ARCHIVED - Transcript, Hearing 11 April 2011
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Volume 6, 11 April 2011
TRANSCRIPT OF PROCEEDINGS BEFORE THE CANADIAN RADIO-TELEVISION AND TELECOMMUNICATIONS COMMISSION
To consider the broadcasting applications for the group-based licence renewals for English-language television groups listed in Broadcasting Notice of Consultation CRTC 2010-952, 2010-952-1, 2010-952-2 and 2010-952-3
140 Promenade du Portage
In order to meet the requirements of the Official Languages Act, transcripts of proceedings before the Commission will be bilingual as to their covers, the listing of the CRTC members and staff attending the public hearings, and the Table of Contents.
However, the aforementioned publication is the recorded verbatim transcript and, as such, is taped and transcribed in either of the official languages, depending on the language spoken by the participant at the public hearing.
Canadian Radio-television and Telecommunications Commission
To consider the broadcasting applications for the group-based licence renewals for English-language television groups listed in Broadcasting Notice of Consultation CRTC 2010-952, 2010-952-1, 2010-952-2 and 2010-952-3
Konrad von Finckenstein Chairperson
Leonard Katz Commissioner
Rita Cugini Commissioner
Suzanne Lamarre Commissioner
Peter Menzies Commissioner
Tom Pentefountas Commissioner
Stephen Simpson Commissioner
Jade Roy Secretary
Joshua Dougherty Legal Counsel
Sheehan Carter Hearing Manager
140 Promenade du Portage
April 11, 2011
- iv -
TABLE OF CONTENTS
PAGE / PARA
Communications, Energy and Paperworkers Union of Canada 919 / 5479
Friends of Canadian Broadcasting 957 / 5727
Score Media Inc. 976 / 5852
Greedy Productions 1005 / 6039
Children's Breakfast Club 1009 / 6056
Winnipeg Harvest 1013 / 6076
Ice On Whyte Festival 1016 / 6095
Hockey Calgary 1020 / 6115
Canadian Conference of the Arts 1049 / 6303
CACTUS 1084 / 6502
- vi -
PAGE / PARA
Undertaking 939 / 5601
Undertaking 955 / 5702
Undertaking 956 / 5712
--- Upon commencing on Monday, April 11, 2011 at 0900
5474 THE CHAIRPERSON: Okay, Madame la Secrétaire, commençons.
5475 THE SECRETARY: Thank you.
5476 We will now begin with the presentation by Communications, Energy and Paperworkers Union of Canada.
5477 Please introduce yourself, after which you have 10 minutes for your presentation.
5478 Thank you.
5479 MR. MURDOCH: Thank you, Madam Secretary.
5480 For the record,l I am Peter Murdoch, CEP's Vice-President, Media. With me today is Monica Auer, our legal counsel in this matter.
5481 CEP is Canada's largest communication union, representing thousands of people in communities across the country who work at radio and TV stations, specialty services, newspapers and magazines, cable systems and telcos.
5482 We are pleased to be here to advocate for the growth and prosperity of Canada's local TV stations. We begin with a brief review of the current state of local TV, we then discuss the applications before you and set out our recommendations. We conclude with a comment on process.
5483 That local TV exists at all today is because the CRTC set COLs for weekly hours of original local news and created the LPIF. We applaud those initiatives.
5484 But there has been virtually no evidence about local TV in this hearing. How many TV stations have their own master control studios; how much central casting exists; how many original hours of local news does each station air; how many reporters work in local TV news; how many TV news bureaus remain and where are they?
5485 None of the broadcasters at this hearing has offered Canadians these basic facts essential to measuring diversity of voices.
5486 Assessing the broadcaster's plans without evidence has been extremely difficult. We do know that thousands of broadcasting jobs have been lost in the last decade. We also know that since the 2001 renewals private over-the-air TV stations have reduced their staff by 12 percent.
5487 Fortunately, Canada's economy is showing strong signs of recovery. Statistics Canada has reported that between January 2010 and 11 Canada's GDP grew by 3.1 percent in real terms. Three weeks ago the TD Bank forecast that Canada's economy will turn the page from recovery to expansion by early to mid-2012.
5488 TV ad sales have improved. In the U.S. revenues of major TV station groups grew by 27 percent over the last three months alone, with profit margins increasing by 10 percentage points. In Canada local TV managers are telling our members that their station's avails are being sold out. CEP's members support the success of Canada's private broadcasters. Sold out inventory is good news.
5489 We therefore welcomed the Rogers and CTV plans to invest $90 million in news over the next five years. We assume that most of this money will be allocated to local news, but ask you to clarify this when the companies reappear. Canadians need this clarification because in Vancouver for example, Canada's third largest city, Rogers' only local program is Breakfast TV and we understand that they have no news bureau in the provincial capital and Rogers simply uses some of CTV's TV footage.
5490 As for Shaw, last year it applied for and received your blessing to buy Canwest for $2 billion. Seven months ago it told you that one of the "key" public interest benefits of its purchase was that the Canwest stations comprising the conventional network will also continue to provide strong local programming in all the communities they serve across Canada. But whereas CTV and Rogers plan to add $90 million new dollars to their news budgets by 2016, Shaw plans to add nothing.
5491 This is not a simple private marketplace decision. If the CRTC accepts Shaw's claim that a zero growth budget will deliver "strong local programming" for five years, why would any rational broadcaster raise spending in any Canadian program category?
5492 Frankly, Shaw's economic forecast defy almost every credible analyst in the country.
5493 As for Shaw's tangible news benefits that CEP supported and supports, that money was promised in the context of an ownership transaction. It is not related to Shaw's renewal and will not be spent until mid-2012.
5494 Counting temporary tangible benefits in Shaw's renewal applications gives Shaw an undue, unreasonable and asymmetrical regulatory advantage over BCE and Rogers, which have committed to spent $90 million more on Canadian news, excluding the tangible benefits.
5495 The flip side of expenditures is exhibition. Since the last major round of long-term renewals we estimate the private English TV stations have cut local news hours by 37 percent, from 899 hours per week in 2002 to 565 hours in 2010. You approved these substantial cuts because of a dramatic shock to the world's economy.
5496 The current TV policy requires local English TV stations to carry 7 or 14 hours of local programming per week, 6 percent and 11 percent respectively of the regulated broadcast day.
5497 Meanwhile, 17 percent of these stations total income comes from local sales and an unknown amount comes from local BDU subscribers.
5498 As broadcasters' finances improve and LPIF revenues grow, it is only fair to ask broadcasters to begin to return what they removed.
5499 CEP has five recommendations.
5500 First, we ask that you re-establish the LPIF as a mechanism to support new and incremental local programs.
5501 While broadcasters claim that some stations are teetering, the Victoria and Hamilton examples show that TV stations focused on local news can be and are successful.
5502 Second, under the Broadcasting Act requirements for broadcasters may only be enforced by regulation or conditions of license.
5503 Expectations and commitments have no legal meaning and cannot be enforced. CEP recommends that weekly hours of original local news continue to be set as conditions of license for each TV station and that these hours increase over the license term as local ad revenues grow to at least 17 percent of the regulated broadcast week in large markets.
5504 Third, we ask you to require Shaw to spend more on local news over the license term outside of tangible benefits by increasing local program spending either in line with the previous years' local ad revenues, or by an average of the forecast annual growth in news expenditures of CTV and Rogers.
5505 Our fourth recommendation involves PNI. Dramas and sitcoms entertain Canadians, but private broadcasters have long been allowed to spend far more on foreign than on domestic content.
5506 While we understand the argument that foreign drama supports Canadian drama, the fact is that the gap between the two is growing. This gap must be closed, but not at the expense of non-PNI programming such as news; increases in PNI expenditures must come from foreign program spending.
5507 Fifth, we note that last Tuesday Corus described this proceeding as one of the most complex in CRTC history. We agree. If broadcasters with regulatory staff found this process difficult, Canadians in general likely found it impossible.
5508 CEP's major difficulty was in finding empirical evidence about the performance of and plans for individual TV services. We have serious concerns about the quality of the existing data on the record, particularly with respect to double counting and murky accounting practices.
5509 When you publish your determinations in this proceeding we urge you to provide clear details about broadcasters' expenditures and exhibition achievements and their plans for each TV service. Without these details it will be impossible for Canadians to hold broadcasters to account and will eliminate meaningful participation by non-broadcasters in the future.
5510 We also recommend that you provide Canadians with annual reports about individual stations -- Canadians -- exhibition and expenditures. How else can Canadians assess progress towards Parliament's section 3 objectives.
5511 Finally, Mr. Chairman, I would like to comment briefly about the process.
5512 In the past the CRTC examined broadcasters' performance and future plans in detail in full public view, offering some balance against the prohibition on intervenors cross-examining witnesses.
5513 The lack of useful data on the current public record has seriously restricted meaningful participation by non-broadcasters. Denying our request since 2007 for data on TV stations past financial performance, even when stations have closed, has turned a quasi-judicial hearing into a "We say/they say" theatre.
5514 We are concerned that discussing broadcasters' Canadian programming plans in camera transforms the most important part of the Act, section 3 mandate, into back room negotiations.
5515 Finally, given 10 minutes to address the past and future of more than 100 important programming services of three separate applicants diminishes intervenor's ability to participate effectively.
5516 To conclude, Mr. Chairman, CEP welcomes the commitment to local news and programming shown by some broadcasters. This is encouraging for all Canadians who rely on these programs.
5517 It is interesting to note, since this hearing is taking place when a federal election is in progress, how much Canadians rely on their local TV stations for local information and analysis of this process. Meeting their obligations to Canadian voters and to local communities is why TV stations must have reporters with feet in the street, not just during elections but before and after as well.
5518 We have appreciated the opportunity to appear before you, Mr. Chairman and Commissioners, and welcome the chance to answer your questions.
5519 Thank you.
5520 THE CHAIRPERSON: Thank you for your intervention.
5521 It wouldn't be complete if you didn't comment on process.
5522 MR. MURDOCH: I know.
5523 THE CHAIRPERSON: But I must say this time I really do not understand you.
5524 We are talking about how much -- there are basically three companies which dominate the landscape, you know that as well as I. They are fierce competitors among each other. How can I ask them to display publicly what they spend on programming in an open forum without doing them a commercial harm? I just don't know how to do it.
5525 MR. MURDOCH: Well, I will let Monica answer that, but let me just say we appreciate that there are certain things that just cannot be in a public domain for competitive reasons, financial reasons, I understand that, but there are a number of things, it seems to us, that can and should be in the public domain that are not there.
5526 So it's not a matter of a complete disagreement with your position here, Mr. Chairman, it's sort of the details.
5527 Monica, you might want to just...
5528 MS AUER: Thank you for your question, Mr. Chairman.
5529 As you know, Corus allowed its in camera session to be published in full on the public record. Apparently it believes that it won't suffer any harm at all from the disclosure of information such as the level of LPIF funding its getting or how much it is actually spending on local news today.
5530 The Commission in the past did do this kind of discussion in full public view. The Commission used to publish certain materials on pink paper, it would read the last number on a column of figures in order to ensure confidentiality of key financial data if such confidentiality were warranted. Thirdly, of course, the Copyright Board, which deals with exactly the same broadcasters, conducts all of its hearings in public, too.
5531 I guess our concern is simply that the more we have an in camera process the more I think intervenors in general, and certainly for a number of other groups such as ourselves, are less likely to be able to participate effectively.
5532 We simply don't know what is happening in public(sic), what is being said or how we can then challenge it quickly in reply. I might note that it is taking three days at least to get the in camera abridged sessions on the record in any event.
5533 THE CHAIRPERSON: But you have them now. That's why we publish the abridged one. That's exactly the point.
5534 You make the comparison to copyright hearing. I mean, come on, in a Copyright hearing everybody is in the same boat, it is exactly the question of how much you pay for showing programs. It's a different nature than here where you are talking about how much people invest in programming and their programming mix and which obviously this betrays their business strategy if you broke it down and shared it with the rest of the world.
5535 MS AUER: Well, as I said, Corus didn't seem to believe that.
5536 In any event, with the new process of publishing the aggregated annual returns we see the same data in any event within the following year.
5537 The question is, for a public hearing of this kind which is going to be determining the future for the next five years of broadcasting whether or not everybody will be on the same level playing field.
5538 MR. MURDOCH: I guess just one other point I might make -- and we sort of referenced it briefly with the double counting -- is for instance we don't know -- and I suspect you find out in the back rooms -- what does account for local ad revenue. Does a Home Depot ad that is going across the country that runs a little thing on the bottom saying "Go see the Home Depot on Baseline Road in Ottawa", does any of that money count for local advertising or is it all national advertising?
5539 How do they count? Because our view is not nearly enough is being counted as local revenue and what we are told by some of our members in sales is that it is going to national. But we are whistling in the dark here. We don't know what the numbers are.
5540 THE CHAIRPERSON: Isn't that what interrogatories are for? Can't you ask questions there: How do you define local programming and local ads, et cetera, if you take objection to it, if you think they are fudging around the edges in terms of accounting definitions, et cetera?
5541 MS AUER: If we had an interrogatory process on the broadcasting side we would be delighted. Perhaps that's something we can pursue in the future. As you know, we simply have the written intervention process and there is no onus on broadcasters to reply in full. Broadcasters at times have failed to respond to interveners at all and there has been no negative fallout so I'm not too sure why they believe they would have to reply.
5542 I guess one question I would have is, what has changed so dramatically from 1989 and 1995 that the process has to -- and 2001 -- that the process must now be conducted in part in camera.
5543 The same information was being discussed in 1989, 1995 and 2000. What has changed?
5544 THE CHAIRPERSON: Do I have to tell you? We have had a major consolidation in the industry, that we now have three players. We no longer have as many as we had then.
5545 MS AUER: I think I heard you once, Mr. Chairman, in the last year saying -- I'm sure you know just as well as your competitors exactly what they are doing.
5546 If the competitors already know basically what their competitors are doing the only people who are left out in the dark here are the other parties in the process and Canadians in general who won't be able to look at the public record necessarily as easily.
5547 THE CHAIRPERSON: But as a quasi-judicial tribunal I am required to respect a request for confidentiality.
5548 You know obviously it's not an unreasonable request, et cetera, and that's why we make this sort of point that we have granted in camera proceedings but we insist on a redacted transcript.
5549 Anyway, I think we answered.
5550 Mr. Murdoch, in paragraph 22 you say:
"You approved these substantial cuts because of a traumatic shock to the world's economy".
5551 When did we ever approve cuts to local programming?
5552 MS AUER: In the last three years you have approved substantial cuts. If you will recall, CTV came before you and proposed the 7 and 14 model but at that point stations were doing considerably more local programming than they are doing now.
5553 And those programming levels, of course, were not set by conditions of licence but tracking through the record you can find out just how much they did. They were doing several hundred hours more per week in total than they are now.
5554 THE CHAIRPERSON: That's a --
5555 MS AUER: Pardon me?
5556 THE CHAIRPERSON: You know you can't take one little aspect. We harmonized requirements across the board.
5557 We introduced the LPIF, et cetera, and we brought it on and far more local news than there was before. The fact there were some communities in which they may have produced more is as a result of this. If they produced less I don't know whether that's the case or not but to call that "approved substantial cuts" is putting it -- saying it -- at best telling half the story.
5558 I mean our efforts throughout the last two years have been to rescue local TV, to create LPIF, to impose equal obligations on small communities and large communities and making sure that -- I don't know how many decisions we have emphasized the need to make sure that local TV remains viable.
5559 So I take some exception to the fact that -- being accused here of cutting substantially local programming.
5560 MR. MURDOCH: To be fair, you know, we applaud -- I think you have demonstrated an interest in local news and local programming and done some things, the LPIF being a very good example to see what we can do to save some of this.
5561 I agree with that, Mr. Chairman.
5562 But what we have seen on the ground is, as a result of this concentration of ownership, as a result of this convergence, we have seen station after station reduce staff. I mean, that's just a fact -- that's a fact of life.
5563 THE CHAIRPERSON: I don't disagree with you there.
5564 You said that we approved it. That's my point -- we approved it.
5565 All I'm saying is that is the nature of -- the reaction of the TV companies to the substantial economic downturn has been to cut local programming, must to our dislike but that's --
5566 MR. MURDOCH: I will take your point.
5567 MS AUER: I guess the one thing I would say when you say that you have concerns about our saying that the Commission approved this, the broadcasters came forward with a specific level and, indeed, that was the level that was accepted.
5568 I'm unclear as to how else the Commission's actions should be described or portrayed. Broadcasters proposed something that was substantially less than they had before and it was accepted by the Commission.
5569 THE CHAIRPERSON: Sorry, let's agree to disagree. I don't see that at all.
5570 As I said, I saw us as harmonizing it and putting some order in it and establishing a floor and establishing decent financing so they would be guaranteed local programming. And lots of local stations have -- local programming has emerged since the introduction of LPIF which wasn't there before, you know.
5571 But anyway, lastly point five, the various data that you want, if you had that new data how would that help you?
5572 MR. MURDOCH: What paragraph?
5573 THE CHAIRPERSON: Paragraph 5. You say:
"But there has been virtually no evidence about local TV in this hearing."
5574 If you knew how many stations have their own master control and you knew that central casting exists, et cetera, all of those, how would that help you?
5575 MR. MURDOCH: We know, or we can take a guess by the way at some of the answers because we know what's happening at some of the stations but; (a) it becomes very difficult for us without this kind of information to make comparisons and to make argument without real data that we are all agreed on, not just something that comes from the union but something that comes from the Commission and Commission staff and it is agreed upon.
5576 That way we can make, it seems to me, rational arguments. I think the last thing that you want is, you know, rhetoric and rants.
5577 We want something that's measureable that we can manage and we can make some decisions about. So if we had the answers that were shared here in this room we would be able to then sort of discuss it more rationally, it seems.
5578 THE CHAIRPERSON: But all these are inputs. Surely you are interested in the output. You are interested in the amount of news programming, not whether they have a central casting or whether they have six reporters or five reporters?
5579 MR. MURDOCH: Well, to be fair, one has -- and I think over the years you have heard us express these concerns. Particularly we had some real problems in the old Global days where the central casting and the lack of master control in fact meant that there were less feet on the street, there were less reporters out there. Halifax was getting covered essentially from Calgary, et cetera, et cetera, et cetera.
5580 You heard these and we had members here, Mr. Chair, you will remember, telling you what was happening.
5581 So we were losing. We didn't have the same quality. We didn't have the same quantity of news programming as a result of some of these, some of these things.
5582 And what we were looking for then, and we are still looking for, is the data. We get the experience from our members. They tell us but we want information that you -- that we can share together and that we are agreed on.
5583 MS AUER: In fact, the Commission did use to report on the number of master controls in Canada province by province, so it was possible to determine which stations were actually specifically originating program on their own.
5584 If a station is no longer actually originating its own programming but transmitting it to a central station which then retransmits back, as a matter of law I would think that it would call into question what is the nature of an originating over-the-air -- if we want to call it still that -- TV station.
5585 THE CHAIRPERSON: You said we used to produce these numbers?
5586 MS AUER: Yes. Some time ago, but I do have copies.
5587 THE CHAIRPERSON: Thank you.
5588 Peter, you have got some questions?
5589 COMMISSIONER MENZIES: Thank you.
5590 You make a lot of good points.
5591 I will start at do you have any statistics on how many jobs were lost in the last two or three years --
5592 MS AUER: Yes.
5593 COMMISSIONER MENZIES: -- among your members in the areas under our jurisdictions?
5594 MR. MURDOCH: We do have. I will let Monica comment on those.
5595 Go ahead.
5596 MS AUER: Were you asking whether we collect broadcasting important lost data?
5597 COMMISSIONER MENZIES: Yes.
5598 MS AUER: Yes.
5599 COMMISSIONER MENZIES: What would the number be? Could you have the number -- the number of jobs that were lost?
5600 MS AUER: I didn't put it in the charts, the wonderful coloured -- full-coloured charts.
5601 MS AUER: But we would be happy to provide it to you in reply.
5602 COMMISSIONER MENZIES: Okay, thank you very much.
5603 MR. MURDOCH: But having said that, we rely to some degree on both our own information that we get but, as you know, we don't represent everybody in the documentary industry itself.
5604 COMMISSIONER MENZIES: Yes. I know you can only speak to your members. So if you have any other data that you happen to come across that would be helpful because data is always helpful.
5605 In some markets when we talk about local is there any benefit to promoting local but not necessarily local outside of news? You know what I mean if there was a prescription for more local programming but it wasn't necessarily news, how might that work?
5606 MR. MURDOCH: Well, of course, you know, history shows that there were scads of these programs that were local, everything from cooking shows to Tales of the Klondike to, you know, local fishermen.
5607 So there have been that local reflection and there used to be studios in most of the television stations that produced local programming other than news. That disappeared and we were left, sadly, with only news.
5608 Now, our view is that because news is critical and you know polling and, I'm sure, submissions that you get, that Canadians really rely on their local news. So it's the number one priority.
5609 But they would also still like to see some reflection of their communities other than -- and, as you know, all these stations do very good charitable work. But other than that, I'm sure they would like to know, I don't know, the history of the Rideau Canal, you know some of that done locally.
5610 It's a matter now where we have costs that are so narrow by all means find the revenue. Don't take it out of local news but by all means find the revenue somewhere to pump up some of this programming that you are talking about.
5611 MS AUER: If I might add, Commissioner Menzies, it's an actual question because it deals with the future of our broadcasting system.
5612 Twenty years ago young people could go to their local TV stations and find work or employment that they could then transform later on into major careers with networks. Today, where can you go except perhaps to the local community cable channel?
5613 And it's my understanding from previous CRTC hearings that there may be a decrease as well in local community channel accessibility and availability.
5614 Well, any effort I think to encourage young people to get into the field. Sure, they can go online but it's not quite the same as the thrill of holding your own camera.
5615 COMMISSIONER MENZIES: So, you are open to the idea that if at some point more local than is currently required was required, that it wouldn't have to be prescribed as news, that people could find the area?
5616 Let me give you an example. I guess and just not to be overly parochial, but say in Calgary where there is three -- there is Global, CTV and CBC -- all have very strong news programming. Very little -- historically there has been very little room for City to compete for news. And in the last couple of years what we have seen is that there is no news at all now from City in Calgary. They shut down in Calgary, Edmonton --
5617 MR. MURDOCH: Yes.
5618 COMMISSIONER MENZIES: -- and I think Vancouver as well they shut down completely. And they didn't replace it with anything at all.
5619 It was understandable that it might be difficult for them to compete in news, that that might not -- in a market that size if there were three strong competitors.
5620 What is more difficult to understand is why there wouldn't at least be some local programming of talk show, cooking show, whatever that would replace it.
5621 MR. MURDOCH: To be fair to them, I think they probably would argue that they -- in some of those cities they increased their breakfast television which, you know, counted sort of pet horoscopes as kind of the news. But there hasn't been a commitment on their part to do that.
5622 So you would sort of, you would like to think -- and I think the thing that's a bit troubling even in a competitive entrepreneurial way is there doesn't seem to be any venture capital here in terms of programming.
5623 There doesn't seem to be any kind of, well, let's see if this will fly. Let's see whether the public would actually like this unless it's something that you know has been done in the United States.
5624 We don't want to see -- and I will make the analogy to drama -- we don't want to see a loss in drama to improve So You Think You Can Dance or whatever. We don't want to see a loss in local news in order to have that local reflection, not to say that that local reflection isn't important. But let's see a little adventurism on the part of these broadcasters, particularly now that they have been touting how much resources they do have and what the benefits of those resources are.
5625 Let's see where the benefits are.
5626 COMMISSIONER MENZIES: Do you have any ballpark guess on how many new jobs might be created by just referencing the $90 million from CTV, Rogers that you mentioned?
5627 MR. MURDOCH: No. I think Shaw in its benefits, the last number they put on I think was 80, but that was in their benefits package. I can't tell you precisely how many more jobs there will be. I would expect there would be some.
5628 You know, it's interesting that as the broadcasters talk about essentially the four platforms now, you know the internet, the mobile phones, the tablets and the conventional broadcasting; as they move their product and their programming to these platforms the originator, at least in news, still remains the OTA station.
5629 And there hasn't been an increase, a substantial increase in staffing to really dedicate themselves to that kind of -- to those new platforms. That's not to say that CTV Edmonton, for instance, doesn't have somebody that is responsible for putting things on the Net.
5630 But you would like to think that they would be generating new and different kinds of news programming for these platforms. And we haven't seen that yet. We have seen some transfer of jobs, as I say, to make sure that things go on the net.
5631 So we will see what happens, but I don't have -- to your question, I don't have an exact number. I'm just -- I can only hope that it's good news.
5632 COMMISSIONER MENZIES: I just want to clarify, and make sure I understand what you are saying regarding Shaw. In paragraph 15 there you say Shaw plans to add nothing. I just want to make sure I understand that.
5633 I visited a Global station in Regina last fall and it was best described as the remnants of a television station.
5634 MR. MURDOCH: M'hmm.
5635 COMMISSIONER MENZIES: There wasn't much left and the staff seemed actually a little shell-shocked but they had survived and they were looking forward to the future. They were talking about having a breakfast show starting --
5636 MR. MURDOCH: Yes.
5637 COMMISSIONER MENZIES: -- this fall and that sort of stuff.
5638 So when you said Shaw plans to add nothing I was a little confused by what you mean by that.
5639 Do you mean nothing outside of the tangible benefits?
5640 MR. MURDOCH: Yes.
5641 COMMISSIONER MENZIES: What did you expect them to add? What do you think they should have done then -- or should be doing?
5642 MR. MURDOCH: Well, when we look -- I will let Monica sort of answer this a bit, but when we look at what Rogers and the CTV did, they brought improvements and money and hours to the table that aside from the tangible benefits -- the tangible benefits is a separate piece that has a limited shelf life.
5643 These have -- I guess it be argued if it has a limited shelf life in terms of the licence, but it's a different process with different expectations.
5644 Monica, maybe you want to say something?
5645 MS AUER: Looking at the financial forecasts and the performance provided by the streaming applicants in whom we were interested, we just noticed that both Rogers and CTV were forecasting annual increases in their expenditures on news as a whole; not specifically local news, true, but news as a whole.
5646 And traditionally each of the three has allocated most of their news budget to local programming it seems. So it was our impression that Shaw was providing zero growth across the board for the next five years, which would translate into cost of living decreases over time.
5647 So it is true that most of the time we assume that if you can achieve sufficient efficiencies you can still have growth with zero increase in expenditures.
5648 At the same time we have gone through 10 years of reduced growth so I'm not too sure how we will see increased growth in the services with a zero growth budget.
5649 COMMISSIONER MENZIES: Okay. So what I am taking from that is what we can expect is when this term expires that the jobs that are being created by the tangible benefits are really temporary jobs.
5650 Would we expect -- would we -- because that's what I'm getting that, well, we can expect those jobs to disappear as soon as the money is spent.
5651 MR. MURDOCH: I certainly hope not. I don't think Shaw has said that.
5652 COMMISSIONER MENZIES: No, but that is the implication that I'm getting.
5653 MR. MURDOCH: Well, our problem is that it could happen but our problem is, as Monica was pointing out, is that at one point -- so you have this commitment for growth but you also have five years where they are saying there is going to be zero growth.
5654 Now, if there is -- if they say there is going to be zero growth which confounds us and, I'm sure it confounds most economists, but still where you are going to have zero growth and then -- and given that you want to generate some kind of profit margin where is that going to come from?
5655 Where is that -- where is the money going to come from if you have zero growth?
5656 Well, I -- what worries us is that it's going to come from labour saving or, you know, reduction in the style or quality of programming, et cetera.
5657 So on one hand -- they are giving with one hand and we fear they are going to take with the other hand. Give over here in this proceeding; take over here from this other proceeding.
5658 MS AUER: And of course -- perhaps this is something we can address as well in the vertical integration proceeding, but traditionally it's been our understanding that tangible benefits do not last forever. They are for a specific period of time. They are usually for a specific set period of years, for a specific set amount of hours or dollars.
5659 We would be delighted if tangible benefits would go into the base and all other increases would then go on top of the base.
5660 COMMISSIONER MENZIES: Okay, understood.
5661 It would be interesting -- perhaps we have some -- if there was data on how much the shelf life of tangible benefits investment, whether as soon as the best before date was done that they ended or whether they continued.
5662 MR. MURDOCH: Just let me add, I mean I think -- I was talking about sort of some kind of entrepreneurship in broadcasting.
5663 It seems to me, and I think this probably happens in primetime as well, where spending occurs, if these things turn out to be successful and the audiences are there, why wouldn't a broadcaster continue?
5664 But what we would like to see -- I mean it would be nice on tangible benefits, as you said and, by the way, this is forever and ever and ever and ever, but that's not going to happen.
5665 COMMISSIONER MENZIES: Right.
5666 Just on your comments on PNI, you mentioned that any increases in PNI should come from foreign.
5667 What I'm getting from that is so if PNI were to increase from -- just to use somewhat round numbers -- from 5 to 10 percent that would mean that the overall CPE should go up as opposed to --
5668 MR. MURDOCH: Monica?
5669 MS AUER: Yes, we would be delighted if the overall CPE would go up. It's my understanding that the 30 percent is a base. A base means that you shouldn't go underneath the base. You should be going up.
5670 Our rough estimate was that last year the total CPE for specialty, pay, video-on-demand and over-the-air for private TV amounted to 32 percent which implies that if you are starting at 30 percent -- they had 2 percent extra last year that they were willing or able to allocate to Canadian programming.
5671 We think that in order to ensure the ongoing and continued growth and the reduction of the gap which we showed on page 7 and on page 6 of our oral remarks today, we would think that the best way to do that is to ensure that broadcasters are aware that future increases in Canadian programming should come from their expenditures on non-Canadian programming.
5672 I guess the thing is we support private broadcasters. They are dynamic. They are competitive. They are able to do good business. They have been broadcasting in Canada since 1950.
5673 It seems to me that after 61 years they know what is a good TV program, and how to make it in Canada. They do an excellent job on local TV. They attract high audiences.
5674 Canadian broadcasters are surely not failures that they must rely always on non-Canadian broadcasters' programming. They are good broadcasters. They can do the job.
5675 Let's let them. Let's free them to do the job well.
5676 COMMISSIONER MENZIES: Well, would it be better then -- is PNI a problem in terms of your membership? By prescribing them that a certain amount of Canadian, no matter what that CPE might be -- we are talking 30 percent right now -- it's preliminary, under review -- does it draw?
5677 Does it -- as you say here is it money going from Peter to Paul?
5678 MR. MURDOCH: We don't want to see that -- money from Peter to Paul. I mean our view is -- well, I think we expressed it. I'm just going to repeat myself.
5679 But if the charts are going like this; foreign programming, Canadian programming, that gap is widening. Well, at what point do we say that gap is too big?
5680 We understand the broadcasters. They need that foreign programming money to support the Canadian broadcasters. We understand that.
5681 But at what point -- surely there has got to be a point in which we say -- otherwise, we are going to get to the point where we have got 99 percent foreign supporting 1 percent Canadian. There has got to be some threshold there that we have to agree on.
5682 We think that we have probably surpassed that threshold now and that somewhere along the line we are going to have to tell new ownership that that gap has got to start to come down.
5683 COMMISSIONER MENZIES: Okay, I understand.
5684 Just one last thing, you mentioned CH and CHEK. Are your members involved in both those areas, both --
5685 MR. MURDOCH: In Victoria they ponied up cash out of their pocket. They are part of the --
5686 COMMISSIONER MENZIES: They are part of the ownership group, right?
5687 MR. MURDOCH: They are, yeah.
5688 COMMISSIONER MENZIES: What are we learning there so far?
5689 MR. MURDOCH: Well, I think we have learned particularly on the news side, that local news can attract audiences. I mean, it's interesting to note that in both of these stations CanWest was sort of saying these things cannot -- these stations cannot survive.
5690 Of course, in our view one of the reasons they were saying that is because they had a station in Toronto that broadcast and a station in Vancouver, the very successful BCTV that they could rely on.
5691 But they were saying that the local news was a real problem, was draining et cetera, et cetera, et cetera. And guess what? It's a success.
5692 So I think what we have learned -- and again, we have learned only from a macro point of view. We always felt that in fact there was enough local revenue coming from those stations.
5693 But because of this double counting we could never get hold of how much was actually local revenue and how much local revenue was being transferred to national, how much of that television stations was being asked to pay off these, you know, $900 million in debt, et cetera, et cetera. But what new ownership has proven is that they can be successful.
5694 Is it a tough go? It's a tough go. They are in competitive markets. But so far so good, it looks.
5695 COMMISSIONER MENZIES: Thank you very much.
5696 THE CHAIRPERSON: Suzanne?
5697 COMMISSIONER LAMARRE: Merci, Monsieur le Président.
5698 As you say, Mr. Murdock, data is key. So I need a couple of points of clarification for the record of the data you provided us this morning.
5699 On page 2 of your presentation you have a graph that shows the average monthly fulltime jobs from 1990 to 2009. Does that include any French television stations?
5700 MS AUER: I believe that's all private over-the-air English and French.
5701 COMMISSIONER LAMARRE: Can you confirm it?
5702 MS AUER: I will confirm it in the reply.
5703 COMMISSIONER LAMARRE: Thank you.
5704 On page 4 the title of the second column under each of the ownerships is the "Difference from Previous Years". It seems to me when I do the math it's rather the difference between that year and Year No. 1.
5705 MS AUER: Yes.
5706 COMMISSIONER LAMARRE: Okay.
5707 MS AUER: 2 to 1, 3 to 4 -- sorry -- 3 to 2, et cetera.
5708 COMMISSIONER LAMARRE: No, I --
5709 MS AUER: Right.
5710 COMMISSIONER LAMARRE: Would you double check, because when I look at it's rather like 2 to 1, 3 to 1, 4 to 1, and 5 to 1?
5711 MS AUER: Okay.
5712 COMMISSIONER LAMARRE: Okay, thank you.
5713 THE CHAIRPERSON: Okay. Those are all our questions.
5714 Counsel, have you got some undertakings to read out?
5715 MR. DOUGHERTY: Thank you, Mr. Chair.
5716 We have three undertakings, and if you could provide this information as part of your May 4th final submission?
5717 - First, please provide further data demonstrating any job losses at local over-the-air stations.
5718 - Confirm that Chart 2 of your presentation is both French and English over-the-air -- that's Chart 2 of your presentation today.
5719 - And please can you confirm the data for your Chart 3 that is found on page 2 of your presentation.
5720 Thank you very much, Mr. Chair.
5721 THE CHAIRPERSON: Okay, those are all our questions. Thank you very much.
5722 Madam la Secrétaire, let's go on to the next intervener.
5723 THE SECREATARY: Thank you.
5724 For the record, I would just like to know if CPE Local is in the room.
5725 Okay, thank you.
5726 We will now proceed with Friends of Canadian Broadcasting. Please come to the presentation table.
5727 MR. MORRISON: Mr. Chair and Members of the Commission, it's unusual to have someone appear before you and in the process of taking the chair from the predecessor to make a date to see him later in the day
5728 MR. MORRISON: And just, by the way, to say that I listened very hard to Monica and Peter's presentation and was unable to find any points where I disagreed with them.
5729 Mr. Chair and Commission Members, thanks for offering Friends of Canadian Broadcasting an opportunity to comment and to provide the Commission with a viewer's and listener's perspective on the issues that are before you at this public hearing.
5730 As you know, Friends is an independent watchdog for Canadian programming in the audio-visual system and we're supported by 150,000 Canadians.
5731 We note that many of the Commission's proposals intended to increase flexibility for station groups were first advanced at a time when the recession depressed the most recent financial information available to the Commission, the 2009 broadcasting year, data which called into question the viability of English-language private conventional television.
5732 We also note that the Commission's proposals predate the recent upheaval in the ownership structure of English-language station groups. The financial resources of the station groups should now be considered in the context of the financial capacity of the vertically integrated companies of which they have become a part.
5733 Just as the BDUs used to insist that the financial capacity of conventional television should be seen in the context of the overall profitability of their respective station groups, and therefore include both over-the-air and specialty channels, a point of view that appears to have influenced your Commission's thinking towards the restructuring of the licensing process, so the financial capacity of the newly acquired station groups needs to be considered in the wider context of their new ownership structures, including other lines of business, such as home phone and Internet.
5734 As in many companies, some parts of the overall business cross-subsidize other parts, a cost of doing business. In this proceeding we therefore urge the Commission to consider the capacity of the whole business.
5735 We also recommend that the Commission exercise great caution going forward when considering proposals to change the nature of service of programming categories of specialty channels to ensure that they do not lead to a reduction of their specialization, their unique program offerings, as elements of the diversity of the Canadian audio-visual system built up over several decades through successive decisions of your Commission.
5736 In recent years, spending on Canadian programming by the English-language private conventional television groups has fluctuated around 30 per cent of revenues.
5737 Friends has reviewed the Canadian programming expenditures of the specialty and pay services of the four station groups, based on publicly available information, and compared the total to the level proposed under the Canadian programming expenditure, that's the CPE, regime.
5738 This research suggests that implementing the proposed regime would result in a reduction of approximately $90 million annually in Canadian program spending by the four groups taken together, 51 per cent of that reduction coming from CTV and 46 per cent from Shaw Media.
5739 We appended to our February 9 submission detailed information for each of the station groups from which the above summary is derived. In view of responding comments filed by Corus, we took another look at these charts and we identified an error on our part which overstated Corus' Canadian programming expenditure on YTV by $10 million.
5740 Although we do not consider that this error is material to our argument, we will share with you today revised charts updating the Corus and summary data presented on page 6 of our February 9 submissions.
5741 Your proposed funding requirement for programs of national interest, PNI, features a requirement for 5 per cent of total revenues in the preceding year to be devoted to a combination of drama, category 7, and long-form documentation, category 2[d].
5742 The following --
5743 THE CHAIRPERSON: And award shows. There are three categories.
5744 MR. MORRISON: You're right. Thank you.
5745 You're often right, Mr. Chair.
5746 The following chart shows that category 7 spending averaged 6.4 per cent of the preceding year's revenue in 2009. While the Commission's published data do no permit identification of spending on subcategory 2[d], these data indicate that the proposed PNI requirement would reduce combined category 7 plus 2[d] spending by in excess of $70 million per annum.
5747 Achieving a new regime without depressing Canadian programming expenditures would require, as Monica just mentioned, a 32 per cent CPE.
5748 As I mentioned, achieving a "programs of national interest" regime without depressing category 7 programming expenditures would require at a least a 6.4 per cent PNI, plus an amount that the Commission would determine based on the category 2[d] expenditures, a statistic which you do not release publicly.
5749 CTV has argued that the end of analog preference packaging would adversely affect analog revenues. Friends doubts that BDUs, which control this packaging, would engage in practices that would negatively affect their own services revenues.
5750 CTV's application also states that, and I'm quoting:
"...the Commission can no longer expect the larger, more profitable undertakings of a particular corporate group to subsidize the less profitable assets."
5751 Why not?
5752 Despite the Commission's significant effort to extend flexibility, each applicant has put his hand out in an Oliver Twist-like request, "Please, sir, I want some more", asking for a variety of exceptions.
5753 One has proposed an exception to the CPE regime for category B services: a lower 15 per cent CPE. Another has proposed relief from the requirement to spend 75 per cent of PNI with independent producers.
5754 Friends recommends that you entertain no exceptions.
5755 Finally, a few comments regarding digital transition.
5756 Recent CMRI data indicate that 29 per cent of Canadian households operate at least one analog television set which receives over-the-air signals. Three million Canadians rely on analog over-the-air signals for their connection to the audio-visual system. Most of them have low incomes and are senior citizens.
5757 The isolation they will face, with anger, on September 1st will have political ramifications, particularly when they find out that the vacated frequencies that deprive them of their television experience have generated in excess of $4 billion in windfall revenue to the Government of Canada.
5758 Yet, our government, unlike its American counterpart, has financed no program to subsidize their continued access to television signals they require to stay connected in their communities and to participate as citizens in this country's affairs. The people vote.
5759 Since the Commission has adopted a digital plan, it is vital that all broadcasters adhere to it, including the CBC, which, as you know, attempted to subvert the plan in its application for a digital transmitter for CBAT, in New Brunswick; however, we do note that most of the station groups seem to be on schedule to meet the Commission's August 31st, 2011 deadline.
5760 They should be strongly encouraged to adhere to the Commission's deadline in mandatory markets and should be required to install transmitters in their smaller markets, rather than use the digital transition as an occasion to drive customers to Bell TV and Shaw Direct, which is a direct conflict between their commercial interests and the public interest.
5761 Monsieur le président, merci d'avoir entendu notre présentation. Nous vous souhaitons de bonnes délibérations.
5762 THE CHAIRPERSON: On the first page, you say:
"As in many companies, some parts of the overall business cross-subsidize other parts -- a cost of doing business."
5763 Well, that's a pretty blatant statement. I mean that really depends on whether its part necessary for your business. You don't cross-subsidize something as a cost of doing business unless it's essential to you and over here run the big danger that there are certain parts if we insist on cross-subsidization that people will just get out of this business or close local stations.
5764 Take CTV and its A stations, et cetera. They are traditionally not profitable and they could very say, "Well, you know, we can exist and we can profit without them". These are not necessary as part of the cost of doing business.
5765 So when you say so bluntly look at them overall, et cetera, you know, and expect that they will have to cross-subsidize, from a business point of view that doesn't necessarily make sense.
5766 MR. MORRISON: If they operate it, Mr. Chair, in a regulated industry, they always appreciate the benefits of regulation and sometimes they're less appreciative of the obligations.
5767 Your Commission, under the Broadcasting Act, has a lot of clout. And inasmuch as they are regulated, just as the taxi I took this morning operates in a regulated environment, you have the clout to advance the point of view that we are putting before you today. It's a question of your will do so, in our opinion.
5768 THE CHAIRPERSON: I can advance a point of view, I can't enforce it.
5769 As you know, when Canwest went into trouble, they closed two stations, and, you know, there was nothing we could do to stop that.
5770 CTV closed the Brandon station. Again, there was nothing we can do to stop it.
5771 We can advocate, but we really don't have the clout to do anything.
5772 MR. MORRISON: You could impose conditions of licence in this process that would go a long way towards meeting the normative principle I am putting before you, particularly when you are aware of the extreme profitability of other parts of businesses that you regulate in other parts of your responsibility, Mr. Chair.
5773 In any case, that's our point of view, and it's our expectation.
5774 THE CHAIRPERSON: Okay.
5775 The other thing, you talk about digital transition and you're taking the Government of Canada to task for not starting a coupon program à la U.S. I presume that's what you're driving about, that in the U.S. they spent $2 billion giving people coupons to convert their analog TV to a digital TV.
5776 Is that what you suggest?
5777 MR. MORRISON: We haven't advocated a coupon program, we've advocated a subsidy for elderly and low-income Canadians, and we have disputed statistics -- I'll back up.
5778 You made a comment publicly, I think it was in The Globe and Mail, Mr. Chair, about eight or nine months ago, that we strongly agreed with. Your comment was something to the effect that there was a problem here and that government had to get involved in solving it.
5779 And then about a month later, you made a comment that we felt contradicted your first comment.
5780 We agreed with your first comment and we believe that the government and this Commission, and the heritage ministry, are underestimating the size of this problem, and in some cases they have an incentive to underestimate it.
5781 But we believe that all hell will break loose on September 1st and we believe that the people who will be disadvantaged by this are going to be very upset, very angry, and many of them cannot afford the costs of the simple equipment to take their digital signals back to analog so they can receive them on their television set.
5782 THE CHAIRPERSON: So that's what you're talking, the $50 set-top box converter.
5783 And when you say they should subsidize it, what exactly do you have in mind?
5784 MR. MORRISON: We would like to ensure that people who cannot afford to do that conversion have access to that equipment.
5785 We are not going to occupy your airtime today by going into detail about how it would happen. You're familiar with examples in other countries.
5786 We are underestimating an major problem that is only four-and-a-half months away. That's an opinion. You know, if you disagree, one of us will be wrong and we'll find out.
5787 THE CHAIRPERSON: It's pretty safe to say we disagree.
5788 There will be, as you know, we have --
5789 MR. MORRISON: Although we did agree with one of the statements you made last year, Mr. Chair.
5790 THE CHAIRPERSON: We mandated the public information program, and, clearly, that's, first, primarily the responsibility of the broadcasters, but part of it is, of course, also the government, and I think you'll see that information program.
5791 As far as what I said publicly, the $40 that it takes to convert it, I didn't see a need for a public subsidy program, and I still remain convinced of that, but --
5792 MR. MORRISON: Mr. Hutton has been quoted as describing it as low as $30, but --
5793 THE CHAIRPERSON: Well, even better.
5794 MR. MORRISON: -- I haven't been able to confirm it.
5795 THE CHAIRPERSON: Even better, whatever it is.
5796 MR. MORRISON: Well, he's getting some kind of a discount.
5797 THE CHAIRPERSON: Tom, you have some questions for Mr. Morrison?
5798 COMMISSIONER PENTEFOUNTAS: Yes.
5799 I was under the impression hell wouldn't be breaking lose till January 1st, 2012, but it might be coming early if we were to believe your assumption.
5800 You mention here that Canadian works of drama are already at 6.4 per cent.
5801 Am I reading your statement correctly?
5802 MR. MORRISON: Yes.
5803 And before I say anything else, welcome to this podium, Mr. Pentefountas.
5804 COMMISSIONER PENTEFOUNTAS: Thank you, sir.
5805 MR. MORRISON: But, yes, we've presented data, which I did not take the time to read, to show you the basis on which we arrived at that figure.
5806 COMMISSIONER PENTEFOUNTAS: Okay.
5807 Given that figure, are you asking for a higher PNI than 5 per cent?
5808 MR. MORRISON: Yes. You should not go into a public hearing process where the licences of all the major English-language private television station groups are up for renewal for a multi-year period offering to reduce their commitments to programs of national interest.
5809 For the record, we would be asking for the 30 per cent to be at least 32 per cent, only to hold the line.
5810 COMMISSIONER PENTEFOUNTAS: Okay, let's stick with the PNI and we'll get to CPE in a moment.
5811 Is there a specific number you'd like to see?
5812 MR. MORRISON: We would be pleased if you considered drawing the line at a place where the commitments that have been made in recent years are continued going forward. So the 6.4 and the 32 -- and they're interrelated -- are the minimum that we would see as acceptable in your responsibility to represent the people in front of the televisions sets.
5813 COMMISSIONER PENTEFOUNTAS: But if we accepted a 6.4 PNI, we'd be decreasing what has been the recent history. Because according to your charts, at 6.4 those are strictly category 7 expenditures, Canadian drama.
5814 Is that correct?
5815 MR. MORRISON: Yeah, we can't give you -- I think I've made this clear, haven't I, and you would understand me, we do not have access to all the information that would enable us to give you a more sophisticated calculation. But if you'll understand the values and the principles behind our point of view, you have the capacity to do the math.
5816 COMMISSIONER PENTEFOUNTAS: I understand the values, but your math here, it's based on information you have, and you stand by those figures.
5817 Is that correct?
5818 MR. MORRISON: Of course. I mean, I wouldn't come before you and say I did not stand by anything that I wrote to you on behalf of the Friends of Canadian Broadcasting.
5819 I could be wrong, but, if so, I'd be wrong in the form of an honest mistake.
5820 COMMISSIONER PENTEFOUNTAS: An honest mistake. Well, you're basing yourself on figures. You're confident in your figures, otherwise you wouldn't put them down on paper and make these representations this morning.
5821 Am I correct thus far?
5822 MR. MORRISON: Yes, but I already said that, Mr. Pentefountas.
5823 COMMISSIONER PENTEFOUNTAS: Great. So why -- yes, I'm sorry.
5824 COMMISSIONER CUGINI: Just one correction, Mr. Morrison.
5825 But these figures are based on specialty and pay services. You have not taken into account conventional television spending?
5826 MR. MORRISON: This is based on everything, Commissioner Cugini.
5827 COMMISSIONER CUGINI: But it says expenditures of the specialty and -- on page 2:
"Friends has reviewed the Canadian programming expenditures of the specialty and pay services ...and compared this total to the level proposed under the Canadian Programming Expenditure regime."
5828 MR. MORRISON: I have an eyesight issue, so my pages and your pages are different.
5829 There is a number of charts in here, or if you go back to our February 9th proposition you will find the data therein. And I think the charts are properly labelled.
5830 COMMISSIONER CUGINI: Okay, thank you.
5831 MR. MORRISON: Okay.
5832 COMMISSIONER CUGINI: Sorry about that.
5833 MR. MORRISON: All right.
5834 COMMISSIONER PENTEFOUNTAS: And, again, the numbers we'll ask you about --
5835 THE SECRETARY: Sorry, please open your mike, Mr. Pentefountas.
5836 COMMISSIONER PENTEFOUNTAS: -- and it goes to the issue my colleague raised.
5837 Did you see a difference between broadcasters that are more heavily concentrated in conventional as opposed to specialty services?
5838 MR. MORRISON: Well, Corus would be an example of a broadcaster that was not concentrated in conventional, wouldn't they?
5839 COMMISSIONER PENTEFOUNTAS: They certainly would.
5840 MR. MORRISON: Yeah. So, in fact, an argument could be made that they shouldn't really be here.
5841 But, yeah, every broadcaster's situation is different. Conventional has been a declining factor in Canadian television and pay and speciality has been increasing, as you know.
5842 COMMISSIONER PENTEFOUNTAS: Well, can we impose the same conditions on the conventionally heavy broadcasters as we would on the specialty concentrated broadcasters?
5843 MR. MORRISON: The regime that you have proposed that is the basis for this hearing has answered that question: it is that you are imposing uniform rules on them regardless of the details of their structure.
5844 COMMISSIONER PENTEFOUNTAS: Thank you, sir.
5845 THE CHAIRPERSON: Okay, I believe those are all our questions.
5846 Thanks very much.
5847 Let's take a 10-minute break.
--- Upon recessing at 1006
--- Upon resuming at 1021
5848 THE CHAIRPERSON: Okay, let's start. I feel like saying, Mr. Levy, "Tennis, anyone?".
5849 THE CHAIRPERSON: Let's go.
5850 THE SECRETARY: We will now proceed with Score Media Inc.
5851 Please introduce yourself, and after you will have 10 minutes for your presentation.
5852 MR. LEVY: Good morning, Mr. Chairman, members of the Commission and Commission staff.
5853 My name is John Levy. I'm the CEO of Score Media Inc. Score Media is the parent company of the Score Television Network, a national sports, news and information specialty programming service.
5854 We also run Score Mobile, I'm proud to say the most popular Blackberry sports app anywhere in the world and one of the top mobile apps on all other platforms as well.
5855 In addition to that, we run Score Satellite Radio and various web properties.
5856 With me today are Benjie Levy, our Executive Vice-President and Chief Operating Officer, and Asha Daniere, our Senior Vice-President and general counsel.
5857 We are very pleased to appear before you to provide our comments on this important public hearing, but before starting our presentation, we'd like to welcome the new Vice-Chairman, Vice-Chair Pentefountas to the Commission.
5858 It's our first time appearing in front of you, and as an independent specialty service we hope to see a lot more of you in years to come.
5859 In our 10 minutes today we'd like to comment on one general matter and two specific matters. The general matter is the discussion that's taken place in this proceeding about genre exclusivity.
5860 The two specific matters relate to the applications by Bell and Rogers Media to loosen the rules for ESPN Classic and the Outdoor Life Network on certain types of professional sports.
5861 Now, we heard the Chairman loud and clear last week when he said that genre exclusivity was not part of this proceeding and, therefore, we're not going to dwell on it. However, we also heard a number of statements from the Commission and from industry participants about the future of this important policy. And we do want to briefly address these in our appearance here today.
5862 In 2007 and 2008, the same genre exclusivity policy was under a microscope.
5863 We have attached as a schedule some of the same questions which the Commission raised back then. Detailed evidence was presented that allowed the Commission to think through the issues and develop a plan. We decided on a careful, staged approach to eliminating genre exclusivity on a genre by genre basis, beginning with national news and mainstream sports genres.
5864 This approach makes sense. It says let's look at the specific genre and see if it can sustain competition. If it can, throw the doors wide open. You created a mechanism and a test for converting closed Category A genres to competitive Category C genres.
5865 The impact of eliminating genre exclusivity would fall disproportionately, however, on independent services. If a vertically integrated group sees a category service it likes, it could simply morph an existing service into it. And even if that were not its true intent, the group could still use that threat in the infamous carriage negotiations to weaken the independent service.
5866 Genre exclusivity and access to meaningful distribution remain the key pillars that ensures diverse independent voices like ours are able to remain vibrant contributors to the Canadian Broadcasting System.
5867 Now, we acknowledge that enforcing genre exclusivity rules is not an easy task for the Commission, that only two and a half years ago you elected to maintain genre exclusivity where warranted while, at the same time, creating a way to move beyond it with a path to competition in each genre.
5868 We believe this balanced approach is still appropriate and we'd be pleased to elaborate on our views in any subsequent proceedings that may be launched with respect to this issue.
5869 Now turning to our specific interventions.
5870 We don't propose to repeat yet again the points we've now made twice in the case of ESPN Classic and no less than four times in the case of the Outdoor Life Network. Put simply, the Applicants want you to help them solve a problem of their own making.
5871 Both of them have two full-fledged mainstream sports platforms on which to air their live sporting events and they can add as many more feeds as they want under their existing Category C licences, yet now they come to you and talk about rain delays, overtime and triple-booked scenarios.
5872 Frankly, we see the whole rain delay and overtime story as, quite honestly, a red herring. These situations are few and far between, and sports broadcasters have been dealing with these issues for decades.
5873 Bell's and Rogers' real ask here is about triple parking. It results from over-buying and, I might add, overpaying for programming. Rather than discipline themselves, the Applicants have asked you to provide even more programming flexibility to their groups in order to help them out of their self-inflicted scheduling difficulties.
5874 As you might expect, we see the solution somewhat differently.
5875 First, now having engaged each other in an expensive race to purchase live sports rights, these deep-pocketed conglomerates want you to amend conditions of licence for their group specialty services that would let them shift that valuable sports programming on to services with lighter regulatory obligations and ease the programming logjam they created.
5876 Sorting out programming conflicts is something programming departments, not the CRTC, are supposed to do. If the CRTC grants the desired relief, the lack of discipline will continue.
5877 Second, in addition to the obvious marketplace solution of just not over-buying, there are other good options that exist for Rogers and for Bell.
5878 You've designed a system in which the Applicants can run as many live sports channels as they want as long as they meet the obligations associated with running those channels.
5879 Category C sports licences are unlimited feed licences, so when they're over-booked, they can just use another feed under their existing licence. And if they don't want to launch another full service like TSN-3 or 4 or Sportsnet-2 or 3, they can use an occasional feed like they've done for years in order to accommodate regional live programming.
5880 The simple fact is that Bell and Rogers already have the capacity to air an unlimited quantity of live sports. However, they'd have to do it using a Category C licence, which would mean that this live sports inventory would be subject to 60 percent CANCON and 50 percent CPE requirements of a mainstream sports service.
5881 That's not what the Applicants are after, though. They want you to approve these changes so they can benefit from the lower requirements of the Outdoor Life Network which brings only 37 percent CPE to the group or, even worse, ESPN Class, which only brings 10 percent CPE to the group.
5882 The Commission should not allow valuable programming that is triple-parked on services with high Canadian programming obligations to count toward services with much lower obligations, especially when the programming is not compliant with the nature of those services.
5883 In addition, if Bell and Rogers aired their triple-parked programming on a Category C feed, they would not be able to count any expenditures in respect of this programming against their Group CPE obligation, which they would be able to do if they're permitted to air this programming on Outdoor Life Network and on ESPN Classic.
5884 Now, to be clear, we have no issue with the Commission's policy allowing Category A and B services to air Category 6A programming. However, it's where that programming is consistent with the nature of their service and other conditions of licence.
5885 And in these cases, spending on Category 6A programming would be permitted to count towards a Group CPE requirement. However, here, these Applicants are requesting an exemption. They want to be able to broadcast live sports that are not consistent with the natures of their service simply in order to alleviate a rare triple-parked scheduling scenario.
5886 Given the potential for regulatory arbitrage which the Commission already identified as a key issue in its previous denials of these applications, we believe the exemptions the Applicants are currently seeking should be viewed with even more scepticism.
5887 We've attached a chart at the back of this oral presentation which depicts the type of obligation arbitrage which we are describing.
5888 Now, if the Applicants are not fond of using a full or occasional use mainstream sports feed, they do have other options. They could embrace new media as a means to distribute their excess sports programming. They could run it to authenticated internet subscribers, direct to mobile subscribers, or through mobile sports apps.
5889 We are, after all, talking about two of the country's largest broadband and mobile providers. Stepping back and letting vertically integrated Bell and Rogers think creatively about using new media to solve their sports over-buying habit would not lose people from the system. It would simply make good use of another part of the system.
5890 It's time to stop fearing new media and start competing in it. There is nothing that Netflix can do on the internet that Rogers or Bell could not also do on the internet.
5891 Finally, if they don't like the internet or mobile or mainstream sports feed or even their over-the-air services as a solution for their triple-parked scheduling scenarios, we can think of yet another few options.
5892 They could run conflicting program on a tape-delayed basis. Now, that's not perfect, but it's certainly not fatal, especially if we're, you know, talking about the few times a year as the Applicants themselves indicated during their experience last week.
5893 Or they could avail themselves of their existing pay-per-view sports licences. Or they could sell their triple-parked live sports service to another service like us.
5894 We heard Bell Media say last week that it has nowhere to go with scheduled programming conflicts because no service wants to buy one. Well, I gotta tell you, we might be interested.
5895 In fact, Bell Media already sub-licenses us a number of NCAA football and basketball games that they're unable to air.
5896 Of course, it would be simpler for them just to not outbid us on programming they don't have room for in the first place. That way, they would not have the problem that they want you to solve.
5897 But that's their business.
5898 The point is that every single one of these over-booking scenarios, there are many consumer-friendly solutions that already exist.
5899 Mr. Chairman, members of the Commission, we have not had time to deal with every argument raised by the Applicants, but we have filed a full written intervention in both of these cases and we'd be very pleased to answer any questions you may have at this time.
5900 Thank you very much.
5901 THE CHAIRPERSON: Thank you.
5902 Regarding this over-parking, if memory serves me correct, isn't it on some of the NHL games, especially, that -- I don't know who it is, but if there's overtime and another program comes, if you want to see the end of this game, go to ATPN and it's go there. So that's already being done.
5903 MR. J. LEVY: Lots of options. Lots of options.
5904 THE CHAIRPERSON: Now, going back to the -- you make a very -- you're absolutely right. It's not on the table. But we have sort of been discussing it here because it's clearly something that's coming our way.
5905 And you say you like the policy that we have on the gradual step, et cetera.
5906 All of this was basically conceived two years ago, and things have changed dramatically since then, as you know. And if nothing else, the arrival of Netflix has really put a very -- put everybody -- in the forefront of everybody's mind.
5907 And the question is, is this gradual approach still adequate in this day and age where we are -- how valuable is carriage, how valuable is genre, et cetera, or do we -- are we forced to move to a different regime?
5908 That's why I've raised it at the front of this hearing because that very much preoccupies our mind and I wanted to hear -- take the occasion from people in the business like you who vest their dollar on it.
5909 Is this still viable, or do we have to change gears or do we have to address this soon?
5910 MR. J. LEVY: First of all, I think, you know, we are going to take the opportunity if a future hearing is called to go into a lot more detail about this and with respect to this.
5911 But to be clear in the context of one of the few remaining independents that are out there, our lifeline is based upon a couple of things. And one is the genre exclusivity which we are warranted within our sports news and information category as well as the -- you know, as well as ability to have access to the consumer, to the audience.
5912 And yes, it's becoming a much more difficult environment as consolidation takes place, but in the context of who we are and what we are, it even becomes more critical for us to be able to continue to do what we do each and every day, which is work within the scope of who we are and what we are, try to connect with our audience and differentiate ourselves and be relevant.
5913 You know, today we're here talking about the skirmish in the fringe of these two licences that we're talking about. And quite frankly, I can't believe we're back here again with the same discussion about those two services.
5914 But we will soon be talking about the bigger issue, which is the bigger arbitrage, which is, you know, moving a lot of the existing programming from current networks, whether they be over-the-air networks or specialty services or however they're being distributed -- and in our particular case, sports content -- onto new channels which are formed not so much for the benefit of the new consumer, but just there to open up new channels and, in our view, extract additional funds from the audience, from the public.
5915 So you know, I think --
5916 THE CHAIRPERSON: Well, exactly. That's why I'm posing the question. As far as I know, there's nothing stopping TSN now from imitating you on mobile devices. 100 percent --
5917 MR. J. LEVY: Correct.
5918 THE CHAIRPERSON: -- information, et cetera.
5919 As viewers shift more and more over to those devices, et cetera -- they won't go totally, but obviously a greater portion will go, et cetera, your -- the protection that you enjoy by virtue of your genre exclusivity and mandatory carriage becomes less and less meaningful.
5920 MR. J. LEVY: What's really interesting is what we do on our mobile apps and what we're doing in our digital world is really a reflection of what we do in our television network. It is a differentiated product, and we're kicking their butts in that world, quite honestly, because we continue to focus on who we are and what we are and not just transport sort of a different type of presentation of provisioning of sports content.
5921 THE CHAIRPERSON: No, you have a brand. No question about it. A very successful brand.
5922 But you're telling me, I guess, that to develop the brand and maintain the brand you need genre exclusivity on TV.
5923 MR. J. LEVY: In this environment, yes. In this environment.
5924 THE CHAIRPERSON: Okay. Len, have you got some questions?
5925 COMMISSIONER KATZ: Thank you, and good morning.
5926 MR. J. LEVY: Good morning.
5927 COMMISSIONER KATZ: I want to come back to your statement who you are and what you are.
5928 Can you provide us with an overview a to what your -- the nature of the service and conditions of licence are, what you can do and what you cannot do right now?
5929 MR. J. LEVY: Specifically with respect to our -- with respect to the conditions of our licence?
5930 COMMISSIONER KATZ: Yeah.
5931 MR. J. LEVY: You want to take that?
5932 MR. B. LEVY: Sure. Let me open up Mr. Buchanan's lovely yellow book here.
5933 COMMISSIONER KATZ: You described in your opening remarks a national sports news and information specialty programming service.
5934 MR. B. LEVY: Right.
5935 COMMISSIONER KATZ: And then you talk about sports and live games. That's why I want to try and understand ---
5936 MR. J. LEVY: Well, there's two levels here. One is the specifics of the licence itself which, you know, is on the record and we can talk to, if that's what you're asking in terms of, you know, 15 percent of our schedule being live events, 50 percent of that being required to be Canadian live events.
5937 A condition of our licence, as you'll recall, is that even though we do do live events, we have to have sports news and information as part of that on an ongoing basis. In other words, our ticker never goes away.
5938 In addition to that, another condition of it was that every 15 minutes, we still -- we have to break in and provide sports news updates.
5939 So even when we're in the live event business, it's still done in the scope and the nature of who we are and what we are and, quite frankly, even if those conditions weren't in our licence, we would be -- that's how we'd provision everything we do.
5940 And that's the essence of who we are. And I can talk to that a little bit in terms of how we differentiate ourselves, how people come to us for sports news and information, how we skew younger than the other networks, how they come to expect a certain style of presenting sports rather than -- you know, the only time you see us in suits is basically when we're up here in front of the Commission. Most of the other time, we're in jeans, t-shirts -- even me, in jeans, t-shirts and we're looking and acting a lot like the people who are 24 and 25 year olds who work with us.
5941 And quite frankly, our whole success of the network is having the people who work for us emulate the people we're talking to. And it's more about a dialogue.
5942 So there is a whole style of how we do things that even with live events on our network differentiates us from other networks.
5943 COMMISSIONER KATZ: You touched on that. I think the point I was trying to get you to comment on, and that is, you're permitted under your conditions of licence to have 15 percent of programming time as live events, full live events.
5944 MR. J. LEVY: Full live events on the condition that (a) our ticker never goes away, and (b) that we intersect -- inject, I should say, every 20 minutes our sports news and information updates.
5945 COMMISSIONER KATZ: Okay. So the fact that ESPN Classic or -- over the Outdoor Life Networks are seeking to be able to provide some degree of live events would actually compete with your ability to purchase some of that programming as well.
5946 MR. J. LEVY: Well, no question it would do that. But I think, honestly -- for sure. But you know, we're in that world anyway, quite frankly, competing for some live programming. You're right.
5947 But more to the core, more to the core is, you know, you still have to look at -- you know, we're still in the genre protection stage. Each one of these networks still has an identity that they're supposed to maintain.
5948 And quite frankly, if the Food Network wanted to run some sporting events, they could. They could run hotdog eating contests or -- what else do we talk about? Egg spoon races.
5949 But I mean, we're being a little flippant about it, but the reality is, it has to be within the genre of what they're talking about.
5950 Classic sports, by definition, is classic sports. Live has nothing to do with classic sports. It never has, never was and never should be, in our view.
5951 And in the Outdoor Life Network, we went through painstaking hearings to close the sides around which they should be allowed to involve some live events but not -- I think the Commission came up with it, was the stick and ball. And it made perfect sense.
5952 I mean, we talked about the sporting events being hockey and baseball and -- and just as an aside, one of the major networks just did a deal to carry cricket. Cricket's getting, obviously, very popular and it's always been very popular in the rest of the world and we do a lot of it on our sports apps, actually.
5953 When they introduced cricket, and it's Rogers, they decided to do it in two ways. One was to put it on their pay-per-view network, and (2) to put it on Rogers Sportsnet.
5954 So sometimes when they're forced to think about where things should land, they do it properly. And to have that sort of stick and ball end up on these other networks is a -- you know, in our view is completely ridiculous.
5955 COMMISSIONER KATZ: But in a 24-hour day, 15 percent is roughly three and a half to four hours, so that basically is one sports event a night --
5956 MR. J. LEVY: And that's a lot.
5957 COMMISSIONER KATZ: -- in prime time.
5958 MR. J. LEVY: And that's a lot.
5959 COMMISSIONER KATZ: Yeah. But you have the ability to put on one --
5960 MR. J. LEVY: Yes.
5961 COMMISSIONER KATZ: -- sports event per night, basically --
5962 MR. J. LEVY: Correct.
5963 COMMISSIONER KATZ: -- a full hockey game or baseball game or whatever.
5964 MR. J. LEVY: Correct.
5965 COMMISSIONER KATZ: Okay. And what you're suggesting is if these other broadcasters wanted additional capacity, they should create another channel and put it on.
5966 MR. J. LEVY: Correct. We think they've got lots of room to do it in lots of ways in other places. Correct.
5967 COMMISSIONER KATZ: And yet we hear from the independent broadcasters that there isn't a lot of room and they're being taken off the networks because there's no capacity.
5968 So when you say they have a lot of capacity, do you have information to support that?
5969 MR. B. LEVY: I would add that the networks that would be looking to secure the space for the additional feed or occasional use feed are also the BDUs, so yeah, I would suggest in the past when some of these networks have launched additional networks like TSN-2 and like Sportsnet-1, they've not met with any difficulty in securing channel space.
5970 COMMISSIONER KATZ: Well, clearly they have to rationalize this: Do we now have a reverse onus obligation as well? So if they are taking somebody off at the expense of their own channel they are going to have to rationalize.
5971 MR. BENJAMIN LEVY: And I'm not suggesting necessarily that they are taking someone else off. In the digital landscape there are capacity constraints, but I don't think anyone has suggested that full capacity has been reached.
5972 COMMISSIONER KATZ: As the Chairman said, the issue of genre protection isn't before us in this hearing, but clearly as these things converge it gets muddier and muddier and it won't be long before you realize that there are opportunities for you folks as well to broaden out with your audience and you will be seeking another channel as well and then the question becomes how do all these channels come together.
5973 I'm not suggesting you would change the score, but you would look for another channel to augment the score because you have an audience out there and there are other things that you want to do.
5974 MR. JOHN LEVY: That's true. I mean right today if we wanted we could apply for a Cat. "C" general interest sports licence. I mean we could do the same thing.
5975 The only reason I can't do it is because basically I still don't own cable companies, so I don't have the luxury -- and we are going to talk about this at the next hearing -- of not only creating the content, creating the channel, but I probably won't get distribution, whereas if my friends launch a new channel and just move content from their existing channel to the new one, they have a much better shot of getting it.
5976 COMMISSIONER KATZ: On page 8 of your comments you talk about the existing OLN or ESPN Classic having different CPE requirements for their speciality, whereas the Category "C" licensees have a 60 percent Cancon and 60 percent CPE and you are suggesting that if they are allowed to augment their existing programming they will be able to use sports as a lever to reduce their CPE for classical programming.
5977 Is that the crux of your argument, that Canadians will lose Canadian programming at the expense of sports because they will be able to use sports as a vehicle to reduce the Canadian content?
5978 MR. BENJAMIN LEVY: I think that would be perhaps a more accurate characterization of the second point we make.
5979 The overall point we are making here is simply that live sports doesn't fit at all on ESPN Classic and that a particular type of live sports does not fit on OLN.
5980 When they are coming forward to the Commission saying, "Please grant me that", that said -- and I think ESPN Classic even up here said, "We make no bones about it, live is not Classic, please give us 5 percent."
5981 COMMISSIONER KATZ: Yes, I got you right here.
5982 MR. BENJAMIN LEVY: Absolutely.
5983 So we think that then forces the Commission to look at additional considerations, which is if they brand this overbooked programming on a Category "C" they would be obliged to invest any revenue generated -- 50 percent of any revenue generated from that programming into new Canadian programming. If they run it on OLN or ESPN Classic, that obligation gets reduced.
5984 Second, and perhaps more importantly, when you start allowing that type of programming on those services and making an exception to their licence, what you are also doing through the back door is allowing them to put expensive Canadian sports product on these services and share that expenditure across their group, which could in theory allow them to reduce spending in other areas of the group.
5985 COMMISSIONER KATZ: Yes.
5986 I want to take you to your submission of February 9th, it was the one dealing with ESPN Classic. I just need a clarification.
5987 In paragraph 3 you referred to the previous request to amend the ESPN Classic's conditions of license in December 2006-34. In paragraph 3 you say at the end:
"The conflict with ESPN Classic's qualitative narrative nature of service that was at issue in the prior application remains unresolved in the current one." (As read)
5988 What do you mean when you say "remains unresolved"? I thought we denied it in the last one, so it was resolved.
5989 MR. BENJAMIN LEVY: No. Very simply that back then they were a classic sports service looking to integrate live programming and today they are still a classic sports service looking to integrate live programming and the conflict between live and classic exists today just as it did back then.
5990 COMMISSIONER KATZ: Okay. But we decided upon it then.
5991 MR. BENJAMIN LEVY: Yes, you did.
5992 COMMISSIONER KATZ: So it was resolved then and now they have come back again?
5993 MR. BENJAMIN LEVY: Yes. Yes.
5994 COMMISSIONER KATZ: Okay. So it was resolved and now it has been reopened again. Okay.
5995 Those are my questions, Mr. Chairman.
5996 THE CHAIRPERSON: Rita...?
5997 COMMISSIONER CUGINI: Yes. Thank you. Good morning.
5998 Just for the sake of the record, and at the risk of correcting Peter Grant and Graham Buchanan, Outdoor Life CPE is 41 percent, not 37.
5999 MR. BENJAMIN LEVY: Oh, in the book.
6000 COMMISSIONER CUGINI: Yes. It says 37 in the book, but their renewal decision says 41.
6001 Just a couple of follow-up questions to your discussion with Vice-Chairman Katz.
6002 Your ability to air 15 percent of live sports is a result of a license amendment that was granted to you post granting of your licence. So if it was okay to amend your license at that time, why isn't it okay to make these amendments to the two that have asked?
6003 MR. JOHN LEVY: Okay. I think the basic reason why it's okay for us and is not okay for them, to be quite honest, is because in our particular context we have never, ever strayed from the nature of who we are and what we are when we started the network in -- actually in 1994 as SportsCo before we had a licence, when it was just date. Then we got our licence to -- not to bore you with all the history, but we came to the Commission and we got an ability to continue to output for news and information.
6004 So our first amendment was getting the licence actually which allowed us to do live video highlights. Then we came to the Commission and said, "Look, this is really working." TSN had a 10-year head start on us and Sportsnet was licensed at the same time we were, so there was lots of live event normal sports networks out there.
6005 We came to the Commission and said, "Look, we want to continue to expand our network in the context of provisioning what we do for a living without varying from who we are and what we are.
6006 So even when we got the amendment, which you are correct, for our licence, it was still strictly within the scope of who we were and what we were, and the Commission recognized that. You know, they said to us, "If you are going to do it then we have three big conditions on you.
6007 One is 15 percent only", which we agreed wouldn't be competitive.
6008 "Number two, your ticker never goes away", which nobody else was doing, "and you have to cut in every 15 minutes."
6009 "Thirdly, half of every live event you are going to do is going to be Canadian."
6010 So they put a bunch of restrictions on us and we were just -- we said, "Fine, no problem" and then continued to develop our brand and never, never wavered.
6011 We see that as entirely different from a classic sport saying, you know, "We are going to redefine who we are and what we are and put live events on something that's classic. It just makes no sense.
6012 With Outdoor Life Network the same thing is true. I mean if we read back to what -- I don't want to bore you, but what the mandate is of the Outdoor Life Network and their nature of service:
"Programs dealing exclusively with outdoor recreation, conservation, wilderness and adventure. The schedule will revolve around eight key themes: outdoor exploration and adventure, marine recreation, winter recreation, conservation, nature enthusiasts, anglers, outdoor cooking and hunting." (As read)
6013 I don't want to bore you with it, but I mean it's pretty clear that there is nothing in there that has to do with stick and ball.
6014 COMMISSIONER CUGINI: Earlier you said that there are particular types of live sports that would not be appropriate for Outdoor Life.
6015 Are you excluding all types of live sports?
6016 MR. JOHN LEVY: No. I think we have actually addressed that --
6017 COMMISSIONER CUGINI: Okay.
6018 MR. JOHN LEVY: -- and we have said, no, they can do it, as long as it's not stick and ball.
6019 Actually it makes so much sense because they are saying stay true to who you are. If there are live events that make sense in the context of, you know, bull riding and the Tour de France.
6020 MR. JOHN LEVY: The Tour de France they can provide.
6021 THE CHAIRPERSON: Skiing surely.
6022 MR. JOHN LEVY: I'm sorry?
6023 THE CHAIRPERSON: Skiing they could do.
6024 MR. BENJAMIN LEVY: Absolutely.
6025 MR. JOHN LEVY: Lots of stuff. I mean this is a complete -- and, you know what, I'm not saying anything that they are not telling you. They have come to you and said, "Look, we can't" -- not even us, these are intelligent guys sitting here in front of you -- not us. I mean we are intelligent, too, but the other guys that are in front of you and they are trying to tell you that that's part --
6026 I heard some argument about adrenalin. Like there was something about adrenalin and therefore if it's -- it's kind of like if you start to sweat that means it could be something that's a sport. I'm sweating right now, does that make this hearing something that --
6027 COMMISSIONER CUGINI: Some people think it's a sport.
6028 MR. JOHN LEVY: -- could be a sport.
6029 COMMISSIONER CUGINI: Thank you.
6030 MR. JOHN LEVY: Anyway, thank you.
6031 COMMISSIONER CUGINI: Thank you very much.
6032 THE CHAIRPERSON: Okay. I think those are our questions for you. Thank you very much.
6033 We will take a break and we will resume at 11 o'clock, Madam.
--- Upon recessing at 1055
--- Upon resuming at 1110
6034 THE CHAIRPERSON: Okay, Madame la Secrétaire, commençons.
6035 THE SECRETARY: We will now proceed with the presentations by Greedy Productions appearing via video conference from Vancouver; Children's Breakfast Club appearing via video conference from Toronto; Winnipeg Harvest appearing via video conference from Winnipeg; Ice on Whyte Festival appearing via video conference from Edmonton; and Hockey Calgary appearing via video conference from Calgary.
6036 We are going to hear each presentation, which will then be followed by questions from the Commissioners to the panel. Each intervenor will have five minutes for their presentation.
6037 I will now invite Greedy Productions to begin.
6038 Please introduce yourself and you will then have five minutes for your presentation.
6039 Thank you.
6040 MR. LUCAS: Hello. My name is Victor Lucas, and I am the President of Greedy Productions and I executive produce and host two television shows across Canada, "The Electric Playground" and "Reviews on the Run".
6041 I have been a producer since 1997, an independent producer. We got our television programming off the ground basically out of my old apartment. My girlfriend and I moved out at the time and we started a production company out of my apartment and we were able to somehow, through a lot of hard work, launch a television series across the country. That launched in 1997.
6042 We worked on this series as a weekly show for a number of years and had some pretty good distribution. We were working with the CHUM group and we had some sales into the United States as well.
6043 But I have to tell you that when we started to partner with Rogers things really started to accelerate with our company. We started our partnership with Rogers in 2003 and the way that it began was they just had an outreach for our content and wanted to purchase it as a second window for their network G4 Canada. We were of course ecstatic to have increased distribution and to create this new relationship with G4 in Canada so we said yes.
6044 It was a harmonious relationship right from the beginning, so much so that by 2007 they asked us to create a daily technology show called "The Lab With Leo Laporte". This was the first daily television show that we had produced. There certainly aren't a whole number of daily television shows that are national that are coming out of Vancouver so we were elated with the opportunity and we jumped on that and we created a years' worth of content there.
6045 When the year was up we realized that it was probably a good move for us to transition into stuff that was a little bit more entertainment-focused, things that still had to deal with technology, video games, gadgets, technology, but a big emphasis as well on entertainment. So what we jointly decided was we should move "Electric Playground" into becoming a daily series and that's what we did in August of 2008.
6046 I had to make the decision to sever my relationships with other broadcasters in Canada. And I had good relationships with everybody, but Rogers, really right from the beginning, showed how much they cared about our company, about our properties and about working with us and, frankly, the decision was easy.
6047 So in 2008 we launched "Electric Playground" as a daily series. It immediately became a lot more popular, it became a better series. Even though we had -- it was much harder work, it just became a much more enjoyable show to watch every day than it had been as a weekly series. And I'm proud of our weekly work, but when we went daily it was a big deal for us.
6048 And that was a success right away and then that kind of led us into creating another daily property, which was our other television show "Reviews on the Run". So in March of last year "Reviews on the Run" went daily as well.
6049 I believe this might be a first for Vancouver. I don't know if there has been two daily national television shows being produced out of Vancouver, you know.
6050 We make 550 episodes of television a year, it has allowed us to expand our distribution. We have some major sales going on with our distributional allies in America right now, we are dealing directly with some of the top markets and some of the biggest -- some of the biggest stations in the top markets in the United States, we are talking about ABC stations, and this is all directly due to our ability to create two very compelling great television shows every single day.
6051 We also made a sale recently into Australia onto the sci-fi Channel who was watching our shows when they were vacationing in Vancouver on Citytv every night.
6052 So I have to tell you that this relationship with Rogers has been phenomenal for Greedy Productions, for everyone that works with us. We started as, you know, about five or six people and now there are 40 of us and we have people that work for us in Toronto and San Francisco and Los Angeles and we make a lot of content and we focus a lot of energy on Canadian creators in video games, technology and entertainment and I'm just really, really grateful for Rogers support. I think they are a progressive company and I think they are giving independent producers like me a lot of great opportunities.
6053 THE SECRETARY: Thank you. Thank you. Thank you. Thank you.
6054 MR. LUCAS: You're welcome.
6055 THE SECRETARY: I would now invite Children's Breakfast Club to begin.
6056 Please introduce yourself and then you may begin.
6057 MR. GOSLING: Good morning. My name is Richard Gosling, I am the President and the founder of the Children's Breakfast Club.
6058 We are registered charitable organization serving the community since 1984. We have 25 locations across the GTA, all located in high-risk, low-income communities across the City of Toronto.
6059 We serve approximately 5,000 children a hot culturally reflective meal, working with our communities to develop healthy individuals who are able to participate fully in all aspects of life.
6060 Since its inception our partners have consisted of the Toronto Police Service, EMS, fire, public health and mainly the community themselves.
6061 There is no stigma attached to being involved with our program. Our strengths consists of strong resident-driven advisory boards which provide guidance for our menus, hours of operation and options and focus on activities for the children.
6062 We are totally privately funded. We have no government support and our board is a volunteer board to ensure that $.87 of every dollar goes directly into feeding children, so that when people donate their funds it goes into the community, not building a hierarchy or a bureaucracy.
6063 Our children consistently participate in additional healthy programs that enhance their life. It consists of learning how to ride bicycles and participating in school programs, a variety of sporting activities such as skating, cricket, baseball, and participating in the Ontario Bar Association's photo competition on anti-racism. I was told as of last night one of our children actually is an honourable mention in that photo competition using just a small Instamatic camera.
6064 Each year we celebrate cultural activities. For example, Black history month, Asian heritage month, Eid, Christmas, et cetera. These elaborate programs are celebrated by all of our children and they fully gather an understanding and respect for each other's cultures and how they have contributed to make Toronto and Ontario and Canada a better place.
6065 When we started our program in 1984 we initiated a program called "Celebrity Chefs". This includes local heroes, police, principals and many others, and our first celebrity chef was Mayor Mel Lastman, the then Mayor of North York. City Pulse came on our very first day and has continued to promote, support and encourage our children across the city.
6066 The Children's Breakfast Club has never allowed the children and our communities to be exploited in any way. City Pulse has been respectful, telling their many stories, including their successes and challenges that they need to be addressed.
6067 Their on-air personalities and camera crews have demonstrated empathy and respect for the residents and this has included following the children to Ottawa. Each year we take a group of children to Ottawa to educate the MPs to the contribution that the black community has made to, again, as I mentioned, Toronto, Ontario and Canada. Their camera crews have supported the children in this endeavour for a number of years.
6068 This also includes not only the on-air personalities but their behind the scene staff, and that's their camera crews. They have adopted our families themselves personally and ensured that our families had a good Christmas or Eid, and that included their full meals, et cetera.
6069 City's ongoing coverage since 1984 has allowed our organization to build strong partnerships with the corporate sector and this is something that we have never been able to do and we wouldn't exist to this day if we hadn't had these partnerships and been able to be exposed to the broader community, so we thank them.
6070 It has also encouraged the sports celebrities, the emergency providers to come out and support us and to be active participants with us on a regular basis.
6071 Many of the children who started with our program in 1984 are now parents themselves. One of our participants actually has become an on-air personality and is very successful in the media field themselves.
6072 Over the past 25 years City Pulse Breakfast Television has never failed to give a complete coverage of our programs. And this isn't just little sound bytes, but they have been there for us right through our programs, making sure that the full story is given and that the community truly understands what we are all about.
6073 Thank you.
6074 THE SECRETARY: Thank you.
6075 I would now invite Winnipeg Harvest to begin.
6076 Please introduce yourself and then you may begin.
6077 MR. NORTHCOTT: Thank you.
6078 I am David Northcott, the Exec Director of Winnipeg Harvest Food Bank and the President of the Provincial Association.
6079 I appreciate -- merci beaucoup pour pas en français. Mon vocabulaire en français est très petit. So thank you very much for speaking in English, Mr. Chair and Commissioners.
6080 I have had to beg in this community for 25 years. I have begged for food, begged for time and begged for dollars to feed families in this province. It's critical for us that two things take place.
6081 One, that we get a chance to be able to be supported by local presence and local media people; and
6082 Secondly, get a chance to sit in front of you and tell you why it's so important. So I appreciate this Commission to be able to have a chance to speak briefly to you. I appreciate Richard's eloquence as well, so well done. So thank you.
6083 The key for us is local presence and local presence and local voices helps us with our issues locally. Oftentimes we will speak nationally about sort of national issues, but locally we need the local presence and local voice and Citytv does that for us very, very well.
6084 We also need to profile the need and issues that attach themselves to local families. Again, Citytv has been able to do that very well for many years for us. Indeed, one of their on-air personalities won a national award for putting himself on a seven-day poverty program to be able to walk the talk. It's very, very involved.
6085 We also like the fact that through various mechanisms we can challenge the community not just on issues and change, but to be able to provide support to the Food Bank in this province.
6086 We are also trying to build validity to these issues. Oftentimes we can be a voice that speaks about it, but until a media person or a media station with journalistic skill-sets says, "Wait a minute, this is an issue for our community to consider", it oftentimes doesn't get validated.
6087 So to have Rogers and Citytv validate issues by putting through the new system or through some community support mechanisms helps us a great deal and helps the families we do business with.
6088 We also appreciate the in-kind support. To be able to be behind the scenes, help us translate the language of media and to be a will to speak in 15 second bytes or 30 second bytes, or to speak well in front of various professionals we often use their skill-sets and their donated sets.
6089 Indeed, when we get going and we get great strength coming, we also have validation from our volunteer base. We have 360,000 volunteer hours that run the Food Bank and most of those volunteers are clients of the Food Bank and we appreciate that Rogers and Citytv has been able to feature a Food Bank hero, volunteer hero each month on the systems.
6090 So a strong presence and because of that strong presence two things take place. One, we get food, we get volunteer time and we get donated dollars to us.
6091 The other thing that happens is when we become active on-air and we get issues in the news with Citytv, the politicians and political decision-makers also pay attention.
6092 For us, we appreciate this opportunity to tell you the story and would be happy to answer any more questions.
6093 THE SECRETARY: Thank you.
6094 I would now invite Ice on Whyte Festival to begin.
6095 Please introduce yourself and then you may begin.
6096 MS BORNN: My name is Wanda Bornn, I am the Festival Producer of the Ice on Whyte Festival.
6097 The Ice on Whyte Festival takes place in mid-January in Edmonton for 10 days and it is an extravaganza of ice carving, music and entertainment and very affordable for families.
6098 The festival is outdoors in a park and it has the giant ice castle, a huge ice slide, a play area for children. We also feature an international ice carving competition that invites ice carvers from all around the world to build and create fabulous carvings for the general public to enjoy.
6099 There is a heated tent on site as well where people can warm up if it's really cold and have a hot beverage. The hot beverages are served as a fund-raiser for a local charity. We also have live music in the heated tent.
6100 In 2011 we had 48,000 visitors come down and experience our outdoor festival.
6101 Citytv has always been involved in our event and provides pre-festival promotion on Breakfast Television and the "Stuff You Should Do" segments. The on-air personalities have come out and even competed in an ice carving challenge for media, which is very entertaining.
6102 And since 2009 Breakfast Television has broadcast live from the festival site and it is something that is completely magical. There is nothing like it in the city of Edmonton. No other television media can and will provide that kind of live coverage of a festival.
6103 The two morning hosts, Bridget and Ryan, they are there bright and early in the morning, no matter what the temperatures are. We have them out when it has been plus 8 and this past January it was minus 38 with the windchill and they were out there hopping on the spot to keep your feet warm and dressed warmly of course and providing coverage of the festival.
6104 We have some ice carvers that come from around the world, as I mentioned, and some of them don't even speaking English and they manage to interview all of these artists. We have interpreters available. It's very entertaining and also provides fabulous exposure for local and international artists.
6105 One of the things that we really enjoy is every Friday night at the festival we have live karaoke called "Frozen Friday Karaoke" and the Breakfast Television morning hosts have actually participated in that and done wonderful promotion of that event.
6106 Visitors come to the festival as a result of this live broadcast and we interview visitors on site and ask them how they heard about the event and they will invariably talk about the Breakfast Television morning hosts competing in a race down the giant ice slide that seems to really, really stick in their memory and they find it obviously very entertaining.
6107 Citytv's community involvement and support in Edmonton is second to none. There aren't any other television stations that provide that level of local community event support and our festival is absolutely thrilled to not only feel like Citytv and Breakfast Television are partners in our festival, but they are also part of our festival. They are there for us, they help promote it and they get involved and broadcast live from the site.
6108 In general the local programming as part of Breakfast Television and Citytv keeps Edmontonians informed of what's happening in the arts and cultural community in our city and there isn't another station in the city that gets involved. If you want to know who is going to be performing at the Winspear and you watch Breakfast Television you will find out and you will also see a little snippet of what is coming.
6109 The staff and the management at Citytv really care about the community and that comes across very, very strongly in the programming, in the local programming that is provided.
6110 Just as a side note, everyone here is a joy to work with. We have gotten to know them quite well and we really have a lot of fun with them.
6111 As I mentioned, there isn't another local television station in Edmonton that supports and provides information for arts and culture the way Citytv does.
6112 Thank you.
6113 THE SECRETARY: Thank you.
6114 I would now invite Hockey Calgary to begin.
6115 Please introduce yourself and then you may begin.
6116 MR. CAVANAGH: Well, good morning. My name is Perry Cavanagh, I am the President of Hockey Calgary and certainly would like to thank the Commission for the opportunity to speak today on behalf of Rogers Broadcasting.
6117 For the record, I am specifically referencing our organization's views and services provided by Rogers Broadcasting Citytv operations located in Calgary.
6118 First of all, I would like to provide some perspective on precisely who I am formally representing here today. Hockey Calgary is one of the largest minor hockey associations in Canada and certainly claims rights to the fact that we are the largest in Alberta. Our mandate is to provide technical and administrative support services to 24 local minor hockey associations across the city at large. With over 13 and a half thousand registered hockey players, 3000-plus coaches, 2000 officials, 27,000 parents, 54,000 grandparents and numerous other extended family members, it's very reasonable to conclude that we reach out to a significant portion of the city's population on a continuous day-by-day basis.
6119 Our current relationship with Rogers Broadcasting truly blossomed when we were approached by the local management team with a special request to consider becoming partners and hosting an outdoor minor hockey tournament.
6120 The intriguing factor that really caught our attention was that this tournament would be linked in spirit to the NHL Heritage Classic game that was being hosted by the Calgary Flames in February of this year. Needless to say, thrilled by the overwhelming potential to create something extraordinary for our young players and families, the inaugural Breakfast Television Outdoor Classic Hockey Tournament became an incredible reality.
6121 That reality quickly evolved into a 56-team tournament benefiting close to 1000 hockey players here in the City of Calgary.
6122 As a direct result of teaming up with Citytv, our membership became fortunate benefactors of a significant once-in-a-lifetime opportunity. Most importantly, that opportunity has generated unbelievable memories that will last a lifetime.
6123 For those 9 and 10-year-old players, the anticipation of actually playing hockey on live television, topped up by being able to play on the same NHL ice that only days before they had watched their much loved Calgary Flames play the Montréal Canadiens was, without question, a fantasy dream come true.
6124 In a nutshell, this truly unifying community-based event would not have been possible without Citytv's unselfish caring and compassion for youth in our city. Their sense of community and commitment to the City of Calgary and to all Calgarians, inclusive of our youth, is clearly woven into the fabric of their day-to-day and long-term strategic planning and routine decision-making.
6125 This fact is further evidenced by the significant financial and professional and technical support that they contributed to the most amazing event that we experienced in our short history as a minor hockey association. For that a million thank yous simply does not do justice to just how indebted Hockey Calgary is for all that Citytv has now accomplished for hockey in our community.
6126 It is relationships such as the one that we now enjoy with Citytv that truly have a significant impact on improving and enhancing the quality of life in our communities as well as society in general.
6127 The benefits derived from this specific corporate and community collaboration extend far beyond the boundaries of our city. Enhancing the hockey experience for our youth and the promotion of Canada's greatest game as a result of the excitement generated by the event itself is still continuing long after the event has actually ended.
6128 Our membership is still talking about what a wonderful opportunity they were privileged to be a part of. In fact, several teams took the time to visit the studio after the event had concluded to award Citytv with autographed certificates of appreciation including team pictures.
6129 I suspect that it was also a strong desire on behalf of the members of each of the teams to simply extend the positive experience just a little bit longer.
6130 So I would like to share with the panel a few comments that have landed on my desk that reflect just how important and significant the continuance of a relationship with Citytv is to our organization and certainly to Calgary:
6131 - It brought the whole community together in Calgary, including the NHL Calgary Flames, the CFL players and other celebrated key individuals with the city.
6132 - The experience gave the kids definitely an opportunity of a lifetime.
6133 - It demonstrated to our membership what Hockey Calgary can do when working together with community-minded corporations like Citytv.
6134 - It gave our members a sense of pride to be a part of our organization and to be Canadian.
6135 - The whole event had generated a substantial side benefit of promoting health and wellness associated with physical activity as well and that was referenced by several phone calls that were received at my desk in my office.
6136 THE SECRETARY: I'm sorry, you have to --
6137 MR. CAVANAGH: -- opened up significant doors to future possibilities to help up as a minor --
6138 THE SECRETARY: I am sorry. Can you conclude, please?
6139 MR. CAVANAGH: I certainly will.
6140 THE SECRETARY: Thank you.
6141 MR. CAVANAGH: In conclusion, the impact that Citytv had on our city was and continues to be significant. We are a stronger organization because of their insight, wisdom and efforts. Their unique commitment to Canadian programming is extremely important to us and all Canadians because of the individual pride, allegiance and value to inclusion that it generates.
6142 Therefore, for the reasons contained in my presentation to you today, on behalf of Hockey Calgary membership group, I sincerely request and recommend with confidence that you replenish Rogers Broadcasting Limited's application for licence renewal.
6143 Thank you once again for allowing me the privilege to present today on behalf of Rogers.
6144 THE CHAIRPERSON: Well, thank you very much for your interventions and very impressive testimonials from five different places.
6145 If I ask you what is it that -- you obviously are great fans of Citytv and what it does in your community. Is there anything that's lacking? Is there anything -- if I ask you, what should City do that it doesn't do in your community, what would you answer?
6146 MR. CAVANAGH: Well, you know I believe that this is a wonderful step forward in terms of helping us promote minor sport here in our city. So I think that we are very, very excited about the fact that they engaged us in this particular event.
6147 We would like to see it continue going forward to, you know, generate the positives associated with being involved in sport and, more importantly, the health and wellness factors that are generated, so continued activity, working within the minor sport market in Calgary would certainly be very beneficial.
6148 MR. NORTHCOTT: From David in Winnipeg, I appreciate that question.
6149 For us it would be that the Citytv group gets stronger and stronger in Winnipeg so they can hire local talent and be able to showcase and bring along some good talent. It also strengthens our voice in the community. That would be the only gap that I could see and although -- a gap looking at being able to grow stronger and grow better.
6150 MR. GOSLING: Yeah, from Toronto, I think the one thing that I would like to emphasize is the fact that they are a strong voice for the community and have been since 1984 and our diverse populations and they have done it in such a positive way.
6151 This is what has been our major strength. It's the fact that, you know, these high risk communities they tend to be exploited for high risk crimes and things that are taking place.
6152 City has been the voice for these communities and our diverse populations. It really highlights that they are safe communities, that they are vibrant communities and that you know our community does participate.
6153 As I mentioned in my presentation, one of our children from a breakfast club was an on-air personality with City and he has grown up because they admire the role models that our on-air personalities were in our communities when they came out. So they have been an important voice for us over the 25 years and I need to really emphasize that.
6154 THE CHAIRPERSON: Okay. Thank you.
6155 MR. LUCAS: From Vancouver I can tell you that partnering with City has been unbelievably beneficial for our company. It's put our programming in very much the public eye.
6156 We have had a great relationship with G4 all the way along, but Citytv has a cachet about it, this community cachet that everybody else is speaking about. And it is wonderful and I have noticed first-hand the awareness of what we are doing everyday with our programming.
6157 Honestly there is -- I get this sense of Canadian pride that people are very enthused that we built these programs out of Vancouver and have shared them with all of Canada.
6158 When I go to events like Fan Expo which Citytv is a big part of in Toronto we meet many, many fans you know and it's unbelievably encouraging.
6159 So I can tell you as an independent producer to have Citytv's support, I'm not seeing any gap there. I'm loving it.
6160 THE CHAIRPERSON: Okay. Who are the last one? The Ice on Whyte Festival, Ms Bornn, did you have any answer?
6161 MS BORNN: Nothing further, just to validate what the others have said, to continue that growth as local programming.
6162 THE CHAIRPERSON: Okay, thank you.
6163 Rita, you have some questions?
6164 COMMISSIONER CUGINI: Yes, thank you. And I, too, would like to repeat our thanks to all of you for appearing at this hearing.
6165 I'm going to start in the order in which you first presented. So Mr. Lucas, I'm going to start with you.
6166 MR. LUCAS: Okay.
6167 COMMISSIONER CUGINI: Now, you are based in Vancouver and always have been?
6168 MR. LUCAS: Yes, I have and, yes, I am.
6169 COMMISSIONER CUGINI: As you know, Rogers Media's head office is in Toronto. So who is your main point of contact?
6170 MR. LUCAS: Elaine and Haydon, Hayden Mendell(ph) and Elaine Shutti(ph).
6171 COMMISSIONER CUGINI: How often are you able to meet with them?
6172 MR. LUCAS: Every time I go to Toronto I make it a point to meet with them, but I communicate with them at least once a month, usually through email where everybody is super busy.
6173 But I have never had a relationship, and I have had a lot of great relationships with broadcasters, but never one this symbiotic, truly at the partnership level.
6174 COMMISSIONER CUGINI: Congratulations on your success with the distribution of your programming.
6175 MR. LUCAS: Thank you.
6176 COMMISSIONER CUGINI: And has Rogers assisted you in any way with that distribution?
6177 MR. LUCAS: Absolutely, yes.
6178 I'm sorry. I'm cutting you off.
6179 COMMISSIONER CUGINI: No.
6180 MR. LUCAS: Absolutely.
6181 MR. LUCAS: Absolutely they have. I signed our first distribution deal last year because I have been able to self-distribute along the way over the years.
6182 But we have gotten so busy with creating so much content that I had to do this in order to progress the company. It's a really great company out of Los Angeles.
6183 But Elaine and Hayden both have some experience with some of these distributors. They actually used to work in Toronto. So there was this immediate kind of respect and, I think, a mutual kind of effort to try to see how much we can grow this content and how far we can deliver this content because it's just going to make the material that much stronger.
6184 I think we are already built some very -- you know content that I'm very proud of and I hear back from the community that they really enjoy.
6185 But I know that we can grow it and get it out to more homes, which is incredibly exciting.
6186 COMMISSIONER CUGINI: Well, thank you, Mr. Lucas. Those are the questions I have for you.
6187 I'm going to move on to Mr. Gosling of the Children's Breakfast Club as soon as I can get you on the screen.
6188 THE CHAIRPERSON: (Off microphone)
6189 COMMISSIONER CUGINI: Oh, okay.
6190 You spoke of Citytv and Breakfast Television's participation in your events. Can you elaborate further on how it is that they participate, other than just news items?
6191 MR. GOSLING: They have actually travelled to Ottawa with us on the train and buses over the years when we first started. We used to travel by bus to Ottawa to celebrate Black History Month.
6192 Their camera crews and on-air personalities have travelled with the children from start to finish in giving coverage not only of their presentation but educating the MPs, to the contribution as I mentioned the Black community has made to our city, and highlighting our communities, their successes and you know, some of their challenges, but doing it in a dignified way.
6193 Breakfast Television broadcasts live from a number of our events. We do a program where we get children to learn to ride a bicycle and to be able to participate, getting them a bike so that they can get summer jobs so that they can go back and forth from school. City Pulse has been there and they spend the whole day with us.
6194 Their on-air personalities actually ride through our high risk communities with us, promoting and encouraging the other children and the families to come out and participate. They are not just there for a few minutes. They are there for the day and work with us regularly.
6195 They have scholarships in their own family members' names to encourage our children to go on in post-secondary education.
6196 This organization is committed to the City of Toronto and committed to these communities and making sure, as I said that they have a voice.
6197 Our communities are so diverse. You know, we have cricket games going on there. We have soccer games but also a number of high holidays. We celebrate them all. We celebrate Eid. We celebrate Christmas. All the children come together.
6198 City highlights all of those celebrations and makes sure that the community realizes that we do it together in a respectful way and it diffuses so many issues and concerns in our city.
6199 COMMISSIONER CUGINI: Now, you also spoke of corporate sponsorships having increased for your organization. Did Citytv facilitate those relationships with the corporate sponsors?
6200 MR. GOSLING: Absolutely. I mean there is so many charities, as you know, out there.
6201 But for people to truly understand in the City of Toronto that we have got children that go to school hungry. I mean I worked -- when I first started I worked in social work. And I truly didn't understand the need for breakfasts. It wasn't until we actually started the program.
6202 You know, I have one little -- guys in our building and it was really just to get them to go to school. They ate 26 pancakes at a sitting and I sat there in amazement. And I had worked in the field.
6203 To get that information and knowledge out to the community to the broader private sector and say we have children in our community here that need to have breakfasts so that they are able to be successful, so that they are able to compete on a level playing field.
6204 Our principals, every single one of our principals will tell you the impact that this program has had.
6205 City has been our voice out to the private sector. Without them we couldn't exist. We go on a year to year basis with getting funds. We don't -- we are not a big major charitable organization. We get private donations on a regular basis.
6206 City has been our only voice and our only vehicle to make sure that the private sector knows what we are all about.
6207 COMMISSIONER CUGINI: So there aren't other media outlets in the GTA that provide that level of --
6208 MR. GOSLING: Well, there are, but they give you sound bites and they give you small coverage but we don't get the same kind of participation.
6209 I mean, when Breakfast Television and Jennifer Valentyne or Gord Martineau comes out and they spend a full program with us that's what -- when you get that kind of real commitment from these communities it gives us credibility.
6210 I think everybody has talked about validity, you know making sure that people truly understand what you are all about. City does that for us on a regular basis.
6211 As I said, it isn't some short term project here. It's not a year or so. It's 25 years of commitment to us.
6212 I have watched these on air personalities. As I said, one of our young men went on to be an on air celebrity and participant on City. So that's the kind of commitment there is.
6213 And not just to on air. As I mentioned in my presentation, their camera crews, they have adopted our families. When they are coming out and doing the video coverage, they build that understanding and empathy for our communities and they themselves personally have gone back and said, "We want to make sure that our family celebrates Eid or Christmas with us, and they have come in it as well.
6214 So everybody is on board.
6215 COMMISSIONER CUGINI: Thank you very much, Mr. Gosling.
6216 I am going to move on to Mr. Northcott.
6217 You spoke of "in kind support for Winnipeg Harvest". Could you elaborate further on that, on what you mean by the in kind support they provide?
6218 MR. NORTHCOTT: Sure. Yes, thank you.
6219 The opportunity for us to speak publicly is remarkable but if we don't frame it properly or be able to speak in shorter bites we often don't get anything in the news.
6220 So we have learned to be able to take some of our writing and out press releases and our written documents and have various individuals over the years help us write it properly. So we have learned to be able to deal with techniques that way.
6221 We have also been able to pick their brains on how do we cut things to public service announcement size. Indeed, they do the public service announcement, donate their time to do PSAs for us which we run on radio and on air and sometimes with other companies which we appreciate very much.
6222 But the other piece that they do that they help us a lot, most of the volunteers at Winnipeg Harvest are clients of the food bank and they can feature that person by being able to walk with that person, help them be interviewed and be interviewed safely and respectfully so that their story can go on air.
6223 It's a huge spiritual boost for that individual to say their story. It has that validity. But if we weren't able to have that skillset from them to be able to say, "Here is how you present it. Here is how you package it so that the real story can get through" then we don't get a story through.
6224 COMMISSIONER CUGINI: Thank you very much, Mr. Northcott.
6225 I'm trying to pick on things that you each said that were different so that you are not repeating yourselves.
6226 MR. NORTHCOTT: Thank you.
6227 COMMISSIONER CUGINI: So I'm going to move on to Ms Bornn.
6228 You, in your presentation, talked about the relationship with City for the past three years.
6229 Did anyone provide coverage of your event before that three-year mark?
6230 MS BORNN: Oh, yes, it was just for the past three years Citytv has produced the whole entire breakfast -- one whole entire breakfast television segment live from the festival, so three hours live in the great outdoors is quite spectacular.
6231 COMMISSIONER CUGINI: Well, especially in Edmonton.
6232 MS BORNN: Yes.
6233 COMMISSIONER CUGINI: Do they also provide pre-promotion of --
6234 COMMISSIONER CUGINI: Sorry, I couldn't resist.
6235 Do they also provide pre-promotion of your event?
6236 MS BORNN: Oh, absolutely. They talk about the festival because it's so much part of their involvement. They promote the fact that they are going to be there live at six o'clock in the morning.
6237 And we have actually invited viewers to come down and participate in the live broadcast. Sometimes a few of them show up, depending of course on how cold it is outside.
6238 It's part of -- it's part of their programming. It's part of their -- they seem -- like they are part of our event so they talk about it. The artists have come into town. They are starting to build the site. The fencing has gone up.
6239 They keep tabs on what we are doing as we are building the site and preparing for it and just creating that general excitement and buzz in the community for the festival.
6240 COMMISSIONER CUGINI: Thank you very much, Ms Bornn.
6241 Mr. Cavanagh, you spoke of financial support that Citytv has provided. Can you elaborate further on what kind of financial support they have provided?
6242 MR. CAVANAGH: Well, absolutely. You know the event wouldn't have been possible without certainly the services provided by Citytv.
6243 You know, there was activities at the Saddledome which, you know, their relationship with the Calgary Flames organization was able to procure ice when we weren't able to use the ice on an outdoor basis due to -- much like our cousins in Edmonton -- the extreme cold weather conditions that we were realizing.
6244 You know, so a multitude of things in that nature that really brought a different level of execution to the event in itself.
6245 You know the key thing was that throughout the course of the week there was hours and hours of on-air broadcasting live from various sites throughout the city. You know, that certainly isn't something that would have been able to be done on a Hockey Calgary budget.
6246 So that financial support was very huge and that service provided just took us above and beyond any expectations we have as a group normally.
6247 COMMISSIONER CUGINI: Well, once again, thank you all very much for participating in this hearing.
6248 Those are all my questions.
6249 THE CHAIRPERSON: Steve?
6250 COMMISSIONER SIMPSON: I have one question to Mr. Lucas.
6251 First of all, congratulations on your Emmy back in --
6252 MR. LUCAS: Thank you.
6253 COMMISSIONER SIMPSON: In this country one leans heavily on those things so I'm impressed that you didn't bring it up.
6254 MR. LUCAS: Thank you.
6255 COMMISSIONER SIMPSON: I have got a question about genre. You know the programming that you are doing right now is focusing on the gaming business.
6256 MR. LUCAS: That's where we started, yeah.
6257 COMMISSIONER SIMPSON: Yeah, that's right.
6258 The question has to do with asking you to be -- as a producer you are selling to programmers all the time. And the challenge that programmers are having, from the testimony we have been getting this week, is that they are trying to build environments where a core idea that might depict or define a genre for their station they need to populate their programming with other programming of interest to those who were attracted by the main genre.
6259 What I find interesting -- I'm trying to inverse things here, in that what I find fascinating is that you know the gaming business and, in your particular lens you know reviewing gaming, you did the programming I think for Discovery, the Military Channel --
6260 MR. LUCAS: Yes.
6261 COMMISSIONER SIMPSON: And it made me sort of sit up and take notice that -- because the genre it would make sense that gamers and those who want to review gaming would have military application or an application to do programming for that channel.
6262 MR. LUCAS: Yes.
6263 COMMISSIONER SIMPSON: And I'm trying to turn it around to ask you this question.
6264 As a guy who has got one foot in the broadcasting realm and another in the digital realm, would you like to comment on the merits of the pressures that the programmers are facing today in trying to put, for example, on G4 Tech shows like "The Office" and others that are of interest to those who are also interested in gaming?
6265 Would you comment?
6266 MR. LUCAS: I can -- yeah, absolutely. I can speak directly to that.
6267 You know I was one of the only outside production companies that launched with G4 in the States which was owned by Comcast, which Rogers went into partnership with to have G4 launch into Canada.
6268 G4 in the States has struggled all the way along because they really focus on information content and spending a lot of money on information content around videogames. And, in effect, they were trying to compete with all of the other, you know, websites and magazines and other things that were out there, sort of really dialled in on this particular subject.
6269 And what people found is that there was a finite level of reach that that kind of square focus -- you know that really sort of sharp focus on the topic was going to bring them.
6270 So G4 in the States struggled with ratings all the way along and they were burning through their initial funding. You know, frankly, they were spending a lot of money I think in the wrong areas. They weren't populating their network with programming that was complimentary to their core, to their "me", you know.
6271 I think that's exactly what G4 Canada has been able to do, not only with licensing you know, programs like "Lab with Leo Laporte" and getting that of the ground. It's very difficult to make compelling programming around technology.
6272 I think we succeeded quite frankly with that but it's still -- technology has evolved to the point where it's so much a part of everybody's life that you have to make it very dynamic and you have to bring something to bear that they are not getting immediately from all other kinds of sources.
6273 But what they have done with G4 is that they have taken risks on that kind of content and our content as well, "Electric Playground" and "Reviews on the Run". But they have made it you know accessible to a wider audience by having, you know, content that is going to be palatable to the demographic that would also watch our programming.
6274 So things like "The Office" and I think they have had "Community" on there and "Freaks and Geeks" and a lot of these cool sort of animated properties as well, that's the perfect compliment.
6275 And if I were in the programmer's chair at a network like G4 I would say, "Yes, we can't have just a bunch of information shows about this medium. You know, we have to also have things that will entertain people and they can, you know, catch their breath and then find some more information about this medium".
6276 Because I think there is a bit of -- I think what happens is if you have too many information shows it's like -- you know not to knock other networks out there, but I tune in to Home and Garden Television or some of these other specialty networks and I can't tell one show from the other, you know. And I think that is -- that can be a great mistake when you are trying to build a brand and build a network that it's going to attract a demographic.
6277 And the other thing about video gamers, as we have discovered as we have grown our content, is that they are incredibly media-savvy. They are into movies. They are into comic books. They are into animation.
6278 That's what we have been able to do with both "Electric Playground" and "Reviews on the Run". We started as videogames and a lot of technology and we have been able to kind of spiral out. You know, now we will talk to movie directors and comic book creators.
6279 One of my greatest sources of pride here is that we have been able to really dig into the creative community in Canada. And we don't just come at this content just purely from trying to be competing with the other entertainment shows out there and just to make it all about gossip and celebrity.
6280 We really try to find cool creators and let them speak and become a platform for them, you know, instead of having to fight for you know sound bites against Paris Hilton and the like on the other types of shows with our programming.
6281 And thanks to Rogers' foresight and I think their progressive awareness that this demographic is not being served, they allowed us this opportunity to be there.
6282 It's a great, gratifying thing to hear from these creators that they are fans of this content, that they watch our shows. And I hear that all the time, thanks to Twitter and Facebook.
6283 It's awesome. I hear from game developers that have been watching us from the beginning and they got enthused or inspired to get into the videogame industry from watching our programming. I can't tell you how gratifying that is.
6284 I do want to say one thing too, on a national level that Rogers provides, that I think is just absolutely incredible.
6285 Last year or the last couple of years I created a -- I co-created the Canadian Videogame Awards and this was created in a real sort of drive and, you know, a sense that we want to have kind of the Junos for Games. And Rogers signed on right away to be a broadcast partner with the Canadian Videogame Awards.
6286 You know, we are celebrating -- Canada is number three in the world for making videogames. They make some of the biggest properties in the world and a lot of Canadian gamers don't understand that there are jobs here; there is incredible creativity here and incredibly popular content being generated here.
6287 And what the CVAs are allowing us to do is reward these people, put a spotlight on them; put a spotlight on the entire videogame community which is very large. It's thanks to Rogers they are playing these programming -- they are playing this awards show on G4 and on Citytv, which is incredible on a national level.
6288 And the other thing that we just launched because of the earthquake in Japan and how important Japan is to the gaming community, I had an idea for a charity event --
6289 THE CHAIRPERSON: Okay. Come on, this is not a pitching session.
6290 MR. LUCAS: Well, I just want to tell you that Rogers is absolutely in the community and I see all of the -- I hear from all of the local community enthusiasts there and I think that's fantastic.
6291 But they also are very aware on a national level too.
6292 THE CHAIRPERSON: Thank you for your testimony.
6293 MR. LUCAS: Thank you.
6294 THE CHAIRPERSON: I'm going to remind Rogers of you because they told us that they don't do award shows because there is no interest in them since they don't have a national network.
6295 So I'm glad to see that they do some award shows like the video awards you just mentioned.
6296 THE CHAIRPERSON: So thank you very much all for participating. It's very important for us to hear not only from the producers and the -- but from the people who actually use the services or who are in the communities.
6297 So I appreciate the time you took then to appear with us via video.
6298 Thank you.
6299 MR. LUCAS: Thank you
6300 THE CHAIRPERSON: Okay.
6301 Madam Secretary, we will break now and we will come back at 1:30. Thank you.
--- Upon recessing at 1156
--- Upon resuming at 1338
6302 LE PRÉSIDENT : Commençons, Madame.
6303 THE SECRETARY: We will now proceed with the presentation of Canadian Conference of the Arts.
6304 Please introduce yourself for the record, after which you will have 10 minutes for your presentation. Thank you.
6305 M. PINEAU: Monsieur le Président, Monsieur le Vice-président, Mesdames et Messieurs les Commissaires, mon nom est Alain Pineau. Je suis le directeur général de la Conférence canadienne des arts.
6306 La CCA est la plus ancienne et la plus vaste coalition du secteur art, culture et patrimoine au pays. Son membership et son mandat de forum national couvrent toutes les disciplines culturelles dans le secteur à but non-lucratif, comme dans le secteur des industries culturelles.
6307 La CCA s'intéresse au monde de la radiodiffusion depuis toujours, et, comme vous le savez, nous sommes intervenus devant vous à plusieurs reprises au cours des cinq dernières années. Pourquoi cet intérêt?
6308 Essentiellement pour trois raisons:
6309 - d'abord, c'est dans la Loi sur la radiodiffusion que l'on trouve l'expression la plus complète de politique culturelle adoptée par le parlement canadien;
6310 - deuxièmement, l'audiovisuel est la forme de produits culturels la plus largement consommée par la population canadienne, et, malheureusement, dans le monde de la radiodiffusion canadienne anglaise, les produits culturels étrangers, c'est-à-dire américains, ont toujours été dominants;
6311 - troisièmement, la radiodiffusion joue un rôle très important dans l'écologie de la culture au pays. Elle contribue un grand nombre d'emplois dans le secteur culturel et fournit un appui indirect à plusieurs autres formes d'activités créatives.
6312 C'est donc avec plaisir que je me retrouve à nouveau devant vous aujourd'hui pour insister sur certains points présentés par écrit dans le cadre de votre consultation sur le renouvellement des licences par groupe de propriété pour les télévisions privées anglophones.
6313 In my intervention, I will cover the following five themes:
6314 - Canadian content requirements;
6315 - Canadian programming expenditure requirements;
6316 - requirements concerning independent productions;
6317 - the need to reaffirm exhibition requirements; and
6318 - the sustained need for regulations appropriate for the new communications/broadcasting environment.
6319 At the outset I will say that the CCA welcomes the new 2010 television policy issued by the Commission and I will echo the comments made by some of our member organizations here last week.
6320 Let us now make sure that this policy is implemented and that the new vertically integrated companies which dominate the landscape are not allowed to escape the obligations imposed on them in exchange for the numerous privileges they enjoy in the Canadian broadcasting environment.
6321 The last thing we want is to be back her in five years time to complain about the fact that flexibility for broadcasters has translated into second-rate productions scheduled overnight on some specialty service or other.
6322 Canadian content requirements.
6323 The opening of this hearing has seen the usual pleas for amendments, exceptions and special considerations. We urge you, as stewards of the cultural objectives of the Broadcasting Act, not to listen to these siren songs.
6324 You need to keep in mind the requirements of the Act in article 3(1)(f) that -- and I quote:
"...each broadcasting undertaking shall make maximum use, and in no case less than predominant use, of Canadian creative and other resources in the creation and presentation of programming."
6325 The CCA deplores the fact that the Commission decided to lower the traditional 60 percent threshold to 55 percent and it is strongly opposed to any suggestion that Cancon requirements be lowered for specialty services, particularly now that ownership of over-the-air stations and specialty services has been consolidated under the umbrella of rich and powerful distribution undertakings.
6326 As we mention in our written brief, a quick look at the history of Category A specialty services demonstrates that applicants competed with each other to guarantee higher levels of Canadian content than their competitors, to commit to other conditions of licence that would benefit the broadcasting system and to commit to higher CPEs in order to obtain a licence.
6327 At the very least, this has ensured that important sums of money were invested in the creation of Canadian programs, while over-the-air broadcasters were taking advantage of the Commission's unfortunate 1999 TV Policy to spend a disproportionate share of their revenue on purchasing foreign programs, to the detriment of Canadian programming, particularly in the area that was then known as underrepresented categories.
6328 Now that specialty services represent the most lucrative part of the business, their new owners are seeking reductions in their Canadian content requirements. This should be rejected outright.
6329 We are particularly concerned by Shaw's application that the self-imposed condition on Showcase to limit to less than 5 percent their scheduled content acquired from any given foreign country be lifted, and similarly by Corus' analogous request to eliminate similar restrictions on W Network. These requests are egregious and must be denied.
6330 The CCA maintains its recommendation to the Commission that Canadian programming expenditure requirements be established as a minimum at 30 percent of total revenue for each group, with even a possibility of scaling upwards over the course of the five-year licensing period, depending on the financial performance of licensees.
6331 This requirement will barely re-establish a reasonable equilibrium between what English-language broadcasters spend on acquiring foreign programs and what they spend on Canadian programs.
6332 We are happy to note that it appears that such a CPE for CTV, for example, would result in it achieving a roughly 50:50 split between Canadian and foreign programming expenses. In our view, this should be the minimum level achieved by each group by the end of the licence term.
6333 We all know, and the Commission itself has acknowledged this more than once, that the most serious Canadian content programming deficiency in the English-language television is Canadian drama and scripted comedy.
6334 Overall, drama and comedy are the most watched form of programming and the most culturally significant. This licence renewal process is a perfect opportunity to correct the situation by requiring that each group invest more money in the production of programs of national interest.
6335 The CCA considers that the proposed level of 5 per cent for programs of national interest is not sufficient and recommends that the Commission establish the level at 10 per cent for Shaw and Corus; at 5 per cent, growing to 10 per cent, over five years, for Rogers; and at 8 per cent, growing to 10 per cent, over five years, for CTV.
6336 As for the contention that Canadian drama is a money loser for broadcasters, we will simply point the finger back in their direction. Canada is not short of talent. Canada exports talent because those in the field cannot find employment here. If broadcasters invested the kind of money needed to develop programs and to promote them adequately, the situation would be quite different.
6337 The problem is that, contrary to their Quebec counterparts, who had to successfully build an indigenous star system, English-language broadcasters have been satisfied for the past 50 years or so to cash in on American productions and to ride on the coattails of American stations' promotions to draw audiences.
6338 It is more than time for them to face the fact that development and promotion are part of the cost of doing business. A portion of the 10 per cent CPE we propose could be used actually to promoting the shows they produce.
6339 Let's now turn to independent production.
6340 The long-standing policy objective of sustaining a vigorous independent production sector is even more important now that the Commission has allowed the highest level of concentration possible between broadcasting and distribution undertakings. The CCA agrees with the Commission's position that the services that are part of these groups should be subject to a condition of licence requiring that at least 75 per cent of PNI expenditures be allocated to independently produced programs.
6341 Furthermore, the group should commission PNI productions from all regions of Canada commensurate with their presence in the respective markets in which they broadcast.
6342 In a similar vein, the CCA opposes the various proposals which would reduce or eliminate conditions of licences requiring specialty services to acquire programming from independent producers. There is no justification for these proposals and they must be firmly rejected by the Commission.
6343 Let's now turn to exhibition requirements.
6344 While it is true that new distribution platforms and new viewing habits by Canadians are eating away at the audiences that traditional television services have enjoyed over the past half-century, these traditional distribution platforms will remain important for quite some time yet. This is why the CCA notes that CPE requirements alone are not sufficient to correct the programming imbalance that exists in English broadcasting. We insist that such requirements must be accompanied by exhibition requirements.
6345 Accordingly, we propose that each over-the-air broadcaster be required to schedule at least two hours of drama or scripted comedy in the 8-to-11 p.m. time slot, Sunday to Friday, each week. This time slot is when most Canadians are watching television and requiring broadcasters to schedule a minimum level of drama and scripted comedy will provide them with a strong incentive to work to make these programs successful.
6346 As shown by the Nordicity study published in 2009, if broadcasters properly promote these programs and make them hits, the shows will make a profit for the broadcaster after the first network repeat.
6347 The CCA also suggests that appropriate exhibition requirements be instituted for other programs of national interest.
6348 I would like to conclude on somewhat of a different note. Senior Vice-President of Corporate and Regulatory Affairs for Shaw Communications, Mr. Ken Stein, made a very interesting comment here last week when he said, and I quote:
"Our view of Netflix is that it is providing broadcasting content. It's not Canadian owned or controlled as per the Broadcasting Act. When you operate in a country, even if you operate under the basis of an exemption, you have to be consistent with the laws that exist. The Broadcasting Act is quite clear: any broadcasting service provisioning programming to Canadians must be Canadian owned and controlled."
6349 End of quote.
6350 We agree entirely with Mr. Stein, not only on the ownership issue, which is a cornerstone of our cultural policy, but also in the need for up-to-date regulation. We urge the Commission to take heed of Mr. Stein's comment.
6351 As you strive to ensure that greater quantity and quality of Canadian programs are available to Canadians, you must ensure that all components of the system contribute to this important cultural objective.
6352 And we will extend Mr. Stein's comment to one of CCA's (inaudible) over the past five years, namely, that the onus of ISPs and wireless should be called upon, like over-the-air, cable and satellite distributors, to contribute financially to the production of Canadian programs.
6353 To sell their wares, these services rely more and more on their ability to deliver programming and cultural content to audiences. And as Mr. Stein says quite correctly, "If it walks like a duck, swings like a duck and quacks like a duck, then it is a duck". The fact that those ducks are now all vertically integrated makes the case for this policy even more compelling in our mind.
6354 Je vous remercie de votre attention, et ferai mon possible pour répondre à vos questions au meilleur de ma connaissance.
6355 THE CHAIRPERSON: Thank you.
6356 I think it's the first time I've heard you and Shaw agree on anything --
6357 THE CHAIRPERSON: -- which is quite amazing.
6358 But, Mr. Pineau, I have a problem with your whole submission, which is everything is based on the world as we know it and as we have come here, et cetera. You completely ignore the fact that we are in the middle of a delivery revolution. And, as for that, at least agree with that. The whole new media, call it Netflix, whatever you want, from mobile to (inaudible), presents an alternative for viewers. The viewers demand to watch what they want, when they want it, et cetera, the new trend, et cetera.
6359 So our sort of very regulated system, with exhibition requirements, spending requirements, a genre in all of this is very much under onslaught, et cetera, yet your whole submissions is based, effectively, on the world of yesterday.
6360 You're making no allowances at all that the ground is shifting under our feet.
6361 MR. PINEAU: With all due respect, I disagree. I mean, our submission is indeed based on the past. It's based on the objectives that were set in the Broadcasting Act. I don't think these are a thing that we should turn our back on. That's the first thing.
6362 The second thing is that when I come here and urge you, through the means that we currently have and the Broadcasting Act that we currently have and the tools that are in your hand, to ensure that there is Canadian content that is produced, and even if I insist on regulation that probably will become completely obsolete within the next what period I don't know, there's a transition period.
6363 The goal here is that for the next five years we must make sure that we have Canadian programs to show to Canadians. Otherwise, we may just as well rip off the Broadcasting Act and say, "Okay, you know, that's the end of that".
6364 THE CHAIRPERSON: No, I absolutely agree with you, we must have the Canadian content, but it's a way that's, in effect, boxing people in, as you suggest, in terms of exhibition, in terms of production, in terms of spending, et cetera.
6365 Isn't that just going to drive them off onto other platforms?
6366 MR. PINEAU: Well, I mean it's obvious nobody will come here to argue, and I never have either, that, you know, the exhibition rules that still apply to traditional broadcastings are the way to the future. That's not the point. But making sure that we have Canadian programs of quality, that we force -- because that's the word that has to be used here -- broadcasters and owners of those services to dedicate, we suggest, 10 per cent of their gross revenue to drama and scripted comedy, I think that's something that is pretty much forward-looking. I really don't see that we're looking backwards on that front.
6367 THE CHAIRPERSON: Well, let me take you to the exhibition comment. You say:
"...we propose that each over-the-air broadcaster be required to schedule at least two hours of drama or scripted comedy in the 8-11 pm time slots, Sunday-Friday...."
6368 You said either our approach was give them as much flexibility as we can, because they have to compete with the new world, et cetera, and we don't want them to spend too much money on the States, therefore, we impose a spending requirements, number one, and the PNI requirement. Now that they have to spend 5 per cent or 10 per cent, or whatever we come out, on PNI, surely they're not then going to schedule it from 3 to 5 a.m., or something like that, they're going to put it where they get their money back.
6369 Having made that significant an outlay, they will spend it. Why should we dictate where it gets exhibited?
6370 MR. PINEAU: For two reasons, and I think I touched one in my presentation here, which is that -- I mean, what do they program during that time slot? I mean, for the next five years won't they program American programs that bring in lots of money? Because there's good viewing time in those time slots.
6371 It is eroding, obviously, it's eroding fairly fast, but, you know, I think if they can put American programming there to earn money. It's not because people are watching their YouTube on their computer.
6372 The other reason is the one that I just raised in this presentation, which is, if they are forced to put it there, they should be motivated to make sure that there are successes, that they do create programs of quality that will bring in audiences, and that they use, as we suggest, part of the money to promote those programs.
6373 I mean the problem is that even when they do good programming, it's not promoted enough in the noisy environment in which they operate. And never has, by the way.
6374 THE CHAIRPERSON: Well, all I'm suggesting is if they have to spend 5 per cent on it, good business just demands that you spend it where you get the highest return, that you promote it as is necessary, et cetera. I don't see that we have to dictate them to do that. I mean, they are there to earn money, not still to invest 5 per cent or to lose it.
6375 MR. PINEAU: No, but, you know, they have to operate within a certain framework, and this would give them motivation to make sure that, indeed, those programs that they've invested -- they'll make good business decisions and, you know, by inviting you to increase the level of expenditure that they had to dedicate to that sort of programming, this is going to give them more motivation to make sure that -- and allowing them to use it to promote the material.
6376 I saw that you raised this issue last week with one of the intervenors on this particular issue.
6377 I mean, is it true that Canadian drama is a loser? I don't think so. I really -- no, no, I don't think so. If it's treated correctly, if it's promoted correctly, if it's developed correctly, I mean it's going to be just as good as anything else.
6378 THE CHAIRPERSON: That's a different issue. You're talking quality. Sure, it's just as good as the other. Is it going to be just as profitable as anything else? Different story. It has nothing to do with quality.
6379 You know, the profitability has very much to do with what market you appeal to, how much is this promoted, et cetera. I don't think you can equate the two.
6380 MR. PINEAU: Well, I beg to differ. I think quality is an important aspect of it, and promoting quality is the other aspect of it, and that's the only point that we're making.
6381 THE CHAIRPERSON: Okay.
6382 Peter, I believe you have some questions.
6383 COMMISSIONER MENZIES: Yes.
6384 I'd just like to start with your proposal on PNI.
6385 You mentioned at the bottom of page 5 there:
"Overall, drama and comedy are the most watched form of programming and the most culturally significant."
6386 First of all, if drama and comedy are the most watched form, is that Canadian drama and comedy are the most watched form of programming that's available to Canadians on the system right now?
6387 MR. PINEAU: The intention was to say it's the most widely consumed form, wherever it's coming from. I mean whether it's Canadian or whether it's foreign, that's the genre that people watch most probably -- well, ahead of news.
6388 COMMISSIONER MENZIES: Right.
6389 MR. PINEAU: And short of hockey games, though.
6390 COMMISSIONER MENZIES: You mentioned in the phrase there, it "the most culturally significant".
6391 First of all, if it is the most watched form, right, as you say, which I accept, why do we need a PNI percentage on it? Wouldn't people be doing it anyway, we'd just say make sure it includes drama and comedy?
6392 MR. PINEAU: Because what they are being offered now is foreign material. That's why you need to impose that.
6393 The market rules have never worked in this particular area, and the 1999 policy was a good proof of it also. If there is no regulation to force people to do that sort of programming, it will not be done, because, quite frankly, it's so much easier to take a program from south of the border and rely on American stations to promote the hell out of it. Then, you just cash in, theoretically, to produce Canadians programs that are then sent to, you know, much less interesting parts of the schedule.
6394 COMMISSIONER MENZIES: But there are Canadian dramas and comedies that are prime time scheduled right now, right?
6395 MR. PINEAU: Yes, and some of them, those that actually met those criteria that I'm putting forward to you, which is quality and promotion, certainly showed that it is possible to have Canadian success. But you have to do both things: you have to develop the program and invest enough in the quality of it for script and for actors and for production value. And you have to promote the hell out of it as well, because it is competing in an environment which is getting increasingly crowded.
6396 COMMISSIONER MENZIES: I raised this point the other day, and I'm curious to have your perspective on it.
6397 You state that these areas, like drama, is the most culturally significant. I use the example of a couple of successful Canadian dramas, Flashpoint and Rookie Blue, and I put it to you that both Flashpoint and Rookie Blue, they're good programs, but they're culturally fairly generic in terms of that.
6398 In order to make money on them, given the size of the Canadian market, they get sold into foreign markets, Korea, Argentina, et cetera, in the case of Rookie Blue, I know that, so they can't be -- in a sense, the economics works against them being overtly Canadian in a sense like that.
6399 And there's other forms of Canadian content. The example I used was the reality show Ice Pilots NWT, which tells a richly Canadian story, far more culturally significant, but it seems to have less priority than these in this area.
6400 Help me understand that.
6401 MR. PINEAU: Well, actually, you're quite right. I mean there's always a challenge. If it's too typically Canadian that it sells, that's one of the problems that, you know, our very successful francophone production system meets. I mean the very reason why it is so successful in Quebec is that people are seeing themselves reflected to the hilt.
6402 Now, does that mean that they can't sell abroad? No. Does that mean that we can't do variations?
6403 I'm not a producer, so, you know, you have to take what I say with a pinch of salt, but it is possible. And it is possible to do maybe alternate versions, or at least sell the concept. That's another way of making money.
6404 Also, I think it is becoming less a fact.
6405 I was at a reception recently with an independent producer, who was saying that, you know, things filmed in Montreal, you don't have to hide the city anymore.
6406 So I think that progress has been made on that front and I think progress is possible. But, you're right, I mean it is an additional challenge.
6407 COMMISSIONER MENZIES: It seems that it's awkward to try to compare, make a comparison, between the sort of inherent popularity of indigenous production in the francophone market and the challenges faced in the anglophone market because one's the francophone market and one's the anglophone market. They're very different.
6408 The francophone market doesn't face direct competition from a producer of francophone broadcasting that's 10 times the size of Quebec that's right on its border. I mean, it seems like that's an apples and oranges comparison that doesn't stand up.
6409 MR. PINEAU: Well, no, I was just using it to prove your point, that, you know, the more rooted in a community a program is, the more difficult it may be to export it. And our colleagues in Quebec have that challenge also. I mean, their main market is definitely the domestic market. It's the same thing with movies also. But it is possible to go beyond that.
6410 Quite frankly, I mean it's most unfortunate for English Canada that it shares that long border with, you know, 300 million people talking the same language, or approximately the same language, definitely. But also the reality is that facility has been the rule of law when it comes to broadcasting.
6411 I mean, you know, our policies have not been enforced stringently enough, in my opinion, in the past and we're faced with that now.
6412 Is it possible to go beyond that? I mean, as long as I believe in this country, I have to say yes. We have to try it. Otherwise, you know, let's erase the border and say "That's the end of that".
6413 COMMISSIONER MENZIES: What do you think if we increase the PNI to 10 per cent?
6414 I'll ask this as well, who would lose? I mean if we increase money to drama, it has to come from some place. The CEP this morning expressed some concerns about that.
6415 MR. PINEAU: Yes, but I think our recommendation only reflects the obvious conclusion that the Commission has reached on several occasions, which is that these are the priority types of programs. And you have identified as programs of national interest, so I suppose there is some substance in your decision, in your policy to ascribe those with the status of program of national interest.
6416 Other things will fall by the wayside. Quite frankly, it's not for me to say which ones. But, you know, it's allocation of resources according to priorities, and it's purely on that basis that we made our recommendation.
6417 COMMISSIONER MENZIES: Okay.
6418 If you want two hours between 8 and 11, Sunday through Friday, reserved only for Canadian programming, first question: why not Saturday, too?
6419 MR. PINEAU: The recommendation, I think, is based essentially on the fact that Saturday night is occupied differently. Apart from sports, which is traditionally -- and I stand to be corrected, and I may be corrected -- but traditionally Saturday night is a sports evening, at least in the long winter that we have; and second, Saturday night is a night where there is less viewing of television.
6420 And, believe you me, when I sit in front of my TV set and I pay for something like 200-odd channels, I wonder why I do on Saturday nights because, quite frankly, there's very little that is programmed that is of interest. So the broadcasters themselves reflect that, you know, this is not a night for mass viewing.
6421 I think it would give an easy way out -- if that's where you're going -- to broadcasters to say, Oh, yeah, you can put your Canadian programming of national interest on Saturday night in the middle of summer. I don't think you'd do service to your own priorities.
6422 COMMISSIONER MENZIES: Still on that, if we were to do that, then the broadcasters would be putting their programming inevitably up against -- they'd be competing for eyeballs with U.S. networks. Canadian drama $1.5 million an episode is a lot. Some say they spent $2 million an episode. You'd still be putting up Canadian drama A versus, potentially, I don't CSI: Las Vegas, or something that's, like, $5 million or $6 million an episode.
6423 It seems to me like you'd be setting them up to lose. It's kind of like the charge of the light brigade there.
6424 MR. PINEAU: Well, it may sound like that, yes, indeed. I think, as I said, if they promote their show correctly and their shows are -- now I lost track of that, but I know that for the longest time broadcasters were asking for non-simultaneous substitution of programs.
6425 In the old days of old viewing that would have probably been the solution. Whether you think it's still worth considering at this point in time is something that would certainly nudge them in the right direction, you know, if they don't have to do that sort of competition.
6426 Now, of course, I mean American channels come in your -- and is it relevant? I'm not sure. I'll go back to Mr. von Finckenstein's point earlier. In the new environment, I think you're in a better position than I am to see whether this is a reasonable approach.
6427 COMMISSIONER MENZIES: Okay.
6428 I just want to touch on the Netflix idea.
6429 If we were to regulate Netflix, how do you regulate something that doesn't have a fixed percentage? What would your view be on how to do that? The Internet doesn't have fixed time periods. Traditionally, with the Canadian system, we regulate it with percentages: 55 per cent Canadian content or 60 per cent Canadian content.
6430 There is no fixed percentage to material on the Internet. They're already buying Canadian programming. So I'm assuming Canadians are profiting from that, because money's exchanging hands.
6431 I mean would you have us, like, tell Netflix that between 8 and 11 they can only provide Canadian programming, or how would that work?
6432 MR. PINEAU: No, actually, that was not my understanding of Mr. Stein's comment, quite frankly. It had to do more with financial contribution to the production of Canadian content. We've never come here to say that you could regulate the Internet as you regulate over-the-air broadcasting. No way.
6433 The point here is that they should make a contribution. And when I say, you know, regulate -- when I've been saying here for the past five years you should regulate the Internet and you should regulate wireless, it was never a suggestion that you would impose quota -- well, quotas is another story, but at least timeframes or time zones or whatever. The issue is: let them contribute financially, particularly now that it's the same owners and it's the same pockets.
6434 COMMISSIONER MENZIES: But aren't they already contributing financially by purchasing Canadian programming?
6435 MR. PINEAU: Yeah, but that's not quite enough.
6436 COMMISSIONER MENZIES: How much is enough?
6437 MR. PINEAU: I don't know, that's your role to determine. I can only urge you.
6438 COMMISSIONER MENZIES: I suppose it's open-ended, isn't it?
6439 One question on that.
6440 In your idea world, would this work better if we just banned 4+1 signals, kept foreign content out of the Canadian system entirely?
6441 Like, that's a bit of the impression I have, because it's hard to see how else the economics would work, unless we just took the foreign content right off the table and told Canadians that they're not allowed to watch it.
6442 MR. PINEAU: Well, you know as well as I do that that's totally impossible and not even something that you can envisage. We've lived with that for the longest time, and we have to carry on living with it.
6443 You know, we're not suggesting that we build a China wall virtually around Canadians on that front. And, quite frankly, in other occasions and in other debates, we're all in favour of the most open access to various viewpoints. So I don't think that would be at all the solution.
6444 I mean, the broadcasters have got business sense. I trust them, but within certain parameters.
6445 COMMISSIONER MENZIES: Last question.
6446 Do you have an analysis of any kind on what you think the financial impact of your proposals would be on the industry?
6447 MR. PINEAU: Well, it depends which side of the industry you're looking at. It can only be positive. And no, I don't have figures, but I will turn to some of our member organizations who may have provided with that.
6448 As to the impact, I don't know if your question is the negative impact it may have on broadcasters, but that is not -- and I don't have figures on that either, and I'm not convinced that it would necessarily have a negative impact. I think if this is the mind-set getting into the policy-making and regulation-making, we've already conceded that there's nothing worth doing.
6449 And if, really, our private broadcasters in English language are there only to convey to us American programming, well, we don't need them anymore. We just don't need them anymore.
6450 COMMISSIONER MENZIES: No, agreed. Just in future it would be helpful if there was some kind of economic or financial impact analysis, because we get that on one side and it's always -- if somebody has an argument that says, Look, this is economically possible, and that sort of stuff, we're open to it, and if you can put it on the table or something like that in the future, it'd be super.
6451 Anyway, thank you very much. Those are all my questions.
6452 MR. PINEAU: If I may have a final comment, there's nothing I would like better than to have the wherewithal to provide you with those figures.
6453 CONSEILLER PENTEFOUNTAS : Bonjour, Monsieur Pineau.
6454 Je veux apporter votre attention à la sixième page de votre document.
6455 M. PINEAU : La sixième?
6456 CONSEILLER PENTEFOUNTAS : La sixième page, oui. La dernière phrase avant la partie qui commence par "Production indépendante."
6457 Est-ce une erreur typographique ou... quand vous mentionnez que 10 pour cent du CPE, "A portion of the 10% CPE we propose," est-ce une erreur typographique?
6458 M. PINEAU : Je m'excuse, c'est que moi, je n'ai pas les mêmes pages que vous là, parce que j'ai...
6459 CONSEILLER PENTEFOUNTAS : Ah, O.K. Désolé.
6460 M. PINEAU : ...élargi le texte pour ma vieille vue.
6461 CONSEILLER PENTEFOUNTAS : Vous n'êtes pas le seul.
6462 Dernière phrase avant la partie qui commence par "Independent production," "A portion of the 10% CPE..."
6463 M. PINEAU : Oui.
6464 CONSEILLER PENTEFOUNTAS : Erreur typographique?
6465 M. PINEAU : Je m'excuse, je...
6466 CONSEILLER PENTEFOUNTAS : Vous voulez dire PNI? Did you want to say PNI?
6467 M. PINEAU : Oui, oui. Je m'excuse. Je m'excuse.
6468 CONSEILLER PENTEFOUNTAS : O.K.
6469 M. PINEAU : Oui, c'est mon erreur. Merci de le signaler.
6470 CONSEILLER PENTEFOUNTAS : Ah, c'est bien de le corriger dans nos documents.
6471 Ceci étant, est-ce que je dois comprendre que vous voulez proposer une espèce de sous-catégorie à l'intérieur du PNI où on peut faire un calcul des dépenses promotionnelles dans le contenu canadien?
6472 M. PINEAU : Bien, étant donné qu'on propose de doubler fondamentalement ce qui est sur la table actuellement...
6473 CONSEILLER PENTEFOUNTAS : Oui.
6474 M. PINEAU : ...tout ce qu'on dit, c'est écoutez, peut-être que dans votre sagesse vous pouvez déterminer qu'une partie de ça, qui compterait sous drama and script comedy, pourrait comprendre -- si vous le mettez à 10, évidemment -- pourrait comprendre une partie du budget de promotion, s'ils en ont vraiment tellement besoin que ça pour faire la promotion comme il faut. C'est une suggestion qu'on met sur la table.
6475 COMMISSIONER PENTEFOUNTAS: You want to remove production money and put it towards promotion, strictly speaking?
6476 MR. PINEAU: In these particular categories of drama and script comedy, it's something that you could consider.
6477 Now, I mean, if we're going to trust broadcasters in their -- that was sort of an incentive that we were putting forward. It may not be the best idea. I don't know.
6478 COMMISSIONER PENTEFOUNTAS: Okay. So there's no formal proposition as to percentage?
6479 MR. PINEAU: No, not as such, quite frankly. That was not included in our written submission initially and I threw it on the table, quite frankly, having read the reports on the discussions last week.
6480 If broadcasters really need help in order to promote programs in which they would invest the right amount of money to make them good programming, well, maybe that's something you can consider. I don't know.
6481 COMMISSIONER PENTEFOUNTAS: You mentioned subsequent to my colleague's question that you trust broadcasters' business reflex, acumen. But I suppose you trust them, but you don't believe them when they tell us they cannot make money on Canadian content?
6482 MR. PINEAU: Absolutely. I don't trust them on that front.
6483 COMMISSIONER PENTEFOUNTAS: Okay. So you don't trust them on that.
6484 MR. PINEAU: No, not on that front.
6485 COMMISSIONER PENTEFOUNTAS: Well, if you trust them on their business acumen, then if it was profitable for them, then they'd make it. They'd make the profit. They're there to make money.
6486 MR. PINEAU: That's what -- yes, they are there to make money. Exactly.
6487 COMMISSIONER PENTEFOUNTAS: Right. And you trust their ---
6488 MR. PINEAU: And if you can make ---
6489 COMMISSIONER PENTEFOUNTAS: If you trust their capacity to make money ---
6490 MR. PINEAU: If they can make money by buying cheap -- well, cheap, relatively cheap, not all that cheap -- American programming that is already promoted to the hilt by stations across the border, I mean, la solution de facilité, l'eau s'écoule toujours là où c'est le plus bas niveau.
6491 COMMISSIONER PENTEFOUNTAS: En tout cas, I think you trust them, but you don't trust them, from what I understand. You don't believe them when they tell you they're losing money on Canadian content.
6492 MR. PINEAU: I trust them that if they were motivated to do something, they would do it correctly. I don't trust them that they're not motivated, they won't do it. And the proof is there. You know, the 1999 policy was based entirely on incentives and it's failed completely.
6493 COMMISSIONER PENTEFOUNTAS: We motivate them by demanding 10 percent PNI. Is that the solution?
6494 MR. PINEAU: Yes.
6495 COMMISSIONER PENTEFOUNTAS: Okay. Merci.
6496 THE CHAIRPERSON: Okay. I don't think we have any other questions.
6497 Thank you very much, Mr. Pineau. As usual, you're most, how should I say -- most engaging presentation. I always enjoy our debates. It makes me look at things from different perspective, which is, after all, the whole purpose of hearings.
6498 MR. PINEAU: Thank you. I haven't been here in a long time. I'll be back in June to talk about vertical integration, which is something that is really dear to our heart.
6499 THE CHAIRPERSON: Yes, I think we all are very concerned about that hearing and how to deal with that issue, so I look forward to hearing from you then. Thank you.
6500 Madame la Secrétaire, qui est notre prochain intervenant?
6501 THE SECRETARY: The last intervenor of the day, I would ask Canadian Association of Community Television Users and Stations to come to presentation table.
6502 THE CHAIRPERSON: Another familiar face. Welcome.
6503 THE SECRETARY: Please introduce yourself, and you have 10 minutes for your presentation.
6504 MS EDWARDS: My name is Cathy Edwards. The Canadian Association for Community Television Users and Stations was created to help ensure that ordinary Canadians have a voice within our broadcasting system.
6505 We represent independent, non-profit community TV broadcasters and the Canadians that use and watch them. We also assist Canadians in communities that want to set up new community-operated television channels or who need assistance to access the community channels belonging to broadcast distribution undertakings.
6506 Before I begin, I'd like to apologize that due to the last-minute rescheduling of our appearance today, we have not been able to review the transcripts of the oral hearing to date in any detail. I therefore apologize ahead of time if the issues we raise have already been addressed by another party, but I'd be happy to respond to any issue they have raised in the questions following.
6507 As we stated in our written comments, our main comments as community broadcasters concern the transition to digital over the air television slated for August 31st.
6508 However, as we also stated in our written comments, as Canadians we would like to make the general observation that in reading through the Commission's table summarizing the key amendments sought by licensees in their applications, we were concerned by the number of requests (1) to reduce Canadian content expenditures and exhibition requirements, (2) to remove limitations on types of programming that makes specialty channels unique from one another, and (3) to reduce minimum percentages that must be acquired from independent producers.
6509 We fully endorse the detailed analysis in evidence presented by the Canadian Conference of the Arts on these issues.
6510 Given that CTV's assets will soon be owned by Bell and CanWest's assets were recently bought by Shaw, we had hoped to see an opposite trend, greater commitments to Canadian programming, spending and exhibition, more unique program offerings and a greater commitment to acquisitions from independent producers drawing on the greater financial resources of these owners.
6511 And given that one of the reasons for allowing the mass consolidation in the Canadian audio-visual media industries in the first place was to enable larger companies to get behind more expensive and culturally significant categories of Canadian programming, I personally find it outrageous that these enormous companies are still asking for more flexibility.
6512 As large players with multiple streams of income and holdings in both traditional and new media, they already have more flexibility and power than any media company in Canadian history.
6513 That being said, our main comments concern the transition to digital OTA TV. Given that each over the air incumbent broadcaster has been allotted a full six megahertz digital channel, the same amount of spectrum they enjoyed under analogue, and that Channels 62 to 69 are slated for a spectrum auction and must be vacated in advance of the August 31st transition date, we're concerned that fewer channels will be available for over the air broadcasters, particularly new entrants, after the transition than before it.
6514 We note that one of the anticipated digital dividends touted by proponents over the last decade has been more efficient use of spectrum and, therefore, more capacity for more entrants. And we note that other countries appear to be using the transition in just this way.
6515 We presented in Appendix A of our written submission a reprint of an article about the digital transition in Kenya in which Kenyans are looking forward to the availability of many more TA free services and more space for local and regional production using standard definition.
6516 Appendix B in our written submission was a reprint of an October 2010 program schedule from Los Angeles in which as many as eight or 10 SD channels are being multiplexed in the space of one analogue channel, enabling many ethnic and other niche groups to get on air.
6517 In Canada, we are concerned that the emphasis on HD broadcasting appears to be occurring at the expense of diversity of voices. Appendix C in our written submission was the presentation made at last year's Spectrum 2020 Conference by CanWest in which page 10 makes clear that the company plans to use only part of its six megahertz digital allotment to broadcast its main HD service. It speculates about what other services might be offered with the rest of the spectrum.
6518 So in effect, incumbents are being given free real estate to squat on rather than making that real estate available for new entrants, a practice that has been criticized with respect to previous spectrum auctions and the anti-competitive behaviour of many of those who have won spectrum in previous auctions and then not used it.
6519 Consequently, we recommend that a condition of licence for all OTA services within the groups seeking renewal at this time be as follows.
6520 That all incumbent broadcasters that have a six megahertz allotment under the digital allotment plan must be prepared to multiplex services of new entrant broadcasters within their own markets where spectrum availability is tight, so if a new broadcaster can't get on air somewhere, that an incumbent be found that's willing to share at least to provide them an SD signal.
6521 Or in the case of ownership groups that have more than one six megahertz allotment in a given market, so, for example, Rogers with an Omni-1 and an Omni-2, such groups must be prepared to share a single six megahertz allotment among two services belonging to the group by multiplexing if not allotment is available for new entrants, so a service by an owner that has no spectrum allocation in that market.
6522 And special consideration should be given to find sharing arrangements for new community or public broadcasters since both groups are currently under-represented in most markets.
6523 Community and public services will be multiplexed on a cost-recovery rather than a cost-sharing basis.
6524 Since the actual spectrum required for an adequate HD signal varies depending on content, i.e. it may make more sense to multiplex certain kinds of services together than others, so, for example, fast sports, everybody knows requires more, we anticipate that the particular sharing arrangements sought in a given market would be mediated by the CRTC.
6525 We note that since we submitted our written comments the CRTC's decision has been rendered on the Bell CTV transaction. Contrary to our hope and expectation, Bell was asked neither to share CTV and A-channel towers, nor digital transmitters with new entrants from any sector, private, public or community.
6526 Since this is the opposite of what occurred in the Shaw CanWest transaction in which Shaw was asked both to share its towers and entertain requests for multiplexing from other parties on Global towers, we would ask for clarification on the CRTC's intention with regard both to tower sharing and multiplexing in the long term.
6527 Is the CRTC assuming that in all communities where there is a Global tower and digital transmitter there is also a CTV and an A-channel transmitter tower and that, therefore, it would be redundant to ask CTV and A-channel to share facilities?
6528 Has evidence been compiled to suggest that this is the case? And what happens if Global decommissions towers and transmitters in the future, leaving communities with no other options?
6529 We would also like to put on the record that we need your assistance to enforce the ruling you've already made for Shaw to share towers and entertain requests for multiplexing.
6530 We have contacted Shaw and Global on four occasions since October to ascertain how a community broadcaster could approach the company to initiate such a sharing arrangement, and our calls have not been returned.
6531 The Kamloops "Save our CBC" group whose spokesperson you met last year, Pam Astbury, has also written to Shaw and to the CRTC to explore tower sharing and multiplexing in Kamloops to enable the CBC to remain available over the air there so that the independent channel belonging to the Jim Pattison Group could upgrade to digital and so that a community channel could launch based in the local college.
6532 So far, that group has also received no reply from Shaw.
6533 We note that the same issue of tower sharing, but for wireless services, has been raised in the ongoing Industry Canada consultation regarding the upcoming auction of the 700 megahertz band.
6534 In that consultation, there is significant pro competitive pressure to enforce tower sharing to make the most efficient use of Canada's existing infrastructure, to reduce duplication of effort, especially where appropriate sites for new towers are scarce, and to ensure adequate competition for incumbents.
6535 Canada is too small a population to afford multiple networks of towers. Such sharing is essential to our overall ability to offer Canadians cost-effective services and adequate choice.
6536 We appreciate the opportunity to provide comments in this process and look forward to working with you so that communities outside the mandatory markets can benefit from the opportunities you are ruling in the Shaw CanWest transaction can create, as well as the ruling we hope you'll make in this licence renewal process.
6537 THE CHAIRPERSON: Thank you for your submission.
6538 Page 4 of your recommendations regarding the six megahertz allotment, aren't you taking us out of our jurisdiction? Isn't this for Industry Canada, spectrum allotment?
6539 We grant people licences once they've got the TA from Industry Canada. We do not allot spectrum to them.
6540 MS EDWARDS: They come to you for al licence, and once they have that licence, a condition of the licence could be that they share that six megahertz channel once they have it.
6541 THE CHAIRPERSON: Yeah, but isn't that doing indirectly what we can't do directly?
6542 MS EDWARDS: Sorry, I can't hear you.
6543 THE CHAIRPERSON: Isn't that doing indirectly what we can't do directly? I mean, that's basically saying, you know, you have to give part of your spectrum. Spectrum allocation is not our business. That's Industry Canada's.
6544 MS EDWARDS: You have no input into how much spectrum they get? Omni-1 and Omni-2 couldn't be asked to share the same allotment? Why not?
6545 THE CHAIRPERSON: I'm just telling you this is the way it works right now. If you -- spectrum is allotted by Industry Canada. Once you have allotted something, you come to me for a licence.
6546 We then can say yes, you can have the licence, but on condition that you split it and give up half of your spectrum to somebody else is my, in effect, doing the business between Industry Canada ex post facto.
6547 MS EDWARDS: I mean, you're the one that's giving them the licence, how they're to use that spectrum allocation, so I don't see why they couldn't be asked to share it between two channel, two applications in one allotment instead of one each.
6548 THE CHAIRPERSON: I put it to you if we did that, I'm pretty sure we'd be in Court within the hour, you know. It's an access of jurisdiction.
6549 But anyway, I understand your suggestion.
6550 Now, what is this other point that you're making?
6551 MS EDWARDS: Sorry, Chairman. Perhaps the -- what we should be doing is looking at how it works in other jurisdictions like Los Angeles and, say, Kenya where there -- some of the -- instead of giving all the spectrum available to incumbents, they seem -- you know, it's working in a different result.
6552 The licensees in LA are splitting their signal and offering SD and in Kenya, it's being planned on an SD purpose. Like it needs to be built in to the planning that some of the allotments are maintained for SD licensees who could share it.
6553 THE CHAIRPERSON: Ms. Edwards, I have nothing against the idea. It's -- I'm talking about legality and jurisdiction.
6554 You should pitch that idea to Industry Canada, not to me. That was my point.
6555 MS EDWARDS: My understanding is they say that there's this many six-megahertz allotments and then licensees come up to the plate and they ask for licences for a television channel.
6556 Do they automatically get the whole six megahertz when they come to you?
6557 THE CHAIRPERSON: Well, whatever they get, they come to me after they've gotten them. I can't redo, undo or change what they did. That's my whole point. That's not -- I'm not in the business of spectrum allocation.
6558 So any other questions?
6559 COMMISSIONER LAMARRE: Yes, I want to touch on your concern about missing maybe spectrum to provide for diversity of voices.
6560 But before I do that, you know, I cannot let you get away with the statement you make in paragraph 12 of your presentation this afternoon saying that broadcasters in the digital age will be squatting real estate space.
6561 Basically, what broadcasters are being asked by the digital transition, they're being forcibly moved from their legacy operating analogue channel to another one that's digital at their own cost with the aggravation that comes with it in order to make room for new entrants, new spectrum users.
6562 So those new spectrum users may not meet your definition of new entrants, but they are. And the only quid pro quo for broadcasters to put up with all of this aggravation is the fact that they can transmit in high definition in order to be competitive as over the year to specialty services that come down the pipe of the cable, of the fibre, and that come also from the U.S.
6563 So I take exception that you're stating in here that broadcasters will be squatting real estate. They're actually making this whole piece of real estate work much more efficiently for all spectrum users. Maybe not just broadcasters, but for all spectrum users. And that's a policy that's been taken by the Canadian government and that they can do nothing about.
6564 MS EDWARDS: Did you look at my Appendix E?
6565 CanWest has said openly in open forums they're only planning to use about 12 megabits per second out of their 19 megabits, even for an HD signal, which means that there are seven in there you could run three or four SD channels on.
6566 COMMISSIONER LAMARRE: It's their choice as an operator, and like I said, it's a quid pro quo that they get to put up with all of the aggravation at their own cost in order to make all the systems more efficient for everybody.
6567 Now, you're saying ---
6568 MS EDWARDS: Even if there's no space left for anybody else.
6569 COMMISSIONER LAMARRE: That's not what I said. And it's not true that there's no space for anyone else.
6570 You say that you're concerned that your channels will be available for over the air broadcasters. Tell me what spectrum study or what engineering studies you have to sustain that statement.
6571 MS EDWARDS: Employees at Industry Canada have told me that ---
6572 COMMISSIONER LAMARRE: No, no. I'm talking ---
6573 MS EDWARDS: --- there's ---
6574 COMMISSIONER LAMARRE: --- about a commissioned engineering study that shows application put forward by members you represent that were denied because there is no more space.
6575 MS EDWARDS: I'm saying that I'm being told by engineers that in the major markets it's going to be really difficult to get on the air. There's not going to be any space.
6576 I hear it over and over.
6577 COMMISSIONER LAMARRE: So it's hearsay. All you have is hearsay, okay.
6578 Well, let me give you a couple of engineering facts here. Currently, when you manage spectrum in the UHF television band, when you put in an application you have to be concerned about 19 other distinct channels than the one you're applying for.
6579 When we're going to move to digital, the same applicant would only have to worry about three distinct channels. That's where the efficiency is.
6580 So before you come and tell us that there are no spectrum available, have the studies done and come with applications, and we'll see how to make room for whoever applies. But right now, you have nothing to sustain your statement that is going to be impossible.
6581 MS EDWARDS: Well, except that I go to Industry Canada meetings regularly and this is what I hear.
6582 COMMISSIONER LAMARRE: Well, commission studies, file them with us, and then we'll look at it. But until then, all this is is hearsay, and basically the system is more efficient.
6583 MS EDWARDS: Well, we'll see.
6584 COMMISSIONER LAMARRE: We'll definitely see. We'll definitely see. And at that point in time, if indeed -- mind you, all -- the two major markets, Montreal, Toronto, Vancouver and probably also Windsor, have always been difficult to get in. They will always be difficult to get in.
6585 MS EDWARDS: Well, we would have -- I would have hoped that with the digital transition that they wouldn't be difficult to get in any more.
6586 COMMISSIONER LAMARRE: It's going to be less difficult, in my point of view. But that's an educated guess, you know. I haven't done the study. But that's an educated guess.
6587 And I think that until you come up with data to back up your statements, I don't see how we can impose conditions of licence that, by the way, as the Chairman pointed out, they're outside our jurisdiction. This entire spectrum ---
6588 MS EDWARDS: But for example, the appendix I put from CanWest is saying openly in public they're wondering, "Geez, what should we do with this extra seven megabits? Should we do mobile TV, should we have a second service?" Well, they have to ask for ---
6589 COMMISSIONER LAMARRE: Because what they're doing ---
6590 MS EDWARDS: --- licences for that service.
6591 COMMISSIONER LAMARRE: What they're doing is an operating decision to make, and they're allowed to do it because Industry Canada is giving them six megahertz of spectrum to work with.
6592 MS EDWARDS: Will they have to ask for licences from you for new services that they offer within the seven megabits?
6593 COMMISSIONER LAMARRE: Yes, they have to ask us for a licence for the programming they put on, for what they put in the container, but the container is under the Radio Communication Act, not the Broadcasting Act.
6594 Those are all my questions, Mr. Chair.
6595 THE CHAIRPERSON: Anybody else have questions?
6596 Thank you very much for your presentation. I think that's it for today, Madam Jade?
6597 THE SECRETARY: Yes, that's it for today. And for the record, I would just like to mention that CTV and Rogers listed in the agenda has informed us that they will not be appearing in the intervenors phase of the hearing.
6598 Also, the Documentary Organization of Canada will be appearing Wednesday morning. And tomorrow at 9:00, we will resume with Media Access, the only intervenor for the day tomorrow.
6599 THE CHAIRPERSON: Okay. Thank you very much.
--- Whereupon the hearing adjourned at 1438, to resume on Tuesday, April 12, 2011 at 0900
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