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Licence Renewals for Private Conventional

Television Stations /


Conference Centre

Outaouais Room

140 Promenade du Portage

Gatineau, Quebec

April 27, 2009


In order to meet the requirements of the Official Languages

Act, transcripts of proceedings before the Commission will be

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

and staff attending the public hearings, and the Table of


However, the aforementioned publication is the recorded

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

either of the official languages, depending on the language

spoken by the participant at the public hearing.

Canadian Radio-television and

Telecommunications Commission


Licence Renewals for Private Conventional

Television Stations /


Konrad von Finckenstein   Chairperson

Michel Arpin   Commissioner

Len Katz   Commissioner

Peter Menzies   Commissioner

Rita Cugini   Commissioner

Candice Molnar   Commissioner

Louise Poirier   Commissioner


Lynda Roy   Secretary

Stephen Millington   Legal Counsel

Valérie Dionne

Nanao Kachi   Hearing Manager


Conference Centre

Outaouais Room

140 Promenade du Portage

Gatineau, Quebec

April 27, 2009

- iv -




CTV Television Inc.   9 / 44

TVA Group Inc. and Sun TV Company   156 / 971

   Gatineau, Quebec / Gatineau (Québec)

--- Upon commencing on Monday, April 27, 2009 at 0930

1   LA SECRÉTAIRE : À l'ordre, s'il vous plaît. Order, please.

2   THE CHAIRPERSON: Good morning. Bonjour, mesdames et messieurs, et bienvenue à cette audience publique.

3   Je vous présente les membres du comité d'audition :

4   - Michel Arpin, vice-président de la Radiodiffusion;

5   - Len Katz, vice-président des Télécommunications;

6   - Rita Cugini, conseillère régionale de l'Ontario;

7   - Candice Molnar, conseillère régionale du Manitoba;

8   - Louise Poirier, conseillère; et

9   - moi-même, Konrad von Finckenstein, président. Je présiderai l'audience.

10   L'équipe du Conseil qui nous assiste comprend :

11   - Nanao Kachi, gérant de l'audience et directeur par intérim de la Télévision de langue anglaise;

12   - Valérie Dionne et Stephen Millington, conseillers juridiques; et

13   - Lynda Roy, notre secrétaire de l'audience.

14   As you all know, this is an exceptional hearing. As a result of the economic circumstances facing the broadcasting sector, we dediced on February 13th to depart from our normal practice. In the past, the Commission has considered seven-year licence terms for over-the-air broadcasters, who are also called conventional broadcasters. However, it would be difficult to establish meaningful, long-term licence conditions given the current economic circumstances.

15   Instead, we announced that we would consider a shorter-term renewal of perhaps one year for conventional broadcasters. This would be followed by a hearing in approximately one year's time to consider seven-year licence terms on a group basis rather than a category basis. That is to say we will consider licence renewals for conventional and specialty broadcasters at the same time, based on their common ownership.

16   The hearing beginning today will be conducted in two phases.

17   We will spend the first phase considering policy issues that affect not only conventional broadcasters but also the industry as a whole. During this phase, the panel will, first of all, discuss the terms for the administration of the Local Programming Improvement Fund with a particular focus on the eligibility to access the fund and the proposed allocation formula. We will also examine the sufficiency of the requirement contributions from cable and satellite companies, currently set at 1 percent of their gross broadcasting revenues.

18   Secondly, we will examine the desirability of advancing the date on which the Commission should implement the new distant signal regime, presently slated for August 2011. Under the new regime, broadcasting distribution undertakings will need to obtain prior consent from conventional television stations before retransmitting their signals in other markets.

19   Third, we will consider the appropriate contributions by conventional broadcasters to Canadian programming by way of local programming, priority programming and independently produced programming. We will consider proposals for the immediate short-term licences as well as for the subsequent group licensing.

20   Fourthly, we will explore whether a condition requiring a 1-to-1 ratio between Canadian and non-Canadian programming expenditures should be introduced for English-language conventional broadcasters for the upcoming broadcast year and/or on a seven-year basis for the broadcasting groups starting in 2010.

21   We will consider the terms of the digital transition with a view to finding a solutin that will not hard consumers but that also avoids imposing unnecessary burdens on the industry. In doing so, the panel will take into consideration the report submitted by an industry working group and the cost-estimate study we commissioned. Both of them are on our website.

22   Sixth, we will obtain an update on the terms of trade negotiations that have been ongoing with independent producers. We will also consider the appropriate links between the conclusion of such terms of trade agreements and the upcoming group licence renewals.

23   And finally, we will want to hear your representations as to whether a licence term of one year is appropriate or whether a longer term is required.

24   La deuxième partie de l'audience portera sur des enjeux propres aux demandes particulières de renouvellement de licences. Au cours de cette étape, il se peut que le comité d'audition décide d'interroger à huis clos les requérantes sur des données financières confidentielles; aussi, il a prévu du temps à cet effet. Ces séances à huis clos seront d'une durée limitée, et nous produirons une version abrégée des délibérations, qui sera rendue publique.

25   Comme vous pouvez l'imaginer à la lumière de ce qui précède, la prochaine année de radiodiffusion sera une année de transition. Au cours de l'été, nous commencerons un processus public afin d'élaborer une formule qui nous permettra, à l'avenir, d'évaluer les demandes de renouvellement de licence en fonction des groupes de propriété. Nous espérons ainsi fournir à l'industrie canadienne de la télévision une solution structurale systémique dont elle a tant besoin et qui assurera sa viabilité à long terme.

26   I would now invite the Hearing Secretary Lynda Roy to explain the procedures that we will be following.

27   Madame la Secrétaire.

28   LA SECRÉTAIRE : Merci, Monsieur le Président, et bonjour à tous.

29   Before beginning, I would like to go over a few housekeeping matters to ensure the proper conduct of the hearing.

30   Please note that the Commission Members may ask questions in either English or French. You can obtain an interpretation receiver from the commissionaire at the entrance.

31   Le service d'interprétation simultanée est disponible durant cette audience. L'interpretation anglaise se trouve au canal 7 et l'interprétation en français au canal 8.

32   When you are in the hearing room we would ask that you please turn off your cell phones and not only put on vibration mode your cell phones and BlackBerrys as they cause interference on the internal communication systems used by our translators and interpreters. We would appreciate your cooperation in this regard throughout the hearing.

33   The hearing is expected to last approximately 11 days. I would like to note that the Hearing Panel will not sit on the afternoon of May 5th.

34   Starting tomorrow, we will begin each morning at 9:00 a.m. and adjourn at approximately 4:30 p.m. We will take a break for lunch and a break in the morning and in the afternoon.

35   We will advise you of any changes as they occur. We invite participants to monitor the progress of the hearing in order to be ready to make their presentation on the day scheduled or, if necessary, the day before or after their scheduled date of appearance depending on the progress of the hearing.

36   Pendant toute la durée de l'audience, vous pourrez consulter les documents qui font partie du dossier public pour cette audience dans la salle d'examen qui se trouve dans la Salle Papineau, située à l'extérieur de la salle d'audience, à votre droite. Le numéro de téléphone de la salle d'examen est le 819-953-3168.

37   There is a verbatim transcript of this hearing being taken by the court reporter sitting at the table on my right, which will be posted daily on the Commission's website. If you have any questions on how to obtain all or part of this transcript, please approach the court reporter during a break.

38   Finally, for the record, we have been informed that S-VOX, item 11 on the Agenda, and La Fédération nationale des communications, which was item 55 on the agenda, have informed us that they will not be appearing at this hearing.

39   Also, the interveners Aaron Goldman and Alberto Patella, who were items 46 and 47 on the Agenda, will now be appearing on May 6th at the end of the day.

40   TELUS and Bell Video Group, respectively items 8 and 9 on the Agenda, will now be appearing individually in the same order as set out in the Agenda.

41   Et finalement, l'article 43 à l'ordre du jour aurait dû se lire : SARTEC et l'Union des Artistes. La Société des auteurs de radio, télévision et cinéma fera une présentation conjointe avec l'Union des Artistes dans le cadre de cette audience.

42   And now, Mister Chairman, we will proceed with the first part of the hearing and we will proceed with the presentations in the order of appearance set out in the Agenda. Each participant will make their presentation followed by questions by the Hearing Panel.

43   I would now invite CTV Television Inc. to make its presentation. Appearing for CTV Television Inc. is Ivan Fecan. Please introduce your colleagues and you will then have 20 minutes to make your presentation.


44   MR. FECAN: Thank you.

45   Good Morning, Mr. Chair, Vice Chairs, members of the Commission and staff. My name for the record is Ivan Fecan and I am President and CEO of CTVglobemedia and CEO of CTV Inc. and I would like to take this opportunity to introduce our panel.

46   To my left, your right, is Paul Sparkes, Executive Vice-President, Corporate Affairs, CTVglobemedia.

47   To Paul's left is David Goldstein, Senior Vice-President, Regulatory Affairs, CTVglobemedia.

48   To my right is John Gossling, Chief Financial Officer, CTVglobemedia.

49   To his right is Dawn Fell, Executive Vice-President, Human Resources and Operations, CTVglobemedia.

50   And to Dawn's right is Rick Brace, President, Revenue, Business Planning and Sports for CTV Inc.

51   Joining us on the back panel today, starting to your right, is Kevin Goldstein, Vice-President, Regulatory Affairs, CTVglobemedia.

52   Seated next to Kevin is Clare Brown, Senior Vice-President of Finance for CTV Inc.

53   To Clare's right is Richard Gray, Vice-President and General Manager for A Ottawa and our Ottawa Radio Group. Richard is also the National Head of A News.

54   To Richard's right is Peggy Hebden, General Manager of our A station in Barrie, Ontario.

55   We would now like to begin our formal presentation.

56   I believe everyone here in this room is united in one common cause and that is to find a way to build a sustainable future for conventional television, a vital part of the social fabric of our country.

57   I don't propose going over the hundreds of pages of evidence that have been filed in the last four years demonstrating the structural issues impacting conventional television and how they are causing the downward trend towards the tipping point that we are at today, one that began well before the recession.

58   And we in Canada are not alone. All advertiser-supported over-the-air broadcasters around the world are facing the same issues. Even two of Canada's BDUs who profit from airing our programs free cannot produce a shred of evidence to counter this worldwide reality.

59   Now, while this recession has not created the problem, it has certainly accelerated the damage. I don't have a crystal ball and can't predict when the recession will end or how it will end -- is it a "V" recovery, is it a "U" or is it an "L" -- a fast drop followed by minimal growth.

60   What I do know is this. When the recession ends, TV will never return to the way it was 30 years ago or even when the recession began not so long ago. The structural damage is ongoing and permanent.

61   We need solutions. So before we address the questions raised in your public notice, we would like to begin with the two defining principles that create the prism through which we see these issues.

62   The first is this. We are private broadcasters. We exist to make a profit from the services we provide. If we can't make money, we have no reason to exist. If using our best business judgment we determine that some of our services can never make money, we must exit those services. That's because the competition for capital is intense and no one can afford to be permanently inefficient.

63   The second is that private broadcasters are but one part of the system and not solely responsible for fulfilling all of the objectives of the Broadcasting Act. In fact the Act is quite clear about the specific role envisaged for us when stating, and I quote:

"Private networks and programming undertakings should, to an extent consistent with the financial and other resources available to them, contribute significantly to the creation and presentation of Canadian programming and be responsive to the evolving demands of the audience."

64   Let me repeat:

"...should, to an extent consistent with the financial and other resources available to them, contribute..."

65   And then later:

" responsive to the evolving demands of the audience."

66   Both of these tenets in our subsection of the Act are informative. No one else in the broadcasting system is instructed to be responsive to the audience. It means we are supposed to run popular programs and it is clear that our contributions are governed by our ability to pay for them.

67   My purpose in opening this way is not to be provocative but to be real. We must make money and the degree to which we do governs what we can contribute and whether or not we can stay in business.

68   This does not take away from the fact that we at CTV are passionate about television, that we are true believers in the importance of local news and national news or that we believe in the enhancement of our national identity through high-quality Canadian programming. In fact, our belief is demonstrated not merely by words at a hearing but by a consistent body of work comprised of top-rated Canadian programming that is unmatched by any other broadcaster in English Canada.

69   Let me continue by saying that in addition to the structural issues facing all conventional broadcasters in the world, we have some unique challenges in Canada.

70   Over the years, when times were much better, numerous obligations were placed on conventional broadcasters for the privilege of owning a licence. However, as our conventional business has deteriorated, the obligations have stayed. This simply makes no sense.

71   At the same time, over the years, there has been a series of decisions that have had the effect of compromising the underpinnings of conventional television while favouring the distributors.

72   To elaborate, the integrity of our local program rights was given away, distant signals were allowed, transfer benefits for distributors were abolished, cable rates were deregulated and finally distributors were allowed to vertically integrate and own, first, conventional and then specialty channels.

73   Each of these decisions may have made sense in isolation but the cumulative impact has been a massive shift of power to the BDUs along with an enormous transfer of wealth.

74   Today, the distributors are strong with record profits and 10 billions of dollars of revenue from multiple streams, while conventional broadcasters are losing money with only one revenue stream, advertising.

75   Look, I'm not saying we're against profit. What I am saying is that things are seriously out of balance when, for five years running, the system produces continuous growth for one sector and continuous decline for another with an ever-widening delta.

76   So, this is a good time to step back and rethink the system. Over the course of the one-year process that you outlined in your Public Notice, which we support, you have a landmark opportunity to create a sustainable framework. You can consider whether the services provided by our sector have value to the citizens of our country. If so, how to prioritize those services? Are they all equally important or are some more important than others? In addition, of course, how to best pay for the basket of services that you decide are still meaningful.

77   Let me turn to what we believe to be true.

78   We believe that the foundation of the broadcasting system is in local broadcasting. I think we cut those roots at our peril.

79   Local is the comfort zone for our audiences. Local is the glue that binds. Local is where people live. There are many forms of community, but the strongest is local.

80   Local broadcasting is not just the news. It's the community messages throughout the broadcast day. It's interaction between on-air personalities and local events.

81   This is even more important in Canada, one of the most diverse countries in the world. Our country is so broad that a collection of voices from one central place cannot speak for all Canadians.

82   Local is the best chance our citizens get to see themselves on the screen and contribute to the national debate. Local television also provides a place for local debate on issues that can't hold national attention.

83   Local television gives local businesses a chance to speak to local customers and compete with national and multi-national businesses. Local is also what Canadian audiences have overwhelmingly told us that they value very highly.

84   We believe local should be the No. 1 priority for conventional television.

85   We believe the second priority should be programs of national interest, particularly those that enhance our national identity. This includes the National News and current affairs shows like "W5". It also includes shows like "Corner Gas", the "Junos", the "Giller Awards", "Degrassi", "Flashpoint", national talent competitions like "So You Think You Can Dance Canada", as well as some professional sporting events and the upcoming Vancouver Olympics.

86   But it's very difficult to have this kind of successful national programming without local roots. Some of these programs qualify for the existing CRTC category called priority programs, but many would not.

87   We believe programming that maintains and enhances local and national identity is the true definition of priority programming.

88   We believe that, as a rule, quality Canadian programming is infinitely more important than quantity. Often quantity has been the preferred regulatory approach because it's easy to measure, but the system should not be managed for ease.

89   Furthermore, high volume Canadian programming has been of notoriously low quality. This has done enormous damage to our system by helping foster a stigma surrounding Canadian programming which has taken years to erase and still exists in certain quarters.

90   Obviously, when it comes to local, it's clear why conventional broadcasting is the only real vehicle. But why in terms of national interest programming do we even need conventional? Why can't it originate from specialty channels?

91   Here's the answer: Conventional, despite fragmentation, despite the Internet, can still attract the largest number of viewers. It's unlikely that "Corner Gas" would have been the hit it became if it just aired on the Comedy Network.

92   It's the combination of your home town favourite channel, the one on which you watch your local news, with high audience entertainment shows, big promotion and strong lead-ins that helps create Canadian hits.

93   In fact, conventional is still the best mass audience vehicle ever invented.

94   The "MuchMusic Video Awards" is every bit as interesting a show as the "Junos" but the "Junos" get many times the audience. The difference is the platform and the promotion. There is even a Juno effect -- CD sales and downloads increase significantly after exposure on the Junos.

95   The same is true of the "Gillers". The short listed authors are often sold out within days of the show.

96   While it is difficult to pinpoint exactly why conventional television still works this well in attracting audiences, serving local communities and nation building, the fact of the matter is it does and, therefore, is worth fighting for.

97   So, if it's this important, why don't we use the profits from our specialty to underwrite conventional?

98   Two reasons. One, our most popular specialty channels, TSN, RDS and Discovery have some shareholders that are not owners of CTV conventional stations. How do we tell one shareholder that his or her money is being used to pay for something in which they have no ownership interest?

99   Secondly, our competitors in specialty, Astral and Corus, don't have conventional TV holdings of any size. They don't need to cross-subsidize. It would be unfair to ask us to do something that our competitors are not required to do and, as a result, when compared, be permanently inefficient.

100   Faced with that prospect, we would have no choice but to get out of conventional completely to remain competitive on specialty.

101   Let me now go to your four questions and we look forward to expanding on them in questioning.

102   1. Appropriate Contributions to the System.

103   Our preference is to find new revenue sources rather than weaken obligations as a whole, as long as those obligations are still relevant in today's world.

104   But it's a little bit of a chicken and egg situation. First, we need to identify new revenue sources to determine what we can afford. Then we should layer in contributions according to priority. And we have given you our views on what the priorities should be.

105   Our conventional broadcasting viability framework includes fee for carriage, DTH carriage of all local signals in each local market and the unfettered ability to own content. It's aimed at creating a sustainable environment for conventional television.

106   In fact, broadcasters in the United States are now actually receiving a cash fee for carriage. The US distributors have acknowledge that they should pay for what they use and what their customers overwhelmingly value. I understand that because of procedural complaints made by certain Canadian distributors, we cannot have a real discussion about this today. Nevertheless, it is a big part of the solution and it needs to be thoroughly examined as soon as possible. That's because it is the most obvious solution, one that's already working in the US and, by the way, working without a consumer backlash.

107   DTH is no longer in its infancy and we would like you to now instruct DTH to carry each local station in its home market. If there is room for dozens of porn channels, there should be room for Timmins.

108   But why can't Timmins -- part of why Timmins can't make money is this: a large part of the population in Timmins, 44 percent to be exact, get their television from satellite and their local station isn't carried on satellite.

109   We further believe that the ability to own content and access international revenues from Canadian programming that we develop is important. Since the 80s, broadcasters have had impediments placed on them to discourage them from owning content or participating in those revenue streams. In virtually every other country in the world, these impediments were removed and broadcasters can own content.

110   2. Local Programming Improvement Fund.

111   A reworked LPIF could also be part of the solution for small market stations, but it must be focused on sustainability, not incrementality. These stations are on the verge of closing and, if incrementality is the test, none of our stations would benefit from this fund. To be effective, the quantum needs to be increased to at least 3 percent and distributed between small market stations that originate local programming.

112   3. 1:1 Spending Ratio.

113   The hard truth is that, generally, we make money on American programming; we lose money on Canadian programming. American pays for Canadian.

114   This is not a criticism of Canadian programming; it's about the reality of our market size and the cost of production.

115   Using American to make money is not just specific to conventional. Specialty does it, Pay-TV does it and the BDUs do it. Thus, we fail to see how imposing a spending ratio on conventional will bring one extra penny to Canadian programming.

116   What we do see is enormous risk to our system. There is no conventional television business here without American content. On the other hand, we in Canada are a small part of the studios' worldwide revenues. If they don't sell to us for one short year, our business evaporates. Alternatively, they could just sell us a reduced amount of programming at the same per unit rate.

117   Which begs the question: what happens to the ratings and revenues that are then lost?

118   All of the American programs would still get into Canada through their US affiliates. And Canadian advertisers will happily buy out all the ads on those border stations creating a windfall for them. And you can be sure that the studios will sell the Canadian BDUs extra VOD runs of their prime time programming. You can also expect the Americans to stop geogating their hit shows and allow viewers in Canada to see them on the Internet. Then they can sell ads aimed directly to Canadians.

119   What will have been accomplished? Nothing good because the money previously used to pay for Canadian conventional programming will disappear.

120   The other issue, of course, is the potential for abuse. The vertically integrated BDUs do an enormous amount of business with the Hollywood studios. For instance, Rogers buys programming from them for Citytv. They license shows for their specialty channels. They get VOD product from the studios. They purchase DVDs for sale and rent in their video stores.

121   The potential for a vertically integrated BDU to allocate costs between their various regulated and unregulated businesses is enormous.

122   How would the CRTC propose to protect unaffiliated broadcasters? And, further, what authority can the CRTC have to audit the unregulated divisions of the BDUs to ensure compliance?

123   4. Digital Transition.

124   This is not about HD programming; we are already investing in HD to respond to consumer demand. What is at issue is how our signal is to be distributed to Canadians.

125   Over 90 percent of Canadians choose to receive their local television signals through their cable or satellite provider.

126   We cannot justify an investment of several hundred million dollars to reach 9 percent of the marketplace, particularly when this investment produces no additional revenue in a business that's already teetering on the edge.

127   We endorse the hybrid solution that has been proposed.

128   Finally, a few months ago, in advance of our application becoming public, we announced that we were not going to reapply for licences in several originating locations because we determined that we couldn't make money there, ever.

129   This was a sad day for us. As a Company, we pride ourselves in building businesses, we can't conceive of closing them. And yet, here we are.

130   We also offered to sell those stations for a nominal fee, $1. Many have come to kick tires. But, so far, not one person or company has made a real offer to buy and continue operating them as local stations under the existing conditions. That speaks volumes.

131   In conclusion, you will hear from many at this proceeding. Some don't want anything to change and that's understandable. The conventional television regulatory regime has worked well for the BDUs, the independent producers, the craft and guild associations and the unions, but it no longer works for us. And if it doesn't work for us, it ultimately will no longer work very well for those very same independent producers, the craft and guild associations and the unions.

132   The crisis in conventional is not just about the recession, it's about the ongoing structural issues. Our smallest stations are the most vulnerable, but the larger ones are not far behind. That's why we applied for a one-year extension only because this will give us the time to see if the new framework arising from your one-year process will allow us to continue and, if so, on what basis.

133   We sincerely hope that it will and we pledge to work with you and other stakeholders to arrive at a sustainable solution.

134   Chairman, Vice-Chairs, Commissioners and Staff, with the launch of this extremely important hearing, the fate and future of conventional television rests in your hands.

135   Thank you very much.

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

137   I want to systematically walk you through all these eight questions that I announced at the opening.

138   But, before that, let's talk a bit generally because I think it is important that we understand each other.

139   Your concept of conventional TV, I read very carefully your statement to the House of Commons which essentially you repeated to us this morning.

140   If I understand, please correct me if I'm wrong because I want to make sure we are speaking to each other, we understand each other, there are really -- as I see it there are four reasons that you advance.

141   You say, No. 1, conventional is local; No. 2, it's the glue that binds community together; No. 3, it's needed for national interest and national unity issues; and, No. 4, it's the best machine for promoting things better than anything we have right now.

142   Have I got that right?

143   MR. FECAN: Yes.

144   THE CHAIRPERSON: Can I question you on some of them.

145   For instance, you have heard lots of people say, you can do all of that without conventional. We have national news, things like Newsworld or CTV News, you have got lots of specialty channels, in most communities the cable company runs a community channel which, if you dressed it up and give it more money or give it more freedom could fulfil that portion, and you also have the Internet which is a phenomenal machine like we have never seen before.

146   And you know, just to take the most recent example, Susan Boyle who nobody ever knew, an unknown woman from Scotland is suddenly an international star. Or could that not have been done with the news world -- with the internet? Did it have to be done with television?

147   You are the man who lives and breathes this. Tell me why you feel only conventional TV can do this.

148   MR. FECAN: Let me start with the amazing Susan Boyle. It was produced by conventional television. The content is produced by conventional. It's distributed by the internet.

149   The clip that's posted on the internet is from a British conventional television show. If you look at that clip you will see it is incredibly highly produced and edited, and that's what conventional does.

150   THE CHAIRPERSON: Yeah, but my question was does it have to be by conventional?

151   MR. FECAN: The internet --

152   THE CHAIRPERSON: Clearly, the conventional part put it on the map but the internet distributed it.

153   MR. FECAN: M'hmm.

154   THE CHAIRPERSON: Could you not have started this Susan Boyle -- in effect do it on the Rogers local community channels and then send it through the world? Why do you need the conventional?

155   MR. FECAN: Because conventional produces and originates content. The internet does not originate professionally-produced content. There are some experiments at that but it's largely user-generated content and it's an entirely different thing.

156   You raise a few other issues in your question, Chairman. The national news -- the national news could not exist without local stations.

157   Newsnet -- our very own Newsnet depends on all of the local stations to create that journalism. There are some unique things that Newsnet does but largely the new system in our company is completely integrated between national and local.

158   If Newsnet did not have the infrastructure of our local television stations who create so much of that content, all of the local content, I'm not sure that Newsnet could exist without -- you know I think Newsnet gets a fairly modest subscription fee. I haven't run the numbers but I'm guessing the subscription fee would have to go up enormously; five, six, seven, eight dollars a household; mandatory carriage in every household. How does that make sense?

159   What I'm saying is these specialty channels largely and often recycle content from local stations, particularly in the news area. So there is a very big interconnection between the local news, local stations and national news -- a huge interconnection.

160   You also mentioned the community channels and, you know, I would like to give you a real example, a real market example of this to kind of put flesh on the concept. Because I mean you are looking at community channels and as a business they largely exist on volunteers. But Peggy Hebden who runs our Barrie station -- and Rogers has a community channel in Barrie -- can speak to the differences, what one does, what the other does.

161   MS HEBDEN: Thank you, Ivan.

162   Mr. Commissioner, I just wanted to say just a little bit about our community. The Rogers channel that runs local news gets a 1 percent share of the market for what they do in the local market. We get a 50 percent share. We are hearing from our viewers daily that they absolutely cannot imagine what is going to happen if we don't have local television in our market.

163   We also have the fact that we have a fairly large coverage area in central Ontario that we are responsible for and we have many different service providers. Rogers is one, Cogeco is another.

164   Plus 46 percent of our viewers get us off of satellite. So those viewers aren't going to have local television, and I would hesitate to say that they are probably not going to want to pull away from satellite to get Rogers so they can have some local news. So those viewers won't be serviced and that would be a shame. And they are telling us that they really, really value what we do for them.

165   THE CHAIRPERSON: Yeah, well, my question probably presupposed that everybody is connected one way by cable or satellite but if you say to me that your local stations are part of your integrated newswire network, while are you still closing local stations if they are so important to your network?

166   MR. FECAN: We would close our national newsroom too, sir, unless -- you know, unless the cable fees for Newsnet went up many, many fold. So they are all interconnected, and that's -- I'm very glad you asked the question because you need to see that interconnection.

167   I also want to state the most obvious point. Locals where -- conventional television is what gets the audiences. People like it. They watch it.

168   THE CHAIRPERSON: Okay. Now, the papers have made a big deal out of you and I not understanding each other. And so let me get this -- put this out of the way and ask you the question now.

169   When I asked you at the hearing for the BDUs, Mr. Goldstein said:

"We submit that a fee would be tied to local reflection as to be defined by the Commission"

170   THE CHAIRPERSON: I said put some bones on the flesh for me. What does that mean? Mr. Goldstein answered:

"One of the issues of course is that of sustainability. As the economic research has borne out, the obligation of these stations are particularly onerous. But we are not coming back or at least not -- what we are presenting today is to ask for reduction of these obligations..."

171   THE CHAIRPERSON: And goes on and on. That was on April 16th.

172   Now, when I appeared before the House of Commons I said -- I asked for what would be the specific commitments to local content and I used a figure of speech and said there was resounding silence. I just read you out what the resounding silence is. So obviously you did answer, et cetera, but you didn't give me a firm commitment.

173   Now, let's put this out of the way once and for all. If you get a second stream of income of sufficient size be it by fee for carriage, be it by local improvement fund or whatever, together with your present income stream from advertising reduced as it may be, what exactly would you offer by way of local commitment on your stations?

174   MR. FECAN: What we would offer is to put the money towards the local programming and have sustainability of the existing local programming.

175   THE CHAIRPERSON: And that means what in terms of hours, in terms of -- first of all, what do you mean by local programming? How many hours would you offer?

176   MR. FECAN: Well, it would be something we would discuss. This is a policy hearing and I'm taking it on a policy basis.

177   THE CHAIRPERSON: I don't ask you for specifics now. I just want to make sure that we understand each other and I understand as much as possible concretely what you mean by saying will have a sustainable local program.

178   MR. FECAN: Assuming the quantum -- the quantum of revenue coming in was the right quantum we would have what we currently have. It would continue.

179   THE CHAIRPERSON: Don't you -- I mean, doesn't that -- we will come to that later on, but you do not want to harmonize that in stations with a certain market and you have x number of local hours and stations with wide populations you have a larger one?

180   MR. FECAN: We looked at this quite a bit, and I'm very glad you asked the question. Our kind of person that did the most thinking about this is on our panel, Richard Gray, and I would like him to answer that because we actually have a thought out position on this.

181   MR. GRAY: Thank you, Ivan.

182   The context of the thinking that we put into this particular issue was in and around the criteria for eligibility for a local program improvement fund.

183   And our belief and our feeling -- and it applies to fee for carriage as well -- in order to be eligible to access the LPIF over-the-air stations, over-the-air television stations must have a tangible presence in their home community and this tangible presence included three things.

184   It included providing seven days a week original local news coverage distinct to the market and the number was nine and a half hours a week in small markets of 300,000 or less, 14 hours a week in medium markets, populations over 300,000. You must employ fulltime journalists on the ground in the market and you must operate a news bureau or news gathering office in the market.

185   We recognized and acknowledged that there needed to continue to be exceptions made to those requirements to those parameters in cases where local program hours were produced on a regional basis in the Maritimes, in northern Ontario and Saskatchewan.

186   But largely that's what we are looking at, and that's what we are talking about in terms of the definition of tangible local presence on a market-by-market basis.

187   MR. FECAN: And so our approach, Mr. Chairman, is to cut the cloth to serve different communities of different sizes with different standards.

188   THE CHAIRPERSON: Okay. You said your existing special benefits that you have such as the monopoly for local advertising, you would keep that I presume? We are now talking theoretically so you have two income streams.

189   MR. FECAN: Yeah.

190   THE CHAIRPERSON: I was wondering, is that quid pro quo? Would you be giving up something?

191   MR. FECAN: No.

192   THE CHAIRPERSON: And how does new media fit into all of this? Give me your -- I mean you were before me before new media, et cetera. I don't want to misrepresent, so please state it.

193   If I understood, you basically see new media as complementary to conventional television and specialty services but not as a -- there is a sort of symbiotic relationship that it promotes and it is a second window, but it does not become a replacement of conventional. Did I get you right there?

194   MR. FECAN: Yeah. It's not a replacement of conventional. It can have some content that is not on conventional that's not a pure duplication of conventional that perhaps adds to the viewer's enjoyment of a particular program behind the scenes kind of thing, deleted scenes, that kind of thing.

195   But essentially it's a tool. We use it as a tool to enhance viewer experience for both conventional and specialty and to draw viewers back to the television screen.

196   THE CHAIRPERSON: Okay. So really, am I wrong when I say what you really want is a specialty channel of this conventional genre; in effect, we have those specialty channels now like whatever, HDTV, et cetra or TSN. You want -- what this really amounts to is a specialty channel called conventional TV and it will be -- what will be aired? It will be local news, local programming, drama and what else?

197   MR. FECAN: It would be what it is today but with two revenue streams.

198   THE CHAIRPERSON: Yeah. And you are not willing to give up either.

199   Would you also -- you told me you are not willing to give up any of the special privileges. Would you be willing to assume some of the obligations attached to specialty channels such as CPE?

200   MR. FECAN: We would be prepared to look at that as long as the Commission recognized that the costs of operating a local station or 20 of them across the country is different from the cost of operating one central master control for a specialty channel.

201   So I think the Commission's methodology would need some refining because currently when you look at the costs of local programming you don't take into account the actual cost. Your view is very narrow.

202   So I think if you were flexible to looking at what the actual cost is, then I think we would certainly be interested in looking at a possibility of a system of revenue -- expenditure system like specialty has.

203   THE CHAIRPERSON: You are ahead of me obviously because of your greater familiarity with the mechanisms.

204   What do you mean by greater flexibility? What do we do right now, for instance, that you feel would not be sustainable in this situation?

205   MR. FECAN: Specialty has one master control. The beauty and the economic efficiency of specialty is it has got one of everything. It doesn't need to have 20 of everything.

206   In order to do conventional television, local television, you need people on the ground. You need bricks and mortar. You need to employ not just the journalists that directly work on the program but you need to employ the person that pays the journalists, otherwise known as overhead.

207   When you look at the cost of Canadian programming you currently -- and apply it to local television, conventional television, your definition doesn't capture what it actually costs. Let me look -- let me kind of tell you another way.

208   If conventional was just a specialty channel with one master control and a bunch of transmitters throughout the country, you wouldn't need a building in Regina. You wouldn't need people. You wouldn't need a conference room. You wouldn't need an accountant or a payroll person to pay these people. But when you look at the cost of local you don't capture many of those costs.

209   So if we were going to setup a system, a Canadian program expenditure system, we have to make sure that the eligible costs are correct and they are different between specialty and conventional.

210   THE CHAIRPERSON: So it's more than programming costs. There are certain infrastructure costs --

211   MR. FECAN: Correct -- that don't exist for specialty.

212   THE CHAIRPERSON: Now, in this wonderful scenario what happens to the stations that you originally announced you were going to close and which you have now put sort of on a one-year suspension, and what happens to the whole list of other rebroadcasters that you said you were going to close in any event.

213   MR. FECAN: I am not sure about what you meant, the first one. The stations that we -- we are still proposing to not renew, Brandon, Windsor and Wingham. What we have said to you is because of the New Digital Television Report that was filed by the working group a week ago, a lot of the transmitters, the re-transmitting towers we would like to keep open for another year.

214   So, that doesn't change the closure or lack of renewal of the three originating stations that we've put in our application.

215   THE CHAIRPERSON: So, those you will close, no matter what, even if you get your B level fee-for-carriage you would close it?

216   MR. FECAN: Well, no. I have to deal with the facts in front of me and the facts in front of me right now doesn't tell me that there is an LPIF that is based on sustainability, doesn't have fee-for- carriage right now. And so, I have to be real and say, based on the facts I have in front of me right now, this is what we must do. If those facts change, then we have options that we didn't have before.

217   THE CHAIRPERSON: We were talking about conventional necessity of getting the treatment as specialty channels and you understand me correctly and depending on what the second incomes you miss, you would have a second look as you would have to close those stations or not.

218   MR. FECAN: We, it is not our intention to close stations as a business policy. We like building businesses. It is a sad day for us to come to the conclusion that we can't turn something around.

219   THE CHAIRPERSON: Yes. But the re-transmitters, because of the eminent conversion to digital equipment would it be closing any of them?

220   MR. FECAN: We sent you a long list of them.


222   MR. FECAN: And those are the ones that we would propose to keep going for another year, while we all try and get through the digital transition process.

223   THE CHAIRPERSON: We will come to that in a second. My last general question is: Obviously, part of this whole picture is a public part cost to and, you know, there is what I sort of call the "Sarkozy solution", which basically is prohibit the CBC from advertising, therefore freeing up that space for the conventional -- for the private broadcasters and providing income for the CBC in lieu of their offer, fee-for-carriage by special parliamentary appropriation or whatever, et cetera.

224   Is that a solution in your way? Is that something that we or the government should contemplate or would that only be a temporary relief for you?

225   MR. FECAN: Well, I think there are two different issues and there are two different sets of considerations. I understand how, and I guess your question really is how one might impact the other, but my first thought really is that we really need to solve the private broadcasting conventional issues.

226   The CBC issues, my God, they have been ongoing for 40 years, 50 years.

227   THE CHAIRPERSON: Yes. I didn't want to talk about the CBC. I was just saying you have now -- they are out of the picture under my scenario in terms of advertising. What does that do for you?

228   MR. FECAN: Let's look at it practically then. Their advertising approximately is $300,000,000. a year. In all of the solutions that you -- that I've heard that are like the one you've just stated, they would get out of advertising and everything except sports. Sports is half of their revenue base approximately. It could be off by a few per cent, but not that much.

229   So, let's say we're now talking about $150,000.000. and then the question is: How much of that goes to conventional television? How much of that goes to specialty? How much goes to internet, advertising, newspapers, flyers, other means and how much just disappears?

230   And, you know, logic would tell you we would get some of that, but I don't believe we would get the lion share of that particularly. A lot of their advertising is very low cost, so I am not sure who that would actually benefit.

231   So, certainly it would be something, but I don't think it's the golden bullet to solve our particular issue and I think, you know, there is a whole -- there is a larger set of issues in terms of, you know, whether the CBC --

232   THE CHAIRPERSON: And I take it you've tried to work, you're saying that CBC had to be out of advertising altogether?

233   MR. FECAN: Which I don't believe is -- well I think that would theoretically make more money, more advertising money put into the marketplace, but we know on public record they have long term hockey deals and other sports deals that have advertising on them.

234   So, for the foreseeable future, five, six, seven years, they're going to be in professional sports. They say that that's what they want to be in and if they're going to be in that, they're going to carry advertising.

235   THE CHAIRPERSON: Okay. Then, let's go to the specific issues that I mentioned.

236   First of all, I would -- madam Secretary, I would like to introduce three documents because they will think I will guide our discussions and I gave you a copy of the -- I gave a courtesy copy to CBC-CTV so they know what I'm talking about and they are available at our distribution there because anything you talk about LPIF is meaningless unless we have a common understanding on fee-for-carriage.

237   You and your fellow broadcasters have for the last three months been saying that fee-for- carriage is the solution, so I wanted to make sure we have a common understanding of fee-for-carriages.

238   So, the first document which I've shown you is, in effect, our analysis done internally, suggesting what a fee-for-carriage at $0.50 would mean. And as you can see on the first page, it suggests that it would be a total in a fee rate of $352,000,000.

239   And there is then an impact of who would be paying it on the BDUs, what it would do to their margin. And then, the last page shows who would be the beneficiaries. And this is based -- on a fee-for-carriage basis, it would mean you CTV that get $56,000,000, Canwest would get $72,000,000, Rogers would get $57,000,000 and so forth, and CBC would get $92,000,000.

240   That's our analysis, you know. I presume you have run the numbers yourself and you have done this kind of thing. However, are we talking about the same thing here or not?

241   MR. FECAN: Well, we are delighted to talk about fee-for-carriage. I think this is --

242   THE CHAIRPERSON: I don't believe this thing is --

243   MR. FECAN: If that's what you're saying here.

244   THE CHAIRPERSON: Let me make it clear for you and for everybody else. This is not for fee-for-carriage. I think this is what everybody compares it to. I want to make sure we compare to the same thing.

245   MR. FECAN: Okay. Well, Chairman, with respect, we got these documents as we were walking into the building, so we really haven't had much of an opportunity to look at them and we really -- you know, to have a constructive dialogue about them, I think we really kind of need to.

246   Having said that, we notice assumptions, just looking at it very quickly, assumptions in here in supposition that we do not necessarily share and this is not what we propose. I see, for instance, there is a fee-for-carriage in your analysis for the CBC. They already get four something per household. Now, we suggested capping the major markets, your analysis does not cap the major markets. So, these are just two things that are different from any assumptions we have made and we really do need to take the time, maybe come back on Thursday when we are due back --

247   THE CHAIRPERSON: Well, sure.

248   MR. FECAN: -- to tell you whether, you know, we are on the same page. We are in the same book, okay.

249   THE CHAIRPERSON: Well, that's what I wanted to hear. I was going to say "ball park", okay, fine.

250   MR. FECAN: We are at the same page.

251   THE CHAIRPERSON: Same book, c'est bon, okay, fine. So, that's the document number l, fine.

252   Document number 2 is the rate of 50 per cent. I have never understood from where you and Canwest came with from $0.50 or $0.75. I just give you there the numbers for 2008 and these are all public numbers or they will be very shortly, and you see the average rate is 35 per cent and that's including the two sports channels, which really takes the whole thing out of whack. If you take the sports channel, it is much lower.

253   And then, the third document is the LPIF, how much it would generate under the terms that we specified in our BDU Decision. We do it all in round millions so that nobody can do any reverse engineering, but just so that you see. Using the figures in 2007, it would be $60,000,000, using the figures of last week because the BDUs have been extremely profitable, it would actually be $68,000,000.

254   And I hope we are in the same ball park here too.

255   MR. FECAN: Well, again, I have -- we really would -- we're relying on whatever inputs you have here and I have to put the caveat out there, but a few observations, please, especially channels in pay services do not have the infrastructure you asked, $0.50, which is $0.35.

256   Well, the most obvious answer is they don't have -- they have one infrastructure. They have one of everything. We have to have 20 of everything. So, it costs more. It costs a lot more. Conventional originates a lot more. I mean, you could see the Newsworld and the Newsnet numbers on your chart.

257   The $0.15 on for Newsnet does not produce the amount of news that Newsnet has. Newsnet survives based on the local television stations.

258   So, you know, there is a whole bunch of thinking when you start drilling down into this that maybe casts a different picture than one that comes up when you say, well, one thing is $0.35 and the other is $0.50. How come? But one produces a lot more and has a lot more infrastructure by nature of what it is than others that essentially re-use the infrastructure produced by conventional.

259   THE CHAIRPERSON: Okay. I hear that. But as I've said before, Mr. Fecan, I introduced these three documents not because I want to have a fee-for-carriage debate, but I want to have a meaningful discussion with you and the others before me. And this is sort of my database which I am sharing with you, so it --

260   MR. FECAN: But we would love to have that discussion with fee-for-carriage in as soon as possible time, sir.

261   THE CHAIRPERSON: Wonderful! We will have it all somewhere along, but for today and for the next two weeks, this is sort of -- just so you know what I am speaking of and where I'm coming from and et cetera, in the interest of transparency at this table.

262   Now, going on that basis, you -- where do we disconnect because as far as I understand you have a small market problem and the LPIF is meant to address it. Your reception of this LPIF has looked wrong, if I may say so, partially because you didn't like the incumbent mentality and, secondly, because you thought it was insufficient at one per cent.

263   But isn't your problem really in the small markets?

264   MR. FECAN: No, no. It's a structural problem of -- for all of conventional television. All of conventional television in the United States is in trouble. It's not just the small markets. It's the same here, plus we have more obligations here. So, it's a problem across the board.

265   The smaller markets are definitely more vulnerable and it is a more urgent matter, but it is -- you know, we are fooling ourselves if we think and the big danger of the LPIF I might say, the big danger is that we put a bandaid on a large problem and we say our work is done and we go home.

266   THE CHAIRPERSON: I don't want a bandaid solution. I am talking about you, I am talking about your network. You're telling me you have a problem in Toronto, you have a problem in Vancouver?

267   MR. FECAN: Yes. We lose money in Vancouver.

268   THE CHAIRPERSON: You don't cross-subsidize? My understanding was that you -- to some extent, you keep the small stations alive with the -- by sharing the costs of, by assuming costs in your large market stations, et cetera.

269   But that's really -- the loss causing problem lies in the small markets.

270   MR. FECAN: No. I think -- I think certainly the problem is a lot more severe and if you would like, we would go through it market by market. I agree that, you know, to the degree that confidentiality permits and if that gets in the way, we can do it in camera on Thursday, if you like.

271   But, no, we have -- the problem is more urgent in small markets, but urgent in the sense of like, you know, there is a problem there like immediate urgent, but the larger markets are not going to be in the same place in a very short period of time. So, if we are going to solve this, we should solve this for a sustainable longer period rather than a year or two.

272   THE CHAIRPERSON: So, solving a yield small market sustainability problem, if I may call it like that, will not solve the issue for conventional television?

273   MR. FECAN: No. It will help, every little bit helps and we are happy to work with you to get any help we can, to help the immediate issues, but we should be very careful to not fool ourselves into believing that it's done at that point and that everything is fine, it's not.

274   THE CHAIRPERSON: Now, the LPIF, you've suggested should be set at three per cent, which at $68,000,000 would be $208,000,000 total.

275   How did you come up to this figure? What is it based on? How do you get back -- how much would you get under your -- up here at three per cent, according to your estimates or your construction of the LPIF?

276   MR. FECAN: Can I ask Kevin Goldstein, who is our expert in that, to give you the answer, please?

277   MR. KEVIN GOLDSTEIN: Sure, why don't I start with our rationale behind where we got to the three percent and perhaps I'll ask some of my colleagues to talk more specifically about the numbers and how it impacts us.

278   In terms of the difference here, the move from one percent to three percent, when we did the analysis initially in terms of the amount of money that we were to receive, and others, under the initial one percent allocation we realized that there was some 70 odd private stations that would be eligible for the LPIF, and when CBC is included in that, should they be included -- I understand under the current policy that's the way it's structured -- that money would then be divided amongst 90 stations.

279   When you split it between English and French you end up with, according to the numbers that we received today, $45-million for English Canada, 68-million total between 90 stations.

280   The problem for us is, is that well, yes, it's helpful, it doesn't amount to a significant amount of money for each station to ensure sustainability.

281   So, our view was, is that it had to be at a level where it would make a significant difference and ensure sustainability for those stations going forward and their ability to produce local programming.

282   Perhaps I'll ask my colleague, Mr. Gossling, to chat more specifically about exactly how it impacts us from a numbers perspective.

283   MR. GOSSLING: Sure. Thank you.

284   I think the confusion may be that when you look at our 2008 numbers as filed, when you add an LPIF of three percent it would turn the number to a profit. However, because '09 has seen such a decline, an LPIF at three percent would not result in a profit for us and we don't expect it to going forward.

285   So, we're not asking to have all of our losses covered, we're simply asking for a greater contribution.

286   THE CHAIRPERSON: And this is without incrementality. You are, in effect, asking for an operating subsidy based on three percent of BDU income?

287   MR. FECAN: Yes. What we're saying is we don't believe these stations are sustainable going forward without a basket of things and LPIF could be one of them, fee for carriage could be one of them.

288   THE CHAIRPERSON: But, I mean, part of it is -- isn't part of it cyclical and part of it is structural, and I guess I have trouble here figuring out which is which.

289   MR. FECAN: We're not sitting here saying that the recession doesn't have an effect, obviously it does. But, equally, we're saying that there is a long-term trend of structural and permanent damage.

290   How do you figure out how much is what, how much is the other? We have guesses at it, educated guesses perhaps, but that's all we can do. I mean, I don't think any of us know for sure.

291   THE CHAIRPERSON: If I was you, you have a greater interest in being right than anybody else, I mean, your future rides on it, so I presume you have -- and you have the data, you exactly know where your losses come from, where you spend, where you are profitable, et cetera, so you are in a much better position to figure out what is new, is it because of the recession and what is an underlying cost issue.

292   MR. FECAN: If John is happy -- I'm happy to have John tell you what our guess is, but it is a guess.

293   THE CHAIRPERSON: Maybe we'll leave that for the income part because I think the discussion can't be very meaningful without looking at the actual numbers which you obviously don't want to share.

294   Now, you keep saying CBC should not be part either of the fee for carriage or the LPIF. Let's stay with the LPIF for a minute.

295   I just don't understand the concept. I mean, people are entitled to their local programming, they want it as a clear-cut service, there's a problem in providing it at a profitable basis, but why does it make a difference whether it's CBC or a private station?

296   I mean, we as regulators have to ensure that that need is met. What difference does it make whether the need is met through a public broadcaster or through a private broadcaster?

297   MR. FECAN: Chairman, it's an issue of principle for us but not a hill to die on.

298   The issue of principle is they already have a dual revenue stream, government money and advertising. But, as I say, it's not a hill for us to die on.


300   Now, we suggested originally -- because of the severity of the recession which changed the formula and basically suggested, let's take your last three years, multiply -- you saw the formula, et cetera.

301   You came back and said, no, that's not the right way to do it, do it on the basis of population served.

302   Presumably this formula works better for you, I assume.

303   MR. FECAN: Again, I'm going to ask Kevin Goldstein to answer. Again, it was a principle issue for us and we're not particularly fussed whether it's your solution or ours, but just to give you a perspective of what the issue is for us, and I'm not even sure we do particularly better at what the --

304   THE CHAIRPERSON: Well, that's what I'm asking. Why the other formula?

305   Go ahead.

306   MR. KEVIN GOLDSTEIN: It's sort of two questions.

307   In terms of how we perform under either one, another material difference is CTV under either formula, to Ivan's comment, with respect to why we propose a different model, we wanted to propose something that we felt was objective, streamlined and very simple to apply.

308   One of the issues associated with the historical averaging model is potentially the manner in which different stations are costing their local programming. Not to say they're doing it -- anyone's doing it in a particularly nefarious way, it's just that if you wanted to do an apples-to-apples comparison it's going to involve a degree of analysis to ensure, you know -- or a high degree of analysis to ensure everyone's essentially reporting in the same manner to ensure the distribution works appropriately.

309   If you do it in a manner where it's essentially completely objective, that removes that administrative difficulty.

310   THE CHAIRPERSON: Could you file with us what our formula and what your formula would mean, let's say, using last year's figures just so we have a comparison?

311   Okay. You have then also a sort of six-month adjustment which I understand is that after six months into it you see the spending into commitments have been filled, if not there's a re-adjustment; right.

312   I was surprised to read that because I understood that all your programming commitments are usually for a year anyway so, therefore, wouldn't this sort of six-month re-adjustment to see whether people are on side or off side actually interfere with your programming decisions?

313   MR. KEVIN GOLDSTEIN: What we did in proposing that was trying to ensure that you didn't have a situation in which one player was claiming LPIF funds and then during a period essentially eliminated their local programming.

314   THE CHAIRPERSON: Oh, I realize, it's the anti-cheat formula, just sort of, doesn't hurt you more in terms of doing long-term programming and planning.

315   MR. KEVIN GOLDSTEIN: I think in terms of our local commitments, you know, a structure and an expectation starts with the Commission, I think they vary in terms of that, in terms of whether it's each week or averaged over the year.

316   THE CHAIRPERSON: Then what would be your commitments -- if we do this, I mean, are these the same commitments you mentioned to me earlier, Mr. Fecan?

317   MR. FECAN: Yes, sir.

318   THE CHAIRPERSON: And how do we ensure that this money will be used truly for programming and not for gold plating, you know, for giving people raises or spending money that is not really directly related to local programming, local news?

319   MR. FECAN: Kevin or Dave?

320   MR. KEVIN GOLDSTEIN: I think the manner in which the system is designed now is that any funds have to be directed to local programming.

321   You know, given the elimination, or gross elimination of the incrementality requirement, we're looking at a situation where we're moving to a sustainability model.

322   I think for -- you know, for our stations, you know, the LPIF is going to help, but it's not going to necessarily move them to, you know, necessarily a profitability perspective.

323   So, that funding is desperately needed and, you know, necessary to ensure their sustained operation.

324   MR. FECAN: We would work with you to develop whatever you thought made sense to give you comfort that the money was going where it was targeted.

325   THE CHAIRPERSON: Well, I guess, just so we understand each other, you say funding for local programming.

326   Promotion of local programming, is that included in that? Would it mean incremental staff? Would it -- for instance, are you thinking of some capital outlays that would qualify in that, et cetera?

327   What about licensing and purchasing of extra equipment, extra trucks, extra cameras, you know, all of this. I think we've got to go through item-by-item say, you know, what you think -- we both want the same thing. I want to be able to say the money you got you spent for local programming, you want to be able -- in case somebody attacks you and says all you're doing is paying raises to -- even if it's -- no, that's not what we're doing, we're actually spending it there.

328   So, have you got an idea of -- have you thought about it, have you made a list of categories of eligible expenditures?

329   MR. DAVID GOLDSTEIN: I think -- to Mr. Fecan's earlier point, I think we need to take a broader look at what the eligible expenses are for the stations and once we have that quotient, we can track the expenditures of LPIF and their contributions to those specific stations in annual reporting.

330   So, I think we would make the case that some of the capital costs are an integral part of that -- those operations, but at that point we should be able to find a very accurate tracking mechanism.

331   THE CHAIRPERSON: That's a bit putting the cart before the horse. I mean, let's say, here's the LPIF you may spend it on this, let's have the categories and later on we'll have an audit of whether you did or not, but I'd like to set that list...

332   Maybe you can in your follow-up documentation set it out very clearly.

333   As you know, I want to be -- I want to know operational wise, is my favourite word, how do you do this and, second, I want to be sure that it's being spent on the right purpose.

334   MR. FECAN: I agree with you that the rules of the road need to be established before any money flows and we would work collaboratively with you and your Staff to give you the kind of comfort that you need and set out some sort of list.

335   THE CHAIRPERSON: What happens for stations like Windsor, for instance. If I understand it, it has no local programming right now, it's essentially a re-broadcast of London; is it not?

336   And if you had the LPIF and had this money, does that mean you would have -- you would (a) keep Windsor open, assuming it's a sufficient LPIF and, (b) it would have local programming, or would it stay in its present form? Just to give it as an example.

337   MR. FECAN: Yeah. I'm going to ask Dawn to answer that question. But I believe that your information is incorrect, I believe Windsor does currently have local programming, about seven and a half hours --


339   MR. FECAN: -- a week.

340   MS FELL: Yes, Windsor does have a local programming commitment of seven and a half hours per week, so it does produce local programming which is inserted then into the CFPL cast and schedule.

341   And in terms of the LPIF, if the LPIF were set at three percent and wasn't incremental, then we would revisit our decision to close Windsor.

342   THE CHAIRPERSON: Okay. Now, Windsor has how many people right now to produce its local programming?

343   MS FELL: Windsor does produce local programming, yes. So --

344   THE CHAIRPERSON: You said seven hours.

345   MS FELL: Yes, seven and a half.

346   THE CHAIRPERSON: Take a concrete case. How many people are there actually in Windsor right now involved in local programming?

347   MS FELL: Windsor employs approximately 40 people who are involved in the production of local programming and the sale of local air time. They do local sales and local programming.

348   And there are also a number of people who are employed in London, but who are associated with the production of the Windsor newscast, the production airing of the Windsor newscast.

349   MR. GRAY: Perhaps I could help with the answer to that question.

350   In Windsor currently we produce a fully dedicated local newscast at 6:00 p.m. and 11:00 p.m. Monday through Friday. The six o'clock show runs an hour.


352   MR. GRAY: The 11 o'clock shows runs a half an hour. We have a fully functioning broadcast facility in downtown Windsor from where those programs originate.

353   There is a news anchor, Jim Creighton who's been in that community for eight years, there is a full staff of videographers who are out on the street telling stories in Windsor on a nightly basis. We have a live truck in Windsor. We provide a substantive amount of local coverage in Windsor currently.

354   In terms of the number that Ms Fell just gave you, 40 people, about 25 of those would be dedicated specifically to the production of that seven and a half hours of local news a week.

355   THE CHAIRPERSON: Okay, thank you. I very much appreciate. As you know, the MP and MPP for Windsor will appear later on, so it's useful for us also.

356   Thank you for correcting my misapprehension that I understood it was a re-broadcast.

357   So, then sufficient LPIF would allow you to sustain that, and is that sort of the seven hours -- you said 20 people I believe I just heard. Is that sort of the ratio of normally what it takes to produce that?

358   MR. GRAY: You know, it depends on the market size.

359   THE CHAIRPERSON: Of course.

360   MR. GRAY: It depends on the scope of what it is you're doing. But, yeah, 25 people would roughly be the right number for that.

361   You know, just to give you some additional context, you know, some of our other news operations where we're producing, you know, just over 20 hours a week, you'd be looking at a staff complement of roughly 50, again depending upon the market with some considerations for geography.

362   But, yeah, that's roughly the number, 25 for seven and a half to 10 hours a week, 50 if you're looking at, you know, 20, 20 plus.

363   THE CHAIRPERSON: Coming back to you, Mr. Fecan, you tell me you're looking for a systemic solution and so far I see it only as a financing solution, right. That's really all you're talking about, maintaining what you presently do in Windsor.

364   Is there anything more, now that you assume you have -- the second income stream would be there, would you see changing the operation in the way you run Windsor or the programming or the structuring in a different way because you can now at least partially count on a regular income stream?

365   MR. FECAN: Well, let me just also state the obvious. It would be nice if 25 per cent of the people in Windsor could now see their local TV station. It's not carried on satellite. So, that would also be a big part of making that more sustainable.

366   You know, Windsor is -- 25 doesn't sound like a lot perhaps compared to 44 percent in Timmins or over 50 percent in other parts of the country, but it's a quarter of the potential audiences there.

367   So that would also, I think, add to making Windsor more sustainable by having it available on satellite.

368   THE CHAIRPERSON: You're still again only talking on the supply side.

369   MR. FECAN: M'hmm.

370   THE CHAIRPERSON: I was -- on the income side, I was thinking, what are you going to do with Windsor now that you assume, under the scenario that we're discussing, you have a regular income stream, you also have an advertising stream.

371   You know, you raise the issue of carriage which should come in second, but what in terms of product, it's the local offering that CTV Windsor offers, we're only talking about sustaining.

372   MR. FECAN: Yes. For that kind of money, yes.

373   THE CHAIRPERSON: Okay. I suggest -- I have lots of more questions, but I'm running out of voice and so I need to take a nature break for 10 minutes.

374   Thank you.

--- Upon recessing at 1047

--- Upon resuming at 1101

375   THE SECRETARY: Order, please. À l'ordre, s'il vous plaît.

376   THE CHAIRPERSON: A couple of clean-up items, Mr. Fecan.

377   Did you tell me that I can see that you are losing money even in Toronto on your conventional TV side?

378   MR. FECAN: In '09 we are in the numbers which you haven't got yet. But what I did say is we are in Vancouver in '08.

379   THE CHAIRPERSON: I know, but I asked for Toronto.

380   MR. FECAN: In the '08 numbers I don't believe so, but we believe we will be.

381   THE CHAIRPERSON: Secondly, when I asked you about local news you mentioned that the local news is essential to feed your national CTV news, et cetera. What about cost allocation? Does CTV, Newsnet for instance, pay the local stations for stories that it carries or is all the cost borne by the local stations?

382   MR. FECAN: I have to --

383   THE CHAIRPERSON: You have a story in Winnipeg -- I don't believe that -- in a flood, I guess, obviously you are going to carry it on CTV news on your Newsnet. Does Newsnet pay the Winnipeg station for that or are all the costs borne in Winnipeg?

384   MR. FECAN: John?

385   MR. GOSSLING: It goes both ways, actually. So there are costs to the local stations that don't get allocated to the central news, but there is also central news costs that belong there as well.

386   So there are some allocations but I wouldn't say it was fully allocated. We don't track story by story if that's what you are suggesting.

387   THE CHAIRPERSON: No. I am just picking up on Mr. Fecan's statement of saying you can't expect us to cross-subsidize, that specialty couldn't cross-subsidize because there is different ownership. I have no problem with that as long as there is honest accounting and everybody bears the cost of their accounting.

388   And it just occurred to me that maybe CTV Newsnet is actually cross-subsidized by the local stations unless they pay for the full value of the news that they receive from those local stations.

389   MR. FECAN: I think that may be true but I think that's the only situation where that's true in. I don't see how else to do a national news channel without having local inputs. The cost of setting up dedicated bureaus in every city in the country would make it prohibitive. So I think that's the one example where you may be right.

390   THE CHAIRPERSON: Yeah, but CTV Newsnet on air gets 15 cents a month fee from the BDUs right now, unless I misunderstand that. So part of that then actually should go to the local stations because it's borne -- it is a cost incurred by the local stations, not by CTV Newsnet.

391   MR. FECAN: Well, then we would have to take it off the air because it would lose money.

392   THE CHAIRPERSON: You cannot have your cake and eat it too. You can't on the one hand say, "I won't cross-subsidize" and then turnaround, "Yes, I have to cross-subsidize".

393   I mean, it's one or the other. I mean, I don't understand how you do your accounting and obviously -- I mean this is not the time to do that, but in your additional if you can tell me how you do the cost allocation between the local stations and CTV Newsnet, for instance?

394   MR. FECAN: We would be happy to.

395   THE CHAIRPERSON: I would appreciate that.

396   Okay. Excuse me while I take a lozenge, but I really have a very sore throat.

--- Pause

397   THE CHAIRPERSON: You mentioned that you want to eliminate priority programming. It was originally put in as a quid pro quo for the CPE, as you know. We relieved you from CPE because we said it will give you more flexibility, but in return for it guarantee us -- if the programs which we value are being shown -- if we accede to your wishes does that mean you are willing to reassume CPE obligations?

398   MR. FECAN: I don't know that -- I will answer your question. Don't worry.

399   I don't know that there was a CPE before in conventional. That's not my memory. I stand to be corrected.

400   But in any event, yes, we are prepared to talk about a CPE for conventional, and I think I said that earlier this morning.

401   THE CHAIRPERSON: And you are asking for complete elimination for the priority programming for the one year and we will see what we do in the seven years that follow?

402   MR. FECAN: Well, no. Actually, sir, we in our one year proposed renewal we are not asking for any changes in our condition of licence. These suggestions that we make are in the context of a policy hearing for the longer fixes in the system.

403   THE CHAIRPERSON: You are absolutely right. I apologize.

404   I have read, over the weekend, your team's submissions. I do mix them up sometimes. I apologize. No, you are right.

405   Now, do you feel that there is a problem with either definition of the priority programming or the spend that we have identified as relevant for spending? Rather than elimination could one modify either the definition or the hours?

406   MR. FECAN: My own sense of it is that you can't have the two different systems. You either go to a CPE or you stay with the priority programming.

407   I just don't think priority programming necessarily captures what my interpretation is of the Act. I don't see anywhere in the Act where priority programming is mentioned. The Act talks about programs of national interest and national unity. And I submit that that's the true definition of national priority programming.

408   And so since we are talking about, you know, what a new system might look like I bring it forward in that spirit.

409   THE CHAIRPERSON: The bottom line, abolish priority programming and you are willing to assume CPE, which in your view will have the equivalent effect of seeing Canadian programming be produced and shown?

410   MR. FECAN: It seems -- the CPE seems to work well for specialty.


412   MR. FECAN: And with the caveat that I mentioned earlier, we need to make sure that your metrics capture the true cost of local because without that it -- you know, if you can't measure it you can't manage it, as the old expression goes. So we just really need to make sure that the metrics that are there really capture the cost of local.

413   With that proviso, yes.

414   THE CHAIRPERSON: Speaking of metrics, you in this morning's opening statement you said we should concentrate on quality rather than quantity. I don't think anybody argues with that. The only thing is why we concentrate on quantity, is because you can measure it. How do you measure quality?

415   MR. FECAN: It's certainly a conundrum, and I don't envy your task. My observation was merely that by doing what is more easily measurable, and maybe the only measurable thing although I think you could measure quality by audience as well, you have perhaps an unintended consequence of people doing low cost things to satisfy -- to tick the box -- to satisfy the category, to get enough hours in priority programming. And I don't think anyone benefits from that and certainly not the audience.

416   I was very heartened to read in the Broadcasting Act that caring about the audience is something specifically pointed at us. And so that's why -- and in our business, you know, we care about the audience first and foremost because we live off the livelihood -- our livelihood depends on our audience. So that's why I make that observation.

417   I'm not sure that the current way gives us the desired impact that we are looking for, and if it actually has an unintended consequence -- it's negative -- then perhaps you have to ask yourself whether it's worth measuring that kind of thing at all, whether the CPE will cover it.

418   THE CHAIRPERSON: No, but surely the logic -- it goes as follows: The quality -- you say go with audience reaction. That's after the fact, not before the fact. We want to give you maximum flexibility but we don't want you to produce cheap programming in order to -- so by forcing you to put it on priority time this is your most valuable time. You don't want to waste it.

419   So you have every incentive to produce quality programs so that you maximize your publicity income. That's the whole rationale behind priority programming. This is your prime time so you have to devote it to Canadian programming. Surely you are going to make sure it is absolutely excellent Canadian programs so you garner maximum advertising.

420   If we abolish it how we -- and following you, I really don't know how to measure or enforce quality.

421   MR. FECAN: Tell me this, Chairman. The Act talks about maintenance and enhancement of national identity and cultural sovereignty. That's pretty well the primary objective of the entire system.


423   MR. FECAN: Tell me how the Junos, a television program that celebrates excellence of the Canadian musicians in our country -- tell me how that program doesn't quality for priority programming under your definitions. Tell me how the Gillers, celebrating the excellence in authors -- now, the Junos is not a cheap show to do. It is more expensive than a drama and doesn't qualify.

424   THE CHAIRPERSON: I just asked you that very question. Should we do something about the definition of priority programming or the hours and you said, no, don't bother with it.

425   MR. FECAN: No. Sorry, I misheard. I thought -- I just heard you talk about hours. I think you either have to span the definition to truly capture what the Act talks about -- to truly capture what the Act talks about or eliminate it and go to a CPE.

426   THE CHAIRPERSON: Well, I invite you to furnish me with a definition of priority programming that in your view captures what your Act talks about.

427   MR. FECAN: We would be happy to do that.

428   THE CHAIRPERSON: Because that's exactly what we are trying to get at. We both have identified the same goal. It is the means of getting there that we need to --

429   MR. FECAN: Agreed.

430   THE CHAIRPERSON: Okay. On local programming, for the next year you basically say status quo. Before we change things -- instead, let's have one year of reflection maybe -- you advance something which for CTV you have suggested 15.5 hours across the board and for the "A" 10 hours across the board rather than the present checkerboard that you have there.

431   This morning you said if I understood you correctly, for small markets nine and a half hours across and for large markets over $300,000 14 hours across the board. Is that sort of what you feel is the type of local programming that you are prepared to live with?

432   MR. FECAN: I just want to make sure that we are talking about the same thing and we don't confuse each other.


434   MR. FECAN: I think what you were reading from -- when you were reading that was an old application that was withdrawn.


436   MR. FECAN: What we filed in terms of a one year renewal was status quo. What Richard Gray was talking about was in the context of a policy hearing, how we see it going forward.

437   THE CHAIRPERSON: Exactly, that's why we --

438   MR. FECAN: Okay. So we are on the same page.

439   THE CHAIRPERSON: Yeah. So the nine and a half would be roughly the "A"s then and the 14 hours would be the present CTV, or you measured strictly by population depending what kind of station you have in that market?

440   MR. FECAN: The basis is population and, if you would like, Richard can dig deeper into that or we can leave it there if that's sufficient.

441   THE CHAIRPERSON: So a CTV station in a market under 300,000 will offer nine and a half?

442   MR. FECAN: Could -- could. In some cases we would do more anyway, but that's the standard that we are proposing, not for the purpose of the one year --

443   THE CHAIRPERSON: No, I understand.

444   MR. FECAN: -- but for the purpose for the long term.

445   THE CHAIRPERSON: Now, why do you feel 300,000 is the right sort of threshold? As you know, our LPIF is basically -- we said a million, you know, and we felt that the markets over the million are really quite a different category than anything under. You are moving it considerably down and I would just like to understand the rationale.

446   MR. FECAN: I don't think we are moving the LPIF down.

447   THE CHAIRPERSON: No, no, no.

448   MR. FECAN: We are still -- we agree with the million. We are just looking at different gradiations within that in terms of how much content gets produced.

449   MR. DAVID GOLDSTEIN: If I could just --

450   THE CHAIRPERSON: No correlation -- excuse me.

451   So there is no correlation between the LPIF received and the numbers of hours that you would have --


453   THE CHAIRPERSON: -- I automatically assumed the two would be tied together.

454   MR. DAVID GOLDSTEIN: Just for a point of clarification, Mr. Gray was speaking of the markets that would be eligible for the LPIF and not necessarily the larger markets and what those commitments would be. So he was --

455   THE CHAIRPERSON: Oh, he was purely speaking --

456   MR. DAVID GOLDSTEIN: That's correct.


458   MR. DAVID GOLDSTEIN: So he made a subcategory between small markets and very small markets.

459   THE CHAIRPERSON: Thank you for that clarification.

460   MR. DAVID GOLDSTEIN: Thank you.

461   THE CHAIRPERSON: And what would it be in markets over a million roughly now --

462   MR. FECAN: Roughly what it is now, which I believe is 15 and a half hours for our stations.

463   THE CHAIRPERSON: And I guess I have to come back to the answer that you gave me before, and I just think I'm somewhat still stunned from it, that you are saying you want a 3 percent LPIF to maintain the status quo.

464   That is a huge amount of extra income that you would be getting and I can't believe that the stations that you are closing right now and that you suggest to close would be equivalent to 3 percent of LPIF, because you say without a second stream I have to close this.

465   We are offering you a second stream. You say it should be 3 percent but then you are telling -- for that you get the status quo.

466   MR. FECAN: Yeah. You know when we get to the in camera session --


468   MR. FECAN: -- we are happy to drill into those numbers for you but I think, you know, sustainability is incremental if the other possibility is you don't have something there.

469   THE CHAIRPERSON: And to follow up, you want 3 percent. We give you 1 percent, what happens?

470   MR. FECAN: We would have to look market by market and determine whether that would make a difference to our decision about how we proceed in that market. I think -- you know, it's very difficult when you're talking about such -- you're talking about people's lives and such important things that kind of go off the cuff on, you know, what if you had this, what if you had that?

471   But if that's where you ended up then we would do our analysis and then we would be able to tell you in which markets we wish to reapply in and which we don't.

472   THE CHAIRPERSON: Right. It is a very tough decision. You don't like them; I don't like them. They are sort of imposed upon us but when we do it next week in camera anyway you might want to have the scenario of what 1 percent means, what 2 percent means, what 3 percent means.

473   MR. FECAN: And we could go through station by station for you.

474   THE CHAIRPERSON: Thank you.

475   Independent production you say you can leave this for the next year, but what happens after next year for the long term and what's your idea of it? Is 75 percent of independent production sustainable or, if not, what number do you have in mind?

476   MR. FECAN: Well, you were correct in that for next year we are saying we are prepared to keep things as are because essentially we have already ordered the shows. They are in front of cameras or about to be in front of cameras.

477   Going forward, as a philosophical principle what we are suggesting is to reconsider whether the public policy that in the eighties was brought in to create independent production, whether that's actually had the desired outcome. Many of those independent producers got big. They bought broadcasters and many of those individuals now have vineyards in Prince Edward County. We are still here.

--- Laughter

478   MR. FECAN: And so what I'm saying is many countries in the world in the eighties and before did similar kinds of things in terms of saying, you know, the independent production should take precedent over productions controlled by -- productions controlled by broadcasters. And most of those countries that I'm aware of have dropped that because it doesn't make sense because broadcasters need to participate in revenue streams beyond simply the first run of a program on their channel.

479   So what I'm suggesting as a position is that I'm not sure that requirement should be there at all. However, I recognize in the Act it talks about independent production. And so therefore, what it brings me to is some sort of a compromise position where it's a different split, maybe not the 75 percent that we currently have.

480   I also notice that the Government of Canada has in its -- the Canadian Media Fund rules has also kind of moved on this because previously our programs would not be eligible for the predecessor fund, the CTF. Under their proposed new guidelines, which of course still need to have some teeth put into them and they haven't really developed them thoroughly, but the general policy proposal is to open it to productions that are owned by broadcasters.

481   So what I'm suggesting is that we somehow rebalance that as we go forward. Maybe it's 75/30, 25 the other way, maybe it's 60/40, maybe it's 50/50 but I don't believe 75 percent for independents is still appropriate.

482   THE CHAIRPERSON: There are two underlying issues here. One is the rights and the other one is the industry concentration and diversity of voices, et cetera. And presumably the number which we stress is to sort of -- has to take into account the diversity of voices. How do we -- assuming we come up to a number, as you suggest 60/40 or whatever it is, et cetera, the rights issue is really for you the more immediate one and the bigger one.

483   Do you see it being resolved in the terms of trade negotiation?

484   MR. FECAN: Well, the terms of trade is a framework negotiation --


486   MR. FECAN: -- of how we are to behave with the independent production sector. The 75 percent is your creation.


488   MR. FECAN: And that's what -- that is that thing that I am speaking to.

489   If you give me a little bit of latitude here on diversity of voices and independent production, I think we need to understand that generally nothing happens until we put the money in. We work directly with writers. Sometimes we work with writers and producers. They will -- the writers will have spent some time thinking about an idea or developing an idea. But that first script or the outline happens generally to -- certainly in my experience and I think -- to be factual, I think I have developed more of this kind of programming than anyone else in Canada by virtue of the fact that I have been around longer.


491   MR. FECAN: Nothing happens until we commission it, until we put the money in. Generally we pay for the outline. Generally we pay for the first script. In recent years we have paid for the full pilot cost. In some cases there is a contribution from the CTF. And generally the producer contribution is an investment of some of their fees.

492   What I'm trying to say is that we hire the same writers. We employ the same craftspeople and technicians. I don't know that when you drill down to it, it actually is a diversity of voices issue because nothing happens in concrete terms until we buy it -- until we buy that idea.

493   THE CHAIRPERSON: Except that your negotiating position was whether you were hiring somebody to work for you, be that as an employer or as a contract employee it doesn't make a difference, or whether that independent contractor who makes quite a different negotiation proceeds. And therefore, to the extent that you can or would want to influence content, you are in a much better position when you hire them than when you --

494   MR. FECAN: I don't think you could tell her anything.

--- Laughter

495   MR. FECAN: And if you do you will get --

496   THE CHAIRPERSON: You have the experience. I don't want to --

497   MR. FECAN: No, I think -- I think the idea is to support the writers.

498   THE CHAIRPERSON: Does it make sense when we talk about priority programming, whatever the number is, to make a distinction between original productions and reruns?

499   MR. FECAN: Well, I just need -- do we have that now?

500   MR. DAVID GOLDSTEIN: We will come back in the next phase with the answer for that.


502   One on one, as you noticed when I introduced it in my speech and in our -- the PN also speaks about this. They said at first blush clearly it is to deal with the issue which you addressed very much in your House of Commons appeal, that there is an appearance that you are spending all the money on U.S. programming and not enough on Canadian.

503   Now, we asked two questions: (a) is it doable for the next year or is it doable in the long term? Do I understand that for the next year you say categorically no because you have already committed, et cetera?

504   MR. FECAN: Yeah, correct.

505   THE CHAIRPERSON: Is it possible to phase it in, not next year but I mean if you know this will be the rule as of let's say 2011 or so, could you do it then?

506   MR. FECAN: Look, you can phase it in any way you like. What I'm telling you is you are playing chicken with the studios and the consequence may well be the end of broadcasting as we know it in Canada because that's where we make all of our money.

507   So the risk/reward profile to me, really, I scratch my head at. There is a huge amount of risk -- cataclysmic risk -- and I don't see any potential reward so why would you do it?

508   That's kind of my -- you know, my philosophical approach to it.

509   THE CHAIRPERSON: Well, I'm more interested in your business approach to it. Is it doable or not?

510   MR. FECAN: I don't think it is.

511   THE CHAIRPERSON: Okay. What about once we go on a group basis, so if you take your whole empire, all your specialties as well as your conventional -- you purchase American programming for both. Does it on that basis -- are we anywhere near one to one?

512   MR. FECAN: I don't understand what you are trying to achieve. I mean, should we only buy programs from people with red hair? That's a category.

513   What are you trying to achieve? This will not --


515   MR. FECAN: This will not put more money in Canadian programming, which is the stated objective and it potentially can destroy the system we have now. So I'm just at a loss at understanding why, considering you, Chairman, have no skin in this game, why you would play this kind of risk with our business.

516   THE CHAIRPERSON: Let me quote one Ivan Fecan testifying to the House of Commons. Quote:

"Still others say that the problem is we pay too much for American programs. The hard truth is that generally the money we make on American programming pays for the losses on Canadian programming. Please understand it's not a criticism of Canadian programming. It's about the reality of our market side and the cost of production. Because of the structural issues I outlined earlier, we make less on American than we did before and now the obligation of less local licences costs more than the money we make." (As read)

517   MR. FECAN: Yeah.

518   THE CHAIRPERSON: Does that not mean in the future you are going to spend even more on American programming because you are making less on it than you do now but you obviously want to stay in business?

519   What I'm trying to say, you already are at disequilibrium. I don't want the disequilibrium to grow; hence, the one to one.

520   MR. FECAN: Well, I think the market is going to take care of that kind of spending in American because we are not getting the margin we need for it. I don't think we need state intervention here. I think the market will be perfectly capable of dealing with this. We don't intend to engage in any bidding wars in this kind of environment with this kind of market.

521   You know, we spend -- I think it's currently somewhere around half of our revenues or 55 percent of our revenue, I believe, is spent on American programming in the last year. I think that's the right number -- is it?

522   My point is that pay spent 74 percent so you should talk to them as well.

523   THE CHAIRPERSON: I am talking to them. You own pay channels. You don't own --

524   MR. FECAN: No, we don't own pay TV.

525   THE CHAIRPERSON: Not pay TV, no.

526   MR. FECAN: No, sir.

527   THE CHAIRPERSON: Specialty channels.

528   MR. FECAN: Yes.

529   THE CHAIRPERSON: Some of the most successful ones; et cetera. That's why I am asking, you know, if it doesn't make sense on a conventional, I wonder whether it makes sense depending obviously -- and we would have to talk about how you allocate it between -- over your empire. But does it make sense on a group basis?

530   MR. FECAN: I don't think it makes sense on any basis, sir.

531   THE CHAIRPERSON: Have you run the numbers? Have you seen what it would mean?

532   MR. FECAN: On specialty and conventional?

533   THE CHAIRPERSON: Whatever?

534   MR. FECAN: No, I have not run those numbers. Happy to do so.

535   THE CHAIRPERSON: Okay. When we go in camera we might talk about that.

536   MR. FECAN: Okay.

537   THE CHAIRPERSON: Now let's talk about distant signal. You estimate it will be -- you want a hybrid solution. I think you're absolutely right, it makes the only sense, et cetera.

538   Do you have any idea right now what hybrid means, where you would have a transmitter and where you wouldn't, station-by-station or market-by-market?

539   MR. FECAN: Well, as you know -- I'll turn to Paul in a second -- we've applied for a number of digital transmitters. We currently have three operating, Toronto, Vancouver and Calgary and this hybrid working group solution I think was just filed last week.

540   So, here's the process from our point of view. One of the stations we applied for -- we applied for a number of stations, I think it was nine or 10 or 11 -- we applied for them to get in line because the process takes a while to get the licence, by the time your people are through with it and Industry's people look at it and everybody else.

541   But let's take Regina. Regina has a population of 300,000 people, give or take. Roughly seven percent of them get their television over the air, 21,000 people. The cost of putting up a digital transmitter in Regina for us is a million dollars, specifically, we actually looked.

542   How do I justify, as a return on capital, to spend that kind of money to reach seven percent of the population, 21,000 people. It's like such a long pay back that you don't do it.

543   THE CHAIRPERSON: I don't question the --

544   MR. FECAN: No, no, I'm just trying to give you the logic.

545   THE CHAIRPERSON: I want to know where are you going to do it?

546   MR. FECAN: I'm just trying to give you the logic.

547   So, what we're now doing is we're going through each market and determining whether we should have more than three. Is it four, is it five? And the clear intent would be to do as much of the country as possible through this virtual contour system, through the hybrid system, rather than putting up transmitters that are a very poor use of capital.

548   THE CHAIRPERSON: I guess what I'm trying to get at is, you're clearly going to put them up in some of the major markets like Toronto, I don't think there's any question.

549   There's also the question that we said you have to do it, in effect, as an interference zone -- we have a map I believe that we're going to introduce, it's being copied right now, which shows where the interference is or not, et cetera.

550   But some places are north of that map, for instance, Edmonton, you don't have to do an -- I don't know where your plans are, whether you're willing to do it in Edmonton or not. So, that's why I wanted to know whether you actually had the plans and you can share with us what markets you are willing to establish a new HD transmitter and which markets you will want to see served by cable or satellite.

551   MR. FECAN: We could file that with you. But generally as much -- as many markets as possible we're going to want to -- it's a commercial matter for us, as many markets as possible, we're going to want to do hybrid.

552   THE CHAIRPERSON: Now, I see the working group suggests it's going to be $330-million to do the conversion, our report says 187. Anyways the numbers have come down considerably and I'm glad to see the Industry is actively involved in looking at this.

553   MR. FECAN: We don't support those numbers, sir. We don't --

554   THE CHAIRPERSON: Either one of those?

555   MR. FECAN: We think the report filed by your group under states it by some 30 percent.

556   Dawn -- we could get you a detail on that, if you like.

557   MR. SPARKES: There's actually a CAB report that hasn't been filed with the Commission that we received that says something a bit different, that the costs are about 30 percent higher which we're happy to -- Dawn can elaborate.

558   MS FELL: Sure. I mean, we've done our own very detailed studies in terms of cost estimates both on a transitional basis and also on a hard cut-over basis in terms of what the total cost and also the per transmitter cost would be to convert our system of towers, both for CTV and also for the A channels.

559   The issue with the Spectrum Report is the engineers were trying to cover a very large number of towers without detailed information about what the system configurations are for each of the broadcasters and what the equipment that is existing -- existing in place is for each of those transmitters.

560   So, you know, in their estimates we feel that they are light, particularly with respect to the CTV system. The estimates are about 30 percent.

561   We can file with you, if it's helpful, our detailed cost estimates on what it is per market and per transmitter.

562   THE CHAIRPERSON: And let's be honest here, I mean, this is a major cost that's coming your way, you are not equipped to handle it all, you will do the hybrid system, but the hybrid system requires some sort of government...

563   But I have real trouble getting a definition on what the actual costs are. I've got two reports which I thought at least narrowed it down, now you're telling me the reports are off side.

564   The sooner we have a definition the better it is to find a solution. So, I'd be very grateful for whatever you can provide us on that point.

565   MR. FECAN: Transmitter-by-transmitter, market-by-market, we're happy to file that.

566   THE CHAIRPERSON: Good. And then I was really struck by this Industry Report, it doesn't mention free set at all, which is what Bell offered and, as you know, how the free set model works basically somebody -- not you, not Bell -- i.e., the government will pay for the installation of a dish and a receiver in a household which then will produce only what was receivable over the air right now.

567   If that owner wants anything more, they have to sign up to Bell or Star Choice; if not, they are just in the same position as before.

568   Bell is willing to do this for free, in effect, render the service for free as long as somebody pays for this initial dish/receiver and installation which they estimate to be around $500-million.

569   I'm just repeating it so we make sure we talk about the same thing.

570   It seems to me this should be something that really addresses your issue in terms of at least putting the people who in fact now receive CTV's signal over the air will receive it by satellite. It may not be the same signal, that I appreciate is partly because not all stations are being carried by DTH, but they say it's easy -- the closest available signal if the local signal is not being carried by DTH right now.

571   But wouldn't that address to a large extent your transition problem and, therefore, make sure that you don't have loss in viewership and also relieve you of the necessity to set up transistors and stations in places where you don't think the business consideration is warranted?

572   MR. FECAN: Just so that we're being productive, are you talking about this instead of the hybrid system?

573   THE CHAIRPERSON: I understood it was, in effect, a complement to the hybrid system.

574   Take a market, whichever one, let's say Prince Albert, you decide not to convert your presence there, then everybody in Prince Albert who right now receives it over the air would get this free dish and receiver and would receive on it Prince Albert, or Prince Albert is presently not carried on DTH, the closest one thereto, which presumably is Saskatoon or something.

575   MR. SPARKES: I was part of the working group, Mr. Chairman. We didn't look at the free set proposal in detail, we were trying to, at first, set out what is the best recommendation moving forward to go digital in 2011, and the recommendation that we found the best at this point was to go with the hybrid model where you would see a virtual contour.

576   As is stated in the report, DTH and cable penetration is upwards to 90 percent in a lot of these communities, they already subscribe to satellite and cable, and there's a couple of options there in terms of what would be provided for the over-the-air viewer.

577   But the free set issue wasn't specifically focused on. There's still a lot of work to be done obviously in the report and maybe there's something we can look at moving forward, but it wasn't dealt with in specifics.

578   THE CHAIRPERSON: But when you said, Mr. Sparkes, you wanted the hybrid model, it assumes that these people will receive the signal presumably from cable or DTH in markets that you don't penetrate and it has no specification how this would be done.

579   And I thought the free set was a logical way of doing it, that's why I was very surprised that the part did not pick that up and say to implement hybrid what you suggest is an incentive program for people who become cable customers. But for whom this set doesn't work; isn't the free set the logical way to go?

580   MR. SPARKES: Well, free set is one thing to look at for sure but, you know, I think we need to look at as well is in these virtual contours how is the signal delivered to the cable and satellite companies, is it via satellite, is it through cable, through fibre which is already happening in some instances, or are there other modes?

581   And, so, these are one of the things that we had to look at as we move forward in the next step.

582   But, you know, in terms of the hybrid model, it's a compromise in a certain respect. If it is still the government's intention that we fully transition all of our towers across the country, it's obvious that we're not going to be able to afford to do that, that's why we came up with the suggestion. There needs to be some sort of a mechanism in place from the Spectrum option that helps pay for that.

583   THE CHAIRPERSON: Mr. Sparkes, I think we're on record as saying we realize that, we agree with you, that's why --

584   MR. SPARKES: Yes, yes.

585   THE CHAIRPERSON: -- we called in all the CEOs and said, let's stop being utopian here.

586   It's not -- all towers won't be converted, so clearly we're looking for hybrid.

587   MR. SPARKES: Glad to hear that. That's great.

588   THE CHAIRPERSON: We'll do our part in terms of regulatory mechanisms. But there's a huge issue of how you actually do it technically and, secondly, who pays for it.

589   And, as I've mentioned, presumably the government in one way or another will have to find a way of paying for it.

590   But I wanted to know the technical way of making sure that all Canadians who right now receive their signal over-the-air --

591   MR. SPARKES: Right.

592   THE CHAIRPERSON: -- will not be without signal, and I don't see it -- unless there is -- I don't see anything in the working group report that really gives me an answer to that.

593   MR. SPARKES: So, your issue is the nine percent that won't receive the signal, how do they get that?


595   MR. SPARKES: Okay, sorry.

596   Well, that is a problem. Whether that's our problem to rectify, I don't know. I think it's a public policy issue. If it is still for public policy reasons that we need to serve these viewers in a digital way, then there has to be a mechanism, whether it's free set or it's a government subsidy, to deliver that signal.

597   THE CHAIRPERSON: We are --

598   MR. SPARKES: It's unfortunate.

599   THE CHAIRPERSON: I'm asking you whether free set isn't the most logical way to do it rather than paying an ongoing operating subsidy to cable companies, or else what the report suggests is say the cable company will have an incentive program of six months free or something, but after that people have no choice but to become cable customers which seems to me a very tough option to sell.

600   MR. SPARKES: But it's a possibility. I mean, it's not free of course, there are costs associated. So, who pays for those is the question --


602   MR. SPARKES: -- as well, but it's an option. It's something that we're going to have to look at moving forward and it's one of the next steps that the working group are going to have to study.

603   THE CHAIRPERSON: Okay. I guess you're going to hear from the BDUs, what they have to -- I mean, I could --

604   MR. SPARKES: Chairman --

605   THE CHAIRPERSON: We were somewhat disappointed by the working group report, that it wasn't more specific in showing rather than just suggesting sort of subsidized option.

606   MR. SPARKES: Chairman, as a business we differentiate between what we feel we can afford to do and what is a public policy perhaps issue.

607   As a business we've come to terms that we may end up losing nine percent of our audience if they don't -- if that nine percent doesn't convert to either cable or satellite or a free set system, and we just don't see a way around it as a business and that's the reality we have to live with.

608   As a public policy matter, universal accessability I think is important. The question is, who pays for it, and that's really what you're suggesting.

609   THE CHAIRPERSON: Precisely. You see it from a business reality, I see it from a public policy reality, I don't see that we can live with nine percent being disconnected.

610   So, how do we connect them in the cheapest most effective way, et cetera.

611   That's what this part was supposed to address and, to my mind, it didn't. But I guess -- I think we explored that about as far as we can go.

612   This really takes me then to the distant signal.

613   You originally estimated that at $47.2-million was, we gave you the right to the distant signal. This morning you made all sorts of allusions to the American model, et cetera. Let's not go there. I wanted to speak on the existing distant signal.

614   We said it should be done by 2011. In light of the economic circumstances, we said maybe should it be done 2013.

615   First of all, have you had any negotiations with the various BDUs about the value of this distant signal? Is there other negotiations going on as we speak?

616   MR. FECAN: I'm going to ask Rick Brace to answer that. But I would just preface by saying that despite your good intentions and our good intentions, this particular story has a lot of twists and turns and has ended up with a lot of unintended consequences.

617   MR. BRACE: Thanks, Ivan.

618   Mr. Chair, yes, we have had a couple of discussions in the marketplace to see where we can go with this and I guess it's been, I'll say, disappointing out of the gate in that repatriating the number that you talked about we don't see as possible.

619   On the cable side -- I'll split it between cable and DTH because we've had two separate discussions. On the cable side the preliminary discussion we've had indicates that there isn't considerable interest for distant signals by the cable company and that's fine.

620   At the end of the day, you know, we have the right to consent; if we can't come to terms, then we'll have to opt for taking the distant signals down and doing our best to repatriate the money through incremental advertising because of the incremental audience that we'll get.

621   So, that's cable so far.

622   On the DTH side, it's a lot more onerous for us in that, as Mr. Fecan put it, maybe an unintended situation has arisen by virtue of the new policy whereby DTH is only obligated to carry one station per province per station group.

623   That has really given DTH a bargaining chip that they can use to bargain for distant signals which, contrary to cable, are very attractive to DTH companies.

624   So, we're in a situation where DTH -- and I won't be real specific -- but is kind of saying, we want to talk about carriage of your stations in exchange for the right and the consent to continue to delivering distant signals.

625   So, in both cases, whether it's cable or DTH, the cash is simply not there. I mean, it's -- you know, and particularly on the DTH side where we're being held up a little bit here in our view.

626   And the shame of it all for us is that it seems so contradictory to what's intended by the Commission who wants local carriage into local markets for local stations because it's so fundamental to their very existence, and here we are in a situation where we may have to be trading off carriage of local stations in exchange for distant signals. So, it's --

627   MR. FECAN: And to be precise, it's clear, they're not offering to carry more local stations, they're offering to keep -- perhaps keep carrying the existing stations that they carry on satellite.

628   MR. BRACE: And understanding with our particular situation, they would have the perfect right to drop the A channels because we're one station group. They could disappear. I mean, or that could be the threat -- I'm not suggesting it is -- but that could be the threat, and I know we talked about this.

629   THE CHAIRPERSON: But just a second, you know, you own both, you can do it all or, you know, you have your own lever, you can say, sorry, you know, if you want to negotiate, you know, you have to carry my CTV and my A; if you don't, then I'm sorry, I won't give you permission.

630   I mean, at the end of the day there's a market in mind for distant signal. It's extremely popular. People love coming in and watching their news at the hour when they are there rather than when it's being -- or see a special program or whatever it is.

631   So, I don't see how all the bargaining chips are in DTH and not in your hands.

632   MR. BRACE: Well, the point is, is that it's vital for us to keep our stations carried and at the end of the day it comes down to whether or not they value distant signals to the extent that we believe, and what it really comes down to is, can we repatriate all of the money, because that was the initial question that we talked about having lost.

633   And it's made complicated by the fact that in the case of DTH, in particular, they're bundling with other issues. I mean, our wish would be that we could negotiate distant signals in isolation because we've lost something there that we're trying to repatriate.

634   THE CHAIRPERSON: I'm missing something here.

635   MR. BRACE: Okay.

636   THE CHAIRPERSON: You appeared before me on the BDU hearing and said, we right now get a certain compensation for the distant signal over the arrangement run by the CAB.

637   It is not enough, it doesn't reflect the market value of those and actually we are losing 47.2-million a year.

638   And I said, I don't see why you should subsidize the BDUs. If that's the market value, go and negotiate it. You have the right to withhold, et cetera.

639   Now you're telling me that right to withhold is valueless.

640   MR. BRACE: No, the right to withhold --

641   THE CHAIRPERSON: What am I missing here?

642   MR. BRACE: The right to withhold is fine, it's just made more complicate when on the other side the offset may be if we do withhold we actually lose carriage of stations. And that's the issue, that's the issue that we're struggling with.

643   MR. FECAN: The issue is not --

644   THE CHAIRPERSON: Is there a question of who blushes first?

645   MR. FECAN: The issue is --

646   THE CHAIRPERSON: Who blinks first?

647   MR. FECAN: The issue is not in cable, just to be clear, because we said this is -- distant signals is a commercial kind of transaction, let us deal on a commercial basis.

648   We think they're worth something, the cable guys think they'd rather drop them than pay for them. That's fine. We have to live with that. We're grown ups.

649   The satellite side, to give an example of Ontario, the policy, as you enumerated it, as I understand it, is that they need to carry one station from our station group in Ontario.


651   MR. FECAN: We currently have five on the satellite. We have Toronto CTV, Sudbury CTV, the A in Ottawa, Barrie and London.

652   The conversation with one of the large satellite carriers is, if you'd like us to continue to five -- carry the five, then we're not going to be paying for distant signals because we only have to carry one.

653   THE CHAIRPERSON: And, hence, your solution to me is...? Your recommended solution?

654   MR. FECAN: We don't have a solution, we're just saying to you that the gold mine that we all thought was there may not be there from cable, but that's okay because we think there will be a positive audience impact.

655   But the unintended consequence of this one station per -- is it province or time zone -- per province, I think has perhaps derailed the intent of the process.

656   I don't know why all of a sudden they only have to carry one when really what they should be carrying is every.

657   THE CHAIRPERSON: I think before they didn't even have that obligation. I mean, they actually had more than they had before.

658   It was unclear how many they had to carry and we sort of set a minimum and you tell me it has become the maximum.

659   MR. FECAN: M'hmm, yeah.

660   THE CHAIRPERSON: And your solution -- you have no recommended solution to this situation?

661   MR. FECAN: Oh, we're talking to them and, you know, but I guess they feel that your minimum is the maximum for a negotiation purpose.

662   And I think what we're saying to you is we're reporting to you that we don't think there's cash there, a lot of cash there to put back into our businesses.

663   We all thought there would be, but because of that wrinkle it doesn't appear to be there.

664   MR. BRACE: And, on balance, should we choose to go the not providing consent route and we lose carriage even incrementally to what we have now, to what's being carried now, it really damages the local stations, which I think is completely unintended, it's not something anyone ever, ever really bargained for.

665   THE CHAIRPERSON: Are you saying, in effect, Mr. Fecan, that the present carriage should be the minimum?

666   MR. FECAN: Pardon me, I didn't hear your last...?

667   THE CHAIRPERSON: That the present carriage by DTH should be the minimum?

668   MR. FECAN: The present carriage, for sure, should be the minimum, but if you're asking me what we're also saying, sir, is, is that every local station should be -- satellite should do what cable does, they've got new satellites going up, new transponders being brought on line, it's time to bring them back in accordance with the Broadcast Act and have priority carriage for local stations in their home markets.

669   THE CHAIRPERSON: Did I read it correctly that you're suggesting that September 1, 2009 is the proper date for implementation of this regime?

670   MR. FECAN: Yes. Of which?

671   MR. BRACE: Distant signal?

672   MR. FECAN: Yes.

673   THE CHAIRPERSON: Now, assuming I do that, I say okay, September 1 is the date, and Mr. Brace tells me you're going to lose carriage.

674   MR. FECAN: If the maximum is the minimum -- or if the minimum is now the maximum, yeah, looks that way.

675   THE CHAIRPERSON: So, you really want two things. No. 1 thing, carry all channels, and September 1 is the implementation date.

676   MR. FECAN: M'hmm.

677   THE CHAIRPERSON: Or as a fallback, at least your present carriage is the minimum and September 1 is the --

678   MR. FECAN: The minimum is the current not the one per province.

679   THE CHAIRPERSON: Yes, okay.

680   I just want to make sure I understand you. When I say okay, it doesn't mean I agree or don't.

681   Lastly, you make a very strong statement saying you don't want us to arbitrate or settle this thing should you not be able to resolve it by September 1.

682   Why is that?

683   MR. FECAN: Rick?

684   MR. BRACE: I guess the bottom line is that when we received the grant of consent we took that literally to mean the grant of consent, where because we want to move this along the road, we want to get his done in as expedited a manner as possible.


686   MR. BRACE: To get into any kind of a situation where we're now delaying it through a dispute resolution process really does, in our view, contradict what consent really gives us. We either have consent or we have some other definition of what that means.

687   And, so, yes, our feeling and our position is that we want and need the right to be able to deal with this at our discretion.

688   THE CHAIRPERSON: When we said we're prepared to arbitrate, it's only because we don't want the customers to be suddenly without your signal because you're withholding. I think the Canadian television viewers are entitled to their distant signal, they've become used to it, et cetera.

689   I mean, one day suddenly you don't blink and they say, well sorry, we don't pay and suddenly the system -- the signal goes off the air.

690   MR. BRACE: Yeah.

691   THE CHAIRPERSON: That's what you wanted to avoid, that's why we offered to arbitrate if necessary.

692   Do you think that undermines your negotiation process?

693   MR. BRACE: Well, I think that it hobbles it to a certain extent, absolutely. That, you know, if we want to expedite this, understanding that we are talking about a significant amount of money and a situation that we've been dealing with, quite frankly, for a number of years, we know that it's been before the Commission for several Chairs, quite frankly, so it's not a new topic.

694   That, you know, the need to deal with this as effectively and efficiently as possible, you know, we feel is appropriate and we were granted the right of consent and that is our interpretation.

695   THE CHAIRPERSON: I hope you took notes that when we arbitrate we do it very quickly and in a time frame as constrained as possible, at least the parties to whom we have -- constantly complain about not having enough time, and that we have done two or three right now and do it as speedily as possible because we realize time is money.

696   But I guess it's -- you have your negotiating position, I won't convince you. I was just interested to seeing that people are not cut off, that they don't lose the signal and I want you to reach a deal with the BDUs.

697   Terms of trade. You mentioned the negotiation. Are you getting anywhere?

698   MR. FECAN: Dave?

699   MR. DAVID GOLDSTEIN: Yeah. Thank you, Mr. Chair.

700   Again, without prejudicing the process because we both -- both parties have filed confidentially proposals in this process, we believe we have had productive discussions and have found many areas of common interest, most importantly, normalizing or finding a means to normalize business practices and the delineation of new media rights which, of course, was an important component to that.

701   I guess our stumbling block, if you will, at this point is a disagreement between ourselves and the producers over what the nature of this is.

702   As Mr. Fecan said earlier, we see this as a normalization of business practices and not a rate-setting mechanism. You yourself identified that in your speech to the CFTPA back in February of last year.

703   And there are a couple of other outstanding issues which I think we can probably see our way through if we can get over that stumbling block.

704   So, I suspect if the Commission were to come back and re-clarify that position, I think we could get back to the table.

705   And I believe you said this morning, can that be done within the upcoming licence renewal or a larger licence renewal process. And I think we should be able to do that.

706   THE CHAIRPERSON: Are you negotiating as a group with the producers, or is each broadcaster doing its separate negotiations?

707   MR. DAVID GOLDSTEIN: We and Rogers and Canwest have been negotiating as a group.

708   THE CHAIRPERSON: And presumably there will be NFN clauses so that whatever negotiate others will benefit and vice versa?

709   MR. DAVID GOLDSTEIN: Well, one of the reasons that we believe strongly that we needed to do this collectively was because we didn't want this to be a process -- an asymmetrical process where one broadcaster would have an advantage over the other.

710   And just as the producers are negotiating collectively, we wanted that to be our position as well.

711   THE CHAIRPERSON: And all the issues have been identified now, et cetera, you are now in the process of delineating -- trying to find solutions to the issues, but I mean you at least have here the seven issues we have to resolve, et cetera...

712   MR. DAVID GOLDSTEIN: Yeah, I believe so. I believe so.

713   THE CHAIRPERSON: And what do you see of the link between in terms of trade and your licence renewal?

714   MR. DAVID GOLDSTEIN: Well, the Commission had stated in previous decisions that there was an expectation that we would come forward with that, and so we're sort of in a mid-phase right now, but I think once that becomes normalized with next year's larger group licence renewal, terms of trade would be part of that.

715   THE CHAIRPERSON: Okay. And last, you will be glad to hear, the one year. We have suggested one year. I just want -- you know, you are the one who lives in this industry. You appreciate it, et cetera. I want to make sure that one year is enough for both -- two reasons; one, that it allows you -- you know, obviously want you to survive, et cetera -- and you said you want to do it on present terms and conditions. I think some other broadcasters are asking for some interim relief.

716   But secondly, is it enough time in your view to do the systemic restructuring that needs to be done to have a sustainable viable conventional broadcaster and to do group licensing next April? And secondly, will you have enough data by that time, because this is a very exceptional year and, I mean, the data that will be generated this year will probably be most unrepresentative.

717   So as we were discussing it internally in the CRTC we wanted to make sure that we have the views of broadcasters of whether one year is the adequate time period or not, whether it should be longer or whether we should sort of build in a provision to revisit this issue in midyear to see where we are going or whatever.

718   MR. FECAN: Yeah -- no, thank you for the perspective on that. As you are well aware, the timeframe has shifted a little bit as you have refined your process and the one year licence renewal which I guess what -- the way I read it in the PN is that was the default position, that people could make arguments if something longer made more sense for them. And, of course, we also paid attention to your House of Commons' testimony where you also several times reiterated that it's a one year term.

719   So we filed for a one year term and that's the application in front of you, and I need to say that just to protect all of my options.

720   Having said that we are not asking for any changes during the year to our conditions of licence. I know other broadcasters are, and I can't speak to whether you have sufficient data to make a judgment or not. But what I can say is we really do endorse the one year timeframe you set out because the need for sustainable change to the system, not just a band-aid but the need for sustainable change is urgent. And if we end up taking two years to think about this, I recognize that some stopgap, band-aid things might be put in, but my concern and our concern is that it's just that much further from the sustainable big picture changes that we think are necessary.

721   We would hope that the timetable you laid out, the one year timetable would give you the flexibility to consider what you need to consider to arrive at an intelligent decision that can serve us well for a long time.

722   So we believe the one year -- one year is what we filed. That's the application for us in front of you.

723   And all I can say is if you decide to go some other way we would certainly look at it but we couldn't commit to anything because we would then obviously need to rethink our application in terms of what relief we might want, and so forth.

724   THE CHAIRPERSON: No, I appreciate what you are saying and I -- you know, the old saying that temporary is the enemy of the permanent is absolutely true.

725   MR. FECAN: Yeah.

726   THE CHAIRPERSON: It just means that we have this policy hearing now for two weeks. It doesn't mean we would have time for another hearing between now and April. We would in effect as a result of this policy hearing, come forward with some idea and we will have a public process but no hearing and then do the licensing into 2010.

727   I think realistically that's the only way we will get it done in that timeframe.

728   MR. FECAN: But you would still have a summer hearing?

729   THE CHAIRPERSON: Well, that's --

730   MR. FECAN: I think you mentioned that in the PN this morning.

731   THE CHAIRPERSON: Summer exercise. I was very careful never to say hearing but exercise.

--- Laughter

732   THE CHAIRPERSON: I want to leave the option open. I don't -- you know, doing this renewal is one thing, taking into account all the policy considerations that we get this week, et cetera, and then trying to devise this is what we are going to do as of 2010 in terms of group licensing and in terms of addressing the systemic issues. It's just can we do that by hearing and still get it done for April 2010?

733   That's really what this boils down. That's why I'm posing it to a question. I wanted to have your input and those of others on this issue.

734   MR. FECAN: And we hope you can.

735   THE CHAIRPERSON: Okay. I think those are all my questions.

736   Michel.

737   COMMISSIONER ARPIN: Thank you, Mr. Chairman.

738   I will limit my questions only to the digital transition. I know my other colleagues also may have some questions regarding this morning's presentation, which I think is very vital and very key.

739   In your oral submission you are saying, Mr. Fecan, that you believe local should be number one priority for conventional television. And I know that you are using the word "local" in a given context. But later on you say that you endorse the hybrid solution as a model for distributing, so removing yourself from the local distribution.

740   Now, that as my background, you used the example of Regina earlier, saying that 7 percent of the population of Regina is not making use of the BDUs to receive their services. Do you know how much this 7 percent contributes in terms of hours or market share to your Regina TV stations?

741   Is that 7 percent -- because we know through the file that TVOntario claims that the 9 percent Ontario who are non-BDU subscribers are contributing 22 percent of their hours tuned. How much hours tuned do those 7 percent contribute in Regina?

742   And I'm using Regina because you use Regina as an example.

743   MR. FECAN: I'm pretty sure we have done the homework. I don't have it here. We are happy to file that particular example, if you like. But as a business we have come to terms with the possibility of losing that 7 percent to that station.

744   So I'm confident we have done the homework but let me file it for you if that's of interest to you.

745   COMMISSIONER ARPIN: Well, if you have done it for Regina I guess you will have done it for other markets.

746   Regina is an interesting case because the U.S. signals are not available off air in Regina. It's a closed market in a way so only Canadian signals are available for the non-BDU subscribers. So it will be interesting.

747   And if you have done it for other markets and you are ready to share it with us it will be -- it will be interesting.

748   MR. SPARKES: Are you referring to the amount of people who received over-the-air in a certain market?

749   COMMISSIONER ARPIN: Well, you said 7 percent of the population is not getting --but those 7 percent currently are contributing to your audience share in terms of -- are they contributing more than 7 percent of your market share or are they contributing 7 percent of your market share or less?

750   MR. SPARKES: All right. We will come back to you with that.

751   COMMISSIONER ARPIN: Okay. And it might vary from market to market.

752   Now, you have gone through a process for -- anonymous process regarding the digital model. Over the years you have been through the Citytv group and you have launched your Toronto services in that fashion, and lately you were part of a work taskforce that has been set up and you, Mr. Sparkes, I know that you have been an important player in that group.

753   Now, have you ever looked at SD as a solution? And I'm putting -- I will make a longer introductory because SD allows for the distribution of four signals.

754   Take Regina. You could share the same structure between CTV, CBC, Radio-Canada and Global, then reducing your costs.

755   I make a guess. The 7 percent of the population living in Regina don't have HDTV sets in their home for the majority of them. There may be a few but the majority of them probably still have -- even maybe even black-and- white TV sets or they are analog colour sets and they are not ready to make the investment. So getting their signal, they won't have anything to downgrade from digital to analog their signal.

756   So an SD shared by all the players in the Regina market, will it make sense as an alternative and you keep then providing a signal, an over-the-air signal making use of the spectrum which I think is a valuable asset, and keep the hours tuned that they are contributing to your service? Is it something that has been looked at?

757   MR. FECAN: I guess value, like beauty, is in the eye of the beholder. We think HD is the present and future of television. I think once you see a sporting event or pretty well anything on HD it's very hard to go back.

758   And as a company we don't want to stand for retrograde technology. We are not going to tell the citizens of Regina that we are not going to give them HD. It's our intention to go HD as fast as possible, hopefully through this hybrid system wherever we possibly can.

759   COMMISSIONER ARPIN: But you said earlier in replying to the Chairman, that Regina is a market where hybrid is your solution.

760   MR. FECAN: Right.

761   COMMISSIONER ARPIN: So it means no over-the-air.

762   MR. FECAN: It means 9 percent of the public will -- or 7 percent of the public will not be able to get our signal, and we can live with that.


764   MR. FECAN: And we would rather live with that than tell you know the 93 percent of the people in Regina that they can't watch HD.

765   COMMISSIONER ARPIN: Oh, no, over-the-air. You currently are providing in the markets where you have already HD transmission.

766   Take Calgary, because there has been an exchange of correspondence that is on the public record, that you have a fibre between your master control and the antenna of the cable company. And in most markets you already have fibre between your master controls.

767   I'm not suggesting that someone could cut the fibre between the cable and your master control. I'm trying to find out a way to provide an over-the-air service for those who by choice are not -- or not necessarily by choice, because they don't have the means to subscribe to a BDU.

768   MR. FECAN: And would their existing television sets be able to see the SD/HD signal?

769   COMMISSIONER ARPIN: Absolutely they are going to need to have a down converter.

770   MR. FECAN: Right. That's right.

771   COMMISSIONER ARPIN: From digital to analog like the U.S. model, the U.S. solution, and more than likely the Canadian solution in the markets where you are going to have HD.

772   My question -- and my question is probably directed more towards Mr. Sparkes who has been involved in these matters for a long time, is it a scenario that you have put on the table and looked at?

773   MR. SPARKES: No, it's not a scenario we looked at. What we looked at was, given the government's position of mandating transition to 2011, what is the best way to do that from an economical standpoint, because we can't from a business perspective make the investment in these markets. So here is the proposal we are making that we go through a hybrid model.

774   You are 100 percent correct that some of these people are going to be disenfranchised. And that is not a good thing and we are not happy with that. But there needs to be another solution for those disenfranchised viewers, whether it's a special promotion from the cable company to attract them to purchase cable, whether it's a free set idea, whether it's a government program, whatever; these are options that need to be looked at.

775   COMMISSIONER ARPIN: Well, when I'm reading the transition report I don't see great enthusiasm by the BDU for -- and the terrestrial BDU for any model regarding offering basic service. So somewhere somebody will have to find out another solution, make it another approach; have another tackle to the issue.

776   MR. SPARKES: Well, it's an ongoing --

777   COMMISSIONER ARPIN: I'm putting that one on the table. I don't -- I'm not asking you to make any commitment, but I think it should be looked at and, you know, even internally in your own group since the radio digital transition is done on that model, you have people both at the engineering and the operation side, who could tell you how the pods are working down in Toronto. It's exactly the same model that I describe.

778   MR. SPARKES: Absolutely.

779   COMMISSIONER ARPIN: I didn't invent anything.

780   MR. SPARKES: There is a lot more work to be done. I think the next steps are engaging the federal departments responsible for this file, Industry Canada and Heritage, which haven't been part of the process to date and we are hopeful that they will become engaged as well.

781   COMMISSIONER ARPIN: Okay. Thank you.


783   COMMISSIONER KATZ: Thank you, Mr. Chairman.

784   Good morning or good afternoon.

785   I have got a couple of questions. I'm going to refer you to your submission dated April 23rd to our Secretary General. It's the eight-page document, if you have it there.

--- Pause

786   COMMISSIONER KATZ: And I will just take you to the overview, paragraph two, where you state:

" noted in CTVgm's group licence renewal application, the persistent structural problems faced by conventional television in the current global recession have resulted in a crisis for local television that is in need of immediate attention." (As read)

787   COMMISSIONER KATZ: And then you go on and say:

"Now is the time to address conventional television's deteriorating economics..." (As read)

788   COMMISSIONER KATZ: And it goes on.

789   Just stopping there for a second, it's my understanding that conventional television encompasses more than just local television.

790   MR. FECAN: It's another way of saying over-the-air, what we call over-the-air television, but you can't have conventional television without local at the moment, I guess. I mean, I suppose technically you could with one station and a set of rebroads throughout the country but, you know, local is conventional.

791   COMMISSIONER KATZ: But when you broadcast conventional you are broadcasting more than just local television. You are broadcasting drama, you are broadcasting foreign programming, Canadian programming.

792   MR. FECAN: I see what you mean.

793   COMMISSIONER KATZ: There is different sectors there as well.

794   MR. FECAN: But it arrives in the home through your local television station.

795   COMMISSIONER KATZ: Agreed; agreed.

796   So you are suggesting here that local television is just another word for it. You are not saying that it's the local television component of conventional television that's in a crisis because it can't support itself and finance itself?

797   MR. FECAN: No, we are saying the whole thing is in crisis but in our submission today we put our thoughts on what the priorities within conventional television ought to be and we said local is the number one priority.

798   COMMISSIONER KATZ: Okay, but -- okay. Let me come at this a different way then.

799   Within conventional television you have got foreign programming that I thought I heard you tell the Chairman is actually contributing some contribution towards your bottom line.

800   MR. FECAN: Correct.

801   COMMISSIONER KATZ: And there is Canadian programming that doesn't necessarily contribute at all and there is -- within that component there is the local news and local programming that also does not.

802   MR. FECAN: Correct.

803   COMMISSIONER KATZ: So if I use those three segments to start with and just say there is three segments there -- there may be more segments there, maybe sports or whatever as well. But there is three segments there and within that the foreign programming is contributing. The other two are not.

804   MR. FECAN: Generally speaking, yes.

805   COMMISSIONER KATZ: And in order to continue to support local television you are looking towards a program, whether it's an expanded local fee for carriage or an LPIF or whatever, that would make the business sound?

806   MR. FECAN: We are looking at a basket of programs because the LPIF only deals with small market local, and the problem is larger than small market local, which is why we are talking about fee for carriage among other things.

807   COMMISSIONER KATZ: I guess what I am coming to is I'm trying to understand how the CRTC and whether the CRTC -- and I will leave that question to you -- should be rewarding success in broadcasting and how you would do that.

808   If, at the end of the day, there is an amount of money that's allocated to all the private networks in order to support their infrastructure and their costs right now given the cyclical, the economic, the business dynamics of your business as well, where does the recognition of success come in to the extent that perhaps you are doing very well on the foreign component and somebody else may not be?

809   How do we take into consideration the fact that some people are just doing a better job in running their business and should be rewarded for it as opposed to having this blanket that says everybody should be treated the same and, at the end of the day, there is no reward for success?

810   MR. FECAN: Well, I guess what we are saying is that the mechanisms like fee for carriage or LPIF should be directed towards Canadian content.

811   So we are talking about a different system. We are not talking about a success system. We are talking about an underwriting of content system.

812   COMMISSIONER KATZ: But within that programming in Windsor or whatever the case may be -- pick any market in Canada, small, medium or large -- at the end of the day the contribution that the CRTC or some other government agency may end up contributing to the private broadcasters will obviously go towards not as you said earlier to bonuses and salary increases, but necessary to the local component -- but as part of that as well there is no recognition there or how do we recognize unless we go to a dynamic system where people may get different amounts of money, I guess.

813   I don't know. How do you recognize success?

814   MR. FECAN: You know I don't know that we are speaking of the same thing, because I don't think in our proposal we are suggesting the costs of American be calculated by a local station. We are talking about funds directed to local content, Canadian content and Canadian content.

815   COMMISSIONER KATZ: So the 1 percent LPIF that was announced last year, however brought you that, would be distributed across all the small markets out there?

816   MR. FECAN: Right.

817   COMMISSIONER KATZ: Some small markets may, at the end of the day, become much more successful than other ones. You are not all earning the same PBITs. You are not all earning the same bottom line.

818   MR. FECAN: But the way we look at small markets -- and this is -- maybe now we are all going to be on the same page in terms of the conversation. When we look at the viability of a smaller market say Windsor, we don't look at the cost of national or foreign programming, for instance, because that cost -- if we don't have Windsor that cost doesn't go away. We buy these rights on a national basis.

819   So when we evaluate whether a station makes sense or not, we look at local revenues and local costs and we don't take into account those other things because, you know, if it's not -- if the station isn't there the costs are still there. So it shouldn't affect the station one way or the other.


821   MR. FECAN: Am I being helpful at all? I'm trying to be.

822   COMMISSIONER KATZ: Let me take it one step further.

823   You stated in your opening remarks this morning -- and I think it's on page 14 -- you talk about the fact that your acquisition of some of your specialty channels should not be penalized, I guess, to the extent that it perhaps by some people believed it should be subsidizing your over-the-air OTA business as well. And you cite examples of Astral and Corus that are in standalone businesses and you have shareholders that are partial owners of some of your holdings and not others as well.

824   As part of that acquisition you also picked up the A-channels as well. And can one not make the same argument that maybe to the extent that the specialty channels that you picked up shouldn't be held to subsidize the OTA, perhaps the A-channels if they are not viable should not be forced to be a burden on the CTV channels to the extent that the CTV channels are more profitable than the A-channels? I'm making that assumption because for some reason everything that I have read seems to imply that the A-channels and the E! channels are not as popular and as successful as the historical conventional TV channels.

825   And so the question is should one conventional be asked to subsidize the A-channels if in fact it was a bad investment to start with?

826   MR. FECAN: Well, that's a really good question. And I think what we are saying is they should not, which is why we are saying some of these channels are at greater risk than others.

827   But I think -- the other thing, frankly, I think you should consider is whether these channels provide value to the service. I mean, if these channels exist as businesses but don't provide value they probably shouldn't be there. If they do provide value then, you know what kinds of things that they do provide the most value? And then you go to, well, then how do you pay for that because economically as units, as business units they don't work. And so you arrive at fee for carriage or LPIF or anything else that you might want to put in that basket.

828   But as a business, we have to decide whether a unit can live going forward or not, and if we think we have a chance of making money on it then we might stretch a bit and give it a shot. If we come to the conclusion that, you know, no matter what we do, barring you know some intervention from you in terms of LPIF or fee for carriage it's not ever going to turn the corner, then we have to face that and deal with that. And that's exactly what we are doing with the three stations that we don't wish to renew.

829   And that's why the one year timeframe works well for us because it gives us an opportunity to evaluate, you know, where you guys are going in terms of what may be possible, in terms of longer sustainable system fixes, and then we can evaluate based on that, based on hard knowledge whether the "A"s make sense, whether small market CTVs make sense. It's all kind of a holistic thing.

830   But we do need to look at each string, if you will, in the case of the conventionals as units. And we have to look at whether they make sense or not.

831   COMMISSIONER KATZ: One of the things you mentioned earlier to the Chairman was the notion of the multiple bricks and mortars, if I can call it that, and the high cost of serving Canadians by virtue of your obligations as well.

832   Have you looked at a way of redistributing the -- I won't call it overhead -- the support activities of your operations in such a way that jobs get redeployed and not necessarily closed down, where Windsor goes from 40 employees to none but the people that are in Windsor are better served by performing a certain function, whatever that function is, and people in Regina are better served doing other functions as well?

833   MR. FECAN: We have looked a great deal at automation and centralization of infrastructure and of certain back office functions. And I know other broadcasters even look at doing the studio work in a central place. I'm thinking of Canwest in particular and sending a signal out to one of their stations without having an actual studio there -- a virtual studio I think they call it.

834   As a company and as a business, that's not our choice. We don't believe that that really provides the local glue that is necessary to make a station work. Different companies, different businesses have a different approach. I'm not saying they are right or they are wrong and we are right or vice-versa. But it is not our belief.

835   Our belief is that you do need to have journalists on the ground and I think you do need to have the anchors in the communities attending the Kiwanis club luncheons. I think you need that kind of stickiness. But that's our -- that's how we approach local. And we certainly don't want to do local poorly. This is how we believe it needs to be done.

836   COMMISSIONER KATZ: Okay. It was made, I guess, clear by some of the BDUs that any fees that they would have to bear from their perspective would be borne by the consumer and by the customer as well. And you have got a different view on these things, obviously.

837   At the end of the day, where does the consumer, the resident come into this? Is there a way for some process of consultation that before a resident in the community is hit with an increased cost there is a consultation that sort of says, do people in Windsor, whatever that majority, proportion you want to come up with, actually want this service and are prepared to pay some amount of money for the service?

838   MR. FECAN: Well, you know, it's within the BDU's control whether they pass the fee on or not since their rates have been deregulated. They're not deregulated in the U.S. and perhaps that's why fee for carriage works a little differently there.

839   In terms of whether there should be a plebescite or something, I don't know. I'm not sure how practical that is. I mean, would it be every year?

840   You know, honestly I really don't have an answer for you on that.

841   COMMISSIONER KATZ: Okay. My last question is about a bit of a different topic.

842   Priority carriage and priority programming vis-a-vis tangible benefits. You want the priority component to be removed I guess, or you're suggesting in the Broadcasting Act it can be inferred that there was no obligation for priority programming, yet when you folks and others have come before us and acquired companies, there are components of tangible benefits that include priority programming.

843   Do you see that being a consideration for the CRTC as well, to reconsider the tangible benefits that have already been agreed to by both parties as part of an acquisition?

844   MR. FECAN: No, a deal's a deal.

845   COMMISSIONER KATZ: Okay. Those are my questions.


847   COMMISSIONER CUGINI: Thank you, Mr. Chairman. I'll be brief.

848   Just one general policy question and it is a follow up.

849   Commissioner Katz provided a great segue for me. You've asked us to take a look again at the priority programming commitment and within that the commitment to independent production, and those are two things that are universally applied to over-the-air broadcasters.

850   In reconsideration of those two elements, do you think that the time has come that they should be customized, that the commitment should be customized to each OTA broadcaster, or should they continue to be applied universally, whatever change we make, if any?

851   MR. FECAN: I think for fairness reasons and competitive reasons they should be universal.

852   COMMISSIONER CUGINI: And the same question, because the concept of CPE was raised this morning and the comparison to how CPE is applied on specialty, I have the same question for you.

853   As you know, in specialty they are customized to each service depending on the amount of Canadian content, depending on the type of programming offered.

854   Do you think that each OTA broadcaster, if we go down the CPE regime, should have the same commitment or should that be customized?

855   MR. FECAN: That's a very interesting thought, Commissioner, and I'd like to get back to you on that.

856   COMMISSIONER CUGINI: Thank you. One other question regarding digital transition.

857   CART reported recently that about 30 percent of the U.S. market has multiple sets in their homes that receive over-the-air signals via rabbit ears.

858   MR. FECAN: M'hmm.

859   COMMISSIONER CUGINI: Through the working group or through any other work that you have done on digital transition, do we have those kinds of figures for Canada?

860   MR. SPARKES: In terms of how many television sets?

861   COMMISSIONER CUGINI: No, how many multiple TV sets -- TV set homes there are in Canada that subscribe to cable or DTH also have a rabbit ears TV set?

862   MR. SPARKES: No, we don't have that, we didn't do that study, but that's an interesting thing.

863   COMMISSIONER CUGINI: Is there any intention to do that?

864   MR. SPARKES: I'll raise it with the committee, absolutely.

865   COMMISSIONER CUGINI: Thank you very much.

866   Those are my questions, Mr. Chair.

867   THE CHAIRPERSON: Thank you.

868   Peter?

869   COMMISSIONER MENZIES: I'll try to be quick.

870   I just wanted to double check. In Windsor/Wheatley you said you have 40 people producing seven hours a week?

871   MR. GRAY: The total staffing number is approximately 40 with 25 of them roughly working on the seven and a half hours a week production.

872   COMMISSIONER MENZIES: Okay. And how many were there before? I'm assuming it's been cut down to that from some point over the --

873   MR. GRAY: Well, that number would be fair -- I don't know the answer to that exactly, but that number would be fairly consistent over the course of the last four or five years.

874   COMMISSIONER MENZIES: Okay. So, there haven't been any layoffs there or anything --

875   MR. GRAY: There have been layoff notices -- there have been layoff notices handed to current staff linked to the possible shutdown of the station on August 31st.

876   But, no, prior to that --

877   COMMISSIONER MENZIES: But in the past there haven't been any --

878   MR. GRAY: No.

879   COMMISSIONER MENZIES: -- efficiencies applied to take it down to there?

880   MR. GRAY: None that I -- none that I can recall in the immediate past, no.

881   COMMISSIONER MENZIES: Okay. And in Wingham, the regulatory obligation there is for an hour and a half a week.

882   MR. GRAY: Yeah.

883   COMMISSIONER MENZIES: Of which one hour can be replaced by regional programming provided it's not news. So, you could be doing as little as half an hour a week of local news in Wingham; is that right?

884   MR. FECAN: We're checking. Yes.

885   COMMISSIONER MENZIES: Half an hour a week?

886   MR. FECAN: We don't have the exact --


888   MR. FECAN: We're told that.

889   COMMISSIONER MENZIES: It just struck me because I'm trying to figure out which is the chicken and which is the egg in terms of that because, I mean, you spoke very eloquently about, you know, local and local is what works, but half an hour...

890   MR. FECAN: Honestly, I think -- I'm not sure that particular station in any circumstance makes sense economically.

891   COMMISSIONER MENZIES: Right. So, yeah, maybe it didn't make sense for a long time; is that what you're saying?

892   MR. FECAN: Probably from day one.


894   MR. FECAN: Well, that's not fair. I think it was a CBC affiliate when it started, it might have made sense at a certain point, but not for a good long time.

895   COMMISSIONER MENZIES: And how many people are there?

896   MS FELL: In terms of fact dedicated just to that station?


898   MS FELL: One.

899   COMMISSIONER MENZIES: One. Okay, thanks.

900   Just regards the LPIF, this might be an exchange similar to the one you just had with Vice-Chair Katz.

901   Would you be in favour of distribution based on performance; in other words, ratings?

902   If you were in a certain community, a for instance, there was a hundred dollars to be divided between three stations, do you want it all distributed equally, or would you be in favour of it being distributed to whoever draws the largest audience get the most, so that you would have to -- there would be a competitive aspect to it?

903   MR. DAVID GOLDSTEIN: What we've tried to do is advance the most transparent model.

904   Since we're the ones that have made the bulk of the investment in local, either way you cut it we're going to be, at least in English Canada, the major recipient.

905   But what we're trying to do is find something. It could be an audience measurement, it could be a population measurement. You know, we're willing to work with the Commission to figure out what the right mix of that is, as long as it's transparent and fairly reflective of what's going on in the community.

906   COMMISSIONER MENZIES: Okay, thank you.

907   The last point. In terms of the LPIF, three percent was the number you mentioned. I'm not saying that I expect it to, or anybody expects a conventional television model to return to the profitability that it had before, but what would you be willing to accept in terms of how long that lasts?

908   I mean, obviously there's other parts to an economic model. Should you become profitable again and that not be required, at what point do you think that should be, so that these costs -- or do you see these costs being permanent?

909   MR. FECAN: I think the only possible answer to that question is you need to look at the totality of measures that may be put in place. Is it just LPIF, is it fee for carriage as well, are there obligations that are lightened?

910   So, I think you need to look at -- before I can answer that, you know, thoughtfully, we need to understand what might the entire basket look like.

911   As a guide, perhaps this may or may not be the right thing, but as a guide the U.S. fee for carriage is re-negotiated every three years.

912   COMMISSIONER MENZIES: Okay. So, I guess what I'm trying to get at is what sort of guarantees do either the BDUs or the public -- whether or not it gets passed along is a different discussion -- have that if three percent is good now you won't come back in two years and say, well, now we need four because conventional television is -- you know, the good old days are gone, it's going downhill and at what point do we just find ourselves pouring more and more of somebody else's money into something that maybe its best before date is gone.

913   MR. FECAN: Well, I don't think so. I had to say that.

914   COMMISSIONER MENZIES: Of course you do.

915   MR. FECAN: Yeah. I actually believe it too, which helps.


917   MR. FECAN: But I think some sort of fixed term makes it workable for everybody, for you as the regulator, for us as a potential licensee, and maybe it's not a seven-year fixed term, maybe it's a shorter fixed term attached to the licence, because things do change and things may get worse and, in fact, they may get better, who knows. Let's hope.

918   But, again, as a guide, in the U.S. system the rate -- the fee for carriage rate is re-negotiated every three years.

919   COMMISSIONER MENZIES: Okay, thank you.

920   THE CHAIRPERSON: Candice, last question before lunch.


922   And I do just have one question.

923   Mr. Fecan, you spoke about the benefits to you for us using our one-year time table to go to long-term sustainable change.

924   One of the issues that's outstanding, however, in my mind at least before we can get a long-term structural perspective of what conventional television will look at, is the digital transition.

925   I appreciate we used Regina as the example and the seven percent of people who won't have service, and I wondered what your thoughts were about making it a condition of the transition to a hybrid that there be a viable proposal put forward for that seven percent before we can go forward with long-term sustainable structural changes to the conventional TV industry.

926   MR. FECAN: Well, it's a very good question but, as it's thrust, it essentially takes what we believe to be a public policy issue with the government, you know, potentially making $4-billion on the auction of a spectrum and making it our problem, and as a business we're saying that we're quite prepared to operate without that over-the-air audience.

927   And we're in front of you as a potential licensee, our licences are expiring. We're now trying to understand what the regime might be going forward and whether it continues to make sense for us to be in the sector. We certainly hope it does.

928   So, I'd like to think about that question because it is a public policy issue and there is a beneficiary, it's the Treasury Board.

929   And, as a business, we can't sustain the kind of capital investment, we've all been through why and everything.

930   And, so, to make it incumbent on us to find a solution for this when we've got nothing to give, it kind of makes us the meat in the sandwich.

931   And let me think about it, but I understand where you're going.

932   THE CHAIRPERSON: Okay. Well, thank you.

933   So, there's a whole list of undertakings, we have to ask counsel to read them off so we all understand them.

934   We took a little bit longer with you, but since you are the largest and most successful broadcaster in Canada I think it was time well spent.

935   I must say, I am distinctly unsatisfied with the issue of you asking for three percent as local LPIF and telling me that's for the status quo.

936   We're talking about structural solution, there's got to be something more than that. This is a bail-out otherwise, and that's how it's going to be seen. And, I mean, I don't expect you to have an answer now, we both have to reflect on, you know, what are the structural underlyings here, so that's my point, as colleague Peter pointed out, you don't come back in two years and say three percent is not enough.

937   MR. FECAN: Well, sir, look, I hear you and I understand your position, but it's not a bail-out.

938   We don't have to be here, we don't have to be in this business.

939   THE CHAIRPERSON: I understand that.

940   MR. FECAN: Yeah.

941   THE CHAIRPERSON: And by the same token, you made a very emotional plea -- or passionate plea, I should say, for what conventional brings to this country and we agree with you.

942   Now both -- you want to stay in the business, I want you to stay in that business, but it's got to be on a sustainable basis.

943   MR. FECAN: Our heart is certainly there. You have to do your duty, I understand that. We have a duty to our shareholders as well, and we both have to do the right thing and discharge our responsibilities.


945   Mr. Millington, you want to quickly enumerate the undertakings so we know and then we can break for lunch.

946   MR. MILLINGTON: Yes. Thank you, Mr. Chairman.

947   I have seven. The first is: Based on 2007 numbers filed with the Commission, CTV's LPIF numbers based on CTV's scenario and the Commission's scenario.

948   No. 2: Provide a list of local operational activities that new LPIF funds would be spent on.

949   No. 3: The cost allocation between the CTV affiliates and CTV Newsnet for shared content.

950   4 is: Provide a definition for priority programming.

951   No. 5: Provide transmitter-by-transmitter, market-by-market CTV's cost estimate for the digital transition.

952   No. 6: File for all the markets that you have data for your market share generated by non-BDU subscribers.

953   And, finally, No. 7: Should the CPE be customized for each conventional broadcaster as it is for specialty.

954   MR. DAVID GOLDSTEIN: Yes, that's fine, as long as No. 3 and No. 5 can be filed confidentially, and No. 1, sorry.

955   THE CHAIRPERSON: You can always file whatever you want confidentially.

956   But there's a No. 8, that -- this document, Fee for Carriage Impact Analysis, and he told me that his view of the issue is different and he makes different assumptions. So, I want a new version of this document making your assumption would be very much appreciated.

957   MR. MILLINGTON: And we'd like that --

958   THE CHAIRPERSON: Confidential or public, it's up to you.

959   MR. MILLINGTON: And we'd like the responses with your reply or sooner.

960   MR. FECAN: Thank you.

961   THE CHAIRPERSON: Okay. Thank you very much.

962   Let's break for a one-hour lunch.

--- Upon recessing at 1246

--- Upon resuming at 1404

963   LA SECRÉTAIRE : À l'ordre, s'il vous plaît. Order, please.

964   THE CHAIRPERSON: Before we start this afternoon's session, I mentioned this morning there was a map that we are going to introduce for the purpose of retransmission, showing which stations are within the 360-kilometre coordination zone and which are out.

965   Madam Secretary, would you take that please and make sure it goes on the register?

966   All the black dots are the ones inside and the red dots are the ones outside the coordination zone.

967   THE SECRETARY: That is right, and copies are available in the examination room.

968   THE CHAIRPERSON: Okay, let's go.

969   LA SECRÉTAIRE : Merci, Monsieur le Président.

970   J'inviterais maintenant Groupe TVA et Sun TV Company à faire leur présentation. Monsieur Pierre Dion comparaît pour Groupe TVA et Sun TV et nous présentera ses collègues. Vous disposez de 30 minutes pour votre présentation.


971   M. DION : Bonjour, Monsieur le Président, Monsieur le Vice-président, mesdames et messieurs, membres et personnel du Conseil.

972   Je m'appelle Pierre Dion et je suis Président et Chef de la direction de Groupe TVA.

973   Je suis accompagné d'Édouard Trépanier, Vice-président, Affaires réglementaires de Quebecor Media, de Pierre Lampron, consultant, et de Jim Nelles, Directeur général/General Manager de Sun TV.

974   Nous nous plions à cette décision du Conseil de diviser en deux parties l'audience pour le renouvellement de nos licences, mais nous le faisons avec une certaine appréhension.

975   Nous sommes aujourd'hui invités à discuter d'enjeux qualifiés d'horizontaux comme s'ils étaient dissociés des enjeux qui seront considérés dans une semaine pour le renouvellement provisoire de nos licences. Nous craignons que l'objectif de cette approche soit de reporter à plus tard les décisions qui s'imposent maintenant.

976   Que devrions-nous comprendre, alors, de la perception qu'a le Conseil des demandes pressantes que nous avons faites pour permettre à TVA de demeurer, dans son marché, le diffuseur privé qui contribue le plus significativement à la production et à la promotion du contenu canadien?

977   Nous discuterons de ces questions aujourd'hui, mais nous les reprendrons au moment de l'audience spécifiquement consacrée au renouvellement de nos licences. Depuis maintenant plus de trois ans, nous alertons le Conseil sur la nécessité de modifier son approche réglementaire afin de prendre des mesures visant à ce que le contenu canadien demeure le pivot de la concurrence sur notre marché.

978   Nous croyons avoir démontré, plus d'une fois, les enjeux auxquels nous sommes confrontés comme télévision généraliste, mais aussi comme seul diffuseur privé au Canada à avoir mis le contenu canadien au coeur de son plan d'affaires.

979   Nous faudra-t-il encore revenir sur les impacts de la révolution numérique en cours?

980   Le Conseil a-t-il besoin de nouveaux indices pour le convaincre du déplacement des auditoires et des revenus?

981   Le Conseil a-t-il encore besoin d'autres informations pour se décider à encourager les diffuseurs généralistes à détenir des droits d'exploitation pour les oeuvres originales qu'ils supportent?

982   Est-ce que le Conseil a vraiment besoin de tenir une autre instance avant de comprendre l'importance de ces enjeux pour TVA?

983   TVA y joue sa raison d'être. La production originale canadienne lui fournit ses meilleurs auditoires, mais les revenus que l'antenne de TVA en tire se déplacent progressivement vers les autres fenêtres de diffusion. Le phénomène est bien en place. C'est maintenant que TVA doit disposer de toute la marge de manoeuvre qui lui est nécessaire pour maintenir son haut niveau de contribution à la diffusion du contenu canadien.

984   Au moment de son intervention du 25 mars 2009 au comité permanent du Patrimoine, le Président du Conseil admettait, et je cite :

« La télévision conventionnelle n'est plus la pierre angulaire ou la pièce maîtresse de notre système de radiodiffusion; toutefois, elle constitue encore le meilleur moyen de joindre un vaste auditoire d'un seul coup. La télévision conventionnelle n'est plus en mesure d'assumer la plus grande partie des obligations découlant de la Loi sur la radiodiffusion. »

985   Permettez-nous de vous rappeler que TVA ne se reconnaît pas dans cette description. TVA est toujours la pierre angulaire dans son marché et il aspire à le demeurer. L'économie du système au Canada ne joue pas en faveur du contenu canadien, où il semble bien que l'approche par obligations et quotas ait montré ses limites.

986   Le problème que semble vouloir résoudre le Conseil n'est pas celui de TVA. Nous voulons rappeler que toutes nos demandes sont inspirées par notre volonté d'en faire plus et mieux, pas d'en faire moins.

987   Si le Conseil veut bien se référer aux documents que nous avons déjà transmis depuis le début de cette instance de renouvellement de nos licences, il constatera que nous avons démontré que les règles actuelles ne rencontrent pas les objectifs poursuivis d'agir en faveur d'une plus grande diffusion du contenu canadien.

988   Maintenir ces règles se traduirait plutôt par une baisse de la contribution de TVA, parce qu'avec cette réglementation :

989   - Il devient de plus en plus difficile de financer nos programmes;

990   - Nous ne sommes pas encouragés à transporter sur l'ensemble des plateformes de diffusion, les contenus, la notoriété et le succès de TVA;

991   - Notre capacité d'avoir accès aux meilleures idées et aux meilleurs concepts originaux est limitée;

992   - TVA ne dispose pas de la souplesse nécessaire pour adapter son antenne aux besoins des consommateurs;

993   - Nous courons le risque de développer une plus grande dépendance aux productions étrangères; et

994   - Enfin, cette réglementation lourde, tatillonne et obsolète nous oblige à composer avec une bureaucratie étouffante.

995   Nous avons aussi eu l'occasion de répéter sur plusieurs tribunes notre avis à l'effet que le système actuel est inéquitable et fortement déséquilibré en faveur de la télévision spécialisée.

996   Le Président et Chef de la direction de Quebecor, M. Pierre Karl Péladeau, l'a encore dit lors de sa récente comparution au Comité permanent du Patrimoine. Nous joignons une copie de son intervention en annexe.

997   Que le Conseil se réfère à n'importe quel indice de performance, il constatera, comme nous, l'injustice de maintenir un système qui garantit aux uns des sources de revenus et de profits plus que suffisants et qui dirige les autres vers le cul de sac.

998   Vous nous invitez à discuter du Fonds local, mais vous ne vous sentez pas en mesure d'aborder l'importante question des redevances ou tarif d'abonnement. Nous anticipons avec impatience le moment où le Conseil sera prêt à discuter d'un système où les redevances ne seraient pas imposées par le Conseil mais seraient librement négociées entre les fournisseurs de services généralistes ou spécialisés et les distributeurs.

999   Entre-temps, vous semblez pressé de constituer un Fonds pour l'amélioration de la programmation locale pour lequel personne ne semble être en mesure d'en déterminer la réelle utilité et qui perdrait sa pertinence dès lors que la décision sera prise de régler la problématique globale du financement de la télévision généraliste privée. Il nous semble que la question du tarif d'abonnement devrait avoir la priorité dans la recherche de solutions à la problématique du financement de la télévision généraliste.

1000   Le Conseil invite les diffuseurs anglophones à discuter de sa suggestion d'imposer une condition de licence qui viserait à équilibrer les dépenses liées à la programmation canadienne et à la programmation américaine (la proposition 1:1).

1001   TVA n'est effectivement pas vraiment concernée par cette piste suggérée par le Conseil et nous comprenons que les diffuseurs anglophones ont besoin de temps pour en débattre les mérites, mais nous ne pouvons nous permettre d'attendre que cette question soit discutée, débattue et considérée en fonction des impératifs du marché de langue anglaise avant que le Conseil se penche sur le marché de langue française et donne suite à nos demandes.

1002   Nous rappelons au Conseil que nous nous sommes portés volontaires pour respecter une condition de licence qui nous imposerait un niveau de dépenses très largement supérieur à ce qui est évoqué pour le marché anglophone.

1003   Les distributeurs ont raison de s'objecter avec véhémence à cette nouvelle initiative de puiser à nouveau dans leurs revenus pour régler un problème pour lequel ils n'ont aucune responsabilité. Quebecor a dénoncé à plusieurs reprises cette pratique qui consiste à utiliser les revenus d'une entreprise pour alimenter un fonds dans lequel elle n'a aucun intérêt.

1004   Il est aussi de l'intérêt de tous les diffuseurs que les distributeurs investissent massivement dans le déploiement de leurs infrastructures et qu'ils offrent aux Canadiens les services les plus évolués et les plus performants au plus faible coût possible. Il est contre-productif de les détourner de cette mission. Il faudrait que le système les encourage dans ce sens plutôt qu'à réduire leur marge de manoeuvre.

1005   D'ailleurs, en ce qui concerne la télévision locale, nous aurions plus d'avantages à être mieux distribués et à rejoindre notre clientèle par l'intermédiaire des entreprises de câble et de satellite. Les problèmes de capacité évoqués par les distributeurs satellite nous semblent aussi, sinon plus, importants à résoudre que ceux liés au coût de la programmation locale.

1006   Le Conseil nous demande si 1 pour cent des revenus est un niveau approprié de contribution de la part des entreprises de distribution. Elles ne devraient pas avoir à y contribuer du tout.

1007   Un fonds dédié ne nous apparaît pas la bonne solution à moyen terme. Le rééquilibrage du système en faveur de la télévision généraliste qui lui permettrait d'avoir accès à des redevances nous semble la seule solution disponible, la seule en mesure de générer suffisamment de revenus pour assurer la viabilité de la télévision généraliste.

1008   Nous comprenons que le Conseil ne veut pas que le supplément de revenus dérivés de redevances serve à payer les émissions américaines plus chères. Effectivement, rien ne serait alors réglé. Mais c'est une problématique exclusive à la télévision de langue anglaise. À cause de cet obstacle en télévision de langue anglaise, vous tardez à régler le problème structurel de la télévision de langue française. Le meilleur reflet de la mission du Conseil en télévision canadienne, c'est TVA, et vous nous mettez sur la glace.

1009   L'apport supplémentaire dérivé des tarifs d'abonnement ne dispenserait pas pour autant les télévisions généralistes de l'obligation de s'adapter aux profonds changements qui affectent tous les médias de masse traditionnels, qu'ils soient local, régional ou national. Nous avons amorcé ce virage à TVA depuis maintenant près de cinq ans. Nous avons transformé cette entreprise et nous allons continuer de le faire, mais les principaux obstacles sont maintenant sur le terrain de la réglementation.

1010   On isole à tort la problématique de la télévision locale et celle de la télévision généraliste. Partout, la télévision par ondes hertziennes lutte pour retenir ses parts de marché, pour s'adapter aux changements d'habitude des consommateurs qui se tournent vers d'autres sources d'information et de divertissement. Si les mesures sont prises pour que la station-mère se porte bien, les stations régionales seront en santé financière et le public sera mieux servi dans les régions comme dans les centres urbains.

1011   Au niveau local, si nous disposons de meilleurs moyens, nous les utiliserons en priorité à l'amélioration de la qualité des services que nous offrons. Nous assumerons une meilleure couverture de l'activité locale et régionale que nous pourrons mieux diffuser à l'antenne de TVA, au réseau national, dans notre réseau d'information continue LCN et sur toutes les plateformes de diffusion possibles.

1012   Par contre, si le Conseil tenait à poursuivre avec l'idée d'un Fonds d'aide à la production locale, seuls les diffuseurs privés devraient y avoir accès. Nous avons suggéré dans nos réponses aux lacunes simplifiées que :

« Le premier critère d'évaluation devrait être celui de la performance, mesurée en termes de résultat d'auditoire de l'antenne, de revenus publicitaires générés et de rayonnement hors antenne aux niveaux local, régional et national. »

1013   Nous ajoutons que la répartition des sommes pourrait aussi tenir compte du nombre d'heures diffusées et des ressources professionnelles affectées aux services d'information dédiés. En fait, pour être admissible, une télévision locale devrait disposer d'une infrastructure et des ressources suffisantes pour produire en région les émissions qui leur sont particulièrement destinées.

1014   La télévision d'État ne devrait pas être admissible à un tel fonds. D'une part, il s'agit d'une mission essentielle de la télévision d'État. D'autre part, elle reçoit un soutien public de plus de 1,1 milliard de dollars auquel une subvention supplémentaire de 60 millions de dollars s'est ajoutée, spécifiquement pour soutenir les activités de la société d'État en région.

1015   Est-ce au Conseil à déterminer si c'est suffisant? Ne s'agit-il pas d'une démonstration du fait que c'est au Parlement canadien d'en décider? Le Conseil ne doit pas se poser en arbitre des besoins de la société d'État.

1016   Pour le reste, nous vous avons déjà fait valoir qu'il serait illusoire d'affecter ce fonds aux seules dépenses supplémentaires engagées pour augmenter le nombre d'heures de diffusion. Nous avons bien démontré qu'il serait pour le moins non enviable de demander aux diffuseurs privés d'augmenter leurs dépenses dans un contexte où toute la télévision généraliste est en crise et où plusieurs stations jouent même leur survie. Le Conseil a reçu sensiblement le même message de tous les diffuseurs.

1017   Le Conseil nous demande notre avis sur la pertinence des règles en vigueur concernant la programmation prioritaire, à savoir si elles demeurent adéquates.

1018   Nous vous avons répondu :

« À notre avis, les règles et exigences du Conseil en programmation prioritaire ne sont ni adéquates, ni efficaces pour servir l'objectif de la Loi sur la radiodiffusion de stimuler la création et la promotion du contenu canadien. »

1019   Et nous nous sommes expliqués longuement. Nous espérons que le Conseil tiendra sérieusement compte de notre point de vue.

1020   Cette réglementation est devenue un carcan pour nous, un frein dans notre volonté de relever le défi de la télévision généraliste en misant sur une meilleure exploitation du contenu canadien.

1021   Nous savons comment nous sommes parvenus à maintenir une part de marché que tous les diffuseurs nous envient. Nous savons comment nous réussissons à placer régulièrement plus de 25 émissions dans le palmarès des trente émissions les plus regardées.

1022   Il ne peut pas être de notre intention de tourner le dos à des émissions qui, comme « Star Académie », nous permettent de rejoindre jusqu'à 3 millions de téléspectateurs.

1023   Nous n'entendons pas renoncer à des séries dramatiques qui nous valent des auditoires supérieurs à 1 million de téléspectateurs.

1024   Nos bulletins de nouvelles ont des auditoires de près de trois fois supérieures à ceux de notre concurrent immédiat Radio-Canada.

1025   Nous ferons tout pour maintenir cet écart.

1026   N'est-ce pas une démonstration claire que nous rencontrons les objectifs de la Loi quant aux goûts et aux aspirations du public? C'est plus qu'une mission dans la vie. Notre succès financier en dépend.

1027   Nous voulons disposer de toute la marge de manoeuvre qui nous est nécessaire de choisir les programmes originaux qui nous vaudront les meilleurs résultats. Nous ne voulons pas nous engager sur des quantités de ceci ou de cela.

1028   En garantie, nous acceptons de donner une assurance quant à la proportion des dépenses de programmation qui ira à la programmation canadienne. Cette mesure permettra au Conseil de remplir pleinement son mandat de régulateur envers le diffuseur privé qui contribue le mieux à la diffusion du contenu canadien. Toute autre forme de réglementation sur le contenu canadien est superflue et contre-productive.

1029   S'il est vrai que la télévision généraliste est condamnée à s'adapter aux profonds changements du paysage audiovisuel, il est aberrant de s'en remettre à une réglementation qui détermine de façon immuable la nature et la quantité des genres de programmation originaux, voire jusqu'à la durée des applaudissements du public qu'un diffuseur généraliste comme TVA devrait placer à son antenne.

1030   Actuellement, CTV et GLOBAL ont les mêmes obligations que nous en matière de programmation prioritaire, mais nous n'avons pas, pour des raisons évidentes de marché, le même rapport au contenu canadien. Quoiqu'il arrive, le Conseil devra rompre avec cette pratique de nous imposer les mêmes conditions de licence à l'égard de la programmation canadienne.

1031   Encore une fois, Groupe TVA est victime d'une pensée réglementaire qui s'applique au Canada anglais. Le Conseil pourrait agir dès cette étape-ci à ce renouvellement de licence.

1032   Les producteurs indépendants nous sont des partenaires précieux. Nous n'avons aucune intention de nous priver de leur apport et nous ferons toujours appel à leurs services de façon notable, mais nous sommes d'avis que les rapports entre TVA et les producteurs indépendants ne devraient pas être encadrés par des obligations réglementaires.

1033   Ces rapports s'inspirent de la nécessité qu'a TVA de recourir aux services des producteurs qui génèrent les concepts les plus porteurs, qui sont en mesure de réunir les financements nécessaires et qui livrent les productions de la meilleure qualité possible.

1034   Cela étant, nous avons à maintes reprises exprimé notre désaccord profond avec les privilèges exclusifs accordés à la production indépendante. Nous sommes d'avis qu'il s'agit d'une mauvaise politique qui n'a pas produit les résultats escomptés, en particulier pour ce qui est de l'exploitation des droits des productions sur les marchés extérieurs.

1035   Même après 25 ans, cette politique a été impuissante à favoriser une meilleure capitalisation des entreprises et elle a surtout privé le système canadien de l'apport significatif que pourraient avoir des entreprises de production affiliées à des diffuseurs.

1036   Le statut de producteur indépendant est, d'ailleurs, de plus en plus confus et il est mal adapté à la réalité actuelle. Il le sera davantage avec le développement de l'Internet et des nouvelles plateformes de diffusion. En effet, quand tout le monde peut diffuser, de qui ces producteurs sont-ils vraiment indépendants?

1037   Monsieur le Président, tous devraient avoir le droit d'investir dans la production, y compris les groupes médias.

1038   Convenons que la télévision généraliste est en crise et qu'elle joue, pour une bonne part, son avenir sur sa capacité de détenir les droits qui lui permettent d'exploiter sur toutes les plateformes et sur tous les marchés les oeuvres qu'elle diffuse.

1039   Les producteurs avec qui nous faisons affaire comprennent bien cette problématique, mais ce n'est pas le cas de leur association, qui lutte farouchement pour maintenir le statu quo qui assure aux producteurs tous les droits et qui n'accorde aux diffuseurs que celui d'acquérir des droits de diffusion sur leur antenne.

1040   Le Conseil nous a invités à conclure avec l'Association des producteurs de films et de télévision du Québec une entente qui déterminerait les modalités des négociations de nos contrats individuels avec les producteurs. Cela n'arrivera pas.

1041   Toutefois, nous avons fait connaître les termes de référence qui nous guident dans la négociation de nos contrats avec les producteurs. Les producteurs s'en satisfont puisque nous ne rencontrons aucune difficulté à conclure nos ententes. Ainsi, nous sommes heureux d'informer le Conseil que tous nos contrats, sans aucune exception, se sont conclus dans les délais normaux et à la satisfaction des deux parties.

1042   Nous avons transmis ces termes de référence à l'Association, qui a préféré les ignorer. En lieu et place, nous avons eu droit à une autre répétition des mêmes revendications, sans considération pour la situation particulièrement critique de la seule télévision privée qui soit encore en mesure de soutenir financièrement la production d'oeuvres comme les séries dramatiques et les grandes émissions de variétés.

1043   Le Conseil est informé de tous nos échanges de correspondance, et nous nous sommes abondamment expliqués dans nos différentes communications sur nos motivations.

1044   Nous ne voulons pas que l'Association des producteurs s'interpose dans ce qui est strictement une relation d'affaires entre nous et des partenaires producteurs. Les contrats que nous négocions sont complexes, et chacun d'eux est adapté à la nature particulière de chaque projet. Ce n'est pas une affaire d'association. Ces contrats sont plutôt le résultat d'une entente mutuellement profitable entre deux partenaires entrepreneurs.

1045   Nous comprenons que le souci du Conseil est de s'assurer qu'il n'y ait pas d'abus de position dominante dans les rapports entre les diffuseurs et les producteurs indépendants. TVA a une longue histoire de rapport harmonieux avec les producteurs indépendants avec qui nous faisons affaire. Nous n'avons pas connu les succès que nous avons eus sans avoir développé avec ces producteurs une grande connivence, faite de respect pour leur créativité et pour la qualité de leurs prestations.

1046   Nos rapports sont équilibrés. Nous voulons toujours faire affaire avec les meilleurs producteurs qui proposent les meilleurs projets. La performance de notre antenne est notre premier objectif, et nous n'avons aucun intérêt à laisser les meilleurs projets aux mains de la concurrence.

1047   Comme nous l'avons déjà dit, nos producteurs nous sont des partenaires précieux, et la notion même d'abus est étrangère à nos rapports. Nos termes de référence leur conviennent. Nos contrats se concluent sans problème majeur. Nous espérons que ce dossier sera clos au terme de ces audiences.

1048   Nous retenons du rapport du groupe de travail ce paragraphe qui décrit les incidences pour les diffuseurs autorisés, et je cite :

« De nos jours, il est devenu possible de distribuer des signaux de télévision en direct aux Canadiens par d'autres moyens que la transmission en direct. De plus, des études démontrent qu'il y a très peu de Canadiens qui regardent encore la télévision reçue en direct. C'est au Canada qu'on retrouve la plus forte pénétration du câble/SRD dans le monde occidental; environ 91 % des Canadiens reçoivent les signaux de télévision offerts par des entreprises de distribution de radiodiffusion. Ce pourcentage est encore plus grand dans les foyers qui possèdent un appareil compatible avec la télévision à haute définition (TVHD). Il faudrait d'énormes investissements pour convertir au numérique tous les émetteurs locaux en direct de télévision analogique, et la situation économique actuelle en rendrait le financement difficile; il est également douteux que ce serait à l'avantage des Canadiens, étant donné les autres moyens dont on dispose pour leur acheminer leurs signaux de télévision. »

1049   Nous avons participé à ce groupe de travail, mais il n'a pas été possible de dégager un solide consensus industriel pour identifier la meilleure solution possible, ni les moyens de la financer. Nous croyons qu'il n'y a pas d'autres options que de poursuivre les discussions. Le comité a examiné des pistes de solution qui méritent d'être investiguées davantage.

1050   Pour notre part, nous ne voyons aucun intérêt économique à maintenir une diffusion numérique terrestre en dehors des centres de Montréal, Québec et Sherbrooke. Nous devrons avoir recours dans nos autres territoires à la distribution via les entreprises de câble et de satellite.

1051   Il est probable qu'il ne sera pas possible d'imposer une solution unique pour tous les territoires desservis, mais parmi les hypothèses évoquées, nous croyons que la suggestion d'offrir une promotion spéciale aux téléspectateurs en direct qui ne sont pas abonnés à une EDR devrait être suivie de propositions plus précises, peu importe le sort qui serait réservé aux autres hypothèses.

1052   Nous ne pouvons envisager que le Conseil ait vraiment l'intention d'accorder des licences d'une année sans nous apporter de réponses aux demandes pressantes que nous lui avons faites. En fait, si le Conseil maintenait son projet de nous accorder une licence en maintenant le statu quo ou le quasi statu quo réglementaire, un terme d'un serait déjà trop long.

1053   Par ailleurs, si le Conseil voulait bien considérer nos propositions, une licence d'une durée de trois ans pourrait s'avérer un compromis acceptable. Nous pourrions utiliser cette période comme une forme de test qui nous permettrait ainsi qu'au Conseil d'évaluer les effets.

1054   Nous vous remercions d'avoir porté attention à nos propos et nous sommes à votre disposition pour répondre à vos questions et discuter franchement et concrètement d'une «business» que nous avons à coeur de faire évoluer.

1055   LE PRÉSIDENT: Bon. Merci pour votre présentation. Donc, est-ce que je dois dire «critique, catégorique»? C'est clair d'où vous venez.

1056   Maintenant, je ne comprends pas ce que vous dites sur la page 3. Vous me citez et vous dites, au deuxième paragraphe :

«Permettez-nous de vous rappeler que TVA ne se reconnaît pas dans cette description.»

1057   Et plus bas dans la même page, vous vous plaignez sur le fardeau réglementaire que TVA doit... c'est exactement ce que j'ai adressé, que la radiodiffusion généraliste ne peut pas être le principal porteur de tous ces fardeaux.

1058   Pourquoi vous dites que vous ne vous reconnaissez pas dans cette description?

1059   M. DION: C'est votre passage dans... lorsque vous dites que la télévision généraliste ne peut plus être la pierre angulaire. Naturellement, dans le marché québécois où un TVA investit 90 pour cent de sa programmation en dollars en contenu canadien, où il a 30 pour cent de parts de marché, a 25 des 30 émissions les plus populaires, on croit que même si la télévision généraliste est en crise, qu'il y aurait des solutions qui permettraient à la télévision généraliste de demeurer la pierre angulaire de notre système de radiodiffusion au Québec -- je ne veux pas parler pour le Canada anglais, mais au Québec.

1060   Et, donc, pour nous, il n'est pas question d'attaquer un plan «B» qui au départ aurait comme stratégie d'accepter le fait qu'on n'est plus la pierre angulaire, au contraire, on pense qu'il y a des moyens qu'on a cités dans notre rapport qui sont assez clairs, qui feraient que TVA, entre autres, pourrait jouer un rôle majeur, continuer à jouer le rôle majeur au Québec en tant que télévision généraliste.

1061   Est-ce qu'on serait la seule plate-forme de diffusion? No. On connaît naturellement le déplacement des consommateurs vers d'autres plate-formes, mais si je regarde les auditoires qu'on est encore capable de rassembler, on se doit d'avoir un mind set qui dit qu'on est encore la pierre angulaire de la télévision au Québec.

1062   LE PRÉSIDENT: Donc, O.k., c'est la question de qu'est-ce qu'on parle, de la pierre angulaire.

1063   Ce que je voulais expliquer dans cette citation-là que c'est vraiment, nous avons mis tout le fardeau sur la radiodiffusion conventionnelle et c'est le temps de changer parce que... avec la fragmentation de l'audience et les autres moyens de distribution qui existent.

1064   Mais dites-moi, vous étiez ici ce matin quand monsieur Fecan était ici. J'ai lu peut-être... décrivez-moi votre vision, votre concept de la télévision conventionnelle? Qu'est-ce qu'elle a... pourquoi elle ressort, pourquoi on doit les maintenir, encourager et renforcer?

1065   Vous avez écouté qu'est-ce qu'il a dit. Est-ce que vous êtes d'accord? Quelle est votre description de la télévision conventionnelle?

1066   M. DION: Je ne ferai pas de commentaire sur les commentaires de CTV. Je vais plutôt répondre à votre question en parlant spécifiquement sur notre vision et la nécessité et le rôle de la télévision généraliste.

1067   Une grande partie de mes commentaires était déjà, lors de ma première réponse à votre question, mais vous savez, dans notre discours depuis maintenant quatre ans, on reconnaît que le consommateur se déplace et on a décidé dans notre stratégie, lorsqu'on parle du virage de TVA qu'on a entamé depuis quatre, cinq ans, on a accepté ce fait-là.

1068   Au lieu d'essayer de se battre et d'essayer de retarder le comportement du consommateur, on a décidé d'être en avant de la vague et d'anticiper justement ce comportement-là en diversifiant nous-mêmes nos différentes plate-formes.

1069   On pense que la télévision spécialisée est là pour rester, naturellement, elle a sa place, l'internet, le web, mais en 2009, et on pense que ça va être encore le cas pour plusieurs plusieurs années, si on réussit à définir tous ensemble le bon modèle et qu'est-ce qu'on peut faire pour justement régler cette crise-là, mais advenant qu'on est capable de trouver les solutions tous ensemble, on persiste à croire qu'il n'y a pas une autre fenêtre de diffusion qui est capable d'être aussi rassembleuse, d'amener des masses de téléspectateurs qui vivent des émotions, qui vivent un divertissement ou qui regardent de l'information ou qui regardent les séries dramatiques, il n'y a pas une autre fenêtre de diffusion qui est capable de jouer ce rôle-là et de créer cette masse-là, notamment au Québec.

1070   Je regarde encore hier, le Gala Artis, 1.8 million de téléspectateurs pendant trois heures et quart de temps, ont célébré ensemble la télévision.

1071   Star Académie qui est, comme vous savez, notre concept de télé-réalité de la chanson, 2.7 millions de téléspectateurs.

1072   Je pense que c'est ce que la télévision généraliste est capable de faire, elle est capable de permettre l'accès aux téléspectateurs de ces contenus-là qui sont d'une très grande qualité parce que pour générer ces audiences-là, c'est des milliers, sinon des millions de dollars qu'on doit mettre dans la qualité de ces contenus-là et c'est le rôle et le défi qu'on se donne comme réseau.

1073   LE PRÉSIDENT: Donc, félicitations à votre succès d'hier. Mais quand j'ai interrogé monsieur Fecan, j'ai dit: Je comprends bien, vous dites quatre choses:

1074   Premièrement, la télévision conventionnelle est l'endroit où on trouve la programmation locale, les nouvelles locales.

1075   Deuxièmement, ça fonctionne comme gel de la communauté dans tous les aspects de la communauté de se mettre ensemble, là.

1076   Troisièmement, c'est le meilleur moyen que nous avons pour joindre un vaste auditoire.

1077   Et, finalement, il a parlé que c'est vraiment un agent d'unité nationale. C'est quelque chose qui veut joindre les diverses parts du pays et c'est... pour lui, ce sont les quatre caractéristiques essentielles à la télévision conventionnelle.

1078   Est-ce que vous êtes d'accord avec ça?

1079   M. DION: Bien, tout d'abord, je vous remercie de nous féliciter, mais je ne voulais pas énumérer ces chiffres-là pour des félicitations. C'était plus pour démontrer que si on n'a pas les infrastructures pour développer ce type de contenu-là, et si on n'est plus capable de jouer notre rôle de télévision généraliste, on ne sera plus capable de faire ce que CTV a énuméré ce matin.

1080   C'est certain qu'on croit à la télévision locale; 50 pour cent de notre écoute est hors Montréal. C'est certain qu'on veut encore plus de présence dans les régions. C'est certain qu'on veut jouer le rôle que la télévision généraliste doit jouer.

1081   LE PRÉSIDENT: Non, mais...

1082   M. DION: Mais ce que j'essaie de soutenir comme point, c'est qu'il y a une différenciation entre le rôle que peut jouer la différenciation... la télévision généraliste et les autres fenêtres de diffusion.

1083   LE PRÉSIDENT: Mais nous savons très bien nous deux que le marché francophone est assez différent du marché anglophone. Pour cette raison, je voulais... pour discuter, est-ce qu'on peut utiliser les mêmes concepts comme la télévision conventionnelle comme monsieur Fecan l'a avancé, pour les marchés anglophones, pour les marchés francophones, ou est-ce qu'il y a un aspect différent?

1084   C'est vraiment ce que je voulais savoir et si je vous comprends c'est, essentiellement, vous êtes d'accord avec lui?

1085   M. DION: Bien, je ne peux pas... je suis d'accord en principe, mais je dois vous dire qu'on voit une différence entre le marché québécois et le marché anglophone.

1086   LE PRÉSIDENT: Oui, sans doute.

1087   M. DION: Et c'est pour ça que j'insiste sur la programmation canadienne. Mais, oui, on se rejoint sur certains points, mais je pense qu'on a... on a des... on vit dans un marché québécois qui nous permet de faire des choses que peut-être pour l'instant le Canada anglais ne peut pas faire.

1088   Je ne sais pas, Pierre, si tu voulais rajouter quelque chose?

1089   M. LAMPRON: C'est certain qu'on va arriver, si vous voulez, si on avait à faire des énoncés de mission, des énoncés de principe, on arriverait probablement à des conclusions un peu... un peu différentes de celles qui vous ont été exposées ce matin avec CTV et simplement parce que le point de départ dans la nature même de la raison d'être de la télévision généraliste dans le marché francophone, le point de départ est complètement différent.

1090   Et, étant complètement différent, par exemple, dans ce que Pierre exprime, c'est certain que dans l'avenir de la télévision généraliste et donc dans sa définition, au coeur du coeur de la réponse vient la capacité de maintenir à l'antenne un nombre considérable de productions originales qui développent la nature, si vous voulez, des concepts qui ont été évoqués dans la présentation et qui fait que l'agora que représente la télévision généraliste au Québec demeure un lieu de rassemblement, mais un lieu de rassemblement qui est fait à partir des contenus originaux.

1091   Alors que dans la reste de la télévision au Canada le point de départ est complètement différent et on en arrive à des notions où la télévision généraliste, par exemple, va servir à, je ne sais pas, moi, un rayonnement national ou ce genre de concept qui a été évoqué tantôt.

1092   Et si on revient encore une fois à la base de la base de la télévision généraliste au Québec, son salut est dans sa capacité à être justement la télévision qui est en mesure de maintenir à son antenne des contenus originaux de qualité en forte proportion nationaux. Et je pense que c'est à partir de cette dynamique-là que vous avez tout le plaidoyer et on dit, bien, la demande n'est pas d'essayer d'encadrer le contenu canadien, elle est dans la nature de la stimulation qui vient avec.

1093   LE PRÉSIDENT: O.k. Merci. Michel, tu as des questions?

1094   CONSEILLER ARPIN: Merci, monsieur le président. Bonjour, bon après-midi puis moi aussi, félicitations pas pour les succès d'écoute du Gala Artis, mais pour les vedettes de TVA qui se sont vu souligner par le grand public comme étant les lauréats de ce Gala Artis. Et je pense que ça doit être mis aussi dans son propre contexte, l'antenne est peut-être allée chercher 1 800 000 téléspectateurs, mais vos personnalités lui ont donné cette occasion-là.

1095   Donc, c'est une espèce de symbiose entre l'antenne et les personnalités qu'il faut souligner et, ça, de ce côté-là, TVA en a un grand mérite et l'a toujours bien joué et continue à très bien le faire et donc, je tenais à le souligner.

1096   Mes questions vont porter exclusivement sur Groupe... sur les stations de langue française de Groupe TVA. Monsieur collègue, monsieur Menzies, en a aussi toute une liste de questions, mais qui seront spécifiques à Sun TV. Et donc, puisque... donc, on fait cette scisure-là.

1097   Quand je prends votre présentation d'aujourd'hui, j'y découvre des éléments que j'ai déjà entendus dans votre bouche, monsieur Dion, ou celle de monsieur Péladeau, mais à chaque fois je réagis en me disant, il y a des affirmations qui méritent qu'on s'y attarde un peu plus longtemps et parce que, effectivement, on semble vouloir nous faire porter au CRTC toute une série des difficultés de la télévision hertzienne.

1098   Et à moins que je sois totalement désincarné, que j'aie perdu le contact avec la réalité, vivre à Gatineau, Ottawa et m'enfermer dans une tour d'ivoire et où, donc, je ne sais plus ce qui se passe sur le... dans le marché, mais donc, je vais aller à votre page 3 où, sous forme d'énoncé vous dites... et je vais en prendre que deux:

«Nous ne sommes pas encouragés à transporter sur l'ensemble des plate-formes de diffusion, les contenus, la notoriété et le succès de TVA.»

1099   Qu'est-ce qui vous en empêche? Quel règlement du CRTC, quelle politique vous empêche de le faire?

1100   M. DION: On fait référence ici, surtout naturellement parce qu'on regarde... on regarde la chose dans sa globalité, on fait référence à l'ancien Fonds canadien ou, espérons-le maintenant, le nouveau Fonds des médias qui nous donnera plus de souplesse quant à l'exploitation de ces contenus-là comme tels.

1101   Vous savez, pour nous, pour être capable d'exploiter le contenu qui nous fragmente d'un côté, donc on veut l'exploiter de l'autre, il y a trois conditions importantes:

1102   Un, c'était de bien s'entendre avec les producteurs indépendants. Ça, je pense qu'on l'a... on a dit que, effectivement, nos négociations, un à un, se portent bien depuis maintenant un an avec la production indépendante.

1103   La deuxième condition, c'était d'avoir une entente avec l'Union des artistes, ce qu'on a fait voilà maintenant un mois et demi.

1104   Et la troisième, c'était dans les structures de financement des émissions et dans l'exploitation de ces émissions-là, d'avoir toute la flexibilité d'aller participer à l'exploitation des oeuvres sur les fenêtres qui nous fragmentent comme telles.

1105   CONSEILLER ARPIN: Mais je constate que, un le nouveau Fonds canadien des médias n'est pas encore en opération et ne le sera pas avant encore, à toutes fins utiles, 11 mois et, B, que vous avez déjà des ententes avec les producteurs.

1106   Je comprends que ça peut avoir pris du temps avant d'en arriver à développer le modèle, mais ce n'était certainement pas des contraintes réglementaires qui vous y en empêchaient, y compris le Fonds parce que le Fonds des médias n'est pas encore en place et vous en négociez des contrats sur des multiples plate-formes. C'est plutôt les réalités commerciales plutôt que les réalités réglementaires qui vous en empêchaient.

1107   M. DION: Bien, je ne suis pas... je ne suis pas tout à fait d'accord, dans le sens que, premièrement, possiblement parce que le marché de la télévision est en crise maintenant, qu'il y a eu une plus grande flexibilité de la part des joueurs, de tous les joueurs, de nous donner certains accès aux droits d'exploitation, mais ça a pris beaucoup de temps.

1108   On parle... vous savez, ça fait quatre, cinq ans qu'on vous parle de cette problématique-là et, là, maintenant, on peut commencer à effectivement avoir des ententes qui nous donnent plus de flexibilité.

1109   Mais je fais aussi référence aux structures de financement, donc pas seulement aux droits d'exploitation, mais aux structures de financement qui fait qu'on ne peut plus regarder aujourd'hui la production d'une émission en pensant à seulement une fenêtre de diffusion.

1110   On se doit d'être capable en amont de regarder comment, et là on n'a pas toute la flexibilité pour le faire présentement, comment on peut la financer cette émission-là, peut-être avec d'autres partenaires, des nouveaux médias et, ensuite, l'exploiter avec ces partenaires-là sur les nouveaux médias.

1111   Donc, on espère que le nouveau Fonds des médias nous permettra de faire ça.

1112   CONSEILLER ARPIN: Maintenant, dans la même séquence, je vais prendre le dernier, puis vous dites:

«Cette réglementation lourde, tatillonne et obsolète...»

1113   C'est pour ça que je me sens désincarner, je penserais que:

«... nous oblige à composer avec une bureaucratie étouffante.»

1114   M. DION: Est-ce que c'était assez précis?

1115   CONSEILLER ARPIN: Mais j'écris «Laquelle bureaucratie»? Laquelle réglementation qui... Vous avez mentionné les émissions prioritaires. Il y a des cadres de références qui sont essentiellement des politiques et qui... mais dans lesquels vous avez manoeuvré avec relativement d'aisance au cours des années.

1116   Les émissions prioritaires, oui, vous en aviez une obligation statutaire, vous en avez toujours fait plus. Donc, ce n'était pas une contrainte lourde, tatillonne et obsolète.

1117   M. DION: Moi, je fais référence ici... effectivement, on en a toujours fait plus et notre intention c'est d'en faire plus et c'est justement là le point. C'est à cause de la spécificité du marché québécois et l'importante du contenu québécois, on pense que dans les prochaines années, on va toujours mettre le contenu québécois au coeur de notre stratégie et qu'on ferait suffisamment de contenu pour justement être capable de répondre à ces sous-conditions de licence-là.

1118   Et vu qu'on le ferait de toute façon, pourquoi s'embêter avec des conditions qui demandent à un paquet de gens chez nous, entre autres, de se soustraire à des rapports qui sont très longs, à du minutage du nombre d'applaudissements, et caetera, dans des émissions, lorsque, de toute façon, comme on dit en anglais: it's a non-issue pour le Québec de faire de la programmation québécoise canadienne.

1119   Donc, pourquoi avoir cette bureaucratie-là lorsque, encore là, dans le marché québécois, c'est au coeur de notre stratégie, contenu québécois. On n'a pas besoin de ces sous-conditions-là.

1120   CONSEILLER ARPIN: Ça fait 40 ans que je suis autour, mais le règlement sur le temps d'applaudissement, je ne l'ai jamais vu nulle part, alors...

1121   M. DION: Bien, c'est arrivé, monsieur Arpin.

1122   CONSEILLER ARPIN: Non. Bon. J'aimerais bien ça qu'on me... j'aimerais bien ça qu'on me l'identifie parce que je pourrais certainement... je n'aurais pas de difficulté à convaincre mes collègues que ça serait un règlement abusif.

1123   M. DION: On a une émission en particulier qui, à cause du nombre d'applaudissements n'a pas eu le 50 pour cent nécessaire pour être admise dans le contenu prioritaire.

1124   M. TRÉPANIER: Lorsqu'on parle de réglementation tatillonne, évidemment on faisait allusion à cette situation-là qui s'est produite, je pense, deux fois, où est-ce qu'on chronomètre les émissions et on a dit, hops! il manque un pourcentage de musique donc ce n'est plus émission de musique, donc c'est une émission prioritaire.

1125   M. DION: On a une autre émission, pour ne pas la nommer «Demande spéciale» qu'on avait à l'écran voilà quelques années et...

1126   CONSEILLER ARPIN: On pourra y revenir la semaine prochaine, ça sera... vous faites bien de la souligner puis ça me donnera une semaine aussi pour me documenter de mon côté.

1127   En page 4 de votre mémoire, vous terminez, le dernier paragraphe:

«Il est aussi de l'intérêt de tous les diffuseurs que les distributeurs investissent massivement dans le déploiement de leurs infrastructures et qu'ils offrent aux Canadiens les services les plus évolués et les plus performants au plus faible coût possible. Il est contreproductif de les détourner de cette mission.»

1128   Et ça, c'est toujours les investissements en matière de distribution de signaux de télévision parce que ce n'est pas pour de la téléphonie ni pour internet.

1129   M. DION: Hum!

1130   CONSEILLER ARPIN: Donc, évidemment, les experts de Vidéotron ne sont pas ici à la table pour nous dire en quoi consistent ces investissements-là, mais peut-être que dans une réponse ultérieure vous pourriez documenter ces investissements que vous qualifiez de significatifs et de substantiels.

1131   M. LAMPRON: Dans le contexte... si vous me permettez, dans le contexte de cette intervention-là, c'est vrai que c'était ciblé particulièrement sur toute l'industrie de la distribution des signaux. Mais c'est aussi de l'intérêt de tous les diffuseurs que les distributeurs investissent lourdement dans les déploiements de tous les autres types de services qui vont faire se multiplier des fenêtres de diffusion qui vont nous donner, effectivement, beaucoup plus de capacité d'avoir ultimement accès à plus d'auditeurs.

1132   Notre stratégie, encore là, elle est toute basée sur le fait que le contenu que l'on produit, on essaie de le rendre disponible le plus possible sur l'ensemble des sources possibles et, donc, c'est de notre intérêt, effectivement, que les distributeurs, s'ils ont à investir à la fois dans la téléphonie et à la fois dans le mobile et dans ses autres types d'investissements, oui, c'est l'intérêt des diffuseurs ça peut se faire ultimement.

1133   M. DION: Et pour donner un exemple précis, on trouve un petit peu... je vais le dire, on trouve un petit peu drôle qu'on se retrouve dans une situation qui a été mentionnée ce matin d'ailleurs, où il y aurait possibilité dans certains marchés que la télévision locale de TVA ne sera pas distribuée et, d'un autre côté, on veut créer un fonds de $60 millions pour du contenu local et on ne serait pas distribué localement.

1134   Donc, ce qu'on dit, c'est qu'on souhaiterait que les distributeurs puissent maximiser leurs ressources pour nous donner accès à ces réseaux de distribution-là, leur argent et énergie devraient être situés à ce niveau-là pour nous donner accès beaucoup plus que de leur enlever de la marge de manoeuvre parce qu'on leur demande des sous pour créer du contenu local.

1135   CONSEILLER ARPIN: Je comprenais très bien quand CTV le présentait parce que c'était... mais quand TVA fait l'argument, TVA à... Groupe TVA n'a de stations que dans la province de Québec?

1136   M. DION: Oui, mais on a... on coure le risque très prochainement d'avoir des stations locales qui ne seraient pas distribuées par certaines...

1137   CONSEILLER ARPIN: Mais vous aurez toujours au moins une de vos stations qui sera distribuée.

1138   M. DION: Oui, mais là, si vous... mais, là, on pourrait rentrer dans une grande section de l'importance de nos stations locales. Nous croyons, et je ne sais pas si vous voulez faire maintenant...

1139   CONSEILLER ARPIN: Écoutez; non, non. Je comprends très bien ce que vous voulez en venir, mais il y a... il y aura toujours une présence TVA.

1140   M. DION: Oui, mais on croit énormément à la présence locale.

1141   CONSEILLER ARPIN: Oui, ça je comprends, mais, écoutez...

1142   M. DION: Pour plusieurs raisons.

1143   CONSEILLER ARPIN: Bon. Malheureusement, l'économie de ce pays-ci fait que les entreprises satellitaires ne sont pas encore... n'ont pas la capacité de se payer autant de satellites qu'il serait nécessaire pour offrir toutes les stations hertziennes canadiennes, ce qui demeure un objectif souhaitable, mais on parle de 164 stations de télévision et... bon, peut-être qu'un jour on y arrivera, mais c'est... et puis, peut-être que ce... puis je ne veux pas que vous me disiez ce jour-là sera peut-être trop tard, mais peut-être qu'un jour on y arrivera et c'est un souhait.

1144   M. DION: Mais peut-être juste me permettre de poser cette question-là: Quelle est, à ce moment-là, la logique de créer un fonds local pour créer des émissions à Rimouski ou à Trois-Rivières si la station locale de ces émissions locales là ne donne pas accès à 40, 30, 35, 30 pour cent de la population?

1145   CONSEILLER ARPIN: Mais si... je vais prendre Chicoutimi comme cas d'espèce où Vidéotron est présent, si la station locale de Chicoutimi de TVA a beaucoup de succès avec sa programmation locale, peut-être que les gens iront s'abonner à Vidéotron plutôt que de s'abonner à une entreprise totalitaire. Vous savez, il y a peut-être des opportunités pour le Groupe Québécor qui n'existerait pas pour TQS, mais qui pourrait exister pour Québec encore.

1146   On va parler maintenant des grands enjeux de cette première ronde d'audiences et je vais commencer par la programmation locale. Dans vos mémoires, dans votre mémoire vous dites que vous voulez maintenir les niveaux de programmation actuelle à Saguenay, Trois-Rivières et Sherbrooke et qui sont pour... en vertu des engagements de la dernière... du dernier renouvellement de trois heures et dix minutes et quant à Québec, vous dites 18 heures si la licence est d'un an, 12 heures si c'est pour une durée complète.

1147   Ma première question, elle est pour vous et si le Conseil y allait pour une période de deux ou trois ans, comme vous le suggérez dans votre présentation orale, on parlerait de combien de temps que vous allouez à la programmation locale.

1148   M. DION: Si vous me permettez, dans le contexte où vous soulevez la question sur une période de trois ans, j'aimerais mieux qu'on vous revienne la semaine prochaine avec cette réponse précise là de conditions dans un marché précis.

1149   CONSEILLER ARPIN: C'est vous qui le préconisez ici, trois ans.

1150   M. DION: Non; je suis d'accord, je suis d'accord.

1151   CONSEILLER ARPIN: Et, nous, le Conseil, ce matin le président a parlé de deux ans comme étant une autre alternative. Donc, si vous pouvez y réfléchir et puis...

1152   M. DION: On va vous revenir.

1153   CONSEILLER ARPIN: ... et nous revenir sur cette question-là.

1154   M. TRÉPANIER: Sur la durée de la licence, si vous me permettez, lorsqu'il y a un renouvellement de deux ans, ça permet au Conseil de voir des résultats financiers de ce qui a été fait sur une année seulement.

1155   Lorsqu'il y a un renouvellement de trois ans, au moins il risque d'y avoir une tendance dans les résultats financiers donc le Conseil et nous-mêmes vont mieux mesurer les changements que l'on a mis en place et en plus -- je termine là-dessus -- dans ce cas-ci, c'est à l'automne 2011, après cette fameuse transition au numérique qu'on aura une bien meilleure idée de ce qui s'est passé.

1156   Donc, si on pouvait vous préparer une demande de renouvellement en décembre 2001 pour une licence qui se terminerait en 2012, ce serait de beaucoup préférable à une licence de deux ans ou d'une année.

1157   M. DION: Peut-être si vous me permettez, parce que...


1159   M. DION: qu'on est dans nos engagement, exemple, dans une ville comme Québec, il y a... Je ne sais pas si c'est un nouveau principe, mais en tout cas, une nouvelle stratégie, une stratégie que nous, on travaille depuis maintenant deux, trois ans et que j'aimerais apporter au Conseil.

1160   On comprend, parce que c'est le rôle ici, entre autres, d'amener un certain nombre d'heures d'engagement sur une chaîne linéaire dans un marché spécifique. Mais j'oserais vous dire qu'on est ailleurs.

1161   Dans notre stratégie, on n'est pas là, nous. On part du principe que le consommateur regarde le contenu où, quand, à l'heure qu'il veut. Donc, le consommateur n'est plus dans un mode où il sent qu'une entreprise a un engagement sur une chaîne seulement.

1162   Et nous, on doit suivre ce consommateur-là. Donc, je peux vous confirmer aujourd'hui qu'on veut en faire plus, à Québec. On veut mieux utiliser, par contre, nos ressources. On veut faire plus de reportages, plus de topos, plus d'information, plus de productions locales, mais pas nécessairement sur la chaîne linéaire comme telle parce que le marché n'est plus là. Ce n'est plus comme ça que le consommateur réagit.

1163   Ce qu'on veut faire, c'est qu'il va y avoir souvent des journalistes qui vont aller faire un reportage et le reportage dans la région donnée va aller sur le Web seulement ou va aller sur le cellulaire seulement ou va aller sur LCN seulement (la chaîne d'information continue) ou des fois, va également faire partie du 17 heures, le bulletin, ou le 18 heures ou le 22 heures.

1164   Donc, on a publiquement dit qu'on voulait encore en faire plus à Québec, mais de façon différente, de façon plus intelligente pour, encore là, s'adapter, être en avant de la vague du comportement du consommateur.

1165   CONSEILLER ARPIN: Ce matin, on a entendu les gens de CTV nous donner leurs critères pour... sous-jacents à ce qu'est une station de télévision locale en termes de programmation locale et ils nous ont donné leurs critères comme étant: c'est une station où il y a des bulletins de nouvelles sept jours par semaine, où il y a neuf heures et demie de programmation par semaine dans les marchés plus petits que 300 000 habitants et de quatorze heures par semaine dans les marchés où il y a plus de 300 000 habitants.

1166   Et c'est une station, aussi, qui a... enfin, qui a un « full time staffing », qui a du personnel en nombre suffisant, donc ce n'est pas tous des pigistes, c'est des...

1167   Je comprends que la proposition de TVA qui... Et elle est historique, elle n'est pas d'aujourd'hui, ce que vous nous présentez, mais je vois très bien que vous êtes à des années-lumière un de l'autre quant à cette notion de présence locale dans le marché.

1168   M. DION: Vous voulez dire...?

1169   CONSEILLER ARPIN: Bien, ce que je veux dire, c'est par rapport : est-ce que vous avez...?

1170   Vos engagements sont quand même très... sont... que je les qualifierais de... pour les marchés de Saguenay, Trois-Rivières et Sherbrooke d'un engagement, d'une présence quasiment superficielle, au plan local.

1171   M. DION: Je vais être obligé de dire « si on se fie à la seule définition de produire des émissions sur une chaîne linéaire », mais la présence...

1172   CONSEILLER ARPIN: Mais c'est de ça qu'on parle, là.

1173   M. DION: Je le sais, mais le marché est ailleurs. Qu'est-ce qu'on fait avec ça, quand le marché n'est plus là? Qu'est-ce qu'on fait quand qu'il y a 40 pour-cent de la population prend leurs nouvelles sur Internet avant de quitter le boulot?

1174   CONSEILLER ARPIN: Il n'en demeure pas moins que vos bulletins de nouvelles attirent... C'est peut-être que c'est... Je ne dis pas que --

1175   M. DION: Oui, mais on va être capable...

1176   CONSEILLER ARPIN: Je ne dis pas que c'est faux. C'est vrai que les gens consultent l'Internet, mais ils écoutent encore les... C'est quand même... la télévision demeure encore la première source confirmée d'information à travers le pays. Les sondages qui ont été faits sur cette question-là, les études scientifiques ou sociologiques qui ont été faites sur cette question-là, encore en 2009, confirment que la télévision est encore le moteur de l'accès à l'information, malgré le fait que les gens vont picoler gauche à droite pour... Ils reviennent à la source primaire qui est la télévision.

1177   Et ça, c'est une réalité de 2009, là...

1178   M. DION: Je suis d'accord, mais vous devez comprendre que nous, c'est effectivement dans notre intérêt si les gens aiment encore leur télévision locale puis aiment avoir de l'information locale sur le réseau linéaire, bien, à ce moment-là, on vit avec le comportement du consommateur.

1179   C'est évident qu'on va continuer à faire de la nouvelle locale. Ça ne serait pas dans notre intérêt de ne pas le faire si la demande est encore là. Hein? Nous, on est là, puis d'année en année, on s'ajuste aux réalités du marché.

1180   Vous me dites (et vous avez raison) que les gens aiment encore écouter leur bulletin de nouvelles traditionnel. On en déjà pris bien note, et c'est pour ça qu'on essaie de bien représenter l'information en région sur la chaîne linéaire du réseau TVA.

1181   Et les lois du marché et le comportement du consommateur va nous dicter, année après année, combien de contenu sur cette chaîne-là on se doit de faire. Alors, c'est dans notre intérêt de bien les desservir sans ça on va le laisser à la compétition.

1182   Donc, on n'a pas besoin de se faire dire combien d'heures sur le réseau TVA... Oui, on peut prendre des engagements, mais ce que je suis en train de vous dire, c'est qu'on va le faire de toute façon parce que pour nous, c'est une question de « bonne business ». Par contre (et là, c'est là que la donnée vient de changer), c'est que ce n'est qu'une composante, maintenant, d'une stratégie en programmation locale. Ce n'est qu'une composante.

1183   Moi, j'aime mieux avoir peut-être un peu moins d'engagements sur le réseau TVA (exemple: baisser de 21 à 18 heures), mais mon budget global en région, lui, va augmenter. Mon engagement global en région va augmenter parce qu'avant, j'envoyais un journaliste faire un topo sur un sujet, puis lui, il allait là à 1 h 30 de l'après-midi puis il se préparait pour le TVA de 17 heures ou le 18 heures avec leur bulletin local.

1184   Aujourd'hui, je vais peut-être avoir cinq journalistes qui s'en vont à cinq endroits différents, puis il y en a un... je me répète, je m'excuse, mais qui va aller couvrir une nouvelle qu'il va envoyer en dedans de 30 secondes sur son BlackBerry pour que les gens aient accès sur Internet.

1185   Donc, moi, je pense -- et je sais que j'élargis la discussion, mais je pense qu'elle est à point parce qu'on a toutes les données, et vous les avez aussi, de... les tendances.

1186   Est-ce qu'on n'est pas rendu à la réflexion de dire quelle devrait être la définition d'un engagement local? Est-ce qu'on se restreint à évaluer la performance d'un média sur son simple engagement d'heures sur la télévision linéaire ou n'est-il pas de voir l'engagement qu'un joueur prend sur sa présence au niveau local, à cause qu'on vit dans une nouvelle réalité technologique?

1187   M. LAMPRON: Si vous me permettez, juste un petit complément... parce que vous faites la comparaison avec CTV et lorsqu'on isole, si vous voulez, les points de comparaison, ça peut peut-être vous mener sur des pistes qui sont... qui ne sont pas très intéressantes.

1188   La situation particulière de TVA, c'est qu'elle doit supporter une programmation nationale faite essentiellement de contenu canadien qui rejoigne toutes les régions du Québec. La réalité, c'est que l'antenne de TVA, sa performance, va chercher 50 pour-cent de son écoute en dehors de Montréal... ou un peu plus, hein, Pierre?

1189   M. DION: Cinquante. Cinquante hors Québec... hors Montréal.

1190   M. LAMPRON: Cinquante pour-cent hors Québec. Cette antenne-là, elle est --

1191   M. DION: Hors Montréal.

1192   M. LAMPRON: Pardon. Cette antenne-là, donc, elle est extrêmement performante. Et lorsqu'on met des heures de programmation locale pour venir s'intercaler à l'intérieur de cet ensemble-là, c'est certain que chacune des heures doit être plus performante ou au moins aussi performante que l'ensemble de la programmation -- encore une fois, une programmation qui est une programmation de contenu canadien.

1193   Et c'est ça qui est la grande différence par rapport à ce que vous observez. Et vous ne pouvez pas dire: Bon, bien, on va faire une réglementation en termes de nombre d'heures locales sans mettre ça en comparaison avec la nécessité absolue de financer sur l'ensemble du territoire du Québec les coûts qui sont majeurs pour soutenir une programmation originale, de bulletins d'information, de dramatiques, de variétés et cetera, ce qui n'est pas, donc, le même cas de figure lorsque vous faites votre comparaison.

1194   CONSEILLER ARPIN: Maintenant, on va parler un peu du Fonds d'amélioration de la programmation locale.

1195   J'ai bien compris, dans votre présentation orale que... la position corporative, c'est que ça devrait être un non-lieu, mais vous avez aussi dit que si malgré tout on l'imposait, vous nous avez donné un certain nombre de critères pour lesquels le Conseil devrait tenir compte.

1196   Maintenant, si je ne m'en tiens qu'à la première année, prenons pour acquis que le Conseil maintient sa position face à la création du fonds et qu'il entre en vigueur le 1er septembre 2009.

1197   Vous nous avez donné déjà un certain nombre de critères, de performances, notamment, d'implications et tout, mais je pense à l'an un. En septembre prochain, est-ce que les critères que vous avez déjà décrits devraient être ceux qui nous guident ou si, pour l'an un, compte tenu de l'ensemble des joueurs qui sont éligibles, les critères pourraient être différents. Et si oui, quels devraient-ils être?

1198   M. DION: Non, je pense que ça devrait être ces critères-là dès le départ.

1199   CONSEILLER ARPIN: Ce qui signifie que TVA, évidemment, aurait la majeure... la partie congrue de ces investissements-là, parce que TVA est le leader de marché au niveau des... a plus que 50 pour-cent de l'écoute des stations qui seraient éligibles au fonds.

1200   M. DION: Et votre question...?

1201   CONSEILLER ARPIN: Bien, à savoir: Est-ce que les critères de l'an un... J'essaie de voir si... puisque tout le monde ne part pas nécessairement du même pied... TVA a certainement une longueur d'avance par rapport à TQS qui vient de passer une période extrêmement difficile, qui est en restructuration avec des nouveaux propriétaires, qui... et donc...

1202   Mais si je m'en tiens à vos critères, vous me dites: La performance, en termes d'écoute, TVA a plus que 50 pour-cent d'écoute de la télévision hertzienne éligible de par les définitions qu'on a données parce que c'est (inaudible) TVA, Radio-Canada et TQS.

1203   Donc vous avez... Il y a à peu près 57 part de marché puis il faudrait enlever celle de Télé-Québec, donc... puis vous en avez 26-27, donc... vous avez donc 50 pour-cent des sommes dès le départ sur ce critère-là.

1204   M. DION: Bien, je vous dirais que oui, effectivement, dès le départ il faudrait avoir des critères qui vont selon la performance, le nombre d'heures, l'implication en région, les ressources qui sont dédiées dans ces régions-là, parce que...

1205   Et je vais essayer de bien m'exprimer, mais je pense que c'est bien important de comprendre. Si effectivement il y a un fonds qui est créé et que ce fonds-là est pour de la production locale sur une chaîne linéaire locale, TVA est condamnée à faire une production qui va au moins performer, sinon mieux performer, que sa grille de programmation réseau.

1206   Donc, en d'autres mots, ça va être difficile sinon impossible de créer des émissions locales qui vont faire mieux que le « prime time », qui vont faire mieux que le « day time », enlevez les émissions du matin ou autre... que nos bulletins de nouvelles réguliers, que... Vous connaissez notre grille horaire du week-end également.

1207   Donc, de remplacer une émission réseau, si la qualité pour un TVA qui a 30 pour-cent de part de marché... si cette qualité-là n'est pas là, bien, à ce moment-là, pour nous, c'est automatiquement une baisse des revenus publicitaires parce que la nouvelle émission locale aurait moins de part de marché que l'émission réseau, donc baisse des revenus publicitaires.

1208   Donc, on est condamné si on fait de la production locale de ce type-là, d'avoir une qualité qui est aussi bonne et, en tout respect, je ne pense pas qu'on a les mêmes types de coûts que certains de nos autres compétiteurs privés. Donc, de là la raison que oui, effectivement, il va falloir que ça soit aussi selon les résultats du marché parce que chaque joueur a des objectifs et des réalités différentes.

1209   M. TRÉPANIER: Si vous permettez... Je pense qu'ici on a un autre exemple. On parle d'une réglementation qui ne nous encourage pas nécessairement à poser les gestes qu'il nous semble devraient être posés.

1210   Je pense qu'on a ici un autre exemple de la création d'un fonds qui n'est pas un élément qui aurait (même s'il était créé) une grande importance dans les solutions dont on a besoin pour la télévision généraliste de langue française et là, vous semblez nous dire qu'il pourrait y avoir un mécanisme qui permettrait de compenser ceux qui sont moins populaires.

1211   Et on pourrait ainsi se retrouver dans une situation où est-ce qu'on récompense... on essaie de créer un équilibre et de récompenser ceux qui sont moins appréciés de la population. Et on se retrouverait en bout de piste à une situation où il y aurait une autre réglementation que l'on appelle tatillonne.

1212   CONSEILLER ARPIN: Écoutez, j'émets des hypothèses. Je ne donne pas d'opinion. Mais j'émets des hypothèses, parce que...

1213   La prochaine hypothèse c'est: on suit votre modèle mais pour toutes sortes de motifs, l'écoute est volatile et les stratégies de programmation n'ont pas donné les résultats escomptés et donc vous n'avez pas rencontré les critères et donc...

1214   Alors, je me demandais quelle sorte... la question que j'ai c'est: comment est-ce qu'on redresse la situation ou quelle sorte de pénalité qu'on peut imposer pour faire en sorte que finalement...? Parce que vous avez failli aux critères qui avaient été établis, alors...

1215   M. LAMPRON: Moi, je pense que techniquement, ça serait assez simple, je dirais, de répondre à cet enjeu en établissant que ces critères, par exemple, sont sur la base à la fois d'historique et de prévisions et qu'ils sont applicables... par exemple, les allocations puissent être applicables sur une période de trois ans, par exemple, avec correction éventuellement aux termes de ces trois ans.

1216   C'est... comment je dirais bien ça...? C'est de la mécanique qui est utilisée dans la plupart des fonds que l'on connaît, où il y a des ajustements qui viennent se faire sans avoir à perturber les plans d'affaires et sans tenir compte de ce qu'on appelle les soubresauts d'une année sur l'autre.

1217   M. DION: Peut-être juste ajouter -- et c'est un commentaire général, mais en tout cas, je crois très important -- on essaie encore de comprendre l'objectif du fonds local. Je suis honnête avec vous, on essaie de comprendre cet objectif-là dans un moment où on essaie de trouver des solutions à long terme de la crise de la télévision généraliste.

1218   CONSEILLER ARPIN: On essaie de restaurer les investissements historiques qui ont eu lieu dans le secteur de la programmation locale dans l'ensemble -- et c'est une vision globale, ce n'est pas spécifique au Québec puis à TVA, mais c'est quand même de restaurer...

1219   On a noter, au cours des ans, que pour des raisons de perte de marché, de perte d'auditoire, de fragmentation, que les entreprises ont généralement procédé à des coupures dans les stations régionales pour pouvoir soit maintenir leur marge bénéficiaire ou donner les moyens à la station-mère de continuer à alimenter le système par des émissions de haute teneur.

1220   Alors, le fonds a été créé dans le but, effectivement, de redonner aux stations régionales (et on a qualifié, pour les fins de cet exercice-là des stations qui sont dans des marchés de moins de un million de téléspectateurs)... de leur permettre de réinvestir davantage pour la couverture et la production locales. La couverture de l'information et la production d'émissions locales si ça fait partie de leur stratégie de programmation.

1221   Mais le fonds, aussi, est limité à des stations qui font de l'information locale. Des stations qui ne sont pas dans le secteur... qui peuvent être hertziennes et qui ne sont pas des producteurs d'information locale ne sont pas éligibles au fonds.

1222   M. DION: Si je peux me permettre... Et c'est pour ça que je posais la question, parce que je voulais effectivement en venir à cette discussion-là.

1223   Je crois qu'on fait une erreur en essayant de trouver une solution en passant par les stations régionales locales plutôt que de trouver l'antibiotique qui va permettre à la station-mère, elle, d'être en santé. Et on croit que si on permet à la station-mère d'être en santé (ce qu'on appelle la tête de réseau), le problème, à ce moment-là, que vous énumérez des stations locales va se résoudre, parce que -- et je vais parler encore de TVA et du Québec -- c'est certain que si on a l'antibiotique et il y a 50 pour-cent de notre écoute qui est hors Montréal, on va automatiquement dans nos stratégies toujours favoriser d'avoir plus de contenus locaux.

1224   Vous comprenez ce que je veux dire? Au lieu de passer dans les stations régionales pour essayer de régler le problème de TVA ou des autres, on dit : réglons le coeur du problème, de la station-mère et à ce moment-là, la station-mère aura les ressources d'alimenter, après ça, les stations régionales d'une personnalisation que vous parlez.

1225   Puis, je vais oser vous donner un exemple. C'est un peu : si on essaie de rajouter une deuxième et une troisième voile sur un voilier qui est en train de couler. Donc, essayons plutôt de réparer la coque du voilier puis à ce moment-là, le capitaine à bord, ça va lui faire plaisir de rajouter une deuxième ou une troisième voile.

1226   Mais là, on rajoute des voiles sur le voilier puis le bateau est en train de couler.

1227   CONSEILLER ARPIN: Les données que le Conseil possède, et puis on aura la semaine prochaine (inaudible) d'avoir une discussion à huis clos pour discuter d'aspects plus financiers et plus pointus, mais les données que le Conseil dispose nous démontrent que d'une manière générale, les stations qui sont dans des marchés de plus d'un million d'habitants ont de meilleurs résultats financiers que les stations qui sont dans les régions.

1228   Et est-ce que ces données-là reflètent la réalité? On aura l'occasion d'en parler à huis clos parce que c'est les données que nous avons, on les a quand même obtenues à partir des déclarations que vous avez... qui ont été faites à l'occasion de la présentation des rapports annuels qui ont été déposés auprès du CRTC.

1229   Or, d'une façon systémique à travers tout le pays, les stations qui sont en souffrance sont les stations locales dans les régions, alors que les stations dans les grands centres s'en tirent beaucoup mieux.

1230   M. DION: Si vous me permettez un dernier commentaire à cet effet-là -- et encore, je ne veux pas parler pour les gens du Canada anglais, mais en tout cas, je vais parler spécifiquement pour TVA -- on ne pense pas comme ça. On ne pense pas...

1231   Lorsqu'on décide d'investir « X » millions de dollars dans une programmation annuelle, lorsqu'on décide de refaire un « Star Académie » ou de refaire de ces émissions-là, je n'ai pas dans ma tête des cases qui me disent : Est-ce que je peux me permettre cette émission-là parce que tel marché, lui, est payant, et l'autre marché n'est pas payant?

1232   Je regarde la stratégie du réseau TVA, du Groupe TVA dans son ensemble, je regarde notre capacité financière d'aller de l'avant avec telle grille de programmation ou avec telle initiative. Et si l'ensemble de l'oeuvre est rentable sur une base annuelle -- pas juste un « Star Académie », mais l'ensemble de la stratégie est rentable -- bien, à ce moment-là, c'est ce que je vous dis, si la coque est réparée, bien, effectivement, le groupe média a les capacités ensuite d'alimenter les stations régionales.

1233   Donc, on ne peut pas, je crois, catégoriser les stations en disant... En tout cas, je parle encore pour TVA, dire: Bien ça, je le fais parce qu'à Montréal c'est payant, ça je le fais pas... Non, c'est une stratégie globale, mais si le groupe n'est plus rentable, c'est sûr qu'une des choses qu'il va commencer à regarder une fois qu'il a commencé à couper du « staff » puis à couper dans sa capitalisation, son immobilisation, à un moment donné, il n'aura plus le choix de regarder la rentabilité de ses stations régionales.

1234   Mais réglons le coeur du problème et tous les autres problèmes, à ce moment-là, vont se régler par eux-mêmes.

1235   CONSEILLER ARPIN: Je veux bien vous croire, mais vous vivez dans un univers concurrentiel où il y a d'autres diffuseurs puis il faut essayer de trouver une espèce d'équilibre qui va...

1236   On va parler maintenant un peu plus d'émissions prioritaires. Je comprends que vous nous dites que vous voulez l'élimination des conditions de licence qui sont relatives aux émissions prioritaires, mais quelle est votre objecti... Vous en avez toujours fait davantage que le règlement ou la condition de licence qui vous était opposée, est-ce que vous dites... la raison pour...?

1237   J'essaie de voir quelle raison qui vous motive pour, effectivement, les... Vous voulez les réduire? En diffuser en dehors des heures qui sont dites prioritaires ou c'est sous-jacent à votre décision de dire: Bien, éliminez les conditions de licence relatives aux émissions prioritaires? Qu'est-ce qui...? C'est quoi votre fondement pour nous demander ça... autre que tatillon, bureaucratique...?

1238   M. LAMPRON: C'est déjà beaucoup.

1239   M. DION: Oui, c'est ça. Mon ami Pierre me souffle à l'oreille: C'est déjà beaucoup.

--- Laughter

1240   M. DION: On est tellement occupé, puis on a tellement de défis que toute tâche inutile qu'on peut se soustraire, je vous dirais que ça serait très apprécié, mais au-delà de...

1241   Pour essayer de répondre aussi plus... je dirais plus stratégiquement à votre question, à part de tout l'aspect bureaucratie, et cetera, 90 pour-cent de notre programmation est canadienne... 90 pour-cent.

1242   On se fait juger à tous les jours, aux trente secondes près, à cause des PPM, de ce que les gens veulent. Et non seulement on se fait juger aux trente secondes, mais on commande en plus des études de marché pour savoir : la diversité ethnique, elle aimerait avoir quoi en ondes, et dans les régions, les gens aimeraient avoir quoi en ondes? Et puis dans les bulletins de nouvelles, puis le comportement du consommateur, et cetera.

1243   Donc, on a un paquet d'études qui vient en supplément de, justement, les audiomètres qui nous rappellent à tous les jours si on a fait des bons choix stratégiques.

1244   Encore là, je me répète: tout ça en sachant que 90 pour-cent de notre programmation est canadienne. Alors, c'est un peu moi qui vous poserais la question dans le sens: Pourquoi s'embêter mutuellement au Québec avec toutes sortes de conditions sous conditions si en plus on est prêt à prendre un pourcentage de garantir, c'est-à-dire un pourcentage de nos dépenses en contenu canadien?

1245   Si on est prêt à le faire, pourquoi s'embêter mutuellement dans ces rapports-là, ces calculs-là lorsque, vous le savez, le contenu canadien est au coeur de notre stratégie, puis le jour qu'on ne le fera plus, on va perdre des parts de marché donc, il n'y a aucun intérêt pour nous de le faire. On veut plus de flexibilité pour pouvoir dire: Bien, c'est-tu à 6 ?h ?30 que ça devrait être ou à 11 h 15 ou est-ce qu'on devrait le faire plus dans telle période de l'année ou telle période de l'année?

1246   Oui, effectivement, on a besoin de plus de flexibilité, pas juste à cause de la bureaucratie.

1247   Et je vous donnais encore un exemple, puis je m'excuse parce que je vais vous embêter encore avec mon multi-plateforme, mais vous êtes habitués, c'est notre discours depuis quatre, cinq ans.

1248   Je vais vous donner une série comme « Lance et compte ». Puis d'ailleurs, je vous amène sur ce sujet-là, des séries lourdes, qui intéressent tout le monde. Bien, « Lance et compte » est la dernière survivante des séries lourdes et on a pris cette série-là et on l'a amenée sur la vidéo sur demande à l'automne 2008 et elle va être diffusée un an plus tard sur TVA.

1249   Donc, où je vous amène, c'est de dire que les modèles d'affaires ont changé. Notre engagement en contenu canadien, il est là, mais plus seulement sur une chaîne de diffusion, sur l'ensemble des plateformes.

1250   Et je ne le sais plus, Monsieur le Vice-président, si je vais diffuser tel contenu dans trois mois sur la VSD ou sur le Web éventuellement, ou sur la télévision généraliste ou sur une chaîne spécialisée. Parce que le marché a changé, on a besoin... on ne veut pas être embêté avec un paquet de rapports qui fait que je sois obligé de confirmer si j'ai un engagement spécifique sur une chaîne.

1251   Le consommateur n'est plus là; la stratégie de TVA, elle n'est plus rendue là. On a une nouvelle réalité, mais vous avez tout notre engagement sur le contenu canadien. D'ailleurs, je pense qu'on devrait être content de voir qu'il y a un groupe média qui dit : Je vais en faire encore plus de contenu canadien. Même si on en fait à la hauteur de 90 pour-cent, on veut en faire encore plus et sur l'ensemble des plateformes de diffusion. C'est quand même un engagement, je pense, important.

1252   CONSEILLER ARPIN : C'est le genre d'engagement que l'on a, puis après ça, vous nous dites que ça crée de la bureaucratie.

1253   M. DION : Non. C'est parce que... non, je m'excuse, c'est que... c'est parce que vous essayez de m'amener sur un engagement sur un réseau de diffusion. Mais c'est ça la réalité, le marché n'est plus là.

1254   CONSEILLER ARPIN : Mais la réalité, c'est que vous nous dites : Exemptez les nouveaux médias, exemptez la télévision mobile, ne vous occupez pas de ça. Mais par après, vous dites : Mais TVA là, en fait, exemptez-nous complètement, en d'autres mots.

1255   Mais ce n'est pas à nous qu'il faut le dire, c'est au législateur. Si le législateur vous croit, bien, il saura quoi faire. Mais moi, mon rôle ici, c'est d'essayer de dire, bon bien, qu'est-ce que c'est qu'on va avoir à cette antenne-là...

1256   M. DION : On est prêt à s'engager sur...

1257   CONSEILLER ARPIN : qu'est-ce que c'est que je peux dire? Peut-être que les rapports tatillons dont vous parlez nous sont utiles pour vous féliciter aussi à l'occasion, pas juste pour vous blâmer.

1258   M. DION : On prendrait les félicitations sur un rapport. On serait heureux.

1259   CONSEILLER ARPIN : Non, non, mais regardez nos allocutions, puis on met toujours en valeur, effectivement, les succès de la télévision de langue française.

1260   M. DION : On est prêt à s'engager à un pourcentage...

1261   CONSEILLER ARPIN : C'est parce que vous nous faites des rapports qui nous alimentent.

1262   M. DION : Oui, mais on est prêt à s'engager sur un pourcentage des dépenses. Ce n'est pas rien.

1263   CONSEILLER ARPIN : Ça, je l'ai entendu.

1264   M. DION : Oui, mais c'est tout. Ça devrait être suffisant, non?

1265   CONSEILLER ARPIN : Sauf que... en tout cas, je n'étais pas là en '99 pour vous dire...

1266   M. DION : Moi non plus.

1267   CONSEILLER ARPIN : ...pour savoir si vous étiez contre ou pour, mais les télédiffuseurs à l'audience de '98 étaient tous contre l'établissement d'un pourcentage des revenus à la programmation canadienne, et je ne peux pas parler de TVA pour une entité parce que je l'ignore. Mais aujourd'hui... d'ailleurs, on a entendu CTV ce matin reparler des mérites de cette règle-là.

1268   M. DION : Mais, Monsieur Arpin, je ne veux pas parler de '99 pour deux raisons : un, je n'étais pas là, puis, deux, les gens du temps savaient qu'est-ce que les besoins du temps exigeaient, mais 10 ans après, la planète a changé. Donc, il faut juste...

1269   CONSEILLER ARPIN : C'est pour ça qu'on tient des audiences.

1270   M. DION : Pardon?

1271   CONSEILLER ARPIN : C'est pour ça qu'on est en audience.

1272   M. DION : Je suis d'accord, et c'est pour ça que je vous répète depuis plusieurs reprises que le marché a changé et je suggère que l'on puisse adapter ces engagements-là, basé sur la nouvelle réalité du marché.

1273   Et moi, j'estime qu'un pourcentage de nos dépenses, qui va bien au-delà du 50 pour cent, d'ailleurs, est un engagement, je crois, qui est un engagement, je pense, plus que suffisant, surtout quand vous voyez que -- excusez-moi le terme -- mais notre track record le prouve.

1274   Et comme on a dit tout à l'heure, on pourrait se donner une période de trois ans pour que vous puissiez justement voir si on est dans ces engagements-là, mais on vous demande plus de flexibilité parce qu'on doit vivre avec plusieurs plateformes maintenant, puis j'aimerais ça mettre mes gens sur d'autres projets que faire des rapports.

1275   M. TRÉPANIER : Monsieur le Vice-Président, on n'a pas dit que votre travail était facile, et...

1276   CONSEILLER ARPIN : Je ne demande pas des félicitations ou quoi que ce soit.

1277   M. TRÉPANIER : Non, non, ce n'est pas dans ce sens-là que je...

1278   CONSEILLER ARPIN : Je m'en donne à moi-même.

--- Laughter

1279   CONSEILLER ARPIN : Écoutez, je pense qu'il y a une question de temps aussi là qui est associée à votre présence, puis je voudrais bien que mon collègue Menzies ait l'occasion de parler de Sun TV et de la télévision de langue anglaise.

1280   Au niveau de la production indépendante, vous nous dites que vous voulez être libéré de tous quotas, vous nous dites, bon, on va continuer quand même à en faire avec eux, et vous nous proposez le dépôt d'un rapport annuel.

1281   Ça contiendrait quoi ce rapport annuel-là?

1282   M. DION : Au niveau de la production indépendante?


1284   M. DION : Bien, c'est un rapport sur... on peut très bien vous faire un rapport sur la réalité de ce qui s'est passé, c'est-à-dire combien de productions on a fait, avec qui, et caetera.

1285   Donc, dans le fond, le message qu'on envoie, c'est de dire deux choses.

1286   Encore là, faites-nous confiance à l'effet que -- et on l'a dit dans l'énoncé du départ, dans l'allocution du départ -- ça ne serait pas dans l'intérêt de TVA de laisser les bonnes idées à la compétition.

1287   Donc, ceci étant dit, si on a des partenaires producteurs qui comprennent bien nos réalités, qui ont des bonnes idées, c'est certain que TVA va faire affaire avec ces producteurs-là, et je pense que le futur vous démontrera qu'on ne veut pas avoir 100 pour cent de la production dans les deux-trois prochaines années fait à TVA. On veut continuer à faire affaire avec la production indépendante, et puis, on pourra déterminer le type de rapport qui est nécessaire pour démontrer ça.

1288   Mais je pense que c'était tout simplement un énoncé pour démontrer qu'on pourrait se -- encore là, toujours dans la période test de trois ans -- se parler éventuellement dans trois ans pour voir est-ce que TVA continue à faire affaire avec la production indépendante, et la réponse va être oui parce qu'on n'a pas le monopole des bonnes idées, et on pense qu'ils ont un apport important qu'on veut continuer à maximiser dans les nouvelles conditions d'aujourd'hui.

1289   CONSEILLER ARPIN : Maintenant, dans un contexte de propriétés croisées où Quebecor est présent dans différentes facettes de la radiodiffusion et de la production -- et vous possédez des studios, d'ailleurs, une des seules entreprises qui a encore des studios de production -- quelle sorte de balises est-ce que le Conseil pourrait mettre en place qui feraient en sorte qu'il pourrait s'assurer que ce que vous dites, vous allez le faire?

1290   M. DION : Je ne suis pas certain de comprendre le rapport avec Quebecor, par contre. Les studios sont à TVA.

1291   CONSEILLER ARPIN : Non, non, non. Mais je veux dire, Quebecor est présent dans la distribution de la musique. Donc, c'est une entreprise intégrée, Quebecor. La seule composante qu'elle n'a pas pour l'instant, mais elle en a une via TVA, parce qu'il y a Productions TVA qui est une boîte de production.

1292   On sait que le ministre a dit que le Fonds canadien des médias permettra le financement des productions faites par les entreprises affiliées aux diffuseurs.

1293   Donc, dans ce contexte général là ou d'une présence de Quebecor sur l'ensemble de tous les cycles reliés à la production culturelle, quelle sorte de balises le Conseil devrait considérer pour garantir ou faire en sorte qu'il continuerait à faire appel à la production indépendante pour ce qu'elle est et non sous forme d'un sous-traitant?

1294   Parce que j'ai souvent entendu monsieur Péladeau dire que, effectivement, idéalement, vous voudriez être détenteur de l'ensemble des droits et que vous utiliseriez le secteur de la production indépendante comme des sous-traitants ou comme des partenaires dans la mesure où ils feraient aussi des investissements dans la production.

1295   Mais j'essaie de voir quelle sorte de balises qu'on peut penser à mettre en place pour s'assurer que le secteur de la production indépendante ne se sclérosera pas, parce que c'est vrai qu'aujourd'hui, il est peut-être générateur de grandes idées qui font le succès de Groupe TVA, mais si vous les traitez exclusivement comme des sous-traitants, peut-être que les meilleurs idéateurs iront faire d'autres choses.

1296   M. DION : Plusieurs réponses à ce que vous dites parce qu'il y a trois-quatre sujets différents dans votre intervention, puis je veux les toucher.

1297   Premièrement, je pense qu'il ne devrait pas y avoir de balises comme telles, puis je vais vous expliquer pourquoi.

1298   La première partie de ma réponse se situe peut-être au niveau de clarifier. J'ai un peu de difficulté à comprendre encore pourquoi on amène Quebecor dans la production télévisuelle.

1299   Groupe TVA... effectivement, si on parle Groupe TVA, société publique avec actionnaires minoritaires et autres, a une responsabilité d'avoir une profitabilité et un modèle d'affaires qui lui permet d'exploiter les différentes fenêtres de diffusion. Oui, il y a certaines de ces fenêtres de diffusion là qui sont, après ça, sur Quebecor, mais que ça soit Quebecor ou un autre, moi comme société, j'ai la responsabilité de suivre le consommateur partout sur les plateformes de diffusion.

1300   CONSEILLER ARPIN : Le VOD, par exemple, est sur Archambault, hein?

1301   M. DION : Oui. J'arrive là.

1302   Donc, nous, on s'est dit, on ne peut plus, TVA -- je parle toujours de TVA -- ne peut plus être un simple diffuseur. On ne croit pas qu'il y a un avenir à une entreprise comme TVA d'être un simple diffuseur, et c'est pour ça qu'on s'est donné comme mission d'entreprise, voilà trois-quatre ans, d'être maintenant une entreprise de contenu.

1303   Donc, comme on pourrait dire en anglais, we have to go from a broadcasting company to a content company. On n'a pas le choix. Le broadcasting devient une commodité. Tout le monde sont des broadcasters maintenant. Google est un broadcaster. Les câblos peuvent devenir des broadcasters. Tout le monde peut être un broadcaster. Donc, on va devenir de plus en plus une commodité.

1304   Donc, on se doit de changer notre modèle d'affaires de créateur, producteur et fournisseur de contenu sur l'ensemble des plateformes de diffusion et amener nos annonceurs sur l'ensemble de ces plateformes-là, et c'est pour ça qu'on a créé TVA Créations et c'est pour ça qu'on a créé TVA Productions, qui sont dans Groupe TVA. Vous comprenez?

1305   Là, à ce moment-là, TVA lui, continue ce modèle hybride là de créer quelquefois du contenu à l'interne, mais aussi d'acheter avec la production indépendante, et je reviens sur la production indépendante dans quelques instants. Donc, on fait les deux.

1306   Ensuite, on se retrouve avec ce contenu-là, et encore là, le modèle ne fonctionne plus. On se fait fragmenter. Donc, on dit, si on est pour se faire fragmenter, on est aussi bien d'aller sur les plateformes de diffusion qui nous fragmentent, et c'est de là la stratégie d'exploiter le contenu sur l'ensemble des plateformes de diffusion.

1307   Si certaines de ces plateformes-là sont opérées par Quebecor, c'est correct, et il y a d'autres plateformes qui ne seront pas opérées par Quebecor, mais Groupe TVA voudra essayer de maximiser l'exploitation de ces contenus-là comme tels.

1308   Donc, je voulais juste faire la différence entre la stratégie de TVA d'avoir une maison de production versus, après, une autre stratégie qui consiste à aller exploiter le contenu comme tel.

1309   CONSEILLER ARPIN : Pour terminer, je vais avoir quelques questions rapides sur la transition numérique parce que je pense que les questions d'ententes commerciales cadres et puis la durée de la licence, vous les avez bien soit couvertes dans votre présentation orale ou déjà couvertes en réponse à des questions.

1310   Mais sur la transition numérique, les données qu'on possède, c'est qu'au Canada, il y aurait 9 pour cent des gens qui ne seraient pas abonnés à des services de distribution et que ça varie par marché. Vous avez dit, notamment, que votre souhait est d'avoir un système de transmission hertzienne à Montréal, Sherbrooke et Québec, et Trois-Rivières, Saguenay, Rimouski, pour vous, ça serait sur le modèle hybride dont il a déjà été fait état.

1311   Maintenant, si je prends uniquement, par exemple, le marché de Trois-Rivières où il y a une population qui, malheureusement pour les entreprises de distribution, n'est pas abonnée -- pour fin d'exemple, disons que c'est le 9 pour cent -- est-ce que vous savez combien il contribue d'heures d'écoute en termes de pourcentage au résultat de CHEM-FM?

1312   M. DION : Ce 9 pour cent là?


1314   M. DION : Je ne pourrais pas vous donner la réponse aujourd'hui.

1315   CONSEILLER ARPIN : Est-ce que c'est une donnée que vous êtes capable d'obtenir?

1316   M. DION : On va vérifier ça, certainement.

1317   CONSEILLER ARPIN : Et si vous êtes capable de l'obtenir pour Trois-Rivières, vous êtes capable de l'obtenir pour les autres marchés où vous êtes présent?

1318   M. DION : Si on est capable, effectivement, dans un marché, on devrait être capable dans les autres.

1319   CONSEILLER ARPIN : La raison pour laquelle je pose la question, c'est qu'on sait par... c'est Télé-Québec qui dit, ce 9 pour cent là contribue 22 pour cent de mes heures d'écoute.

1320   M. DION : M'hmm.

1321   CONSEILLER ARPIN : Évidemment, ils sont captifs. Ils n'ont pas... ils sont moins fragmentés que les autres, et selon Télé-Québec, à tout le moins, ils consommeraient davantage de télévision que les abonnés des entreprises de distribution. Parce que c'est une donnée qui n'est pas sans intérêt. S'ils contribuent significativement à vos heures d'écoute, donc, cet auditoire-là fait partie de votre succès.

1322   M. DION : On va vous revenir.

1323   CONSEILLER ARPIN : L'autre question que j'ai, je l'ai abordée ce matin avec les gens de CTV. Vous avez fait partie du groupe de travail sur la transmission numérique et vous avez été un partenaire aussi dans toutes les études qui ont été faites de télévision numérique depuis que ce sujet-là est en discussion.

1324   Est-ce que vous avez regardé réellement la question de la transmission en SD plutôt qu'en HD? Parce qu'on sait que cette technologie-là permet de diffuser quatre signaux.

1325   Or, je prends Trois-Rivières encore à titre d'exemple. Donc, vous pourriez avoir la station affiliée à TQS, la station affiliée à Radio-Canada, la station de TVA et Télé-Québec pour vous partager une même infrastructure, qui aurait les mêmes caractéristiques de couverture et qui serait à moindre coût que de s'implanter individuellement, qui est la proposition que vous regardez depuis des années.

1326   Or, cette technologie-là, on le voit, d'ailleurs, aux États-Unis, il y a des stations qui se sont implantées uniquement en SD aux États-Unis, plutôt qu'en HD. Et là, moi, je parle ici d'une hypothèse de regroupement de tous les diffuseurs, qui auraient une couverture égale, et dans l'objectif uniquement de rejoindre ce 9 pour cent là, puisque vous le faites déjà.

1327   Votre signal de la station locale, l'entreprise de distribution de Trois-Rivières ou de Cap-de-la-Madeleine ne vous reçoit pas off air. Elle vous reçoit par... il y a un lien de fibre optique qui va de votre régie centrale à leur tête de ligne. Je ne dis pas de couper ce câble-là.

1328   Donc, j'essaie de voir s'il n'y a pas des opportunités pour vous de regarder une solution qui permettrait de rejoindre ces téléspectateurs qui n'ont pas l'intérêt ou les moyens de passer à un système de distribution.

1329   C'est une suggestion gratuite que je propose et pour laquelle je ne demande pas nécessairement de réponse parce que je sais que ce ne sont pas des hypothèses qui ont été regardées.

1330   M. LAMPRON : Je peux quand même très rapidement vous dire qu'à l'époque, on a beaucoup étudié les systèmes européens de la télévision numérique terrestre, en particulier en Angleterre et en France, où il y a une solution, donc, qui a été implantée de distribuer par voie terrestre, donc, un peu à partir de technologies qui permettaient de regrouper sur une même antenne le même genre de choses, et ça s'est avéré qu'ici, technologiquement, mais aussi à cause de la nature des rapports entre les diffuseurs, c'est une hypothèse qui s'est avérée difficile à réaliser.

1331   Ensuite, on a évoqué un peu...

1332   CONSEILLER ARPIN : Mais ça, c'est avant que tout le monde connaisse la date fatidique du 31 août 2011?

1333   M. LAMPRON : Oui, ou pendant. Il y avait cette chose-là parce que ça apparaissait à première vue, effectivement, une solution qui est intéressante. Mais l'hypothèse d'y aller avec la formule que vous avez n'a jamais, effectivement, été étudié parce que dès le point de départ, il y a eu une prémisse, si vous voulez, une hypothèse de travail où ils disaient qu'il n'y avait pas d'avantage à y aller par diffusion terrestre peu importe d'où. Le groupe de travail ne l'a pas étudié.

1334   CONSEILLER ARPIN : Alors, ça complète mes questions, Monsieur le Président.

1335   LE PRÉSIDENT : O.K.

1336   M. DION : Je voudrais peut-être juste rajouter, par contre, qu'à moyen et long terme, tout le monde va vouloir être en HD. Je vous ai entendu ce matin dire, bon, les gens n'ont pas de téléviseur HD à la maison. Je ne suis pas certain. Dans quelques années, avec les technologies qui existent aujourd'hui, ça va être très facile d'avoir un téléviseur HD.

1337   Donc, est-ce qu'on veut mettre cette structure-là en place en sachant que ça serait à très, très court terme d'avoir une diffusion SD numérique et non HD? Donc, c'est un facteur important qu'il va falloir regarder en regardant l'option que vous soumettez ce matin.

1338   LE PRÉSIDENT : Monsieur Dion, vous aurez la chance de faire des commentaires sur la suggestion de monsieur Arpin.

1339   Maintenant, on va prendre une pause de 10 minutes, et après ça, on commence avec Conseiller Menzies.

1340   I want to mention that while we were talking here, Commissioner Menzies was appointed a full-time Member of the Commission. So he will address you in his new function as a full-time Member of the Commission.

--- Laughter

1341   MR. TRÉPANIER: Congratulations.


--- Upon recessing at 1550

--- Upon resuming at 1602

1343   THE CHAIRPERSON: Okay. Peter, you have some questions?

1344   COMMISSIONER MENZIES: I have some questions. I do. Just for a little bit of background in context for me. Can you explain why you don't produce any news?

1345   MR. NELLIS: When TVA purchased the original Toronto one, they purchased the licence commitments, the conditions of licence and we have simply continued those commitments and news was not a part of it.

1346   It wasn't that we couldn't do it, it was that we just have never been granted one.

1347   COMMISSIONER MENZIES: Yes. That's fine. It's just a different -- just a different strategic decision. Is that right?

1348   MR. NELLIS: That's correct, on the part of the previous owner.

1349   COMMISSIONER MENZIES: Okay. How many -- how big is your operation? How many employees do you have?

1350   MR. NELLIS: Seventy-two (72).

1351   COMMISSIONER MENZIES: Thanks. Now, what I would like to do is go into your position on -- what do you think of the suggestion that an industry-wide local programming requirement should be established?

1352   MR. NELLIS: Commissioner, that's really an issue that quite frankly we have not spent a great deal of time on and the only reason for that is because being located in a market that is of a magnitude of Toronto, it really did not apply to us and so, we did not spend a great deal of time on that.

1353   COMMISSIONER MENZIES: So, how does that work with a market being the size of Toronto? How does that -- does it make it unnecessary or does it make it --

1354   MR. NELLIS: Well, I think the LPIF was for markets under a million and the Toronto --

1355   COMMISSIONER MENZIES: Excuse me; what I meant was that to be a requirement on you for a certain local programming, as opposed to just Canadian content and that that be industry-wide? That's what I was getting at, not in terms of the LPIF?

1356   MR. NELLIS: We currently have a requirement for local programming.


1358   MR. NELLIS: And we abide within that requirement.

1359   COMMISSIONER MENZIES: But what about having something that's industry-wide? Do you have a point of view on that? You don't have to.

1360   MR. NELLIS: Yes. I think different markets, different stations and we're sort of getting into next week's licence renewal process I guess, in terms of some of those issues, but I would have to say that every market has a different dynamic and one brush might not be the answer.

1361   COMMISSIONER MENZIES: Okay. Thank you. Some of the Broadcasting Act objectives are social and I need to get a better sense of where you see yourselves fitting within that.

1362   Where do you see yourselves? What role do you see fulfilling -- some TV fulfilling within the Broadcasting Act social objectives?

1363   MR. NELLIS: Well, Commissioner, we're a convention television station, as you know, and unlike specialty services which may service a community of interest, I think a conventional television station services a community. And in order to do so with some sort of financial legitimacy, one has to review a mixture of programming, some of which may be for and acquired and some of which may be local, but I think you can only enhance your position, your relevancy, by doing more in a way of local programming and that's why we try to do and, thereby, make yourself relevant to the community.

1364   We are not a jukebox, we live in Toronto and our signal is carried across Southern Ontario. So, we feel that we need to be relevant to the communities we serve.

1365   COMMISSIONER MENZIES: So, how does that segue into your view on the Local Programming Improvement Fund, LPIF?

1366   MR. NELLIS: Well, if we were eligible to take on funding and put it into Canadian programming, that's certainly something we would consider. We certainly -- you know, we're a struggling television station as you probably know right now, so we have to be mindful of those financials.

1367   But we certainly are well aware of the fact that our long term position is only enhanced by continuing to try and spend against the markets we serve. So, local programming is very much part of that and so, if we had funding that we could access that was going to enhance our position, then I think that's something that we would find desirable.

1368   COMMISSIONER MENZIES: So, what adjustments would have to take place to the current proposal to make it work for you? I mean, if the aim of the fund is to increase the local relevance of conventional television and the localness of it, that, as you indicated, is your aim to, where is the road block in you being able to access that and how would you like to see a change so that you could access it?

1369   MR. NELLIS: Well, that's something I wouldn't mind spending a little bit of time on this week and coming back with perhaps a little more researched answer next week as currently we can't access those funds, so it's not -- it's really not something that we've given a great deal of thought to.

1370   COMMISSIONER MENZIES: Maybe the shape of it is something that's for discussion this week.

1371   MR. NELLIS: Absolutely.

1372   COMMISSIONER MENZIES: Okay. Thank you.

1373   LE PRÉSIDENT: Louise, tu as des questions?

1374   CONSEILLÈRE POIRIER: Oui. J'aurais des questions pour le Groupe là, quelques questions. Dans un premier temps, le président, ce matin, a remis des documents sur le fee-for-carriage and pack analysis. On aimerait, bien sûr, avoir de votre point de vue une réaction sur ce document-là, de la même façon qu'on l'a demandé à CTV, pour savoir si on parle des mêmes chiffres quand on parle du fee-for-carriage, d'après votre point de vue parce que je pense que vous aimeriez aussi obtenir un fee-for-carriage.

1375   Alors, il serait important d'avoir votre point de vue. Est-ce que vous allez être à même de pouvoir nous revenir là-dessus, sur les chiffres présentés?

1376   M. DION: Oui, absolument.

1377   CONSEILLÈRE POIRIER: Merci beaucoup. Dans ce document-là, en plus, on parle toujours dans le Fonds. Je vais d'abord poser une question un peu plus philosophique puis ensuite on ira un peu dans le document qui vous a été présenté par le président.

1378   Pour le Fonds d'amélioration de la programmation locale, vous parlez de performance comme outil d'évaluation de ce Fonds-là et vous mentionnez dans votre document l'auditoire, la publicité et d'autres éléments. Donc, vous voulez que ce Fonds-là aide ceux qui vont bien. C'est ça?

1379   M. DION: Bien, comme j'ai dit tout à l'heure, parce qu'on a des réalités différentes entre différents joueurs, on est condamné à livrer des émissions qui vont faire au moins 25, 30 pour cent de parts de marché, donc juste par ce fait-là on a des réalités au niveau des dépenses d'une émission différente que nos autres collègues dans l'industrie.

1380   CONSEILLÈRE POIRIER: Oui. Mais est-ce que quand on a comme optique la diversité des voix, quand on a comme optique l'équité. Quand on veut aussi se reposer sur les forces du marché, est-ce qu'un fonds ne doit pas trouver un juste équilibre pour autant aider les plus petits que les plus forts avec des critères qui seraient plus équilibrés que ceux que vous proposez?

1381   M. DION: Oui, mais à ce moment-là, le modèle pour nous, il ne devient pas intéressant parce que je vais changer un dollar pour 0,50 $. Donc, on a une responsabilité naturellement commerciale envers nos actionnaires, donc quelque part on n'a pas le choix de dire, oui, si un programme existe, il faut que ça vienne améliorer la situation de TVA et non détériorer la situation de TVA.

1382   CONSEILLÈRE POIRIER: Par contre, vous avez... vous faites affaires avec des affiliés; c'est-à-dire qu'il y a RNCMédia, il y a Télé-Interive qui, eux, sont en accord avec le Fonds, tel qu'on l'a présenté parce que ça répond à leurs objectifs de développement de la nouvelle.

1383   Qu'est-ce que vous en pensez? Est-ce qu'aider ceux avec qui vous êtes affilié n'est-ce pas aussi vous aider, vous, TVA, à être présent, entre autres, dans l'ouest avec RNCMédia et plus dans l'est avec Télé-Interive qui, eux disent, bravo pour cette initiative-là et ce fonds-là?

1384   M. DION: Bien, je vais un petit peu répéter le même message. Je pense que ce n'est pas à travers le fonds local qu'on va résoudre le problème de la télévision généraliste. Je persiste à faire ce commentaire-là et, là, ce qu'on a dit, c'est s'il est pour y avoir un fonds local, bien à ce moment-là nous on pense que c'est des critères qu'on a soumis.

1385   Est-ce que ces critères-là iraient à l'encontre de ce que Radionord et monsieur Simard aimeraient? Je ne crois pas parce que je pense que, au contraire, ça pourrait avantager nos affiliés de voir qu'on va être capable d'avoir accès à notre part de gâteau encore là qui fait qu'on est condamné à un certain nombre de parts de marché, parce qu'il ne faut pas oublier que je n'ai rien contre, au contraire, d'avoir de la diffusion, de la production et diffusion locale, mais si je fais un trade-off en perdant des parts de marché, je pense qu'à la longue, sur le long terme, le diffuseur associé affilié ne sera pas content lui non plus parce que la station-mère va connaître de plus en plus de difficultés et il va y avoir des répercussions directes et indirectes, qu'il y a un effet domino, là, qui va s'ensuivre très peu de temps après.

1386   CONSEILLÈRE POIRIER: Hum-hum! On leur demandera demain.

1387   M. DION: Donc, on a tous... on a tous raison, la mère et les stations affiliées, d'être dans une solution gagnant-gagnant. C'est ce qu'on vit à tous les jours.

1388   CONSEILLÈRE POIRIER: Oui. Mais pour eux, en tout cas, la solution semble gagnante. En tout cas, vous écouterez demain, ils viennent nous rencontrer puis je pourrai leur poser la question à savoir comment ils jugent vos critères par rapport à leurs besoins.

1389   Dans les papiers aussi qui ont été présentés par le président ce matin, pour le Groupe TVA, il y aurait avec un pour cent de demandé aux entreprises de distribution un $6 millions.

1390   Est-ce que vous avez un plan d'investissement pour ce $6 millions-là parce que, outre le marché de Montréal, vous avez accès pour l'ensemble de vos autres stations à cet argent-là, si je comprends bien?

1391   M. DION: Non, on n'a pas de plan présentement parce qu'on attend de voir, premièrement, est-ce qu'il y aura un fonds? Et, deuxièmement, quels seront les critères de ce fonds-là et, le cas échéant, bien à ce moment-là, il va falloir regarder par rapport à notre stratégie de programmation globale comment ça s'insère dans cette stratégie-là, parce que, encore là, pour nous, aussi petit que la part de marché peut être, à la baisse ou à la hausse, ça a un impact incroyable sur nos revenus et nos dépenses.

1392   Et aussi, il ne faut pas oublier qu'une bonne, une mauvaise émission, ou des parts de marché à la baisse pour une émission a aussi un effet domino pour le reste de la grille. Donc, il va falloir voir à quel moment de la journée qu'on pourrait amener quelle et quelle émission. Donc, il y a beaucoup de variables qu'on va devoir regarder.

1393   Et, en plus, vous savez qu'on a soumis que ce fonds-là ne devrait pas être pour de la... seulement pour de la programmation supplémentaire, pour de la production supplémentaire. Ça devrait être utilisable à partir du dollar zéro parce que je pense que ce qui est important avant tout c'est qu'on soit capable de maintenir au moins les émissions qu'on a à l'heure actuelle et je pense, entre autres, dans notre cas à Salut Bonjour Week-end qui est produit à Québec.

1394   À ce moment-là, je pense que l'objectif du fonds local devrait être aussi de nous permettre d'améliorer encore plus la qualité d'un Salut Bonjour Week-end qui est une émission forte. Donc, je ne pense pas qu'on devrait utiliser ça seulement pour de la production supplémentaire parce que vous allez, en faisant ça, ce qui semble pour vous être un objectif de nous aider, ça va créer l'effet contraire.

1395   CONSEILLÈRE POIRIER: Donc, si vous...

1396   M. DION: Si c'est seulement de la production supplémentaire.

1397   CONSEILLÈRE POIRIER: Parfait. Donc, s'il y a un fonds comme celui-là qui est créé, vous souhaitez que ça ne soit pas uniquement pour la quantité, mais pour la qualité?

1398   M. DION: Exactement. Et également sur du contenu existant, amélioration de contenu existant ou production supplémentaire.

1399   CONSEILLÈRE POIRIER: Je ne vous ai pas entendu vous prononcer sur la possibilité que ce fonds-là aille chercher deux pour cent au lieu du un pour cent et CTV est allé même jusqu'à trois pour cent aujourd'hui.

1400   Alors, j'aimerais avoir votre point de vue là-dessus?

1401   M. DION: Bien, nous, on pense que ça devrait être zéro pour cent, donc c'est pour ça que vous ne m'avez pas entendu parce que, encore là, et je ne le répéterai pas, parce que je pense que vous connaissez mon point de vue à cet effet-là.

1402   CONSEILLÈRE POIRIER: Parfait. Le but c'était de l'entendre définitivement.

1403   Un sujet, celui de la production indépendante. En supposant... tantôt, vous nous avez dit que la question semblait bien se régler avec les producteurs. Vous êtes optimiste. Vous avez parlé de l'UDA et du cas par cas qui se règle assez bien et vous souhaitez qu'on n'intervienne pas dans ça, mais qu'on laisse aller.

1404   Vous savez que la production indépendante, c'est aussi la diversité des voix. C'est aussi une entreprise, c'est de l'argent, une économie locale qui est importante et vous en utilisez une bonne proportion. J'écoutais, entre autres, Destination Nord-Ouest qui est diffusé chez vous le jeudi soir et qui est fait ici dans la région d'Ottawa, donc qui est produite ici.

1405   Est-ce que, en supposant que la question des droits se règle, est-ce qu'il n'y a pas un peu moins d'enjeu du côté des règles que nous avons établies pour la production indépendante?

1406   M. DION: Non. Il reste que... j'avais nommé trois composantes tout à l'heure : production indépendante, l'UDA et le nouveau Fonds des médias du Canada. On a beaucoup beaucoup d'espoir que le Fonds des médias du Canada puisse finalement répondre aux préoccupations qu'on avait avec l'ancien fonds... le Fonds canadien de a télévision.

1407   Et pour ne pas les nommer, on a parlé des structures de financement, comment on est capable de structurer le financement d'une émission. Il y avait très peu de flexibilité avec le Fonds canadien de la télévision.

1408   Ensuite de ça, il y avait l'obligation pour nous de passer automatiquement, je pense que 16 de nos $17 millions qu'on recevait du Fonds canadien devait passer par la production indépendante. Là, il semble y avoir une plus grande flexibilité de ce côté-là.

1409   Et, ensuite, il y avait les droits d'exploitation parce que les producteurs indépendants devenaient automatiquement propriétaires des droits d'exploitation. Donc, plusieurs problématiques dans l'ancien fonds, on espère que ça va se régler avec le nouveau fonds.

1410   Ceci dit, on a... au niveau de... vous me parlez de la diversité des voix et de l'argent que ça met dans l'économie, production pour production, je suis un producteur associé ou à la production indépendante, on a effectivement les mêmes avantages. Nous aussi, si on fait une émission comme Occupation Double à l'interne ou une émission comme la Classe de 5ième, ça met autant d'argent dans l'économie qu'une production indépendante.

1411   Donc, je ne pense pas que l'un ou l'autre crée plus ou moins d'argent dans l'économie hein! Il faut engager, nous autres, des concepteurs, des scripteurs, des producteurs, des réalisateurs, et caetera, et caetera. Et par ce fait même là, effectivement, on crée la diversité aussi parce qu'on engage, nous, des pigistes, on engage des gens du milieu qui créent ou qui conçoivent certaines émissions.

1412   Donc, par le fait même d'aller chercher ces ressources externes là, bien c'est toutes les idées de diversification qui sont amenés à l'intérieur de la boîte comme telle. Donc, je pense que dans les deux cas on répond exactement à ces préoccupations-là comme telles.

1413   Pourquoi le faire à l'interne versus l'externe, c'est du cas par cas et comme j'ai dit, nous autres on favoriser un modèle hybride qu'on va maximiser le meilleur des deux mondes.

1414   CONSEILLÈRE POIRIER: Monsieur le président, j'ai une dernière question. C'est celle qui est relative à la transition numérique. Vous dites que 50 pour cent de votre auditoire est hors Montréal?

1415   M. DION: Montréal.

1416   CONSEILLÈRE POIRIER: Vous voulez mettre des émetteurs numériques à Montréal, Sherbrooke, Québec et vos affiliés vont en mettre, eux, dans l'est, dans l'ouest du Québec. Dans le fond, il vous reste juste le Saguenay, Trois-Rivières et Rimouski.

1417   M. DION: Hum-hum!

1418   CONSEILLÈRE POIRIER: Est-ce que vous avez évalué les coûts pour mettre des émetteurs numériques dans ces trois villes-là et est-ce que ça ne vaudrait pas la peine, considérant que même si ça ne reflète que... bien, on va dire, entre neuf et sept pour cent du marché, n'empêche qu'il y a beaucoup de foyers qui ont aussi un deuxième téléviseur qui n'est pas toujours branché et que ça permettrait aussi de maintenir la télévision gratuite pour beaucoup de gens?

1419   M. DION: On va vous revenir la semaine prochaine avec les pénétrations aussi dans ces marchés-là au niveau... parce qu'on parle beaucoup du sept neuf pour cent, moi j'ai vu dans ces territoires-là des chiffres et je ne veux pas garantir quelque chose, là, mais j'ai vu des chiffres aussi très bas, là, mais on va vous revenir avec les chiffres de pénétration d'écoute, tel que monsieur Arpin a mentionné et aussi d'investissements, combien c'est.

1420   CONSEILLÈRE POIRIER: Les coûts d'investissements, c'est ce que j'aimerais obtenir.

1421   M. DION: D'investissements, on va vous revenir avec ça. Merci.

1422   CONSEILLÈRE POIRIER: C'est tout, monsieur le président.

1423   LE PRÉSIDENT: Merci. Ce sont nos questions pour vous. Je suis bien heureux que madame Poirier vous a demandé de donner vos propres commentaires sur le fee-for-carriage parce que c'est essentiel que nous ayons tous la même compréhension sur ce que ça signifie.

1424   Merci. Madame la secrétaire, je crois que c'est tout pour aujourd'hui, n'est-ce pas?

1425   THE SECRETARY: It is. The hearing is adjourned and we'll start over at 900 a.m. tomorrow. I am sorry, Legal has something.

1426   Mme DIONNE: Je m'excuse. Oui, j'ai des engagements à clarifier.

1427   LE PRÉSIDENT: O.k.

1428   Mme DIONNE: J'en ai noté quatre. Le nombre d'heures de programmation locale proposée pour chaque station advenant un renouvellement de deux ans.

1429   Il fut mentionné que neuf pour cent des téléspectateurs reçoivent le signal de service de télévision en direct seulement. De ce pourcentage, fournir ce qui représente votre part d'audience.

1430   Troisièmement, fournir vos commentaires sur les chiffres présentés par le président ce matin et déposés au dossier public par rapport aux frais de distribution et, quatrièmement, la pénétration d'écoute et les coûts d'investissements pour la transition au numérique.

1431   Merci.

1432   LE PRÉSIDENT: Merci. Et à quelle heure ça commence demain matin?

1433   LA SECRÉTAIRE: Neuf heures demain matin. L'audience est donc ajournée pour aujourd'hui. Merci.

--- Whereupon the hearing adjourned at 1620, to resume on Monday, April 28, 2009 at 0900


____________________      ____________________

Johanne Morin         Monique Mahoney

____________________      ____________________

Beverley Dillabough      Madeleine Matte

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