okay.  I am sure my other colleague will catch up with you.  We have read your written submission anyway.  Go ahead.

PRESENTATION /PRESENTATION

12372            MR. THIESSEN:  Thank you very much.

12373            Good afternoon, Mr. Chair and Members of the Commission and staff.

12374            My name is Jeff Thiessen and I am President of Only Imagine Incorporated, a company Drew Craig and I own, dedicated to solving the issue of local avails and providing significant contributions to the system.

12375            Only Imagine appreciates the opportunity to present its thoughts today at this critical hearing and the impact which it will make over the many coming years.

12376            Today we want to announce that we have made an application to the CRTC regarding the use of local avails and this is obviously not the forum to debate the merits of the application so I will be extremely careful to limit the scope and discussion today and will be very brief in my remarks.

12377            OII believes it is important in this proceeding to consider new opportunities to bring new revenue into the system.  We would suggest that one of the most effective ways of bringing new revenues into the system for Canadian programming is through the U.S. avails and eligible U.S. satellite services.  However, we also believe that the benefits of such new opportunities have to be carefully weighed against their likely costs.

12378            And we would echo the sentiments we have heard from other parties in this proceeding that we should not simply change existing regulations and policies for change's sake.  Rather, any changes to fundamental principles should be carefully considered.

12379            The BDUs are once again requesting that the Commission grant them the privilege of getting into the advertising business by selling avails in some of the most popular and widely‑watched channels and programs in the country.  For over 30 years the Commission has precluded the BDUs from competing with the services they carry by disallowing advertising.

12380            Specifically, the Commission has disallowed the BDUs from utilizing the avails from generating advertising income over the last decade for a host of policy reasons.  There was an extensive process related to this matter just three years ago and we believe the Commission's reasons for denial remain sound.  The BDUs have failed to make a case for revising the avails' policy.  Certainly, they aren't proposing much of a quid pro quo for the wholesale policy changes they are asking the Commission to make in their favour.

12381            We would like to make three further points with respect to this request.

12382            The first is that the avails do not belong to the BDUs.  While it is the case that the avails are granted to distributors through their affiliate agreements with foreign programming services, these provisions in the contracts do not fetter the Commission's ability to regulate the use of avails as it is sees fit.  At most it can be argued that the BDUs' contractual rights to the avails might spring to life if the Commission regulates in its favour and until such time, if ever, those rights are as between the BDUs and the U.S. services and are entirely irrelevant unless and until the Commission empowers them.

12383            We reasonably emphasise this point is because it has been suggested that the BDUs somehow have an inherent first right to the avails' opportunity and that is simply not the case.

12384            The second point relates to the Rogers' proposal to sell only local ads in the avails.  We find this proposal very difficult to reconcile with the concerns expressed in this proceeding by the Commission about the ability of broadcasters to meet their local program commitments.

12385            How does letting BDUs sell local ads help fix that program?  The short answer is that it doesn't.  It would simply exasperate it with a potential to have rate cards at, as Bell put it last week, a dollar a holler, the impact on local services could be devastating.  The local radio stations would be tremendously impacted by this.  Would they also ask cable for a fee?

12386            Further, if the Commission gives the avails right to the BDUs only if BDUs develop dynamic ad insertion capability these new avails would be worth far more than any Canadian specialty channel.  Even if they offer broadcasters similar opportunities to utilize the new technology it will be on the BDUs' terms.

12387            The third point is that it is OII's position that a public hearing be held in order for the Commission to assess how the avails can best be used for the benefit of the system as a whole.  Indeed, we note that it was only after OII's interest and previous application for the use of the avails that Rogers has apparently now stepped up and proposed to contribute 50 percent of the net profits realized from the sale of such advertising back into the broadcasting system.  This is a far cry from anything they proposed before.

12388            It is OII's position that a competitive process where the best ideas and plans can be debated will yield the best results for the broadcasting system.  Without such a process many new and innovative ideas may never be brought forward and considered.

12389            We have heard various values attributed to monetizing the avails from as low as $20 million to high as $60 million.  Regardless of the correct figure, it is surely large enough to warrant such an open, public process.

12390            VOD, dynamic ad insertion, local avails, all could be considered to be utilized by third parties instead of BDUs using the same well used and implemented practices in the telecom sector.  This has led to the incredible benefit of consumers and the system generally.

12391            In summary, there are many complex issues that the Commission is grappling with in this proceeding.  Advertising in the U.S. avails is just one of them and we venture to say not the most critical one.

12392            We respectfully suggest that the Commission not be tempted to simply accede to the BDUs' request on the avails issue.  Just as they may argue that broadcasters are not entitled to huge profits, neither are BDUs entitled to new revenue opportunities which would change how the system has been built for the last 30‑plus years.  The BDUs have other significant revenue opportunities that do not require the Commission to change longstanding broadcasting policies precluding BDUs from directly competing with broadcasters for advertising.

12393            We ask the Commission for a separate process to evaluate the best solutions for the avail opportunities where competition will bring the best chance for the best solution with much more clarity.

12394            Thank you very much for the time to present our position.

12395            THE CHAIRPERSON:  Thank you for your very clear presentation.

12396            Just so I understand it correctly does the third paragraph of your handout today mean that you have filed with us another application for the use of local avails?

12397            MR. THIESSEN:  Yes, we have.  That's why I am very careful not to get into it.

12398            THE CHAIRPERSON:  Yes, okay.  So that's presently before us?

12399            MR. THIESSEN:  Yes.

12400            THE CHAIRPERSON:  Okay, thank you.

12401            Ron, you have some questions?

12402            COMMISSIONER WILLIAMS:  I have because it's before us.  I basically just have one question.  It gives you an opportunity to repeat your ‑‑ what I interpret to be your main point, and is that a public hearing be held in order for the Commission to assess how avails can best be used for the benefit of the system as a whole.  Is that your main point and reason in presenting here today?

12403            MR. THIESSEN:  That's exactly it.  We think that we have addressed the issues that are required and feel that the best place for doing it would be in a public process that is separate from this one.

12404            COMMISSIONER WILLIAMS:  Okay, thank you very much.

12405            That's my question, Mr. Chair.

12406            THE CHAIRPERSON:  Those are all our questions for you.  In light of your application I think that's all we can do.

12407            Thank you very much for coming.

12408            MR. THIESSEN:  Thank you very much for having me.

12409            THE CHAIRPERSON:  Madam Secretary, over to you.

12410            THE SECRETARY:  Thank you, Mr. Chairman.

12411            This concludes the hearing for today.  Please note that the hearing panel will not sit on Monday, April 21st.  The hearing will resume on April 22nd at 9:00 a.m.

12412            Have a great weekend.

‑‑‑ Whereupon the hearing adjourned at 1541 to resume

    on Tuesday, April 22 at 0900 / L'audience est

    ajournée à 1541, pour reprendre le mardi 22

    avril 2008 à 0900

 

 

 

                      REPORTERS

 

 

 

 

____________________      ____________________

Johanne Morin             Sue Villeneuve

 

 

 

 

____________________      ____________________

Jean Desaulniers          Fiona Potvin