ARCHIVED - Transcript, Hearing 10 September 2012

55   M. BIBIC : Merci, Monsieur le Président. Pour les fins de la transcription, mon nom est Mirko Bibic. Je suis vice-président exécutif et chef des affaires juridiques et réglementaires pour BCE et Bell Canada.

56   S'adresseront à vous aujourd'hui :

57   - George Cope, président et chef de la direction de BCE et de Bell;

58   - Ian Greenberg, président et chef de la direction d'Astral Media;

59   - à ma droite, Kevin Crull, président de Bell Média; et

60   - à la gauche de monsieur Greenberg, Jacques Parisien, vice-président exécutif et chef de l'exploitation d'Astral Media.

61   Notre panel comprend également, premièrement, de BCE et de Bell Média :

62   - à votre gauche, Gerry Frappier, président et directeur général de RDS - Réseau des sports;

63   - à côté de Gerry, Martine Turcotte, vice-présidente exécutive, Québec;

64   - à côté de Martine, Chris Gordon, président, radio et télévision locale; et

65   - ensuite, à la droite, au bout de la table, Rick Brace, président, chaînes spécialisées et productions CTV.

66   Dernière nous, commençons avec les individus de Bell Média. On a Kevin Goldstein, vice-président, affaires réglementaires et ensuite Nikki Moffat, première vice-présidente, finances.

67   Aussi ici avec nous d'Astral, la deuxième table, on a Claude Laflamme, vice-présidente, Affaires corporatives et réglementaires d'Astral Radio, ainsi que Robert Fortier, vice-président, finances et chef de la direction financière.

68   Finalement enfin, Ken Goodwin, deuxième table, de PWC, notre évaluateur indépendant. Ken complète notre panel.

69   Monsieur le Président, Mesdames et Messieurs les Conseillers, je vous remercie de nous donner l'occasion de vous exprimer notre point de vue quant aux avantages que les Canadiens pourront tirer de l'acquisition d'Astral par Bell. Nous attendions cette audience avec impatience car elle représente la tribune appropriée pour discuter de façon rationnelle, constructive et détaillée du bien-fondé de cette transaction pour l'intérêt public.

70   Des centaines de Canadiens, des consommateurs, des producteurs indépendants, des annonceurs, des entreprises de médias, des groupes communautaires et des groupes d'artistes, de même que la communauté financière, ont directement exprimé leur soutien à la fusion d'Astral avec Bell.

71   Plusieurs thèmes reviennent constamment dans le soutien que nous avons reçu, en particulier, la reconnaissance des très nombreux avantages résultant de l'engagement de Bell envers la radiodiffusion au Canada, le fait que ces investissements offrent de formidables possibilités aux créateurs de contenu canadien. Tous comprennent qu'ensemble, nous pouvons faire beaucoup plus.

72   Chairman, Commissioners, the success of our business depends on responding to the needs and desires of Canadians to create and communicate, to be entertained and informed. Viewers and listeners across Canada, whether they are Bell customers or not, our content creators and partners, the millions of television and telecom subscribers, the people who live, work and create in the communities in which we ourselves live, work and create, Bell's commitment to serve them all ensures our transaction is indeed in the public interest.

73   MR. COPE: Thank you and good morning Mr. Chairman, Commissioners. And congratulations to you, Mr. Chairman, on your recent appointment.

74   I welcome the opportunity this morning to outline the tremendous benefits that Astral joining with Bell Media will bring to consumers and to the broader Canadian broadcast community.

75   The benefits will flow from the execution of Bell's strategic vision, a strategy built on unprecedented investment in Canada's best content and on the world-class network infrastructure that will deliver it to Canadians on all four screens: TVs, laptops, smart phones and tablets, a strategy to increase choice for consumers in a very competitive marketplace.

76   When Bell acquired CTV and formed Bell Media 18 months ago, we rapidly expanded programming and viewing options for Canadian consumers.

77   Since then, Bell Media has invested in an array of new programs of national interest and greatly enhanced news in local markets.

78   We've reenergized the A Channels and rebranded them as CTV Two.

79   We've invested in the music industry, rebranding radio stations and investing in new talent and content to serve local communities.

80   And we've assembled what we believe is the world's best mobile TV programming line-up, including content from independent programmers, and we've made it available to all wireless carriers.

81   We joined with a great company when we acquired CTV and we are investing to make it even better today.

82   We look forward to accelerating this progress with the Astral team. We'll start with French-language content and programming for the Quebec marketplace, where Astral has built real strength. This will allow us to better compete with Quebecor, the largest fully-integrated media company in Quebec.

83   The gap in Bell Media's Quebec portfolio is clear. With just one French-language brand -- RDS -- we are unable to provide the diversity that Quebec viewers, listeners and advertisers want. The scale and the audience we need to finally bring real competition to Quebec media are only available with Astral's diverse French-language content services.

84   Bell has been a Quebec company headquartered in Montreal since its founding in 1880. Our 17,000 team members across Quebec, and more than $900 million in capital investments here each year, have delivered world-leading fibre and mobile technology, including mobile 4G LTE and competitive new Fibe TV and Internet services to the province.

85   We plan the same high level of commitment to Quebec broadcasting. We announced that all of Bell Media's French-language programming decisions will continue to be made right here by the Astral team in Montreal. We will also welcome Ian Greenberg to BCE's Board of Directors after the transaction closes, ensuring we continue Astral's well-respected culture of service and innovation.

86   We have also unveiled an innovative joint venture with world-renowned Cirque du Soleil to produce compelling made-in-Quebec content, which we will showcase to Canada and the world.

87   We're very excited about the opportunities ahead in Quebec and we believe that Quebec consumers, producers and advertisers also eagerly welcome the choices that result from a truly competitive media marketplace.

88   Similar benefits will flow to English-language viewers throughout Canada because Astral's English-language content is equally important to our strategy.

89   The Canadian system needs companies with the scale to compete against foreign content companies like Netflix, Apple, Google, and, as of last week, Amazon. More than 10 percent of Canadians now subscribe to Netflix, which accounts for more than 11 million hours of TV viewing per week.

90   With scale, Canadian companies can make the investments in Canadian content and technology required to go head-to-head with these well-financed global competitors. And while international players do not invest in Canada or focus on Canadians, at Bell we always have and always will.

91   This is why, following the transaction, I am pleased to announce today that we will launch a service to compete with foreign competitors like Netflix, a made-in-Canada service, available in French and English everywhere we have rights, to all Canadians, importantly, through the cable, satellite or IPTV provider of their choice.

92   Available on demand and on any device, the service will showcase the very best in Canadian and international movies from Astral's pay TV services, such as HBO Canada and The Movie Network, and great news, entertainment and sports content from Bell Media.

93   Combining the unique pay TV strengths of Astral with Bell Media's broad range of programming will create a Canadian service that truly stands apart from those of international providers and will be distributed through the BDUs.

94   Bell has committed that all content will be available to all Canadians through the cable, satellite or IPTV provider of their choice. This is not only because we respect the CRTC rules and regulations but because it makes obvious business sense.

95   We understand the importance of this transaction and the Commission's role in assessing its public interest merits. However, the concerns raised have largely been from the perspective of its impact on some competitors like Quebecor and Cogeco.

96   They have conducted a heavy-handed campaign of misinformation and they've used Bell's name and brand inappropriately. They've used their own extensive media properties to demonize the transaction to an absurd degree.

97   Quebecor, the most powerful media operator in Quebec, and Cogeco, with its own media assets and a failed bidder for Astral, both would rather see this transaction stopped than face more competition.

98   We trust the Commission can see this campaign for the self-serving propaganda it really is.

99   Cable companies are by far the leading TV distributors in all the markets they serve. Let's take Quebecor as an example. The largest cable provider in Quebec, it has a 70-percent market share in TV distribution and it also remains the largest vertically integrated media player across Quebec.

100   The simple fact is that some of our big competitors are worried about the challenge represented by an increasingly competitive and nimble Bell. Astral joining with Bell Media will further enhance choice and increase innovation, which are very good for customers and consumers and creators.

101   Now let me turn to the topic of market share. There has been so much misinformation seeking to confuse the issue that we need to be clear and precise.

102   Even after the transaction, our share of total French-language viewing will be 24.4 percent. This is six percentage points below Quebecor's share and well below the 35 percent threshold. Our combined English-language share will be 33.5 percent. By contrast, the Shaw-Corus share will be 30.2 percent.

103   These calculations of course take into account the significant 13.2 percent viewing share held by non-Canadian TV channels, all of which are authorized by the CRTC for distribution here, and these service providers clearly compete every day for Canadian viewership. However, our share figures do not take into account the increasing impact of OTT services, even though they now account for a very significant portion of Canadian viewership.

104   The viewing shares make clear this transaction will not diminish the diversity of voices. In fact, Bell is underscoring its support for diversity of voices with a generous tangible benefits package, which we are proposing today to increase to $241.3 million to be spent over 7 years rather than the 10 originally proposed.

105   The increase is a reflection of the Commission's suggestion that the proportionate value of minority interests in services that form part of multiple asset transactions should be considered for inclusion.

106   The majority of the additional $41.3 million will be directed to independently produced French-language content, French and English programming celebrating Canada's 150th anniversary in 2017, and the launch of an all-new national French-language news service based in Montreal.

107   As an organization with a strong track record in news, Bell Media looks forward to bringing a fresh perspective to French-language news and information services.

108   Also included is $40 million to support an unprecedented initiative to enable modern, multi-screen broadcasting across Canada's North. We want to enable youth in the North to create, consume, and engage with content as their peers do in the rest of the country.

109   No other -- no other company has ever proposed broadcasting investments in the North of this scale and we believe that none ever will, considering the high cost of serving these areas. We encourage you to support this unique opportunity to help bridge the digital divide.

110   The Bell -- the Astral-Bell transaction is completed consistent with what the Governor of the Bank of Canada, Mark Carney, strongly encouraged Canadian companies to do: To invest in our country and to put money to work for the benefit of all Canadians.

111   That is exactly what Bell is doing. Over the past five years, we have spent over $15 billion in network expansion and R&D. The billions in strategic investments Bell has made and the debt we have added to our balance sheet to do so have delivered Canadian job growth and retention. Bell acquired The Source from a bankrupt American owner, saving thousands of Canadian jobs in every region of the country.

112   We are acquiring a leading Canadian data hosting company, Q9 Networks, from an American private equity owner.

113   We joined with the Molson family to bring ownership of the Montreal Canadiens back to Canada and we helped ensure that MLSE stayed Canadian.

114   Bell's acquisition of CTV has resulted in significant new investments and fresh ideas in Canadian broadcasting.

115   We look forward to building on this all-Canadian record of success by joining with the team at Astral Media.

116   The Commission is aware of the strong support for this transaction from stakeholders across Canada. I would also like to note the strong support from another very important group: Astral shareholders; who voted 99.84 percent in favour of this transaction. This includes some of the most high-profile names in Canada finance, including Canada Pension Plan; Desjardins; and of course, the Caisse de dépôt. As the largest independent shareholder of Quebecor Media, The Caisse would have appeared to be far less concerned about this transaction than Quebec might have you believe.

117   Following the Astral/Bell transaction, there will continue to be four large and well-financed private media companies in Canada: Public broadcaster CBC/SRC; multiple regional broadcasters; and a significant portion of viewership; at least 13 percent in growing held by the U.S. and international channels; and of course, the fast-growing presence from foreign OTT companies like Netflix.

118   This is a healthy and diverse marketplace, one with unlimited potential for these willing to create and compete by embracing new ideas and technologies.

119   Some of our content market rivals would like you to impede on our plans to compete through regulatory challenges and fear mongering. We would suggest and said that they too consider investment in Canada and a focus on the consumer as a better path to success in Canadian media.

120   Chairman, Commissioners, this broadcast complies with all the rules and ownership thresholds that the Commission itself has painstakingly crafted to ensure the diversity of voices in Canada. Bell is paying $3.38 billion to acquire Astral. We would obviously not have moved forward with one of Canada's largest media transactions without a full appreciation of the applicable regulatory elements with which following our radio divestiture, we will fully comply.

121   MR. CRULL: Mr. Chair, Mr. Vice-Chair and Commissioners. As Head of Bell Media, I am very pleased to be before you today to discuss our plans for the combined Astral/Bell assets, and I am particularly pleased with our performance to date at Bell Media. We have delivered public interest benefits from the acquisition of CTV which have, by all measures, far exceeded expectations.

122   As you will hear from our panel today, the benefits to all stakeholders from this proposed transaction, in both the French and English media markets, are significant.

123   I am particularly excited today to announce that Jacques Parisien has agreed to join the new Bell Media Executive Team, pending your approval of this transaction.

124   Located here, in Montreal, Jacques will oversee both French and English-language media properties operating across Canada. In addition, Jacques will contribute to Bell as a key executive leader in our Quebec market development efforts through his extensive relationships with stakeholders across the province.

125   The media industry in Canada has experienced unprecedented change which is only accelerating. This is the result of technological innovation; evolving consumer demands; and the globalization of content. Canadian broadcasters and distributors have been quick to adapt.

126   This began over a decade ago, in fact, when Quebecor added TVA to its array of media properties, and additional transactions have followed.

127   In every case, these transactions delivered benefits to Canadian television and radio audiences, driving investment in the Canadian broadcasting system which is among the best and most admired in the world, providing incremental support to independent producers and funding for important culture programs; even saving aspects of this business that were, quite frankly, on the brink of collapse.

128   Bell Media is a great example. In 2011, we transformed the A Channels, once on life support but now re-energized as CTV 2. While these stations are not yet out of the woods, they remain in business as a direct result of investment by Bell.

129   But that is only a small glimpse into the massive investments we have made to improve television and radio. We continue to make our television and radio stations even more effective in bringing a uniquely Canadian voice and perspective to news and entertainment programming, spending almost $600 million each year on Canadian content. We have green lit more Canadian drama in the last 18 months than CTV did in the prior three years to our ownership.

130   In 2011, we launched new local news shows, increasing local programming by 21 hours each day and bringing total news content available for CTV and CTV 2 viewers each year to about 17,000 hours.

131   We have added 700 hours of independently produced Canadian content over and above news, sports and in-house production.

132   We have taken businesses that were previously being harvested and we have re-invigorated them. We produce 1,500 hours of programming in-house across CTV and another 1,500 hours of original Canadian sports programming at TSN.

133   In addition, we have adjusted the formats of key radio stations in Calgary, Winnipeg and in Toronto, responding to the demands of our listeners.

134   An overwhelming proportion of our content is created by Canadians for Canadians, the result of our close working relationships with partners across the Canadian creative industry. Both Bell and Astral were leaders in creating the terms of trade agreements with French and English-language independent producers.

135   This focus on working with our Canadian partners and serving Canada's national, regional and local markets in ways that international OTT providers do not and will not is a great advantage to our system and our country, one we hope to leverage with the new multi-platform service offering which was announced this morning.

136   M. PARISIEN : J'aimerais commencer en disant à quel point je suis honoré d'être invité à me joindre à l'équipe de direction de Bell Média. En tant qu'employé d'Astral depuis 1994, j'ai vraiment très hâte de profiter de l'expertise de toute notre équipe pour aider à offrir aux Canadiens le meilleur contenu possible, en français et en anglais, d'une façon originale et intéressante.

137   Astral a une longue histoire et une solide réputation au Québec. C'est ici, à Montréal, que nous avons lancé les premiers services canadiens de télévision payante et spécialisés en français. Nous ne serions pas ici si nous n'étions pas convaincus de l'exceptionnel apport au système de radiodiffusion canadien provoqué par la transaction dont bénéficieront tous nos employés, nos téléspectateurs, nos auditeurs, nos annonceurs, ainsi que la communauté de créateurs avec qui nous sommes fiers de collaborer tous les jours.

138   Le Fonds Harold Greenberg et ses programmes de support aux longs métrages canadiens dans les deux langues officielles seront maintenus, et nous prévoyons que nos investissements annuels de plus de 100 millions de dollars pour du contenu canadien à diffuser à la radio et à la télévision seront appelés à augmenter au fil des ans.

139   Nous allons accélérer le déploiement de certaines initiatives novatrices, comme le lancement du service multiplateforme sur demande annoncé ce matin par George Cope. Les services de télévision payante en anglais d'Astral sont au cour de ce nouveau service et sera offert à tous les distributeurs dans les deux langues.

140   En se joignant à la famille Bell, Astral sera encore mieux positionné pour poursuivre sa croissance. Nous serons également en mesure de fournir les services que les Canadiens désirent dans la langue et sur la plateforme de leur choix.

141   Et avec le maintien à Montréal du processus décisionnel lié aux propriétés de radio et de télévision francophone, il est absolument faux de prétendre que cette transaction entraînera une diminution de notre engagement à desservir les consommateurs, les annonceurs, les téléspectateurs, les auditeurs et les communautés du Québec. En fait, nous pouvons affirmer que l'expertise et la connaissance intrinsèque du marché médiatique francophone de l'équipe d'Astral n'ont jamais été autant valorisées.

142   Je suis vraiment ravi à l'idée de me joindre à cette nouvelle équipe et je suis très optimiste quant aux formidables opportunités qui s'offriront à nous.

143   M. GREENBERG: Lorsque la famille Greenberg a vendu Astral il y a un peu plus de 50 ans, la compagnie était bien différente de celle que nous connaissons aujourd'hui. Évidemment, nous avons grandi, mais nous avons surtout su nous réinventer, notamment lorsqu'après une profonde transformation Astral est devenue, au milieu des années 90, une entreprise exclusivement média et «pure-play media company».

144   Our growth since then has been impressive, based on delivering the very best content to our viewers. In doing so, we developed great business relationships with independent Canadian producers as well as with leading distributors like Quebecor, Cogeco, Shaw, Rogers and of course Bell.

145   But our great company is at a crossroad. Everyone can see that the revolution in communications technologies is intensifying competition for viewers and listeners and driving up programming costs. This is especially true with the emergence of new content aggregators, including OTT providers like Netflix, Apple iTunes, Google's YouTube, Amazon, and others to come. These large international companies face no obligations whatsoever to support Canadian programming; Canadian employment; or the broadcasting system as a whole.

146   Compte-tenu de ce rapide changement systémique, la famille Greenberg a décidé que le moment était venu de céder Astral au bon acheteur. Nous recherchions des investisseurs prêts à consacrer les décennies à venir à notre entreprise et à investir les sommes nécessaires pour lui donner un nouvel élan. Bell Média est manifestement l'acheteur idéal.

147   La production de contenu canadien est une activité complexe qui repose sur la volonté des radiodiffuseurs à réaliser des investissements nécessaires. Bell Média s'est clairement montrée prête à le faire.

148   Our system requires players with a much larger scale of operations that may have been the case just a few short years ago, when the large cable companies began their vertical integration. Scale has only become more important with the entry of well-financed international OTT providers to Canada.

149   For Astral, the proposed transaction provides the scale and financial stability required. Like Bell, Astral is a strong believer in providing consumers with access to the content of their choice on the platform of their choice. But very little Astral content is currently available on multiple platforms, due to the high level of capital investment and costly rights acquisition required.

150   Aucun autre acheteur ne peut nous faire bénéficier d'autant d'avantages aussi rapidement : lancement de nouveaux projets; respect de la nature bilingue de notre entreprise; maintien des activités à Montréal; engagement à investir dans l'entreprise plutôt que la démembrer; tout cela dans le stricte respect des règles et règlements du Conseil.

151   Je suis convaincu que ce transfert est la meilleure option pour notre entreprise, ainsi que pour nos employés, partenaires, ainsi que les auditeurs et téléspectateurs canadiens.

152   I have been in this industry for many years and I am quite familiar with the regulatory environment governing Canadian media as it has evolved. Clearly, I would have not entered into this transaction on behalf of Astral shareholders had I not been convinced that this transaction complies with all the Commission's rules, including the ownership thresholds we are discussing today.

153   M. FORTIER: Monsieur le Président, Conseillers. En conclusion, depuis l'acquisition de CTV par Bell, le Conseil a établi une série de nouvelles règles et a récemment nommé une dirigeante principale de la consommation, le tout en vue de favoriser la concurrence; de protéger les consommateurs; et d'assurer la viabilité du secteur de la radiodiffusion au pays. Bell a la ferme intention de respecter ces règles comme l'a toujours fait.

154   Notre transaction est dans l'intérêt du public pour toutes les raisons que nous avons exposées aujourd'hui. Nous avons annoncé le lancement d'un nouveau service sur demande très attrayant, ainsi que d'initiatives de contenu francophone novatrices. Nous avons considérablement augmenté notre généreux bloc d'avantages et proposé un nouveau service national de nouvelles en français et une hausse des investissements pour des émissions d'intérêt national en français et en anglais.

155   A notre avis, ces initiatives sont tout à fait cohérentes avec la philosophie exprimée par le Conseil dans son plan d'action des trois prochaines années, rendu public la semaine dernière. Merci.

156   LE PRÉSIDENT : Merci beaucoup, Monsieur Cope et Monsieur -- et votre équipe; fort apprécié.

157   As you mentioned your opening -- we will be dividing the questions up if -- as is our usual style, between Commissioners; I will be going first in going through this.

158   But before we get to the actual matter in front of us; as you mentioned, Mr. Cope, this is my first hearing; I am still within the first 100 days. And I notice that this particular application seemed to attract a lot of senior, experienced broadcasting and communications CEO's. So I thought I would take this opportunity to ask bigger, broader questions about the vision of where you see the broadcasting system being in five years; so a five-year term. So if we are looking forward to 2017, what would the Canadian broadcasting look like, in your view, by then?

159   MR. COPE: I think -- well, first of all, again, welcome in your new role, and it is nice to see your first assignment is a low profile case you have taken on.

--- Laughter

160   But seriously, in terms of our vision and for the industry; I think we will have a vision -- the broadcast industry will be on multiple screens. It will -- it has already begun to look like nothing it looked like three to four years ago. Today, we talk about a vision of the broadcast industry on four screens. I am sure there are people out there today inventing whatever that fifth screen will be. But the way we have watched TV in the past or seen the broadcast industry will be dramatically different that way in five years, across all these various broadband technologies.

161   We also believe it is an industry that fortunately, in Canada, now has very deep-pocketed companies involved, them being Rogers and Shaw and Bell, and in Quebec, we also, we have large scale operations as a result of what is happening from the (indiscernible) integration, which really started with the cable operators.

162   And in one sense, Bell's strategy has followed what three of the cable operators had started a few years ago, because of course the TV business is important for our end and also, as I indicated at the CTV acquisition, the initial strategy was to make sure we leveled the playing field.

163   And with the Astral acquisition, of course, clearly does that in the French market and, to talk about the future, it gives us an opportunity now to make sure we have products and services that do compete with the international OTT providers.

164   I think that will be one of the most interesting evolutions over the next five years; how that plays out. We think today's transaction puts the Canadian broadcast system in a much stronger position in terms of making sure Canadians have an OTT service that a Canadian broadcaster could bring to the market. And what is really important about that is we see the equal system is distributing that through the current BDU's.

165   So this service we fully expect that now we are handing and will be distributing to Cogeco, Quebecor, TELUS, Shaw, a product that competes with Netflix. Netflix does no distribution in Canada; as we know, makes no contribution into the regulatory funds that we do, in terms of Canadian content.

166   So we think, as we look forward; today's transaction sets our organization up, and I believe the Canadian broadcasting system, to compete with the new realities of the broadcasting marketplace.

167   MR. CRULL: Mr. Chair, if I may, I would like to add to what Mr. Cope said, with a couple of observations about the next five years in the Canadian media and broadcasting and distribution market.

168   I see it as a bit of a fork in the road with a couple of potential avenues that could evolve. On the positive side, I would see much more Canadian produced creative content and stronger Canadian players in the market. I would see consumers exercising the ultimate choice -- ultimate choice, by having more options -- their ultimate choice can -- actually happens with the remote control in their hand or with the device of their choice, which is digital, in what they want to watch.

169   I do see more consumption. I think we are at a very exciting time for the media industry, because despite the fragmentation of the market and all of the new consumption choices, as per the recent monitoring report the Commission released, we see hourly viewing of linear television growing in Canada and we see significant new viewing on multi-platform options.

170   So I think there exists an almost insatiable appetite for good entertainment, both music and television entertainment. And I think the value proposition for consumers therefore will continue to improve, because they are going to get more choice meeting their needs for on-demand anywhere, anytime content.

171   I do see a fork in the road that could cause some outcomes that concern -- should concern all of us. If foreign OTT players - and these aren't small -- we often use Netflix as the example, but they aren't small players: Apple, Google and Amazon, and others, which are entering the market and have the ability, certainly, to have a profound impact on Canadian consumption.

172   Foreign linear channels are growing. It is alarming to me as a Canadian broadcaster to see the tremendous share of foreign linear broadcast services and their growth in Canada, and finally, a growth of foreign content, as opposed to our own creative here.

173   So I think where the fork in the road - and we choose to see the positive - has great potential.

174   THE CHAIRPERSON: Thank you. You haven't mentioned radio.

175   MR. CRULL: Well, for sure I said the consumption of digital music. Whenever I talk about the consumption growing; that it applies both to music and to television entertainment. Radio is a really -- is a remarkably stable -- we are very committed at Bell and excited about the radio business, and we have seen that it serves the local needs of advertisers and consumers in a way that has allowed it to be really stable and resilient as the market has fragmented into new listening options and delivery mechanisms have emerged. We are excited about participating in that digital delivery but also in the stability of the existing system.

176   MR. COPE: In fact, when you say broadcast; I apologize; I was very specifically addressing and thinking in the TV space.

177   But in the radio space; probably one of the most exciting parts of our acquisition of CTV has turned out to be the radio industry and the ability to take that platform nationally; making the advances that we needed to make; making the investments and changes in some of the product portfolios.

178   And then, if you look at that market, it is such a localized market; we will be able to do -- we think things in the marketplace that are local and national, with this scale, from a competitive perspective and with the portfolio that Mr. Greenberg put together; we think again that improves our competitive position; it improves choice in the marketplace. And if you have seen some of the exciting branding that we have done with the earlier on acquisition of the CTV radio portfolio; consumers will continue to see that with the coming together of the Astral/Bell.

179   So you are right; it didn't address that at all.

180   THE CHAIRPERSON: When you did your strategic thinking about -- thinking towards the future, five years out, putting aside this particular proposal as one action to respond to the threats -- First of all, maybe you could, other than what you call "OTT" what other threats do you see out there for broadcasting companies at large and, second, beyond this particular transaction, what other strategies were you pursuing to adapt to that future you were envisaging in five years time?

181   MR. COPE: Sure. I would step back and say as you know and it's -- I'm a little careful as the Commission understands because my competitor is going to take notes of Bell's five-year strategy here -- but within that competitive context, I would say a few things.

182   It was very clear to us strategically in this province that competing with a very strong vertical integrated and fairly an excellent company in the marketplace regarding consumer choice, that we wanted to make sure we were in a competitive position and what had become a vertically integrated industry in Canada.

183   We didn't create that. We followed that development at Bell. I think that's very very important to understand. And so, we looked at the portfolio opportunities quite frankly to everyone here, the concept of organically growing the solution in Quebec we didn't was viable.

184   Our view was we looked at Astral's assets that are out here in the province and we saw that as absolutely critical to give us the scale and we think tremendous for consumers and the media mark is now we have two very strong players plus, of course, the Government broadcasters in the province to compete in the marketplace and provide choice.

185   So, we saw that, even as we looked out five years that looked like the strategic option there.

186   And then, in terms of the significant assets on the pay side, right, that -- and the specialty side that Astral brings, if you look at our conventional business on CTV, that has continued to be challenged. I think the Commissioners and everyone knows that the economic of conventional has been tougher and so, balancing out our portfolio within, it lands itself to making our conventional business stronger which, of course, is excellent from a news perspective in Canadian content development.

187   So, that's one of the benefits and then also strategically when we look out, we think content costs, despite our best efforts, are going to go up because there are global players bidding for this content.

188   And when we look out strategically and if we look at Astral's track record in building they pay services and then we look at what CTV buys in content, our ability to combine our buying capability over time we think will be strategically important to keep costs lower in Canada, not the other way around.

189   In fact, making sure Canadian broadcasters have enough scale to buy that content is one of the main reasons Mr. Greenberg and I came together on this transaction as we both looked out at the industry evolution because, you know, there is this continual global demand for this content and so I think that -- and so, one of the words used was the threat.

190   I do view this acquisition as a great opportunity and I think as we look out five years, this will put the Canadian broadcasting system, this particular asset that we are talking about today, in a strong position.

191   And more important than anything is Canadians incredible choice across all four screens. I mean Canada has led the world in mobile TV. No country is as far advanced as we are in mobile TV.

192   And that is directly a result of Bell and CTV coming together and that content is available to all wireless carriers, has been since day one. And so, we are excited about adding that to the other three screens and four screens as we move forward.

193   MR. GREENBERG: Mr. Chairman, if I can just add, Astral's pay TV stations are really the line of the first defence against the OTT providers and there is no question when we've looked at the increasing cost of content as we have to compete against global players to buy content, that without the combination of a Bell-Astral merger, in order to buy more than one window in Canada, there won't be much to look forward to five years if we keep allowing the Canadian system to be ignored and that the only way that we can protect the Canadian system is to have strong players and that takes large mergers.

194   And so, in order for us to make sure that we don't have core cutting or core shaving, that we provide Canadians what they want, where they want it and how they want it, it's imperative that we have the kinds of players that would come about with this kind of merger in order to compete with OTT buyers from around the world.

195   I mean, we are dealing with players who can buy for many markets beyond certainly North America and Europe. And so, it is important to have the Canadian system to survive and grow, to have players that can compete with global players.

196   LE PRÉSIDENT: Merci d'avoir contribué. J'étais pour vous demander la question semblable sur votre vision, monsieur Greenberg, de l'avenir.

197   Si je comprends bien la position de monsieur Cope, il est relativement optimiste, particulièrement si on approuve cette transaction-là sur l'avenir de la radiodiffusion au Canada. Je ne suis pas certain s'il est aussi optimiste si jamais on refusait cette transaction en partie.

198   Mais je me tourne à vous, monsieur Greenberg, parce que votre société a été présente pendant des décennies au Québec. Vous avez su vous réinventer vous et votre famille et vos employés pendant plusieurs années et pourtant à ce stade-ci on pourrait penser qu'au lieu de faire face au défi mentionné, que je crois que vous partagez cette analyse, vous avez décidé de vendre.

199   I take it the price was good and that helps make a decision, but beyond that, were you optimistic or pessimistic about the broadcasting system?

200   MR. GREENBERG: A decision to sell is obviously very complex and in some cases emotional, but at the end of days you well know this company was started by four brothers, two of the brothers have deceased, so we are dealing with two families and two brothers alive and I think it was based on approaches I have had from the other two family members that they decided it was time to sell and came to see me and talk about the possibility.

201   From my own perspective, I think the industry has been great, will continue to be great, but I really think it takes larger scale. I could see the winds against an independent company like Astral not being able to compete with global players any more and on that basis we have to face realities and it became -- it was clear in my mind that a combination of Bell and Astral would accomplish the goal particularly for our employees going forward to have a company that will grow and to be -- continue to propel the legacy of Astral and be a major player in Canada.

202   THE CHAIRPERSON: Okay. Thank you for that. Let's now turn to the application in front of us rather than these big questions. First of all --

203   J'ai remarqué que dans votre présentation vous faites référence à plusieurs reprises, dans la représentation orale ce matin, aux règlements ou -- the rules of the Commission -- je pense que c'est ça dans la version anglaise.

204   Juste pour être clair, je veux bien comprendre votre position. J'ai toujours cru que les politiques du Conseil, particulièrement celles sur l'intégration verticale, étaient adoptées en vertu de l'Article 6 de la Loi sur la radiodiffusion et donc, ce n'était que des politiques larges, que ça ne liait pas nécessairement la discrétion du Conseil.

205   C'était un peu le Conseil qui parlait à haute voix pour essayer de guider les intervenants du système, mais qu'en fait ça serait une erreur de juridiction de se lier à ces politiques.

206   MR. BIBIC: Fundamentally, Mr. Chairman, I agree with you. Obviously, every transaction the Commission takes on a case-by-case basis and assesses it from the perspective of its broader jurisdiction. What we are referring to in our opening statement factors, two things going on.

207   One, first and foremost, transaction est dans l'intérêt public. Premièrement, on a énoncé les raisons pour lesquelles on croit fermement que la transaction est dans l'intérêt public et ça commence là.

208   But that being said, of course, now the Commission as with most regulatory bodies does issue policies and guidelines to allow parties or to better assist parties in determining how things will be analyzed.

209   So, of course, another important policy aspect when we are assessing a transaction like this is the diversity of voices decision from 2008 which was meant to give us all in the industry an analytical framework, in other words, a certainty so to speak, and how the Commission would assess a transaction like this.

210   And so, beyond the broader public interest merits and all the advantages that we will bring to the marketplace as a result of this transaction which Georgie and Kevin have discussed, we also rely on the broader policy and the diversity of voices analytical framework and in that respect, we certainly firmly believe that in all respects we meet all the criteria in that analytical framework.

211   And, of course, there are other policy structures like the vertical integration rules which there is no question we respect and despite all the rhetoric frankly of our competitors, we have always respected since those rules came into place and those rules have even been tied down even more with the issuance of new regulations on July 26 of this year.

212   So, it's at that level that we are trying to put forward our position in the opening statement.

213   Yes, you have broad jurisdiction case by base, but there are policies below that which give us complete confidence that we are in respect of those rules and, of course, the broader public interest.

214   LE PRÉSIDENT: D'accord. Merci pour ces clarifications.

215   Vous avez fait mention dans votre présentation aussi que... vous avez eu des critiques de la campagne publicitaire qui a eu lieu, la page médiatique et tout ça et puis, effectivement, certains auraient dit que ça n'aide pas nécessairement la sérénité de nos processus publics et qu'il fallait dire à Ottawa certaines choses, qui est assez curieux parce que nos bureaux sont du côté de Gatineau.

216   Cela dit, par la même occasion ce matin vous arrivez et puis vous « tirez des lapins de votre chapeau »: Un Netflix canadien, augmenter les bénéfices tangibles.

217   Le processus du Conseil est quand même un processus contradictoire où on a plusieurs mois pour vous à préparer une demande, vous la mettez de l'avant. Il y a des oppositions. Vous avez une opportunité de faire une réplique et vous arrivez le matin de l'audience avec quelques lapins.

218   Est-ce que, ça, ça aide la sérénité de notre processus public?

219   M. BIBIC: O.k., on va... Monsieur Cope va répondre à la question de l'annonce sur le produit concurrent de Netflix et, moi, je vais répondre sur les bénéfices tangibles.

220   MR. COPE: Well, what I would say is this. We had absolutely no intention to announce a product launch at the hearing because Netflix is now listening in and now knows what we are doing and all of our competitors in the broadcast industry, not the BDUs, but the broadcast industry now know what we are planning to do.

221   But given the public profile of two competitors with complete misinformation, using our brand name in advertising, not disclosing that they are the companies behind that campaign in those advertisements in the newspaper, we felt compelled to announce a product launch here so that the Commission clearly understood and Canadians understood the real benefits of this transaction that they'll see as consumers.

222   So, that's really why you have seen the announcement this morning. It is because typically in a merger you know, you wouldn't pre-announce product portfolios that you will bring to the marketplace because of the competitive market we have in Canada.

223   But given in respect as you have even raised the unusual situation that seems to develop over this transaction, we decided as an executive team that it was important to disclose this to the Commission so they had this information, so they understood again consistent benefits for Canadians that they would see in the marketplace that benefits the broadcast system and I would say that benefit all BDUs because again the strategy around this product, which again sharing that strategy and we would love to do it in private we are not allowed to, will distribute that product through the BDUs, so our plan of course should make this make this private to allow Rogers to tell us to COGECO to Quebec Corp to everyone so that they can sell it to their customers in Canada and that product will compete directly with the Netflix product and other.

224   And I want to just talk about Netflix, other OTT services have been announced as well. So, that's why you have heard the additional information hopefully that's helpful for the Commission.

225   M. BIBIC: En ce qui concerne les bénéfices nets, ce n'était pas pour mélanger les cartes ce matin. Et, moi, je lis le paragraphe 12 de la décision qui a approuvé la transaction de Bell et de CTV en 2011 et le paragraphe 12 indique que:

« Le Conseil a l'habitude lorsque les transactions impliquent de multiples éléments d'actifs, d'inclure dans la valeur de leur transaction tous les intérêts minoritaires dans des entreprises de radiodiffusion. »

226   Personnellement, je ne crois pas que le conseil ait l'habitude de faire cela et, en effet, dans notre réplique on énonce les raisons pour lesquelles on croit fermement que ce n'est pas la politique du CRTC, ça n'a pas été auparavant la politique du CRTC d'inclure des intérêts minoritaires dans la valeur de la transaction.

227   Néanmoins, il y a eu... vous le savez sur le dossier, le Conseil nous a demandé deux, trois, quatre fois de répondre à cette question et le 20 août, quand on a déposé notre réplique on expliquait encore une fois pourquoi est-ce qu'on n'y croit pas.

228   Mais, là, la raison pourquoi est-ce qu'on n'a pas... on n'était pas d'accord au mois d'août d'inclure la valeur des "joint ventures" et aujourd'hui on change d'idée, c'est une question de jugement.

229   On se prépare et en se préparant c'est normal, on a fait un jugement comme équipe que, bon, la dernière fois que le CRTC s'est prononcé sur cette question on nous a indiqué que le Conseil a l'habitude et, donc, on a décidé de céder l'argument, c'est tout.

230   Les autres annonces qu'on a fait, il fallait... puisqu'on a augmenté la valeur de la transaction à cause des "joint ventures", le montant des bénéfices nets a augmenté de 200 millions $ à 240 millions $, là, il fallait allouer les sommes d'argent additionnelles et à cause de cette augmentation on a fait deux autres annonces: le nouveau canal Nouvelles de catégorie « C » et de la programmation qui entourerait le 150ième anniversaire du pays en 2017.

231   LE PRÉSIDENT: Donc, c'est une révélation qui a eu lieu après... après le dépôt de la réplique?

232   M. BIBIC: En effet, en se préparant quand le jour arrive, on a fait un jugement.   

233   THE CHAIRPERSON: Over the years --

234   M. PARISIEN: Excusez; monsieur le président.

235   LE PRÉSIDENT: Oui.

236   M. PARISIEN: Si je peux juste compléter?

237   LE PRÉSIDENT: Oui, monsieur Parisien.

238   M. PARISIEN: Je me meurs de vous faire connaître certaines de nos humeurs au niveau du terrain et au niveau de l'opération chez Astral.

239   C'est loin d'être des lapins et c'est aussi beaucoup le reflet de l'engagement de Bell et de contrer aussi la campagne médiatique à laquelle vous avez fait référence.

240   Lorsque la famille a décidé de vendre, c'est sûr que les employés d'Astral ont eu un deuil à faire de cette situation-là et très rapidement, le meilleur acheteur qu'on a identifié, l'ensemble des employés, les 2 800 employés d'Astral lorsqu'on en a eu l'information, c'était Bell. Bell a la profondeur nécessaire pour nous permettre d'avancer et a la profondeur nécessaire pour nous permettre d'évoluer.

241   Vous savez très bien puisqu'on les a présentés au Conseil que nous avions des projets pour HBO GO puis Movie Network everywhere puis ces choses-là et, là, tout à coup Bell arrive dans le portrait et ce que ça fait, c'est que ça donne tellement plus d'ampleur et tellement plus de profondeur à nos projets.

242   Ce que monsieur Cope a annoncé ce matin, ce n'est pas un lapin. C'est juste que Bell plus Astral ça nous permet de faire ça, ce que ça ne nous permettait pas à Astral seul de faire.

243   On n'a jamais parlé de ces produits-là en français. Tout à coup, Bell arrive et, encore une fois, l'ajout de Bell à nos projets nous permet de faire ça pour le Québec. Alors, pour moi, ce n'est pas des lapins du tout. C'est juste la conclusion normale de mettre les deux entreprises ensemble, ce qui s'est fait après l'annonce évidemment puis après le dépôt, mais on en parlait depuis l'annonce.

244   L'autre chose, ce que c'est aussi une réaction... pour moi, en tout cas, où je me positionne dans les opérations, c'est aussi une très bonne nouvelle pour nos employés qui ont suivi la campagne médiatique dénigrante sur Astral et sur Bell, à qui on avait dit: « Quel bel acheteur, quelle bonne nouvelle » puis, là, tout à coup, le "build-up" incroyable sur... négatif sur Bell et sur Astral, et c'est contré par des annonces comme celles que vous avez entendues ce matin.

245   Alors, pour les employés d'Astral, pour les producteurs indépendants, pour l'industrie du cinéma, quelle belle nouvelle qu'on puisse annoncer ça. Alors, moi, je suis loin de considérer ça comme un lapin ou un "teaser" pour essayer de vous séduire.

246   C'est plutôt une initiative qui résulte de la transaction et qu'on n'aurait jamais été capable de faire sans avoir la profondeur et les ressources que Bell apporte à l'expertise et aux projets d'Astral.

247   LE PRÉSIDENT: Je comprends bien les réalités commerciales de part et d'autre, sauf qu'on est quand même un tribunal administratif et il faut être équitable pour tous et il y a des règles de procédure pour une raison, justement, pour accomplir les réalités d'être équitable pour tous.

248   Maybe I will turn to other questions. Over the years the Commission has developed a number of policy principles in these types of transaction, in particular when someone wishes to sell a broadcasting undertaking the licensee, it doesn't normally return the licence for us to reissue it through competitive hearings.

249   So, we have always instead required that the applicants come up to the Commission and establish or argue that the transaction is in the best possible proposal -- that it is the best possible proposal in the circumstances and it's in the public interest.

250   So, perhaps more on the first side of that, in light -- and putting, setting aside the offer because it's obviously chosen by Astral and its shareholders, I would like to hear a little bit more why this really is the best possible place to set those Astral assets within the Bell family.

251   Why is it the best possible proposal, which implicitly suggests that maybe there were other options on the table and why is this the better one?

252   MR. GREENBERG: Well, if I can start, Mr. Chairman. First of all, well, put price aside. Bell was the only company that, number one, had the financial ability and came forward offering to buy at the terms we set.

253   Second of all, it was the only company that was willing to keep the integrity of Astral together as bilingual company and not split up the English and French assets.

254   Number three, for our employees who have worked very hard to build Astral to what it is today, there was no question in my mind that Bell offered the best opportunity to keep most employees engaged in the company going forward as opposed to any other possible bidder.

255   And fourth, I think Bell is more committed to a pan-Canadian bilingual company. Their requirement to have assets in Quebec and in the rest of Canada frankly stood out as the only bidder that could accomplish that.

256   So, when you put together the financing, you put together the growth for employees and I think personally for the good of the broadcasting system, if we keep fragmenting the broadcast system in Canada, it will never be as strong as it could be by having strong players who can compete.

257   And so, for all those reasons, there was no doubt in my mind after many months of discussion and deep thinking that Bell was by far the only buyer that could meet all the criteria we had set up.

258   MR COPE: If I could add from our perspective if it's helpful -- and I guess the Commission will decide that if it's helpful -- if you kind of take it both ways, well if you look at the English assets, you know this acquisition puts us pretty much on power with the Shaw course asset pool at about, you know, 33 per cent, but if you look at the benefits to the broadcast system and to, as we looked at it, why the Astral assets in the English pay assets fit so well was, as I have mentioned, CTV runs as we all know a significant conventional business, the Commission is very aware of the financial pressure on the conventional side versus the specialty side, this balances that portfolio therefore by definition makes the conventional industry stronger in Canada.

259   And also, I think when we look at why are we the best acquirer, not that someone else couldn't, if you look at the Canadian broadcast industry having stability, having a deep pocket like Shaw, Rogers and Bell and Quebec Corp owning significant assets, these two assets coming together allow us to again compete for this content that we are buying globally now, which is very painful to do, and so putting that scale together we think was the fit and offering these competitors services we've talked about, the new product offerings that we will bring to the market both English and French. That's on the English side.

260   On the French side, in Quebec market, hand-in-glove fit, a company who is in the content business today in Bell, small in the province competes every day with very strong vertically integrated player, the consumer ends up now with two very strong French-market providers in Quebecor and Bell, who, as everyone knows, we compete every single day in every single market in telecom and so that obviously makes that asset.

261   And then finally, as Mr. Greenberg said, when you can bring an organization completely together and not split it and have someone such as Jacques step into that leadership role, the ability to move that company forward becomes a pretty significant benefit to putting those assets together.

262   The split-up and break-up of Astral is nothing but financial engineering and it does nothing to respect the core and the assets that have been built here and no other buyer in Canada will hold this asset together and puts us on par with our competitor in Shaw and Corus.

263   THE CHAIRPERSON: So leaving aside the tangible benefits now, as you know, in these transactions there's always -- we look at both the tangible and intangible. I've been involved in these transactions for a number of years wearing different hats and we usually hear that we will ultimately see more and better quality Canadian programming.

264   I certainly remember hearing that when BCE did the first acquisition of CTV. The argument back then was because of competition from abroad we had to stop renting our content, we had to start owning it so we could put it on multiplatform.

265   I'm sort of hearing the same thing again today. Maybe you could address that aspect to it. I mean is this new and different or is it the same argument I may have heard a few years ago?

266   MR. CRULL: I think, Mr. Chair, sometimes predictions are accurate and timing is inaccurate. And so I think in some ways that the vision of convergence was very accurate. I think the timing of it really happening took a little bit longer than some a decade ago had forecasted.

267   As to the vision of a stronger, made-in-Canada, Canadian-content-focused broadcasting company, it's very core to how Bell Media operates and I think one only need look at the track record of the last 18 months since Bell Media has been formed.

268   In that period of time we have actually increased our Canadian content spending by 9 percent and decreased our foreign spending by an equal 9 percent. And when you add our capital investments to upgrade the facilities which had not been upgraded, more than $100 million incrementally over and above benefits or any licence obligations have been invested in Canadian programming.

269   I mentioned in my opening remarks that never before has CTV greenlighted so many Canadian dramas and in fact we have more dramas in our schedule in this upcoming broadcast year than in any year in the last decade.

270   I would like if the Chair would provide for two gentlemen to just comment because they have seen the commitment that Bell has to investing in Canadian creative -- Mr. Gerry Frappier in regards to RDS and the impact we've had there and Mr. Rick Brace for our specialty properties.

271   M. FRAPPIER : Merci, Kevin.

272   S'il y a quelqu'un qui est bien placé pour parler des bénéfices de Bell depuis qu'ils possèdent RDS, c'est bien moi, et je peux vous dire, depuis 18 mois, l'investissement en capital que Bell a fait dans le marché au Québec par rapport à RDS est cinq fois la mise par rapport aux quatre années précédentes combinées.

273   Si vous êtes des fidèles adeptes de RDS, vous avez sûrement remarqué dans la dernière année une augmentation, une amélioration majeure au niveau de l'offre. Quand on parle d'une conversion totale de l'ensemble de nos installations, toute la production interne ainsi qu'externe de RDS est maintenant en haute définition, incluant pour le lancement de RDS2, incluant pour RDS INFO.

274   On a fait la modernisation des trois studios actuels que nous avions. On a construit quatre studios additionnels qui sont maintenant opérationnels. On parle du lancement de RDS. On a modernisé les studios dans leur ensemble.

275   Et je peux également vous dire, mis à part l'investissement massif qui a été fait, il y a également la question de l'autonomie. Je suis le premier à avouer que j'avais une petite inquiétude lorsque j'ai su que j'étais pour avoir un nouveau propriétaire. On ne sait jamais à quoi s'attendre, s'ils vont faire une ingérence dans nos affaires.

276   Je peux vous dire que l'ensemble des maquettes des sept studios qu'on a chez nous ont été conçues chez nous, ont été exécutées chez nous. La première fois que les gens de Bell ou autres ont vu, c'est lorsqu'ils sont allés en ondes, il y a peut-être huit mois maintenant.

277   Et si vous regardez la grille de programmation de RDS, elle est totalement différente de la grille de TSN. Ce sont des décisions qui émanent de chez nous, tant au niveau du contenu, des choix des talents et de la grille de programmation.

278   Alors, je suis probablement celui qui a le plus profité de l'arrivée de Bell depuis les 18 derniers mois et j'en suis très reconnaissant. Ça m'a permis maintenant d'être peut-être... Je ne veux pas dire que j'étais à l'âge de pierre au niveau de RDS, mais maintenant, on est vraiment à la fine pointe de la technologie sur toute la ligne.

279   LE PRÉSIDENT : Merci, Monsieur Frappier.

280   Monsieur Brace, vous avez quelque chose à ajouter?

281   MR. BRACE: Yes, thank you.

282   Well, I've been around a long time and I've seen a lot of changes through the NetStar days and to CTV and certainly through Bell and it's never been as profound as I've seen in the last 18 months.

283   On the specialty side of the business it really started with our migration to HD and a $39-million investment that Bell put forth to make sure that our specialty services for the most part are now in HD. We've migrated many of our studios. MTV is moving into HD, into a brand-new facility. We've done that with many other of our facilities.

284   And from a programming standpoint it was only 18 months ago, maybe two years ago, that most of our specialty services were actually in a harvest mode. The culture of our company was mainly conventional in nature and the specialty services were living off that valuable subscriber revenue and doing just fine. But in terms of programming we really weren't doing the job that we needed to do.

285   Bell recognized two things, number one, that specialty was really an area that could be improved and that conventional was really in a bit of a struggle, and so the investment came. As a result of that we've seen significant improvement in our schedules. We've added many shows.

286   In fact, what I really kind of look at is what's happened in terms of the interest from foreigners in buying our programming. When Bell took over there were a total of nine shows that were distributed in the U.S. from a specialty standpoint. This year there are 22. And so it's really been profound.

287   Producers are benefiting from it. Certainly, consumers are benefiting from it. If I look at Bravo!, for example, you know, we have completely revamped that schedule. We've done a great job there and improved the audience 40 percent year over year.

288   So I'm delighted to say that we're going down the right road and it's all because of Bell and it's only because of the scale that Bell brings to the table that we're able to do that.

289   MR. COPE: Let me just end. I hadn't followed initially your question but I can tell from the answers we were talking about an acquisition years ago that Bell would have done of CTV and I was not there. I wasn't an executive at the time.

290   I can talk about the wireless industry at 20 percent penetration. A very, very different world. No iPhones, no iPads.

291   And I think probably the way I'd crystallize it, the biggest two changes -- just to, you know, not simplify things too much -- is, one, broadband explosion to four screens. You know, the concept that possibly BCE had years ago, as Kevin has just said, clearly, the idea of really watching this on these screens has changed so much. So now the idea of taking it to four screens, one.

292   Two, every one of the strong BDU carriers in Canada vertically integrated and Bell making an enormous decision to invest billions in Fibe TV three or four years ago, going -- one day I remember the Blue Jays went off the year and I realized the way the Regulations had been set up was Bell had no way to call back that particular supplier and say, I'll take you off the air. That will never happen again because now there's a level playing field and that's good for consumers.

293   And so now we have a broadcast industry with cable operators and broadcast with telco where we have balance for the consumer.

294   And then the real benefit, which maybe wasn't as important back then, that third leg of the stool that really didn't exist, which is buying content for Canada against people buying content for Canada who are selling in Canada in a different way through these broadbands.

295   So I think those are maybe three structural changes.

296   And then finally, probably the one difference is we're now doubling down that investment. We're not retreating from the investment. We're taking what was $3 billion and making it a $6 billion investment of BCE shareholders' money in the broadcast business. We clearly believe in this business going forward.

297   THE CHAIRPERSON: Again, with respect to the intangible aspects of this transaction, would we see -- and I add "hear" because we also should be thinking about radio -- more local content as a result of this?

298   MR. CRULL: Well, absolutely more local content would emerge from -- we're very excited about the French-language news service. We see a real lack of representation in the French language. When we look at daily news sources in the English language there's more than 25 individual sources of daily news and in French there are only six. So that's a very local initiative.

299   In addition, the $240 million, of which $200 million will be on-screen benefits, we expect to have very Canadian flavour and in many cases very local.

300   As for radio, I'll turn to Chris.

301   MR. GORDON: Thank you.

302   You know, certainly from a radio perspective, local is obviously the key metric that's involved in running radio stations. Any radio station that's not intensely local is not going to be successful in its market.

303   But certainly, under Bell's leadership, the expansion in local radio, the expansion into TSN radio and sports in markets like Winnipeg, which didn't have a sport station, which added diversity in the market in Toronto and added another sport station, and certainly, in all of our youth-based music formats that's the kind of benefit that we will be able to enhance under this new arrangement.

304   THE CHAIRPERSON: We've heard over the years arguments about the threat to local over-the-air television. If this is approved, do those threats go away, threats of potential closures of stations across the country?

305   MR. COPE: I don't think from a commercial perspective of course you can ever say something is impossible. Goodness, we all lived through three-four years ago where we were in a position none of us could have imagined.

306   I would say this -- and I have, I think, tried to make sure it's clear -- there is no doubt in our mind that our conventional business is strengthened through the coming together of these two assets. Because of some of the challenges in the structure of the conventional it allows us to continue to make those investments.

307   And I would, as I think Kevin has mentioned and I have, you know, our investment in CTV Two, the rebranding there, the work we're doing, I mean we are putting a lot of work into that area and so what I would say, we can guarantee nothing because there's no -- and I don't think you're asking us for that.

308   But in terms of our strategic intention, do we think it strengthens that position? For sure it does. It's, frankly, as I've mentioned, one of strategic rationales for this.

309   Kevin, did I miss anything?

310   MR. CRULL: No. I just might add it's a good question. I'm glad you asked it, Mr. Chair. I think that unquestionably the portfolio improvement of less overall reliance on conventional is helpful to the media assets.

311   I will tell you it's humbling and it's difficult to look at a business that generates as much as 50 percent of the viewing in Canada and delivers all of the local expression that Canadians enjoy, yet it contributes zero percent of the profit generation in the industry and so it has been probably one of the biggest strategic dilemmas and difficulties, since I've been in my role, to reconcile.

312   Reducing our reliance on it in the portfolio is helpful. I believe that the Commission has an opportunity working with leaders in the industry to look at things such as non-simultaneous substitution. I do believe that the digital initiative that we talked about can provide benefits to the conventional OTA business that it's not enjoying today.

313   So I think there are things that -- without opening a can of worms on a debate -- things that are different from the old value-for-signal/fee-for-carriage discussion that can evolve that industry to be helpful. It is a very difficult part of the business and it still generates, as I say, half the viewing and all the local expression. So there's work that will remain to be done there.

314   THE CHAIRPERSON: I understand, but there were considerable challenges for over-the-air television, lest we forget the "Save Local TV" national ad campaign, which reminds me of certain comments made earlier this morning about national ad campaigns.

315   If the CRTC were to approve the transaction -- and I know forever is a long time, but let's say a five-, seven-year horizon -- knowing what you know today, how would you react if as a condition of that approval you were required to continue to operate those local stations over a period of time?

316   MR. COPE: Let me -- commercial, I'm not used to being asked for guarantees, so it's an unusual comment.

317   THE CHAIRPERSON: As I said, it's not a negotiation.

318   MR. COPE: No. I get it. I got that earlier and I'm here. I got it.

--- Laughter

319   MR. COPE: So the way I would first of all answer it, absolutely for sure as long as -- let me begin by saying that our competitors have to have the same obligation as to the same market share, which would be Shaw-Corus. So we can't put our shareholders in an uncompetitive position, to agree to something from a regulatory perspective that would give them an advantage over us.

320   In that context, now let's step away and say, do we have any intention at the moment in our business plans to close versus invest? No. This is about an investment strategy we have. It's about making our conventional stronger through combining it with what Mr. Greenberg has built on specialty to give us the portfolio we need to compete in the marketplace against our other vertical integration players.

321   So we can of course take your comment and come back on Friday with a little more specific granularity on what you may be asking us.

322   But in terms of business intention it would be no.

323   In terms of you imposing something on us, as long as we -- we will both get to know each other well, the term "symmetry" with me never goes away -- as long as we see symmetry.

324   So a player who has 70 percent market share in Quebec of TV subscribers and dominates the media place is asked for those same commitments, and in the English market where Shaw and Corus have a leading position today, I ask for the same commitments.

325   We will compete on a level playing field with those types of commitments and we will obviously take your specific question and maybe respond Friday.

326   THE CHAIRPERSON: Okay. I must say, you have to help me understand the symmetry argument. I don't see anybody else in front of me today asking for an approval. So we were talking about yourselves and there's of course two over-the-air stations in the Astral Group.

327   You're saying big is better, it helps build the Canadian broadcasting system, and I recall long debates about over-the-air television stations in smaller markets being threatened.

328   I think all I'm asking -- and you can wait for the reply stage if you prefer -- well, if big is better and creates more stability, can we at least get a little bit of stability for five-seven years with respect to those assets, the over-the-air assets?

329   MR. BIBIC: So we'll take that question, as George said, and come back to you with a very specific answer on Friday.

330   The symmetry point, of course, no other player is before you trying to seek approval to buy Astral today. The symmetry point is more of a forward-looking point.

331   Should this transaction be approved, here we are in the marketplace competing across the board, including in conventional -- which is the specific topic of your question -- with a conventional player in Quebec which is going to be far larger and conventional players in the rest of Canada which are large in their own right, and it's a question of they would have more flexibility and they would -- you know, the rules applying to our conventional assets wouldn't be symmetrical compared to the rules applying to them in the sense of the guarantee of keeping them open. That's the symmetry point.

332   THE CHAIRPERSON: Okay, and we can get back to that at the reply stage.

333   In terms of news information -- and I get back to the point earlier that this was the best combination in the sense that you've addressed that issue, but the net reality is that we would be losing a voice as a result of this, right?

334   You've put forward a proposal this morning to create a new news and information service, more multiplatform content, all great except that it would be coming from a single owner and therefore in a sense a single voice.

335   I would like you to address that because in a sense once you lose an independent player in the system I'm not sure you can get one back later on.

336   MR. BIBIC: I would love to address that. Thank you for the question.

337   So starting at a really high level, again going back to first principles in diversity of voices decision, what is it that the Commission was concerned with? It was the issue of diversity of elements, public, private, community. We don't think that that's affected. You still have a healthy private broadcasting system. You will still have the public broadcaster in communities not affected here at all in terms of community broadcasting.

338   Then you have the plurality of editorial voices within the private element. Noteworthy that Astral isn't engaged in news. So in the sense of the editorial voice, in fact we think this is going to enhance it because of the launch of -- or the hoped-for launch of a French-language Category C national news service in Quebec.

339   So you have diversity of elements, you have the plurality of editorial voices, neither one of those affected, and then you have the issue of diversity of programming, which is a third leg of the stool.

340   And there, again, I don't think that that's affected because of -- I'm not going to repeat everyone else's answers but in terms of diversity of programming you've heard a lot of commitment to content and creating Canadian content and enhancing programming across the board for consumers, and Gerry gave some examples, as did Rick.

341   Now, if I can kind of move beyond principles and get into more mundane data, you know, in preparing we took a look at some of the stats that is available from the Commission and it's pretty interesting actually and quite striking in a very positive way.

342   If you examine the 10-year period 2002-2012, that 10-year period, the number of Canadian programming services has grown from 226 to 365. That's a 61-percent growth in Canadian programming services in 10 years.

343   Now, let's look at the number of unique owners because ultimately the heart of your question is losing a unique owner.

344   So if you look at the number of unique owners of programming services, in 2002 we had 40, 40 different unique owners of Canadian programming services. Now, we have 89. So that's more than doubled.

345   Let's take it another level. Who owns those 365 stations? Well, there's 89 who own 365 programming services and the proportion or the share -- or the proportion of those services controlled by the eight largest ownership groups has declined actually in 10 years from 58 percent to 46 percent.

346   So the point I'm trying to make if I sum it all up, more Canadian programming services than ever before, more independent owners than ever before, and the number of those services owned by the largest groups has reduced in terms of a proportion.

347   So one independent will be merged with a great and committed owner, but there will be room for others to grow and flourish, who will find the niches that they want to cater to and do very well.

348   MR. COPE: And the only thing I would add, and I'm sure we will be seeing, is the diversity of voice in Quebec help through also the creation of the news that we talked about this morning, where we think maybe that's one of the added benefits of the two assets coming together because it gives us the scale to compete on a national basis and in Quebec.

349   As I talked about, organic options alone were not really -- we just didn't have enough scale to make this comment this morning. Hopefully that's helpful.

350   THE CHAIRPERSON: Okay.

351   In your reply and as well this morning you mentioned that a number of companies have been out against your application. You seem to suggest that they have taken this position largely because they're your competitors and, of course, it's part of the regulatory game.

352   However, I had the pleasure to read a rather considerable intervention file related to this application. There are a number of members of the public as well as consumer groups who have taken a position against this transaction. Your argument about competitors' actual motivation to oppose doesn't seem to be as present for those consumer groups and those individual consumers.

353   So how do you account for this difference between you saying on the one hand, this is in the best interest of Canadian consumers, and those consumer groups and those consumers disagreeing?

354   MR. COPE: So specifically I'll have Mirko take you through some of the specific responses. But on a general perspective, the numbers that you talked about, given the size of the campaign that's been run, to watch Bell's name in advertising like we have, we'll leave it to the Commission to determine but it doesn't look to us that millions of Canadians have said they are not in favour of this transaction.

355   I would say, though, that consumers will absolutely benefit from this transaction; the media choices in Quebec; a stronger competitor in Quebec. And as we talked about, we will launch services now that compete with global players.

356   The leadership we have seen Bell provide in the world, in mobile TV, is giving consumers choices that they don't have in other countries.

357   So we are confident -- and for those consumers who are concerned about it, we are confident that the product and services it will bring to the market; ultimately, they will see that choice and understand the benefits as consumers of these products; how there are benefits to them as customers. Always, you would expect some reservation, given the size, the scale of Bell buying a company, and that is a process that we would normally go through. And as I said, it will be -- I believe that whatever we pay for content will be less than it would have been if Bell and Astral did not come together. And ultimately, if we pay something lower than we would have paid otherwise; then the economic system in Canada, for the consumer, ends up in a better position.

358   And not only that; the more content we are able to put through the BDU distribution system; we amortise that cost over the base, not competing against other providers.

359   So, you know, it is imperative to understand that when we are down in these marks; we are competing for this content with players who are not Canadian; who contribute no money to the Canadian broadcast system. People have said: Oh; why don't you have an eight-dollar service? Well, if Netflix had to pay 30 percent of their revenue to Canadian content, their service wouldn't be eight dollars. But they don't have to.

360   And so these are the realities. But at the end of the day, we believe wholeheartedly that consumers will benefit from this. And it will be up to us, obviously, to launch those services that Canadians expect from Bell.

361   MR. BIBIC: Okay; so Mr. Chairman; of course, we respect the views of everyone who filed submissions and read they avidly. So ultimately, when it comes to individual consumers, we are just going to have to delight them with the best content possible and serve them as best as we can in terms of, you know, the telecom services and network services that we provide. So in other words, engage them and serve them in that way.

362   Now at the individual level as well; we just -- I don't think we can put aside the fact that there was this heavy-handed campaign that said the most ridiculous things.

363   And if you don't toil in this vineyard every single day, you know, things like -- you know; you could face pressure to pay for other Bell Canada channels that you are not interested in watching, you know. There are rules against that. You may be pressured to buy other Bell Canada phone, wireless Internet and TV services unless you buy their programs.

364   You know; that can't help but influence some views, I would have thought, and none of it is true, and it is all patently false.

365   In terms of the consumer groups; against, we will just have to prove every single day that the consumer comes first and foremost. Some of the consumer groups admissions did take kind of a broader view of things and were making comments on the competitive -- their view of the competitive situation in some of the telecom segments of the market.

366   And again, if you kind of break each of those up; well, you know, in wireless, there is balance between the players in TV distribution; Bell TV is nowhere near the largest. And as the Commission's and monitoring report also shows, in the internet market, the cable companies have the largest scale.

367   Ultimately, let's take a look at all the submissions filed, and I think it is noteworthy that there were 52 independent producers who supported; there were over 200 advertisers who supported; there were competitors who supported - integrated and independent; other media companies and associations who supported the transaction.

368   Of course, those groups, some of them, might have taken issue with the value of the transaction and how the benefits we allocated; which is all fair and we respect and we are prepared to debate.

369   But ultimately, fundamentally, the groups I mentioned supported the approval of the transaction.

370   MR. COPE: And the last thing is the consumer, always in this case -- certainly, if we look at our market shares, will have lots of choice. If Jacques and Mr. Crull don't lead this organization and if our consumers don't want to watch, our viewership, they will be able to watch, and that other 70 percent we will have lost as a provider of service.

371   So the consumer, which I think is critical because there has been a lot of perception of choices gone; market shares dominant out of this. We are smaller than Quebecor, when it is over, in Quebec, and we are generally on par with Shaw and Corus. But the consumer will have choice and they will speak with that channel -- if they don't like what we are providing and both these gentlemen; that will be their job; to make sure they choose our channels.

372   THE CHAIRPERSON: As you mentioned in your opening remarks, the Commission is refocusing its attention on consumers. So I thought it would be a good idea to take a few interventions and see what those consumers are saying.

373   I have got one here from Guillaume Côté; he is from Gatineau; I don't know him; Intervention 1406. And he writes:

"Je suis un client de Vidéotron depuis de nombreuses années et en ce moment, sur mon forfait de câblodistribution sont inclus des chaînes qui sont la propriété d'Astral Média. Si la fusion devient effective de BCE avec Astral Média, mes frais de facturation augmenteront, puisque ces chaînes seront la propriété d'un concurrent."

374   So what do you say to Mr. Côté?

375   MR. BIBIC: Well, ultimately, the BDU, the TV distributor is the entity who is going to determine the retail pricing to Mr. Côté. We are, as a Bell Media, combine Bell/Astral Media, will be obviously supplying our product to Vidéotron as distributor and reaching commercially negotiated rates with Vidéotron, and we have managed to do it, you know, with Vidéotron each and every single time.

376   And our -- we have gone through this extensively, not with Vidéotron but with other distributors; we have put forward, a rather flexible forward-looking packaging model, that will -- that now allows BDU, TV distributors, to offer a lot of packaging choice.

377   And English Canada, of course -- Mr. Côté lives in Gatineau, where there is already pick-a-pack distribution models so there is flexibility in the French market.

378   So we will continue to negotiate collaboratively with our BDU partners. Every once in a while, should things break down - and we hope they don't - the Commission has the ability to step in and the TV distributor will set the retail price, in an environment where we are more and more moving, towards flexible models and we hope to enhance that with the new service we noticed today as well.

379   THE CHAIRPERSON: So Mr. Gilbert Lécuyer of Montreal; 1103. He says:

"Je crains que Bell ne mette en ouvre de manière plus discriminatoire qu'elle ne le fait déjà ses politiques à l'égard des chaînes concurrentes pour s'accaparer à elle-seule un marché qui doit être le plus libre possible. Déjà, les comportements de Bell sont inacceptables. Il ne faut pas lui donner le moyen d'être pire".

380   What would you say to Mr. Lécuyer?

381   MR. COPE: Well, I would say that is a general comment. It is hard to specifically know -- but I would say, with over 20 million customers in Canada and a dramatic turnaround of our company in the last four years, Canadians are speaking in volumes about their improvement and experience with Bell. Clearly, this is a customer we haven't won over. It is a competitive marketplace and we have got work to do there.

382   MR. CRULL: I think I would just add, Mr. Chair: We welcome the voices of the individual consumers on the public interest benefits of this transaction but we just think they should be informed accurately. And the difficulty of what we have talked about in what they have seen in the press has been unfortunately misleading and inaccurate, and it hasn't allowed them to be really informed, even to the point when --

383   As Mr. Bibic said, retail pricing and retail packaging is ultimately the responsibility of the BDU and in the control of the BDU, and this is a wholesale transaction of suppliers.

384   And so I think that that hasn't been perfectly clear, and the choice at the retail level just isn't impacted. I have even seen consumer groups who have made the claim that choice at the consumer level is reduced. And it is unfortunate misconception where this has no impact on the consumer level in that purchasing decision.

385   MR. BIBIC: Monsieur le Président, on a gamme, c'est bien évident, on a une gamme de services spécialisés; la plupart présentement sont des services anglophones. Il y a RDS et RDS Information; RDS 2; et cetera. Elles sont toutes offertes à tous les distributeurs canadiens, incluant les distributeurs ici, à Montréal, et au Québec. Et on les offre tous. On négocie pour -- avec les distributeurs, pour la gamme au complet, mais c'est les distributeurs qui choisit lesquels des services à distribuer aux consommateurs et c'est à eux de choisir - et on leur donne le choix de choisir des services qu'on a, lesquels ils veulent -- les distributeurs veulent distribuer.

386   Donc on a -- we certainly did not deny any service to any distributor.

387   MR. GREENBERG: Mr. Chair, if I could just add -- Astral has made its services available to every distributor in the province and in the country, for that matter. We have one grid that is applicable to all distributors and it is the same. And as said before, from there on, what is charged to the consumer is up to the BDU.

388   But the price charged to every BDU for Astral services has been and will continue to be the same, depending on the grid.

389   THE CHAIRPERSON: There are others here; I won't read them. But I note on a few of them, it is Intervention 882974 and 1253; they are obviously frustrated, as consumers; as to what they see out there in the marketplace.

390   And it is extremely complicated, I understand. But you seem to suggest that, you know, that there have been a campaign of misinformation. There may well have been.

391   But we don't apply a test to consumers to come to our hearings to see if they are knowledgeable about the broadcasting system. They are entitled to come to our hearing.

392   So -- and I -- they are welcomed to come to our hearing. It is what our job is.

393   Aren't you concerned that somehow we aren't doing a good enough - and I say we - good enough job in explaining to them what their choices are; what the reality is; and more specifically what your role in a potentially much larger company; in helping them understand their media choices?

394   MR. COPE: Well, you know, it is a complicated answer. But I would say -- because, you know, there are so many different elements to that. But I would say this: We had a market that was today 70 percent BDU-dominated by cable operators. Bell is spending billions of dollars offering a new TV service to the marketplace to give consumers more choice, as is other telco's across the country. We didn't have choice in the city just 24 months ago.

395   So now we have consumer choice for TV. There is an all-out consumer marketplace battle going on for TV customers. That is the benefit to the customer: More choice; multiple screens; leading the world. And yes, as the consumer overall says all the time, some of those services are what we want to see in some areas, absolutely, for sure. And it is our responsibility, obviously, to respond to that consumer, and if we don't, our competitors take that customer and we lose that customer.

396   So yes; do we have a responsibility to provide the services Canadians expect us to provide? Yes; absolutely, and if we don't, of course, they speak pretty quickly. At every quarter we see it in competitive market share changes.

397   But I think one of the biggest fundamental changes in the broadcast industry in the last 36 months is the investment in the IP TV in the cities by the telco's. Because now, we have full competition. There was only one market dominating left in Canada and it wasn't telco; it wasn't local access; that is at 55 percent, 45 percent market share. It was in-city cable operation, which has 77 percent shares. And now, that market has choice for the consumer. That is a competitive (indiscernible) which gives the consumer some choices.

398   MR. CRULL: I would add, Mr. Chair, that at the aggregate level - and we are very sensitive, I can tell you. In the years that I have worked with Mr. Cope, every Monday morning, we would go through customer complaints, many times individual ones and certainly at an aggregate level, and this is a broad multi-business company that impacts consumers on so many levels and it is a daily part of our job.

399   At the aggregate level, the Canadian television industry seems to be doing pretty well by which Canadians vote how happy they are with their voice and with their money. They are viewing more. The hours of viewing of television in Canada are amongst the highest of the countries observed in the monitoring report. And in fact, the penetration; so how many households choose to subscribe to Canadian television is the highest of all eight; and the prices are the lowest.

400   And so individual -- we have our work, it is a never-ending battle to please every single individual customer. But at an aggregate level, I think the system has a lot to be proud of and consumers are voting that way.

401   THE CHAIRPERSON: Thank you. I see that we have -- we are coming near to 11. Why don't we take a ten-minute health break and come back at 11 to continue the questions? Merci. And I do hope that people will arrive on time because I am starting on time.

--- Upon recessing at 1050

--- Upon resuming at 1102

402   LE PRÉSIDENT : A l'ordre, s'il vous plaît. Before the break, we were talking about the broad public interest. As you know, in prior commission hearings and decisions, sometimes we start -- à l'ordre, s'il vous plaît - we start having discussions on certain modifications we could make or imposing certain conditions; sort of to smooth out, perhaps, possible rough edges.

403   Now of course you can't make a silk purse out of a sow's ear so we won't that far. But we can maybe talk about certain other things.

404   One of the tools the Commission has used in these proceedings is to require a certain amount of divestiture of certain assets. It seems to me in this -- and tell me if you disagree, but there seems to be three bundles of assets involved. There is radio assets; there is French-language television assets; and there are English-language TV assets.

405   If at the end of the hearing and its deliberation, the Commission were to conclude that a certain amount of divestiture in each one of those bundles or all or part of those bundles needed, as a condition of approval, to result in divestiture, I think it is important at this stage in the proceeding, early one, before we get to the interventions, to get your position as to how you would deal with an approval that, for instance, said: Yes, but you have to divest a -- or some of the radio assets; beyond the ones that you need to divest; in any event, to meet the common ownership rules, policies.

406   Second: What if we were to require divestiture of all or in part of the French-language TV assets? What would your reaction be?

407   And thirdly, same thing for the English-language television assets.

408   So it would be useful for us to have your position on the record on each one of those.

409   MR. COPE: Well, I will answer the question and I will start with a comment. We have proposed, as you know, the divestiture of radio assets. When we look at the market share we will have in market relative to our competitors, we considered in no deliberation in the acquisition of Astral that we would be in a position to ever have been asked to divest anything at all out of this acquisition, given the competitive landscape.

410   So we would be very surprised and very disappointed if that were a conclusion based on all the market conditions today, the market shares of our competitors and our strategy, which we would have hopefully started this morning to share with you, how we plan to compete in the marketplace against Shaw and Corus and Cogeco, and the global over-the-top players.

411   THE CHAIRPERSON: But you understand, Mr. Cope; we are down the decision chain.

412   MR. COPE: Yes. And having said that, what I would say is this: If the Commission concludes we should divest something because of a market share-specific issue, we would not hold that divestiture to just the assets of Astral; it is assets about a market presence issue you will conclude upon and we, at Bell/CTV/Astral would of course want the discretion. If you are concerned about something in the French-language area in terms of our market presence, then we would look to divest something within those two combined assets and decide.

413   The same as would be in the English portfolio; we have an English portfolio of very important specialty and assets combined, and we would want the discretion to decide which of those we would sell, so that we have the competitive market we want and the product we want to bring to the market, such as it is very clear that the Netflix competitor who is going to launch in the market is very contingent on some of the absolute core assets that Astral brings to this -- to the table here for consumers.

414   But if someone were to conclude or for whatever reason you may conclude - which we can't see today but you were are asking us the question - that somehow our market presence was too big in either the French or the English market - and we will come back to radio - then we would like, obviously, discretion; for you to tell us what you think that market presence should be and we would look at disposing of the assets that got us to that level. We would use things like what the impact would be on our brand, our product, our strategy for this acquisition. Because obviously, some assets are absolutely core to the strategy of this acquisition. We look at where we make the most money versus the least money; where we have the least viewership; all those types of things; and then we would respond accordingly. So that we understood that when we are buying assets; that it is a total pool.

415   On the radio side; again, we try to meet -- as you said, we are a level below that. On the radio side, we again would be disappointed to be asked to divest anything further. It is a very local market, as you would note; as you have asked in the question.

416   But again, we would like to have the discretion; same principle; that we would look at what assets, just as we are in the proposed divestiture; and I would ask what we would divest.

417   So if there is a threshold that is introduced that is different from the one we have understood up until now, when we made forward this acquisition, then it should be completely at BCE's discretion to decide which of those assets we would divest, to hit whatever threshold you may be thinking of. That is how I would start to think of the answer.

418   THE CHAIRPERSON: Okay. And at the beginning, when you presented, and throughout the process, you eloquently described sort of the strategy, globally. I take it that to achieve that global strategy, those three bundles of assets are ranked in order of priority. Are they?

419   MR. COPE: Well, I would say, to be -- as (indiscernible) but to be as frank as we possibly could and happy to share with you, on the documents showing the acquisition, there was no contemplation whatsoever that there was a divestiture pressure in any way in the scale that we would accommodate through this acquisition. We couldn't see it. We see Shaw on course -- we see an ad campaign from a bunch of competitors, one who bid and lost and who is upset; and the other one who can't stand competition and who now has it in Quebec coming.

420   So that is all great for the consumers. So we have no cheat(ph) over here. We have no divestiture; we have nothing at the board; nothing that says we may have to divest anything, because we couldn't even contemplate this question until our competitors ran this information campaign; by the way using our brand illegally.

421   But having said that -- so having said all of that; if we were to have to rank order the divestitures in those three (indiscernible) we would quite frankly -- because I think you would probably look at them by market differently. I know Quebec probably has a different position than the English market and radio. I don't know how to answer the one, two or three, because I think -- you may say I have a problem with radio. Then what I would respectfully come back to say is: If that is what your conclusion is, then we would just respectfully have to have the ability to decide what that divestiture would be.

422   Because I think it is hard to quarter our strategy; is our pay English services of Astral to launch a market product for Canadians that competes with Netflix, and quarter our French strategy is to compete with Cogeco. And on the radio, it is to get the scale and bring the local market; which I don't think there is anything we can do with this type of scale.

423   So we would just have to pair each one back, based on what you have told us.

424   MR. CRULL: And Mr. Chairman, the -- the question is a general one in a sense, in a rank order and all that stuff. If the Commission ultimately, through its deliberations, decides to go down one of those paths, of course we would love an opportunity or I think we would like to have an opportunity to say -- let's take radio. If the Commission says: Well, we think we may have a problem with the merger in Market A; well we would like an opportunity to say to try to convince you that then in fact you should not have a concern about Market A; so that we get beyond the more general abstract and have an opportunity to respond to what the Commission may be thinking beyond George's very critical point that ultimately, we would like the discretion to decide what would need to be divested in order to meet our threshold or level the Commission judges should be the case.

425   MR. BIBIC: And I think I would just add, Mr. Chair, that at the general level, there is no question that when we looked at the Astral assets, they fit like a hand in glove and there is really not overlapping genres or overlapping. Let me take television.

426   First of all, there is not overlapping genres or geography and in order to deliver the consumer benefits which we think are absolutely extensive, we need to be, we need to be in these genres which we are acquiring through the Astral transaction and any television divested would absolutely harm the service that George has introduced, the multi-platform service and it would harm our ability to be a strong coast-to-coast bilingual broadcaster and deliver all the benefits that that promises.

427   THE CHAIRPERSON: Thank you. It has been suggested that one of the mechanisms that could be used to address some of the policy concerns to -- and this is relating to structural separation.

428   Now, in your various presentations you actually didn't quite go to the structural separation. You suggested that the Astral assets, particularly those in French, would be operated as a distinct unit. What if we were to ratchet that up a little bit and make it in requirement that they be operated as structurally separated? What would reaction be?

429   MR. BIBIC: We would disagree with that notion, Mr. Chairman. Again, let's put this into context. CTV, Bell Media, Bell, we operate TV distribution unit, we have a media unit. There is no formal substructural separation. We respect all Commission rules with respect to things like sharing of information between units, always had and always will and if you --

430   So, if we operate in that fashion today and now what are we acquiring. We are acquiring French language specialty services and we're adding them to the one brand that we have today, RDS. So, there is nothing, there is going to be nothing new there in the sense of how we operate.

431   If you think about the English market we're adding through this acquisition four licences, so we're adding. I don't see why the addition of our four licences in the grand scheme would suddenly require structural separation.

432   I should have mentioned, of course, that we operate conventional, specialty and radio without formal structural separation and we don't see why we would -- should have to agree to have that kind of formal rules put in place that aren't necessarily imposed on everyone else as well.

433   THE CHAIRPERSON: So, help me understand then what you're proposing in terms of the arrangement for the French language assets to be sort of managed or overseen in a sort of a separate unit?

434   MR. CRULL: Well, I think that what we've said consistently and we are very committed to is that all French language programming decisions and the oversight of the French language operations would continue to be made here in Quebec and predominantly for the Astral products services for sure predominantly by Astral leadership and the announcement of Mr. Parisien's continued executive leadership is the first indication.

435   Now, it's certainly premature, Mr. Chair, for us in this process. We look forward to your approval and then an integration process where we have, of course, an organizational structure.

436   But when Mr. Frappier spoke earlier, that was to indicate the level of autonomy that exists for the French market and the French operations. That's one bucket of an answer.

437   I would like to add to your earlier comments just if it's helpful, regarding organizational design. Undeniably, scale brings about the opportunity for organizational efficiencies and effectiveness and something that we have been very committed to since forming Bell Media is being as efficient as we can with all of our overhead costs so that we can invest on screen and on the air.

438   And Mr. Frappier and Mr. Brace talked about the well over 100 million $ of incremental investment beyond benefits that have been made. That has been enabled through organizational efficiencies that are sort of back office and overhead efficiencies.

439   MR. COPE: Yes. And I would just add this is an acquisition of. We are a national media company, we are buying a national media company. I have had absolutely no contemplation structure of any type of structural separation of Bell Media or Astral from Bell Media. We have had actually had no interest in the acquisition.

440   This is two national assets coming together to compete against some very strong players, both regionally and nationally. Kevin will be president of that division, just as we have in Bell Mobility and we have in Bell other divisions.

441   We do as a matter of interest publicly reported the financial results of our media business and our wireless business and our land line business separately. So, there is a fair amount of structural inside Bell separation in terms of how we run the profit and loss centres, but in terms of one integrated organization leveraging overheads where we can to make sure we can keep costs down for consumers, just cost come down for consumers when there are synergies and that becomes a lower price point for the end user in the marketplace, which is I think part of the core questions earlier today,

442   So, it wouldn't have been contemplated by me in any way, shape or form in the question.

443   THE CHAIRPERSON: Okay. Thank you. Your position is clear.

444   My past experience in these transactions involving publicly traded companies is because of the reality of the markets, often quickly we put the asset under trust arrangement, trust arrangement approved by the Commission with an independent trustee approved by the Commission.

445   The purpose of this is to, even though the transaction would be subject to CRTC approval, we are ensuring that the purchaser isn't yet exercising control and, in fact, the March arrangement agreement provided for such potential reality in this case.

446   I am struck, and just to be clear, I mean we are very conscious up here and throughout the Commission, that we are still dealing with two publicly traded companies and we are very careful about the information and are reacting on it. But I am struck by the fact that it has not been done in this case, to put it into trust.

447   Some may suggest that that's because you in fact had concerns that in fact approvals would not be obtained.

448   MR. COPE: I'll turn it over for you to give the -- there are some technical answers to this.

449   I would say since I become CEO, we have put nothing in trust for an acquisition. We acquired CTV a year and a half ago and waited to go through the process. We have done the same here. We did the same with MLSC I believe as well.

450   Given the size and magnitude of this transaction, we felt it was a prudent way to go forward in no way, in any way whatsoever is an indicative of the lack of confidence in the proposal and I would invite the Commission to read the terms of our transaction, which would also enlighten a little bit more in terms of the comfort that Astral has as it will be going forward with this acquisition.

451   That probably more than anything undermines our competence and the fact that this will go through, but given we are a publicly traded company --

452   THE CHAIRPERSON: I agree with that.

453   MR. COPE: Thank you.

454   THE CHAIRPERSON: I appreciate that. Do you have anything to add?

455   MR. BIBIC: Oui. I could give you a technical answer if --

456   THE CHAIRPERSON: No. This actually satisfies the question from my perspective.

457   MR. BIBIC: Okay.

458   THE CHAIRPERSON: Can we turn to terms of trade issue currently as you know the BC services that are part of the group base licence when you were last year, must adhere to a condition of licence to have terms of trade with CMPA.

459   With respect to Astral, by contrast, it's more of an expectation. Were this transaction to be approved, could we envisage a requirement for terms of trade agreements as a condition with the CMPA for the Astral's English language services and one with the APFTQ pour les services en français?

460   MR. BIBIC: Both organizations and I think both associations who are presenting independent producers in both languages would back me up on this, but both organizations, Bell and Astral have been leaders in the industry in terms of reaching terms of trade agreements with the associations.

461   We would be -- we fully intend to continue that leadership with a combined joint Bell Astral entity, so we would be okay with a condition of licence to that effect for the Astral properties.

462   THE CHAIRPERSON: In these transactions the independent producer is always nervous about losing a door to knock on to pitch an idea and a product. It's particularly a challenge for those that operate outside the large production centres of Montreal, Toronto and Vancouver, although there is issues even in those markets when there are a fewer doors to knock on to pitch an idea.

463   Have you given some thought on making sure that there are still opportunities for those independent producers because there is -- you will still be a large purchaser of content I hear, and that's good, but there is probably fewer roads available to get to your door?

464   MR. BIBIC: Well, I think -- let's unpack that a little bit. I think about our announcements with Jacques and our commitments with respect to where French language programming decisions will be based. That's nothing but great news for French language independent producers.

465   Another point is Astral's assets, the content on Astral services is all independently produced. That's another important point. On the English language side, I would -- I think we have to look at Bell Media's track record and CTV before that.

466   It has got a phenomenal track record in terms of all the regions from which we obtain or contract for a production. Montreal, Calgary, Edmonton, Halifax out west, not only -- not only Vancouver, Winnipeg, and the list goes on, Huntsville, Victoria the most recently.

467   So, we have a track record and I think that's what ought to dictate here Bell Media's strong solid track record in commissioning independent production from across -- from across the country.

468   MR. CRULL: We want the best ideas and so we are absolutely motivated and committed every corner of this country and we think that we have a process right now. We have staffed our independent production team in Bell Media and as you've heard repeatedly this morning Astral, is a leader in that space.

469   No doors will be closed whatsoever through this transaction and we're excited to hear ideas from every corner for this 200 million $ which will go on on screen and also our regular ongoing operations.

470   M. PARISIEN: Et lors du renouvellement du mois de décembre des licences d'Astral nous avions représenté au Conseil qu'Astral achetait des contenus francophones de fournisseurs indépendants hors Québec et on a fourni la liste au Conseil et nous allons continuer avec cette pratique-là, évidemment.

471   THE CHAIRPERSON: Okay. A number of parties have expressed concern that the addition of Astral within this larger company, if approved, would give Bell too much bargaining power and the ability to impose terms and conditions. And some have suggested that that might impact the competitiveness of the market, diversity, pricing, consumer choice.

472   We have talked a little bit about that beforehand and some have gone so far as to suggest strengthening or adding to the vertical integration code.

473   So, the first question is: What would you -- how would you react if such bonification, improvements to the Code were just with respect to your company as opposed to across the sector?

474   M. BIBIC: Well, first, when the vertical integration herein took place and the Code was developed, almost all -- not all but almost all the rules there applied to stakeholder in the broadcasting system across the board, whether they're independent or vertically integrated or programmers or BDUs and then some rules when they only applied to vertically BDUs applied to all of them.

475   Back to our principle and our discussion of symmetry, we feel very very strongly, especially given the balance across the industry almost the vertically integrated players, that the same rules should apply to all of us, if there indeed are going to be rules that apply only to vertically integrated entities, which we don't see needs to be the case across the board.

476   Now, beyond that, I can't think of what would be added to the vertical -- to the Code of Conduct, but if there are specific things, I would love to debate them. One thing as I have said publicly and I have no hesitation saying it again, if we could all come up with a model to try to compress a Dispute Resolution, for example, and the Commission has done a very good job for a long time and particularly through the last six to eight months in resolving issues.

477   I think some people have said it needs to be quicker, I would subscribe to that, but beyond that if there are specific proposals, I think we should have a discussion about them one at a time.

478   MR. COPE: I would only add from a commercial perspective. I think the vertical integration process that was put in place, we've watched it unfold. I think the protections are clearly there on what is contemplated by the CRTC.

479   I think the CRTC has probably found itself in more price disputes than they initially contemplated, as it was explained to me when the rules were put in place, it didn't expect to see that.

480   I think in fairness, some people are really on just to test it to see how that process would unfold, but I think people have to get on the running their businesses and commercially solve these things without being in front of you and your group.

481   And I do think or where I do concur with Telus in their submission that may place, the clarity here is speed is always a benefit, but I think the Commission has recognized that too.

482   It has been complicated I think early on to get a rhythm around everybody, as many integrated players that we have the industry is involved to vertically integrated and I think will be -- I think what you've put in place now will accommodate when we need to go forward and that is my feedback.

483   MR. BIBIC: I will take another shot here, Mr. Chairman, as George was talking. So, taking, assessing the question or answering the question from the perspective of the consumer, so I want to make sure that the consumer has access to content that they want, regardless of where the provider is, so we have a rule in place which we respect.

484   We have reiterated a couple of times in opening statement we would respect, but it's a rule that content can't be held exclusively. It's there from a perspective of a consumer.

485   Another thing from the perspective of a consumer is back to more packaging choice and flexibility. There is a firm rule that says a programmer like Bell Media or like Shaw or like Rogers can't insist that a BDU take all its services. They have to be available on a stand-alone basis. We respect that. There is a rule in place for that. So, I am just trying through from the perspective of a consumer.

486   The consumer will want more packaging in terms of -- more flexibility in terms of the packages they buy and the platforms they receive content on and we took a huge step forward with the mediation that took place with some of our competitors over the summer, to offer the same kind of packaging flexibility in English Canada that we have already, the market has in Quebec.

487   So, we are living up to the ideal and doing even more because we are trying to get a multi platform on demand service off the ground to give the consumer flexibility from yet a different angle, which is the multi platform.

488   And then you have again from the perspective of the consumer making sure that they have access to services available from vias, non vias independent programmers on the platforms that we own.

489   And on that I can't, you know, let the question pass without pointing that Bell TV and I am playing on my distributor hat. We are very equitable in terms that Bell TV in terms of the distribution of independent programming services, even if you compare them with our own Bell Media Services, but note worthy as a BDU Bell TV carries more independent programming services than any other BDU in the country, three times our principal competitor in Quebec, 50 per cent more than COGECO, which happens to be an independent BDU, and more than all the other BDUs across the country as well.

490   So, looking at it that way, the rules are in place and our track record shows that we're trying to meet that ideal as well.

491   MR. CRULL: Mr Chair, I would like to add as the head of Bell Media for the last 18 months, I have spent no less than 50 or 60 per cent of my time as many of your colleagues are aware because I have been at every proceeding and every hearing and every single interaction on this topic and I have great regard and high respect for it.

492   I want you to know that the various safeguards from the vertical integration framework in September of 2011, the Code of Conduct that was included, an extensive expedited hearing decision released in April 2012 that provided guidelines for non-monetary terms and distribution and then finally, the specific and detailed vertical integration regulations, these are -- there are the Bible by which we operate the business and they're extensive.

493   Some might say they are unprecedented, but I would say on behalf of this organization they're understood and respected.

494   Are they sufficient? I point just to two sources which I think might provide some insight. One is we noted that in the MLSC Decision, and we do understand in the Commission's defence that every decision is unique and individual, but in the very recent MLSC Decision, it was noted that current safeguards are considered to be sufficient.

495   And in a letter to shareholders I must put into the record that I find it -- I find it concerning and confusing that one of the most vocal advocates for more safeguards or believers that the current process isn't working is Mr. Louis Audet of COGECO and in his letter to his shareholders following the vertical integration hearings and ruling, this is in October of 2011, Mr. Audet was complimentary, saying:

"The consultation resulted in a decision that favours independent distributors and programming services as well as consumers. In its decision the CRTC accepted most of the proposals presented by COGECO for a framework governing operations of vertically integrated entities. In the end, this decision will support healthy competition and benefit consumers directly, which we applaud."

496   And that's end of quote. I think that the legitimacy of safeguards to prevent the potential of abuse of behaviour, we have never quarrelled with. We think that the legitimacy of safeguards is warranted and are there.

497   What we do quarrel with is the legitimacy of any claims that we have ever violated any of the Codes of Conduct or provided any behaviour in the marketplace that was inconsistent with both the spirit of vertical integration and the letter of it.

498   THE CHAIRPERSON: I think my point was more that the status of in regard to the discussion we had earlier about the status of the Code is an interpretation document. It carries the name "Code". It is not immediately applicable and I was trying to delve whether we could take some of the policy statements in that Code and more specifically impose them as conditions which ratched a little bit up in terms of -- and it's not to suggest that you have acted inappropriately in the past, but it would ratch it up at the level of safeguards.

499   MR. BIBIC: Well, ultimately, Mr. Chairman, I think we respect them and we have to respect them despite the fact, because they are -- they in some respect are an interpretation of guidelines, in some respect they are hard and fast rules in the vertical integration decision which we have to respect, so I am not sure how it would get anyone any further.

500   So, one could say in a condition of licence that a programming undertaking should not require a party to accept terms or conditions -- and I am reading from the Code -- that are commercially unreasonable.

501   How is putting that in a condition of licence going to give immediacy to that concept? There needs to be some fluidity to it in the sense that what is commercially reasonable and reasonable is always fact specific.

502   So, the Commission will never be able to sit down and think through the millions of permutations and combinations of the services we'll have, how we will get them to market, who will negotiate it, when, what, what our programming costs are, what the rates are going to be to be able to say, okay, for Bell we know that the price has to be X, for this content distributed in this way, if it's to this consumer. It's never going to work.

503   In order -- you know something else like this:

"A programming service shall be given comparable marketing support by the BDU as is given to similar related services."

504   Again, that has to be a fluid concept. You can never foresee how Bell TV will want to market for a Bell Media service and then say, this is exactly how Bell TV is going to have to market a service owned by Blueent. So, there needs to be the fluidity in a generality in order for this to ever function and given that's the case and given that those quotes should apply to all players and given that we have a decision with which we all comply, I think that's the much better approach than to impose all of these in a specific COLS that only apply to Bell.

505   THE CHAIRPERSON: Of course, you've chose two examples with words like "reasonable" and "comparable" with our very open textured terms. Now, I do point out that we find words like that even in the Criminal Code and we still find people of -- you know, there are processes. Just because it's open textured, it doesn't mean you can't enforce it.

506   MR. BIBIC: Of course, and they apply to everybody, those Criminal Codes and they're case by case.

507   THE CHAIRPERSON: Indeed. The major difference though is that it probably might provide more focus and immediacy if they were a condition a licence.

508   MR. COPE: I'll let Mirko -- with you on the specifics.

509   I would say nothing can make us more focused than we are on the vertical integration rules, let me assure you of that, because Bell's always guilty before they start and Bell has never violated the vertical integration rules.

510   And I would step back and I think the vertical integration rules go too far. That's my own view. I think they take flexibility and creativity out of the marketplace completely and the previous Chair absolutely knew my view on that and I still maintain that view. It has slowed the industry down to the detriment of Canadians against the American distributors of content. Without a doubt it has done that.

511   So to add to those rules will add a burden and take productivity out of the economy and impact the consumer on cost. There's no doubt in my mind on that. So adding a burden would be the wrong direction to go.

512   Finally, I just want to step back. Bell Media and BCE cannot spend $6 billion on media companies and not distribute that content through every BDU or it will not work. All of our content has to be distributed across all BDUs, across every channel we can possibly find or we can't economically make the model work.

513   So the precept always of the vertical integration rules is that Bell bought CTV to put it on Bell TV and never show it on Rogers and Videotron and Cogeco is absurd.

514   We can't make it -- there's no economic model in the world that works. We have to distribute this content not just now over one screen -- to make a $6 billion acquisition work, these two acquisitions, we have to distribute it over four screens to 30 million Canadians through every BDU.

515   So the premise of the vertical integration of course is that we're going to use our market power to not distribute the product. We have no intention of doing that whatsoever.

516   THE CHAIRPERSON: Thank you.

517   Some have suggested though that in this -- we know we can count market shares and revenues and all that. The reality is here we're talking about bringing together properties that have two of the most popular genres -- sports and films -- and that there's a quantitative evaluation that should be made of this, that not all programming services are created equal in the sense that what really drives the system and what Canadians love to watch is sports and films -- when they're not watching local news, I mean, of course.

518   Should we be concerned about not just which assets, counting, you know, market share and viewership, but also the fact that sports and film products, programming services are particularly attractive?

519   MR. COPE: I will start and let some our other colleagues comment.

520   I would say my first answer is no but it's from a high level again, and that is there will be 24, so 76 percent of the market supplied through other broadcasters in French language, and I think we're at 32, so 68 percent through other competitors.

521   So the customer has -- clearly, the consumer has spoken. They only acquire roughly 30 percent of the services in English from this entity that we're talking about creating and roughly 24 percent of French. So obviously there's lots of other products in other people's portfolios that Canadians are quite interested in.

522   And so there are some that are more successful and there's no doubt we're very successful in the sports area and Astral's been very successful in the pay area. So those are areas where we've been successful.

523   Our competitors have been obviously successful in other areas or they wouldn't have the 68-percent and the 76-percent market share that are in their hands.

524   MR. CRULL: Ian?

525   MR. GREENBERG: Just to add, when we talk about movies let's understand that there are sort of two windows in particular, the first-run window where Astral has got a national competitor in Super Channel and therefore we're not alone, and of course I don't want to remind you because you've heard enough today about the threat of OTT which carries movies, both first-run and library.

526   When it comes to the window after the first-run window there are at least 15 different movie services that run in this country. So there's a wide plethora of choices for consumers and there are 15 competitors to The Movie Channel that Astral runs other than TMN. So it's not as if there's a monopoly on the genre or the product.

527   MR. BIBIC: If I may again. I'm the one who's always getting technical, but equally important --

528   MR. COPE: It's your job.

529   MR. BIBIC: It's my job, yes.

--- Laughter

530   MR. BIBIC: -- equally important for the consumer though.

531   So back to your very specific question. You're putting a stable of assets which include very popular sports with popular movies. Well, again, from the perspective of the consumer, TMN is carried by every BDU.

532   MR. GREENBERG: In our territory, yes.

533   MR. BIBIC: So every BDU in Astral's territory carries TMN.

534   So regardless of whether it's Bell or somebody else or Astral as an independent, the fact is that renewal agreements, affiliation agreements come up and then what happens?

535   Well, we have vertical integration rules that say that if there's a dispute or any worry about a dispute then a standstill kicks in so that the consumer doesn't lose access to that service while the debate or the discussions are going on. That's the first point.

536   The second point is the rules say that a programmer like Bell Media won't be able to say to a BDU, if you want TSN you've got to buy TMN. We can't do that. They have to be offered each standalone. So that's point number three -- point number two.

537   And the third point is of course there has to be an agreement between the programmer and the BDU on what the wholesale unit rate is going to be for the service and we're going to get those agreements done in the commercial arena, as is done in a significant majority of the cases. And when every once in a while parties on both sides stumble, the Commission is there through FOA, Final Offer Arbitration, to resolve that dispute based on the principles highlighted in the Code.

538   So again, taking a step back from the consumer, continue to have access while discussions go on, can't tie-sell at the wholesale level, and then if there's a breakdown on negotiations on wholesale unit rate recognizing that the BDU ultimately decides the retail price, the Commission can step in, and that's regardless of whether it's Bell Media-owned or Astral Media continues to be an independent, for example.

539   THE CHAIRPERSON: Thank you.

540   Maybe I will focus now on the status of the Astral zone negotiation for the renewal of its affiliation agreements with BDUs -- and maybe it might be more efficient for you to provide this answer in writing because it may get a lot of details -- but we would be interested in knowing how many affiliation agreements were up for renewal prior to the announced purchase agreement, how many have been signed since and what is the state of those affiliation agreements where renewal has not been reached globally, so the status of all the affiliation agreements, where we're at.

541   Perhaps you can give an impression and file details later.

542   MR. PARISIEN: Well, we will definitely file details.

543   As for the impression we've been running business as usual with BDUs and we have signed some since the deal has been announced.

544   MR. GREENBERG: I am pleased to say that one of those we've signed since the deal has been announced is with Cogeco for all our services and it was business as usual and I think both sides would say it was done on terms that were acceptable to both sides. So that was the only one that actually came up for expiration during the time.

545   There are some that come up later on in the year and we're starting negotiations now but a major one in the Province of Quebec, as I just said, was Cogeco and it was done on the normal terms that actually was done with every other distributor in this province.

546   MR. BIBIC: Mr. Chairman, I have to add one more general impression.

547   The pricing -- the affiliation agreement that Mr. Greenberg referenced as having entered into with a competitor is also the competitor who's taking great issue with the pricing model that Bell Media has put forward and endorsed by the Commission in the arbitration.

548   And what is particularly noteworthy is that that pricing model that Cogeco accepted with Astral is exactly the same principle and the same model that Bell Media put forward in the arbitration and ultimately the Bell Media model was accepted.

549   So the point I'm trying to make is the same pricing curve that we put forward that is causing so much noise is exactly the same one that Cogeco willingly entered into, without any noise, with Astral.

550   So it's a model that exists commercially in the marketplace, that Astral has had for many, many years -- of course, I know this because representing Bell TV as well -- and for some reason when Bell puts it forward it's the end of the world, but it's been in the marketplace between Astral and BDUs for years.

551   THE CHAIRPERSON: Could you provide that answer, the detail by let's say 9:00 tomorrow morning? Surely you have people back at the office listening in that could do that.

552   MR. GREENBERG: Mr. Chairman, no one's at the office, they're all in the back room.

--- Laughter

553   MR. GREENBERG: And yes.

UNDERTAKING

554   THE CHAIRPERSON: Thank you.

555   Now, we've had a lot of BDUs in particular raising concerns about multiplatform rights, allegations that you're not open to negotiations.

556   You've said earlier today on Netflix and the Canadian presence you want to create that you would make it available, but could you tell us a little bit more about what your approach is to negotiating such rights, your experience for instance with the 2012 Olympic multiplatform rights, was that a unique case, was it different, and what will be the way forward?

557   MR. CRULL: Mr. Chair, I will answer it in more general terms and then Mr. Bibic will answer about the Olympics, which he and I know several of your colleagues have been very involved.

558   At a general level the availability and the distribution and the business model surrounding non-linear rights is something that is very fluid and is not settled by any other provider broadcaster in Canada or in any other country. So I would say that we both as a broadcaster and as a country are moving sort of in lockstep with the trial and error, the experimentation and the different models that are emerging for non-linear.

559   If you go back five or six years to when really online consumption of entertainment and video started to explode, if I set aside piracy and I set aside the illegal forms of consumption, predominantly that content was made available free to consumers on broadcaster.ca sites, ctv.ca, global.ca, discovery.ca, foodnetwork.ca and whatnot, and that was advertising-supported, free to consumers through broadcaster sites.

560   That was the predominant application sort of supporting that early growth curve of online consumption.

561   And then a couple of years ago, probably two years ago, set-top box video-on-demand is also a non-linear right and a non-linear form of consumption and that started to be entered into commercial agreements between broadcasters and distributors. We have agreements to distribute for a fee our content to set-top box video-on-demand with several distributors and we've made it available very broadly.

562   Also, about 18 months ago Bell was a leader in identifying the mobile market as a real opportunity and we developed a business model to go to mobile carriers with our content.

563   So now we see -- I would say that was a bit of the second generation, is those sorts of distribution.

564   And then TV Everywhere has emerged as the third generation, I would say, and this has been identified in the industry and talked about for probably 18 months, where you link the non-linear rights and the non-linear consumer benefits. You link them to the authenticating -- or to the subscription of a pay television service through a BDU.

565   And our industry is now embracing that in what Mr. Cope announced this morning is the fruition of, frankly, long discussions with distributors about what they want, with suppliers to acquire the rights and for technology to be able to deploy TV everywhere.

566   We are certainly not behind another country in this regard and Bell Media is not behind any other broadcaster, nor have we ever, ever denied non-linear rights that have been made available to Bell Media distribution entities, denied them to others.

567   I will let Mr. Bibic address the Olympics.

568   MR. BIBIC: Okay. So on non-linear rights you have of course the mobile side and then you have set-top box and Internet distribution rights, et cetera. I think Kevin has answered all of it except the Mobile TV product.

569   So I am going to answer specifically the issue that you raised, Mr. Chairman, about the Olympics and then I will hand to George to discuss our philosophy with respect to the distribution of our broader Mobile TV platform or content.

570   So on the Olympics the specific issue there was that those Olympic mobile rights, non-linear rights on mobile, were owned by the Olympic Broadcast Consortium, not Bell Media alone, and that agreement dates back to '04.

571   And so way back then in '04 when the Consortium first came together there was a mechanism for distribution of the mobile rights for the Olympic content for 2010 and 2012 -- in fact, 2008, I believe.

572   And so the fact that the Olympic Games, the London Games were available only on Bell Mobility phone is a function of the pre-existing agreement going way back years and years and years ago.

573   And of course, as you know, the vertical integration rules have made clear that the no exclusive rule, the prohibition on exclusives doesn't apply to arrangements pre-dating -- I think it's -- I can't remember the exact date, it might be March 2011. So that was in complete compliance with those rules.

574   Now, there's the broader Bell Media mobile content portfolio, and for that, to George.

575   MR. COPE: Yes. I think if we back up all the way to the first principle, but I want to talk about the Bell Mobile TV, as again, we're in the business of selling our content to every BDU on all the screens. That is absolutely core to what we're trying to do and it's our belief that across four screens Canadians are going to end up with world-leading and are now world-leading services from all of our competitors too at the BDU level.

576   But yes, Mobile TV -- there's no doubt Bell Wireless has been a leader in the world in this. We came up with the concept. We launched it in Canada. But our vision has been really simple. For the consumer it's an incredible service because it's $5 a month for 10 hours of viewing and it's outside of any of your data bucket.

577   So it's totally affordable and 500,000 Canadians are now subscribing to the service. We could not be more excited than to sell our service to TELUS and Rogers and the other wireless carriers to put it on their handsets.

578   Just to give you a perspective, Bell Mobility today pays $8 million -- and that number is growing -- on an annualized basis to Bell Media. We have offered these services, all of our content, to our other wireless companies for $3 million a year and if you do the model, after that it becomes a per subscriber fee. If you do a model on a $5 bill for a Canadian consumer and you take all the Canadian content that we expect to be on handsets, these dollars are so small.

579   We believe people aren't carrying the wireless product to create a perception of vertical integration being a problem because at $3 million if Bell Media's content is not worth that much in an exploding wireless business, then we actually don't have a Mobile TV business.

580   And so we're very relaxed about the economics. We're excited to sell it. We want to buy -- we have, and if you look at Bell Mobile's product you will see we have lots of other content other than Bell Media's content on it and we look forward obviously to carry everyone's content on it as soon as we can arrange it.

581   And more importantly, Kevin's job is to sell that content to our other wireless companies to get everyone in Canada to have available these types of services. That's our fundamental belief.

582   THE CHAIRPERSON: Well, your position is clear. We'll see through the intervention phase how others react to that.

583   MR. COPE: We will but I do think it's absolutely critical to understand that TELUS and Rogers are upset about $3 million a year for access to this and that it's created headlines in the media about us having exclusive wireless. We don't. We have actually created a world-leading technology that Canada can be proud of, not worry about $3 million bills for these companies. Thank you.

584   MR. CRULL: Mr. Chair, I might just add. A lot of the noise is -- I saw it through the Final Offer Arbitration, I saw it through the process that those that are making noise, they want this for free.

585   And the Commission fortunately ruled in the process that there is value to these rights, they just certainly cost us incremental money over and above linear rights, and that it should be made available at commercially reasonable rates.

586   They also want to dictate the business model and let me just say that we must find -- in order for consumers to benefit from this we must find a win-win-win solution to get these new capabilities to market. Very frequently technology is able to do things long before a business model that makes it survivable and lasting exists.

587   And so I'll just say the noises that they want it for free and they want to obligate our business model, and we are motivated, as Mr. Cope said, to find something that's a win for the distributor, a win for the consumer and a win for us, who are spending money to buy the rights.

588   THE CHAIRPERSON: In light of your strategy that does try to leverage the non-linear rights, it has been suggested that online television and radio operations, even though they may not be licensed, should be included in licensed operating revenues because they don't have value without the traditional platforms. Do you agree?

589   MR. BIBIC: This would be from the perspective of contributing to the various content funds, et cetera?

590   THE CHAIRPERSON: Well, we could get there but I just was more interested in the notion that in fact they are not two separate businesses anymore, that they are in fact one business. You are just exploiting different facets, four screens, perhaps five screens one day, and it's all one business.

591   MR. CRULL: Well, the business model that we've embraced and announced this morning is actually within -- it's actually linked to the regulated distribution and broadcasting system and we feel that had we chosen to go direct to consumer and make these rights available outside of the system there would have been revenue generated and maybe a great deal of revenue generated from non-linear rights direct to consumer.

592   Since we are not doing that, we fully anticipate that -- as you say, I don't think I can disagree that these are inescapable but that the incremental revenue from non-linear will be small, and instead what we are doing is we are protecting the existing system for all participants.

593   MR. BIBIC: In many respects it's a great question and a difficult one to answer because to me, I would have to think and reflect more on the question because it all depends to what end.

594   So is it for the purposes of adding revenues to what's reported so that the 5-percent contributions or the CMF contributions, et cetera, get enhanced? Well, then I think we should have a policy discussion and that and then whither Netflix and Google, et cetera, what about their contributions to the system and the whole notion of symmetry?

595   Is the question for the purposes of thinking ahead as to whether or not regulation of some sort should be imposed in this space? Again, is now the right time, should it be later? Again, back to the question of symmetry.

596   No doubt there's a level of integration here but also these rights are separate rights. We pay separate rights fees for them. And we're negotiating. At some point there may be one comprehensive negotiation but at this stage it will be separate negotiations with the distributors for these rights.

597   So it kind of depends on where one -- what part of this one wants to discuss may lead to a different result or answer from me.

598   THE CHAIRPERSON: Yes. I understand, Mr. Bibic. You are hedging your bet because you are afraid that it may lead to a regulatory obligation down the road, and that's fair enough, that's part of the process.

599   But, you know, in the written record there was -- and help me understand this because I can't reconcile your position in both cases.

600   In the written record there's been considerable disagreement among the parties as to what is the television market and you appear to suggest that what you call OTT services, non-Canadian services and other non-BDU video consumption should be included in the definition of that market.

601   And it seems to me that -- I would like to have your view as to what is the television market in that case for that purpose, although you may not want it for another purpose, and certainly would love your reaction to the fact that licensed Canadian services have considerable advantages, mandatory carriage, simultaneous substitution, genre protection and so forth, and because of that they may actually constitute a separate market.

602   MR. BIBIC: I don't think I was hedging my bets. We didn't come before you today in the context of this transaction to say, look, there's this threat from over-the-top providers, global competitors who are acquiring content and competing in Canada, for the purpose of saying, therefore, you must impose regulatory rules on them and on everyone else; that is not what our position is here today. In fact, our position is that is an inescapable fact. Our viewership is significant to those services; as we say in our opening statement: 11 million hours a week of viewing to these services, and then stats to back that up are in the monitoring reports. What we are saying is it is inevitable; the consumers love this type of content; they love the flexibility. So what are we going to do? We are going to step forward and we are going to compete; and we are going to give Canadian consumers back to - Mr. Chairman - to the point about the consumer and reading the letters from the consumers is very important. We will compete and offer a made-in-Canada service, national, bilingual - French and English - available through the distributor of their choice.

603   So our position here today is not, you know, mend the barricades; erect the regulatory barriers; and impose rules on them. It is not -- we are going to step up and this transaction is going to allow us to do it; and offer a competitive service.

604   So that is where I start. Now in terms of the definition of the market; I think, you know, in the broadest sense or -- back to our submissions. It should in, but when we calculated the shares for the purposes of convincing you of where we lie in respect of the thresholds and diversity of voices; we did not include viewing to internet TV, but we do include viewing to U.S. linear services authorized to be distributed in Canada.

605   MR. COPE: Yes; and I do think it is -- because the Commission -- the comment that, with all due respect I take issue with is that Bell on one hand says this and on another hand says that. We won't ever do that to you as a company.

606   Clearly, we don't think the Netflix market shares should be in the definition today because it is not in -- how you have looked at it. So I think we would all agree, probably, at some point, there would be some bigger measurement that is going to have wireless and all this stuff. But we will not, on one hand and then on the other hand, for our convenience, pick numbers; we won't do that. And so we are very clear.

607   Secondly, though; you did at the very end ask another question, and I want to make sure I got it right. You did ask us about the definition of U.S., in or not, I think, today?

608   THE CHAIRPERSON: Yes; what is your definition of (indiscernible) market. Regardless of the, you know, the regulatory consequences; just from a business perspective, from where you are sitting, what is the television market?

609   MR. COPE: So from a top perspective, as we have said and we tried to say in the -- we say it is a world moving the (indiscernible)

610   So the market is going to explode and there is going to be -- Netflix has got people watching TV in different areas and different places; and we talked about that 10 percent market number.

611   But we obviously, for the purpose of making an acquisition of this size and magnitude, had to rely on something to understand how the market would view our market share. And there is no doubt, if we had Netflix and our market share gets lower, we all know that the nominator or numerator math and how that would work, and we could --

612   But because, quite frankly, when you look at how you and how the Commission has reported the market; the concept that someone would have to, for whatever reason, take U.S. channel viewership out of the definition in the market; it makes no sense. 13 percent of the market is of Canadians viewing U.S. channels. The concept that CNN doesn't compete with CTV news; I can't understand it. We compete for that content.

613   So if you take each level; we buy the content. If it is American content, we compete with American broadcasters for that content. So we clearly compete with what there is in the market.

614   We compete for the advertising dollars. When Walmart advertises on CNN; if they are running a huge campaign on CNN; 1) It takes away from Bell Media's ability to advertise and sell advertising to Walmart; and secondly, if we ask Canadian Tire, I am sure that they will tell you that a Walmart ad on CNN in Canada is competition. So it competes in the advertising space with us.

615   In terms of viewership Canadians have spoken. Viewership of American channels is growing, so clearly it is a competitor to what we do every day. From a BDU perspective, BDU's pay over $340 million a year to U.S. channel carriers to carry those channels. Those U.S. carriers contribute nothing back to the Canadian system in terms of dollars, but we do have a cost in the industry of $340 million.

616   And then, of course, they compete for our staff; some of our great staff will be attracted by those U.S. organizations, and we have mentioned the over-the-top.

617   So again, never contemplated - shame on us - never contemplated that someone would arbitrarily take 13 percent of the market and say: It doesn't matter; and then they would forget how they did it. Because it takes a market share number and makes it look larger.

618   But I don't think anyone -- I don't think one Canadian, if we polled them, would say they don't view watching CNN when they take that flipper from CTV as a choice and then once it is a choice, it is competitive.

619   So it has to be in the definition. It would be -- it is the market.

620   And at every single level of the market, it competes with us and it competes, by the way, with the other organizations; for sure in the broadcast industry; taking it to an extreme. If U.S. viewership were 90 percent and we had only one Canadian broadcaster; would we say they had 100 percent of the market, with 10 percent? Never. I mean it is clear.

621   THE CHAIRPERSON: Now it is interesting -- I remember over the past few days as we tripped over how we were going to calculate this. I couldn't imagine an application getting much more scrutiny then this is, depending on where we are putting thresholds. So I am not sure it makes a big change at the end of the day.

622   It has been suggested that a merged entity might be tempted to over-acquire non-Canadian programming just to prevent competitors from acquiring it, and there has been allegations that in the past that may have been done to prevent other over-the-air Canadian undertakings from having access, for instance, to American programming, without any intention to actually broadcast it; just to prevent it from being in the hands of somebody else.

623   Would you like to comment on that?

624   MR. CRULL: Thank you, Mr. Chair; I would love to. I heard -- when I joined the organization, I heard those allegations as well. And let me put some context. First of all, you will find, as I did, that the allegations of that happening in the past, they were untrue, and I can give you some comfort that that kind of thing wouldn't happen in the future.

625   We have a really unique broadcasting system here, given that we have the rebroadcast of the U.S. channels. And so when we buy rights to a program - and by the way, international broadcasters all over the world buy rights from Hollywood; we do buy rights from the U.S. I would like to tell you that we are reducing our dependency and it is a business imperative to do that.

626   But all over the world, people buy from Hollywood to meet their needs. But the benefit they have is they can schedule them and program them when they want. They can put them -- in their -- they can put them in their schedule at any time of the year or on any night of the week. And we don't have that freedom.

627   So in the past, I have heard those allegations and when I went and looked at it, it just didn't happen that content was bought and never aired. What did happen is sometimes content was bought and not aired in the same timeslot in the same season that the U.S. broadcast that, because there was conflicts. And so it would wind up being aired, you know, later in the year or on a different night, or even a year later. But the rights that were purchased were always used, and if it wasn't aired at the exact same moment that the U.S. aired it, it was because of scheduling conflicts.

628   As I said, we are motivated because we think in this world of multi-platform viewing, multi-platform growth and on-demand viewing, we absolutely think that value is created for our business by having more Canadian content where we do control more of the rights and where we benefit from more of the consumption.

629   And so as I mentioned, in our last 18 months, I think we have made good progress there. We would like to continue doing it. But as a new executive in this industry, I am profoundly struck by the difficulties in being a Canadian broadcaster with the unique structure of all of that U.S. re-broadcast.

630   THE CHAIRPERSON: We are getting to the end of my questions.

631   It has been suggested that advertising online and traditional television radio is generally sold as a bundle. I would be interested in knowing if that is in fact your experience, whether with Astral or Bell, that these online traditional advertisings are actually sold as a bundle? And - to advertisers - and how, if that is the case, how do you allocate the revenues?

632   MR. PARISIEN: Well, I can tell you that at Astral, television is sold as a bundle but it is not so much Astral that is doing it as the agencies and the clients' desire to buy it as bundles.

633   As far as radio is concerned; it is exactly the opposite. There is more local web commercial activity done in radio than in television.

634   MR. CRULL: I might add, Mr. Chair, that advertisers have told us that they are interested in more platform campaigns. Agencies have told us that they are interested in more multi-platform solutions that include online radio out of home and television. Every time we package them - and it is an increasing part of our business and other Canadian broadcasters' business - every time we package them, the pricing is discreet for each platform. There is such a Canadian -- or there is such a competitive marketplace, for example for online advertising that there is a well-established CPM or the price rate which you charge.

635   And so we may in fact put together a packaged solution that presents creative across-multi-platforms and leverages; the unique delivery and reach of each platform. But the pricing is discreet and it is accounted for that way.

636   I would say that as Mr. Bibic said, overwhelmingly, the advertising community has really been supportive of this transaction, because they see those benefits and they see no risk or threat whatsoever, because the combined entity, when we look at television print, out-of-home and online, in radio, the combined entity will represent only 13 percent of Canadian advertising; so a small percentage of the total advertising dollar.

637   MR. CRULL: And it is allocated based -- the pricing is distinct; the pricing for radio is very distinct, because the market is very fluid and competitive, and so your CPM's in each of the platforms are distinct and are accounted for in that way.

638   THE CHAIRPERSON: Based on the CPM's? Okay; my final question, before I pass you on to the Members of the Panel.

639   Mr. Cope, the last time I was at the Commission, Canadians saw BCE enter the broadcasting business then do a slight exit and re-enter in the business at some point.

640   What assurances do you think we will have that this change of ownership might not be just the beginning of another, in a few years' time, change of direction yet again? And I ask the question because once you have gone and scrambled the egg -- well, I guess it is the opposite of scrambling an egg, but putting it together again and bake a cake; it -- as I asked earlier, we might lose an independent voice and I am not sure if one can step back from this at one point. It will be irremediable, in a sense - not irremediable; I wouldn't suggest it is a bad thing; I mean you can't undo it at one point; it will be done.

641   But companies go in; they go out. It certainly was the experience of BCE over the past decade.

642   MR. COPE: Yes, as everyone knows, it is pretty hard for me to comment on the strategies of BCE because I wasn't here at BCE or here as an officer of BCE. But I would say there is a significant difference in terms of what we have done. Because we are sitting here before you today to talk about taking a $3 billion investment and turning into $6.3 billion of investments in this acquisition.

643   So I would be -- the world can unfold in so many different ways and none would know, because of how fast business is changing; we have witnessed what has happened in the telecom.

644   And in terms of strategic intent; we have six core strategic intents in BCE. One of them is to be a leader in media, and if you look at our significant investment also in sports content; you can see, we are in this, you know, in a significant way.

645   But then I would also say if we just stepped back and look at the competitive landscape; the way Canada is evolving. I think part of it is just the scale of our country. I think we all recognize that; we have a very strong -- Rogers is vertically integrated in all the businesses that Bell is in.

646   We have Videotron who is vertically integrated in all the businesses Bell is in.

647   We have Shaw who is vertically integrated; they are in all of our businesses other than one; they are not in wireless today.

648   So when you step back and look at the landscape; I find it hard to imagine that, you know, vertical integration will be a part of the portfolio for the industry, going forward, and therefore, by definition, BCE is what I would say -- and it is a core (indiscernible) to our future strategy.

649   I would say that the difference is too that 10 years ago, there was no local phone competition, you know; local phone competition -- today, it is 55, 45, and that excludes wireless. And I think, you know, as much as it may be painful for Bell and Bell shareholders, we know where the home phone business is going and it is not the growth profile of the media. So there is a redirection of the resources too here that allows us to invest in broadband.

650   MR. BIBIC: And Mr. Chairman, if you -- again, having re-entered in April, 2011, as George mentioned; just look at the track records since then in terms of -- Gerry gave you good examples of the investments we have made in our DS in terms of new channels; new look-and-feel; more programming; Rick Moore production commission; more independent programming or more content commissioned than ever before; HD.

651   I mean if you just look at our Bell mobile that -- mobile TV product that George mentioned; these are all market, you know, consumer-focused proof points of BCE's commitment to the broadcasting industry. And we want to just kind of propel that forward even more and even better for the consumer through this acquisition. And I am not going to repeat what is in the opening statement of previous responses, but I think it just gives you a sense of -- those are quantifiable, tangible proof points.

652   LE PRÉSIDENT: C'est très bien. Je vais vous passer maintenant à la Conseillère régionale, Madame Lamarre.

653   CONSEILLERE LAMARRE: Merci, Monsieur le Président.

654   A ce stade-ci, je vais poser mes questions et faire mes interventions sur tout en français.

655   Il y a plusieurs enjeux dont je veux vous entretenir à ce stade-ci, au sujet de la concentration de la propriété en radio qui résulterait de la transaction, si on l'approuve.

656   La spécificité du marché de Montréal et la demande pour (indiscernible) n'est pas un de ces enjeux dont je veux discuter ce matin. Cela, c'est l'article 2 de l'audience; on en parlera plus tard.

657   Alors je vous demande de faire comme moi, un effort, et de résister à en discuter en répondant aux questions.

658   Par ailleurs, je note votre commentaire un peu plus tard, Monsieur Parisien, à l'effet que certaines annonces qui ont été faites ce matin ne sont pas des lapins sortis d'un chapeau.

659   Il n'empêche que même en présumant que je puisse être d'accord avec vous, il y en a quelques-uns qui mettent un peu la pagaille dans mon plan interrogatoire.

--- Laughter

660   Alors je vous annonce ma planification initiale mais je ne vous promets pas pour autant de m'y tenir parfaitement.

661   Alors ce que j'avais à l'ordre du jour pour discuter avec vous ce matin, c'est d'abord une mise au point sur quelque chose qui a été dit dans la présentation de ce matin. Une discussion générale sur la règle de propriété commune et les dessaisissements qui sont prévus; dessaisissements auxquels Monsieur Cope a fait référence plus tôt aujourd'hui.

662   La diversité éditoriale; l'impact sur le marché publicitaire; dans un sens ou l'autre, je ne suis pas encore tout à fait non plus.

663   Je veux toucher brièvement la question des montages en radio francophone et la question de l'emploi.

664   Alors pour la demande de précisions; cela devrait être une réponse rapide, mais je veux seulement m'assurer qu'il n'y a pas de contradiction.

665   A la page -- pas à la page, au paragraphe 35, ce matin, Monsieur Crull nous a dit qu'il était ravi de nous annoncer que Monsieur Parisien avait accepté de se joindre à la nouvelle équipe puis qu'à partir de Montréal, il superviserait toutes les propriétés média de langue française et anglaise au Québec -- au pays.

666   Un peu plus loin, au paragraphe 50, Monsieur Parisien, vous avez pris la peine de répéter que le processus décisionnel est lié aux propriétés de radio et de télévision francophone continuerait à se faire à Montréal pour le bénéfice des téléspectateurs du Québec.

667   Disant cela, vous -- cela n'était pas une contradiction de ce que Monsieur Crull avait dit plus tôt, à l'effet que cela serait les décisions média françaises et anglaises qui seraient prises à Montréal?

668   M. PARISIEN : C'est vrai.

669   CONSEILLERE LAMARRE : OK. Donc vous vouliez mettre l'emphase sur le fait qu'il y a eu des interventions qui ont été faites au niveau public et que vous vouliez rassurer un peu tout le monde?

670   M. PARISIEN : Tout à fait.

671   CONSEILLERE LAMARRE : Merci.

672   Bon; en ce qui concerne la concentration de la propriété radio; CTV a de nombreuses stations de radio; Astral aussi. L'amalgame des deux fait en sorte que pour tous ceux d'entre nous qui savent compter jusqu'à dix et jusqu'à huit, on voit que dans plusieurs marchés, il va y avoir des dessaisissements pour que la règle de la propriété commune soit respectée.

673   Jusqu'à présent, la liste de ces dessaisissements potentiels, c'est-à-dire l'identité spécifique des stations, donc pourraient se dessaisir, le groupe Bell/Astral une fois fusionné; c'est traité comme un secret d'état. Et je me demande si cela ne devrait pas plutôt être un secret de polichinelle. En ce sens que cela a une importance pour l'ensemble de l'industrie et pour le public de connaître quelles stations feront l'objet d'un autre changement de propriété suite à la transaction si elle est approuvée.

674   Alors je vous le demande : Ne pourriez-vous pas dès ce matin déposer la liste des stations qui feront l'objet d'un dessaisissement ou d'une vente subséquente à l'approbation de la transaction, le cas échéant?

675   M. BIBIC : Madame Lamarre, il y avait -- jusqu'à présent, on a préféré garder l'identité des stations qui seraient vendues confidentielle. Il faut apprécier que la divulgation de cette information aurait eu un impact majeur sur les opérations et les employés affectés, et on voulait être certains que ce soit planifié d'une façon qui respecterait les gens qui seraient impactés par cette décision. Et la discussion qu'on aurait aujourd'hui; cela aurait été ma préférence de garder le questionnement général, mais on est prêt à -- si vous insistez - et je comprends bien les discussions sur les enjeux sur l'intérêt public - on est prêt à divulguer ou identifier les stations aujourd'hui et on a un document. Malgré que cela aurait demeuré ma préférence de garder cela confidentiel, mais si vous voulez, on est prêt à déposer un document qui identifie les 10 stations dans les cinq marchés.

676   CONSEILLERE LAMARRE : Mais écoutez, je me permets d'insister, oui; je préfèrerais que vous la déposiez. Et je suis bien consciente du stress que cela peut causer aux employés concernés. Mais je pense que présentement, ce qui arrive, c'est que tout le monde est stressé de toute façon, quand vous y pensez deux minutes. Tout le monde se pense à risque, alors là, au fond, peut-être que --

677   M. BIBIC : Oui, oui, mais il faut quand même respecter le fait qu'on doit planifier; on doit discuter avec les gens. Cela a été fait.

678   CONSEILLERE LAMARRE : OK.

679   M. BIBIC : Et maintenant, on est en position de le divulguer les stations, mais on ne l'était pas auparavant.

680   CONSEILLERE LAMARRE : OK; je comprends. Alors dès que vous pourrez le déposer, tout le monde l'appréciera.

681   Maintenant, la question de l'évaluation aussi des stations de radio dont vous devrez vous dessaisir - et là, je ne vous demande pas de divulguer vos évaluations. Cela, je comprends qu'au point de vue d'affaires, il faut que cela demeure confidentiel.

682   Mais en même temps, en regardant toutes les discussions et les échanges qu'il y a eu à ce sujet-là; je me demande jusqu'à quel point c'est franchement utile. Et je vais vous dire -- je vais vous préciser ma pensée.

683   Depuis que je suis au Conseil, j'entends parler de streamlining, pour le dire en latin, de simplification, de règlementation. Et là, il y a deux options devant nous. La première, c'est que vous avez une transaction globale ou un certain montant. Vous payez des avantages tangibles sur ce montant-là. Et ensuite, vous vous vous dessaisissez de certaines stations et il y a d'autres transactions qui ont lieu. C'est fini; on n'a plus besoin d'en reparler; on n'a plus besoin de faire de rajustements.

684   Si on tient compte de l'évaluation spécifique de chacune des stations qui va être vendue, là on va être obligé de tout rajuster.

685   Il y a des précédents; il y a d'autres transactions qui ont été faites dans le domaine de la radio où est-ce qu'il y avait des stations dont le nouvel acheteur devait se dessaisir. Mais plutôt que de faire le calcul des avantages tangibles en deux étapes, bien le paiement des avantages tangibles revenait à l'acquéreur initial, qui ensuite arrangeait son prix avec le nouvel acheteur des stations dessaisies pour au fond que cela soit valable pour lui.

686   Alors est-ce vraiment nécessaire de se compliquer l'existence pour que nous, on sache absolument la valeur des stations et combien vous allez les vendre, et qu'après cela on soit obligé de tout rajouter?

687   M. BIBIC : Kevin Goldstein peut me corriger si j'ai tort, mais le processus qu'on avait envisagé, c'est que le Conseil établirait le montant des bénéfices nets, des bénéfices tangibles avec une déduction des... On réduirait le montant en fonction de la valeur des sept stations, mais vous avez la liste maintenant. Il y a dix stations qu'on vend.

688   CONSEILLERE LAMARRE: Hum, hum.

689   M. BIBIC: Sept de ces stations-là sont des stations qu'on va acquérir d'Astral et revendre. Donc, le modèle qu'on avait envisagé c'est que le CRTC, le Conseil établit le montant global de la valeur de la transaction. Ça donne un montant des bénéfices tangibles et, là, on réduit les bénéfices tangibles à la valeur de ces sept stations-là et hier soir, je crois, on a déposé l'avis de monsieur Goodwin de PWC, son rapport sur la valeur de ces sept stations.

690   CONSEILLERE LAMARRE: Oui.

691   M. BIBIC: Donc, tout pourrait être fait immédiatement. Je ne vois pas pourquoi le Conseil ré-établirait le montant de la valeur de ces sept stations quand le nouvel acheteur se présenterait. Si j'ai tort, Kevin peut me corriger.

692   CONSEILLERE LAMARRE: Non, mais c'est parce que de la façon que vous l'envisagez, si on ajuste la valeur à la baisse de la transaction pour les fins du paiement des avantages tangibles, après ça quand le nouvel acheteur va arriver, là on va considérer cette transaction-là pour fins des avantages tangibles.

693   M. BIBIC: Là, ce que vous dites, c'est pourquoi est-ce que Bell ne paie pas le montant global...

694   CONSEILLERE LAMARRE: Voilà.

695   M. BIBIC: ... des bénéfices nets et ensuite on s'arrange avec les acheteurs.

696   CONSEILLERE LAMARRE: Ça simplifierait la vie de tout le monde, surtout la nôtre.

697   MR. GOLDSTEIN: It's fair, I'll try to do this. Our understanding in terms of the way in which the Commission has proceeded in past transactions is that actually where assets are to be divested is to actually assess the value to them, such that you could have one comprehensive decision that wasn't contingent on another decision later on. That's the manner in which it was handled in the CTV transaction in fact where there was a swamping out of different assets to be divested, the Commission actually assessed the values of the pocket such as the benefits that now would be known.

698   So, last night as Marco indicated, we filed an addendum to Mr. Godwin's Report that had to assess the value of the seven Astral assets, you know, stations to be sold and then we have envisioned that the Commission would make a determination on what that value was, based on the information in that report, would adjust the benefits amount for the English radio benefits accordingly because that's the only stations that are at issue, relating to the divestiture. And then, when the stations are sold, applicants would come forward and, you know, with proposals relating to the value of those transactions.

699   The other thing is that there is the possibility it could be multiple purchasers, not just one application before the Commission. So, our understanding is historically that's the matter in which it's done.

700   COMMISSIONER LAMARRE: Hence, increasing the regulatory issue here.

701   M. BIBIC: Est-ce que je peux... mais je comprends...

702   CONSEILLERE LAMARRE: Mais je vais vous suggérer quelque chose, monsieur Bibic.

703   M. BIBIC: Oui, oui, oui, allez-y.

704   CONSEILLERE LAMARRE: Et je pense que vous comprenez bien le sens de ma question.

705   M. BIBIC: Oui, je comprends la question, oui.

706   CONSEILLERE LAMARRE: Je vous invite à aller voir la décision dans la transaction Cogeco, Corus-Cogeco, de la fin de l'année 2010 parce que ce qu'on a fait à ce moment-là, c'est ce qu'on aimerait faire ici; c'est-à-dire le faire seulement que les avantages tangibles soient payés en partant par le premier acquéreur et vous pourrez me dire peut-être à la réplique ce que vous en pensez.

707   M. BIBIC: Oui, c'est ça que j'allais suggérer, qu'on vous revienne, mais je comprends. Je comprends la préoccupation au niveau du processus.

708   CONSEILLERE LAMARRE: Hum.

709   M. BIBIC: D'accord.

710   CONSEILLERE LAMARRE: Maintenant, en ce qui concerne la diversité éditoriale et l'impact sur le marché publicitaire. Il y a plusieurs intervenants qui nous ont exprimé leur inquiétude à l'effet que la taille de BCE suite à la transaction serait telle que d'abord il y aurait un certain contrôle au niveau des voies éditoriales et aussi qu'il y aurait une difficulté à avoir des tarifs publicitaires qui seraient raisonnables.

711   Et je comprends dans vos explications depuis ce matin et même nous, là, on en est coupable parce que sinon, on n'arrive pas à avancer dans le dossier, on a l'habitude de séparer les marchées français et anglais.

712   On va parler de radio et de télé et c'est valable jusqu'à un certain point, mais je vous demande, là, quand je vais vous parler de diversité des voies de plutôt considérer l'ensemble de l'oeuvre parce que devant une transaction telle que celle que nous avons devant nous présentement, de toute évidence la somme va valoir plus... le tout va valoir plus que la somme des différents éléments.

713   Et vous-même, vous en parliez ce matin et vous parlez justement des bénéfices à pouvoir avoir des synergies entre les différents services.

714   Alors, en réponse à certaines de ces interventions-là au sujet du contrôle des salles de nouvelles en radio, bon, vous avez fait valoir que vous avez quand même seulement deux petites, là, stations en ondes en Colombie-Britannique qui sont des affiliées de Radio-Canada, je veux bien. Et, là, je regarde un petit peu plus précisément, là, les paragraphes 161 et suivants de votre réplique. Mais vous avez aussi un service de Nouvelles continues en anglais.

715   Vous venez de nous dire ce matin que vous allez faire une demande pour un service de nouvelles, un service national de nouvelles en français. Vous allez avoir un réseau de stations de radio en français et en anglais à travers le pays.

716   Alors, comment est-ce que vous allez vous assurer que, effectivement, les programmes d'affaires publiques, les programmes de nouvelles que vous avez ne viennent pas influencer indûment le contenu local dans vos différentes stations de radio?

717   MR. CRULL: Commissioner Lamarre, I might start and I would appreciate my colleague, so Mr. Parisien and Mr. Gordon to comment, but radio is an intensely local business. It's an intensely local as far as content, listenership and advertising as well.

718   And to answer your question first of any concern on the global aspect of the number of radio stations that combined entity will hold, in each local market, as you know, we're meeting the Commission's requirements for ownership, but to unpack that a bit, if you look at the top 14 English language markets, there is actually a very nice balance.

719   Bell-Astral combined will be present in 14 of the 14, Rogers is present in 10 of the 14 and Corus in eight of the 14, not present, but they own the maximum -- I'm sorry, they earn the maximum number of stations in each market.

720   So, really, there is not -- I think in this it's not really a one plus one equals three, it's really you have to look at it each local market by local market.

721   As far as the diversity of voices and the local expression, we will continue to have news organizations that remain dedicated and that are dedicated to radio and distinct from television. We may in fact have opportunities for management at a much higher level, but the news operation would remain distinct.

722   M. PARISIEN: Et si je peux ajouter quelques commentaires sur l'info. et aussi revenir sur votre question concernant la publicité. Vous avez commencé...

723   CONSEILLERE LAMARRE: Oui.

724   M. PARISIEN: ... avec un commentaire sur la publicité. En ce qui concerne l'information, Astral a 84 stations de radio. On a au-dessus de 125 journalistes à travers le Canada qui vont continuer à travailler et à ramasser de l'information, particulièrement local pour les communautés que nous desservons parce qu'au niveau de l'information nationale, on a des services qui fournissent l'information. Alors qu'on achète notre information d'un fournisseur ou d'un autre, très souvent c'est équivalent.

725   Puis on a des représentants sur les collines parlementaires et on va maintenir cette position-là.

726   Les stations de Bell et d'Astral mises ensemble, ça va juste augmenter notre rayonnement au niveau de l'information et notre potentiel pour faire un bon travail sur l'information.

727   On a souvent parlé au Conseil qu'on avait mis en place un système burelé et ce système burelé-là va servir aux stations de Bell qui vont se joindre au groupe et toutes les stations de Bell Média seront bénéficiaires du système burelé; c'est-à-dire l'échange des fichiers d'information pour tous les marchés, toutes les communautés, encore une fois ce qui va donner de l'information de beaucoup plus grande qualité.

728   Et je vous rappelle tout ça avec le « focus » de maintenir nos stations de radio localement impliquées et très très à la fine pointe de ce que les communautés locales ont besoin d'entendre et veulent savoir.

729   C'est sûr qu'au niveau de l'information, il y a de la diffusion nationale, vous le savez, c'est une composante de n'importe quel bulletin d'information et je pense qu'on est très... beaucoup plus avantagé par la transaction de pouvoir bénéficier sur les CTV qui vont peut-être nous approvisionner dans des choses qu'on n'aurait pas autrement -- je pense aux Olympiques -- et des RDS, des TSN qui peuvent nous approvisionner aussi.

730   Mais la radio va continuer à maintenir ses salles de nouvelles et son système d'approvisionnement en nouvelles, indépendant, tels qu'ils ont et c'est ce que monsieur Crull vous a dit.

731   CONSEILLERE LAMARRE: O.k. Et si je peux ajouter quelque chose ici, c'est que j'essaie de réconcilier tout ce que j'ai lu depuis quelques semaines et tout ce que j'entends depuis ce matin.

732   Et ce que j'ai entendu ce matin c'est effectivement monsieur Crull me dire que la radio était locale, en même temps j'ai entendu monsieur Cope me parler de radio nationale et, là, vous, parce que vous me dites... vous me dites que ça va être quoi? Ça va être des nouvelles nationales, mais ça ne sera pas un réseau national?

733   M. PARISIEN: Non. Je ne suis même pas allé là, madame Lamarre.

734   CONSEILLERE LAMARRE: O.k.

735   M. PARISIEN: Ce que je vous dis c'est que quand vous êtes dans un marché... prenons Calgary. Il y a trois ou quatre journalistes qui travaillent à ramasser de l'information pour les stations de Calgary qui appartiennent à Bell ou qui appartiennent à Astral et de l'information qu'ils ramassent s'en va en ondes à Calgary.

736   S'il y a des informations d'ordre national; monsieur Harper est en Chine puis il fait une conférence de presse, je n'envoie pas un journaliste de Calgary couvrir la conférence de presse. Je vais m'affilier avec quelqu'un qui est déjà là et on va partager ces fichiers-là.

737   Ça, c'est la composante nationale de mon bulletin de nouvelles, mais la compostante locale est toujours faites par les journalistes qui travaillent sur le terrain de le marché local. Ça, c'est ce que Bell fait, c'est ce qu'Astral fait, c'est ce qu'on va continuer à faire.

738   Ce que la transaction amène, c'est que ça nous donne encore plus de profondeur et plus d'habilité à aller chercher de la bonne information. Je donne les Olympiques comme exemple puis je pourrais en donner beaucoup d'autres. Je donne le sport comme exemple également.

739   Donc, ça va juste venir enrichir l'offre qu'on donne à notre communauté à Calgary parce qu'on va avoir plus d'information, mais il n'est pas du tout question d'aseptiser l'information ou de faire un réseau d'information avec tous les marchés, les mêmes nouvelles, loin de là.

740   CONSEILLERE LAMARRE: O.k.

741   M. PARISIEN: Ce bout-là est clair?

742   CONSEILLERE LAMARRE: Ce bout-là est clair.

743   M. PARISIEN: Merci.

744   CONSEILLERE LAMARRE: Mais il y a le revers de cette médaille-là.

745   M. PARISIEN: Oui.

746   CONSEILLERE LAMARRE: Qui fait en sorte, comme vous dites, vous allez quand même avoir une puissance de frappe absolument extraordinaire, là, si la transaction est approuvée, en radio française et anglaise.

747   Vous allez aussi bénéficier de synergies qui vont être faites avec un service de nouvelles continues en anglais et, éventuellement, compte tenu de l'annonce de ce matin, un service de nouvelles continues en français.

748   Rajouté à ça, comme vous le dites, les deux marques sportives qui sont connues et désirées par à peu près tout le monde à travers le pays, RDS et TSN, est-ce que ça ne fait pas à ce moment-là des services de radio dans tous les marchés qui sont compris dans la transaction, est-ce que ça ne fait pas les services de radio l'entité d'Astral un incontournable qui peut à ce moment-là fixer des tarifs publicitaires à la hausse et qui deviennent inabordables pour justement les entreprises locales qui devraient normalement pouvoir bénéficier de ce média-là?

749   M. PARISIEN: Non, absolument pas puis je trouve ça intéressant qu'on glisse de l'information à la publicité; c'est très rare que ça arrive, alors on est... c'est fort agréable, mais ça ne peut pas se produire parce que la décision... vous savez que 70 pour cent des revenus publicitaires de la radio sont locaux à peu près au Canada et la décision finale, c'est celle du client qui annonce, le concessionnaire automobiles, le restaurant,m la pizzeria, la boutique dans le marché de Calgary, d'Halifax ou de n'importe où.

750   Ce n'est pas le diffuseur qui contrôle ses tarifs ou ce n'est pas le diffuseur qui indûment peut mettre de la pression sur les annonceurs. At the end of the day, là, c'est l'annonceur qui dit: Moi, je suis prêt à payer ça. Et dans un marché comme Calgary, je vais rester là, on ne compétitionne pas juste contre la télévision. On compétitionne contre l'affichage, on compétitionne contre les journaux, les hebdos, les magazines.

751   On compétitionne contre tout ce qui est disponible dans ce marché-là. Et si on avait ce comportement-là sur lequel vous m'interrogez, on n'irait nulle part et on ne serait pas capable de faire... d'avoir les résultats qu'on a là présentement.

752   On est très à l'écoute des annonceurs, on est sensible aux besoins des annonceurs et on répond à leurs besoins en leur donnant des tarifs qui sont acceptables de leur part, sinon on va les perdre, ils vont aller ailleurs, ils ont trop de choix, ils ont trop d'options.

753   Puis pour conclure sur l'information, là aussi at the end of the day, ce n'est pas Astral ou Bell qui a le contrôle sur ce que le produit va finalement être et comment il va être acceptable, c'est l'auditeur, c'est le consommateur.

754   Si je ne fais pas un bon produit d'information et que je ne parle que de problèmes de météo ou d'international, c'est sûr que le monde vont changer de poste puis ils vont aller ailleurs puis ce n'est pas ça que je veux. Je veux les garder chez nous et je vais continuer à leur donner un bon produit local parce que notre expérience nous démontre comme Bell l'a dit aussi précédemment que c'est ce que les consommateurs veulent.

755   CONSEILLERE LAMARRE: O.k. Donc, monsieur Robins qui reste à Mont-Royal et qui est intervenu au dossier et qui estime que vous auriez un trop gros contrôle justement sur les coûts publicitaires et que monsieur Robins a une petite entreprise et pour les fins de votre dossier, là, c'est l'intervention numéro 1423, vous lui répondez quoi pour le rassurer? Qu'est-ce qui va être mis en place pour faire en sorte qu'il va continuer à pouvoir se permettre de la publicité sur vos ondes?

756   M. PARISIEN: Le commentaire de monsieur Robins c'est que je vais avoir trop de masse critique et que je vais mettre de la pression envers le haut sur les coûts publicitaires. Qu'est-ce qui va arriver à monsieur Robins? Il va aller ailleurs. Pensez-vous que c'est ça que je veux? C'est tout à fait le contraire que je veux. Je vais positionner mes tarifs comme je le fais actuellement, comme Bell le fait également dans la télévision puis en radio, pour que monsieur Robins reste chez nous.

757   C'est un contresens que de voir la chose différemment. Le modèle ne tient pas si je pousse mes tarifs tout le temps.

758   At the end of the day, encore une fois, les agences pour le national décident et les consommateurs, les clients locaux décident des tarifs parce qu'ils ont tellement d'options, tellement de choix; surtout lui à Montréal.

759   CONSEILLERE LAMARRE: Et son... je ne dirais pas son collègue, là, son ami...

760   M. PARISIEN: Son voisin?

761   CONSEILLERE LAMARRE: Mais son voisin à Calgary, monsieur Yasensky dit à peu près la même affaire. A Calgary, vous estimez qu'il va avoir lui aussi autant de choix que monsieur Robins à Montréal?

762   M. PARISIEN: Bon, Calgary, parlez-m'en de Calgary, je vais vous dire, je l'ai justement parce que je savais que vous me poseriez la question.

763   CONSEILLERE LAMARRE: Mais faites attention, mon collègue écoute attentivement à côté de moi, là.

764   M. PARISIEN: Je sais et c'est pour ça que j'en parle parce que, lui, il va savoir de quoi on parle. Bon, Calgary, juste en radio, Rogers, Corus, Newcap, Harvard, Rawlco. Vous pensez que si Bell-Astral impose un tarif à monsieur qui est indu, qui est trop élevé,, qu'il n'a pas de choix? Ça, c'est juste en radio. C'est sans compter les télévisions locales, les journaux, les hebdos puis je présume que c'est un homme très intelligent puis c'est un homme averti puis c'est un bon commerçant puis c'est un bon businessman; il va aller ailleurs.

765   Nos représentants qui sont dans le terrain, c'est ce qu'ils vivent tous les jours puis on le respecte ça. Nous, notre modèle d'affaires c'est d'avoir le plus de revenus possible. Alors, la pression, on la reçoit des acheteurs, des clients.

766   M. FRAPPIER: Madame la conseillère, peut-être un excellent exemple c'est le cas de RDS avec le Canadien de Montréal. Ça fait une dizaine d'années qu'on a 100 pour cent des matchs du Canadien. On aurait pu, si on était de mauvaise volonté, faire un abus au niveau de la tarification de la publicité, mais il y a des lois du marché qui existent comme Jacques le précise.

767   On ne peut charger... écoute, je peux toujours essayer de vendre un spot à un million, mais je vais peut-être en vendre un puis le reste de mon inventaire va rester invendu. Donc, il y a quand même des taux de change qui existent dans le marché qui sont établis par le marché lui-même.

768   Autrement dit si moi j'arrive et je veux essayer d'avoir une tarification qui est 30 ou 40 pour cent plus élevée que la moyenne du marché, c'est le marché qui va m'imposer mon pricing si vous voulez.

769   La meilleure preuve dans un sens, les gens n'ont pas le choix que d'acheter à RDS le hockey du Canadien et vous pouvez demander à n'importe quelle agence publicitaire au Canada comment la tarification du hockey de RDS ils vont vous répondre sans exception s'ils font référence aux vrais chiffres. On est dans la moyenne des 20 plus importantes émissions au Québec.

770   Autrement dit, c'est le marché qui décide de la limite de la tarification de RDS.

771   Je peux aller à un niveau différent aussi quand on parle d'abus de pouvoir. Quelqu'un pourrait dire RDS, propriétaire de Bell, Bell propriétaire du Canadien de Montréal, RDS diffuseur exclusif du Canadien de Montréal, donc une relation très étroite, quelles sont les chances que RDS va être objectif lorsqu'il fait les reportages sur le Canadien de Montréal? Ils risquent de ne pas parler en mal du Canadien de Montréal; c'est bien le contraire.

772   Je pense si les gens, si je me fie aux milliers de commentaires qu'on reçoit régulièrement, une des choses que les gens apprécient énormément de RDS, c'est qu'on a maintenu notre objectivité.

773   Quand vous écoutez les émissions, les talk shows chez nous, que ce soit le « 5 à 7 » ou « l'Antichambre », nos gars n'ont pas peur de dire les vraies choses. On se doit de faire ça pour une simple et unique raison. On perd la crédibilité auprès de nos consommateurs si ça devient apparent qu'on ne dit pas les vraies choses.

774   Donc, il y a un mécanisme de contrôle au niveau de la tarification qui est imposé par les lois du marchés et il y a également le consommateur qui exige qu'on soit honnête et objectif dans la manière qu'on rapport les nouvelles.

775   M. BIBIC: Madame Lamarre, c'est pour ça en bout de ligne que si le Conseil a établi des règles sur la propriété commune dans le domaine de la radio, ça protège la diversité des voix, ça protège les annonceurs et si Bell ou Astral détiennent quatre stations de radio à Vancouver, ça n'a aucun impact sur l'annonceur qui est à Winnipeg parce que, comme Jacques l'a dit, 70 pour cent des annonceurs, des annonces dans un marché, c'est fait par les annonceurs uniquement locaux.

776   M. PARISIEN: Et j'aimerais, si vous permettez, fermer la boucle en vous rappelant que, contrairement à la télévision, la radio vit à 100 pour cent de ses revenus publicitaires, d'où notre préoccupation « focusée » sur avoir des tarifs qui rencontrent le modèle d'affaires qu'on met de l'avant.

777   CONSEILLERE LAMARRE: Oui, mais est-ce que vous comprenez quand même, monsieur Bibic et le panel au complet que... parce que, là, vous avez fini, vous avez fait votre réponse en me parlant uniquement de la radio. Oui, puis on n'a pas le choix, là, il faut scinder les sujets si on veut passer à travers la semaine.

778   Mais les préoccupations qu'on voit dans les interventions qui viennent surtout des groupes de consommateurs, c'est que, non, ce n'est pas si clair que ça et, justement, la forme et la grosseur finales de l'entreprise va être telle que la tentation du pouvoir va être trop grande pour que vous puissiez résister. Est-ce que vous comprenez cette préoccupation-là?

779   M. BIBIC: Madame, vos questions... vos questions, madame Lamarre, ont été axées sur la publicité. Comme Kevin l'a mentionné un peu plus tôt en répondant au président, la part de marché de Bell-Astral combined, marché de la publicité nationale, 12 pour cent. Ça, c'est loin d'être une position dominante, loin, loin, loin.

780   CONSEILLERE LAMARRE: Oui, mais ça c'est aujourd'hui, aujourd'hui au moment où on se parle, alors que ce sont deux entreprises différentes, distinctes et lorsque ça deviendra une grosse entreprise si on approuve la transaction, ça... comment est-ce que ça pourrait ne pas changer la donne, compte tenu justement de l'ensemble du contenu auquel vous allez avoir accès, parce que même vous, vous en parlez.

781   Et cette préoccupation-là qu'on sent dans les interventions et surtout des groupes des consommateurs et vous semblez dire qu'ils n'ont pas à s'inquiéter, on va tout faire correct. D'accord, mais qu'est-ce que vous allez faire et qu'est-ce qu'on devrait faire, nous, pour s'assurer que vous ferez tout correct?

782   M. COPE: Well, I have to make a few comments. I think Bell's history of 130 years in Canada should demonstrate how we behave as a company. I think it speaks volume for our behaviour in the community from the present public organization obviously, the Commission should take absolutely no discomfort on how Bell behaved in the marketplace, for sure.

783   And then in terms of consumers, as I have said, I think this is an absolutely tremendous transaction for consumers. It's going to add new services that we don't have in Canada, it's going to level a competitive playing field and in the area of advertising, as we have commented on the radio industry, it is very very much a local advertising market and I think my colleagues will keep me honest, everyone of those markets will meet, of course, the regulatory requirements in terms of the number of channels we have, but I think where the major radio competitors, everyone of those local markets with the large organization.

784   So, I hope there is comfort in the fact that -- well overriding comfort we can give you is that Bell's behaviour always in the marketplace when it complies with the laws and the rules but, secondly, we wouldn't be 130 years later if we didn't do what the consumer wants and in the end that's what we have to do every day.

785   We don't keep every consumer, it's a competitive marketplace, but that's our goal obviously. Thank you.

786   MR. CRULL: Commissioner Lamarre, I would like to -- it's always tempting for me to seize onto the affiliate comments and distribution, but I'll set that aside because I believe your --

787   CONSEILLERE LAMARRE: Set it aside, yes.

788   MR. CRULL: I believe the origin of your comments came from the advertising market and I believe the two interveners that you read from where small market advertisers, local advertisers.

789   CONSEILLERE LAMARRE: Yes.

790   MR. CRULL: When we announced the deal, Mr. Parisien and I spent a week literally around the clock. In one week we spoke with the leadership teams of every advertising agency in the country, of every major advertising agency. I think there were 17 or 18 of them that we sat down and spoke with and we received feedback from them about how their market was changing, about how advertising was fragmenting.

791   In many cases we heard that -- for example, let me give you a statistic. Television advertising as a percent of the total advertising pie in Canada has declined from 36 per cent to 30 per cent over the last decade and that's as more on line advertising sources, social media and so many things.

792   And, first of all, we heard -- and I believe the record shows in the filings overwhelming support from the advertising community and I heard it firsthand in these meetings with every major agency that they are concerned about the growth of foreign online because they don't do -- although they buy advertising from them they don't get support here in Canada and it's very different for them to deal with an entity in California than it is to deal with an entity in Montreal or right here in Canada.

793   And we see that they are concerned about that and that they embrace the multiplatform breadth of this portfolio, they embrace a strong Canadian solution and they have zero concern that the competitive market won't keep the pricing honest, especially as the market has been so dynamic and fragmented.

794   CONSEILLERE LAMARRE : O.K. Alors, je vais laisser le sujet à ce niveau-là et on va passer à la question des montages.

795   En radio, il y a une dynamique bien particulière au niveau francophone, qu'on ne voit pas encore ou qu'on ne détecte pas nécessairement de façon significative du côté anglophone, à l'effet que les montages à une certaine époque semblaient vouloir servir à diminuer la présence de musique vocale de langue française sur les ondes.

796   L'année dernière, on a eu une audience très intéressante sur le sujet, et, suite à ça, on note définitivement qu'Astral a mis en place des mesures qui donnent des résultats. Quand on examine ce qu'on entend en ondes, ce n'est pas nécessairement que tout est parfait, mais on sent que c'est tout à fait qu'est-ce qui est en train d'être visé là, c'est vraiment l'esprit et la lettre de la règle qui a été établi, et qu'Astral a mis en place des mécanismes pour s'assurer que ces montages ne diminuent pas indûment la présence de musique de langue française sur les ondes de ses stations. C'est une expérience qui est tout à fait étrangère à BCE.

797   Est-ce qu'on peut savoir dans quelle mesure et de quelle façon vous allez vous assurer que cette expertise-là soit conservée et continue aussi à s'améliorer?

798   M. PARISIEN : Madame Lamarre, on porte encore les cicatrices de cette audience. On a mis en place les mesures dont vous avez parlées. Ce n'est pas parfait...

799   CONSEILLERE LAMARRE : Mais on voit des beaux résultats.

800   M. PARISIEN : ...mais c'est beaucoup mieux, et moi, je vous assure que les stations de Bell et les stations d'Astral vont continuer à adhérer aux principes qui ont été mis de l'avant lors de cette audience.

801   CONSEILLERE LAMARRE : Et vous allez y voir de votre bureau de Montréal?

802   M. PARISIEN : Je vais y voir personnellement de mon bureau de Montréal, oui.

803   CONSEILLERE LAMARRE : O.K. De votre bureau de Montréal.

804   M. PARISIEN : Vous pouvez en faire une condition de licence si vous voulez.

805   CONSEILLERE LAMARRE : On va le noter.

806   M. PARISIEN : Je parlais du bureau du Montréal.

807   CONSEILLERE LAMARRE : Ah! O.K.

--- Laughter

808   CONSEILLERE LAMARRE : Le dernier point dont j'aimerais discuter avec vous est un peu délicat, mais malgré le fait qu'il est délicat, je ne veux pas le passer sous silence. C'est la question de l'emploi.

809   Monsieur Greenberg a fait allusion au fait que l'entreprise Astral était bilingue. Il a raison, elle est franchement bilingue, mais elle est plus que bilingue. C'est aussi une entreprise qui est clairement multi-genre.

810   Je ne sais pas ce qui s'est passé chez Astral dans les 15, 20, 30 dernières années, mais de toute évidence ce qui s'est passé était très positif parce que le résultat est là. Quand on regarde l'entreprise et ses employés, on voit qu'à tous les niveaux, il y a de la place autant pour les anglophones que pour les francophones, que pour les hommes et que pour les femmes.

811   J'ai été habituée, moi, quand Astral présentait devant nous à voir des comités qui présentaient où est-ce que la parité se faisait naturellement entre les hommes et les femmes, et là, ce matin, j'ai un petit choc.

812   La parité, on l'a quasiment sur la deuxième table -- on ne peut pas diviser une personne en deux, je veux bien -- mais sur la première table, moi, je m'ennuie pour madame Turcotte.

813   Je me demande quel est l'engagement de BCE à maintenir ce niveau de diversité d'équité dans l'emploi tel qu'on le voit présentement chez Astral.

814   MR. COPE: Well, I welcome the question --

815   COMMISSIONER LAMARRE: I'm not looking for a job.

--- Laughter

816   MR. COPE: I welcome the question.

817   BCE could be no more proud of its diversity in its employee base.

818   We have in Karen Sheriff, a subsidiary of BCE, a woman in the most senior leadership position of any female public company executive in the country.

819   If you look at the executive team at BCE and you look across the organization, by any standard we're employer of all -- the implication that Martine would be the only female on our executive team would be incorrect, for sure.

820   So the strategy and focus and ultimately a company's success is built on talent and resources and we of course welcome everyone to work at the company.

821   And then across the Province of Quebec, which is a little bit implied in the question to Mr. Greenberg, as we've said, we are the second-largest private employer in the Province of Quebec, 17,000 employees. We invest more money in the province than any company, we believe, private -- public company does in the province and so our commitment to the province today is also an additional $3.3 billion acquisition. I hope everybody sees it undoubtedly for what it is.

822   And also, obviously strategically we have acknowledged that we have a hole in one of our portfolios. That's our French-language TV. We need to compete better than we have in the past and that's why we're here today to make that commitment.

823   COMMISSIONER LAMARRE: Okay. So if I hear you right, Mr. Cope, what you are telling me is that you do foster equity and employment at all levels, including the very high one at BCE, and basically this morning the issue is one of visibility, not of substance?

824   MME TURCOTTE : Peut-être que je peux répondre, Madame la Commissaire Lamarre.

825   Je suis peut-être seule ce matin en avant, mais il y a beaucoup de mes collègues féminins parmi les 46 vice-présidents et plus hauts au Québec. Donc, je parle au Québec. On a 17 000 employés très francophones, très bilingues, mais très, très francophones dans la Province de Québec.

826   Donc, au niveau de la diversité, je peux vous assurer, et je fais partie du comité exécutif avec trois autres femmes, c'est très important pour nous la diversité et je dois reconnaître, avec toute l'équipe exécutive de mes collègues, c'est quelque chose qu'on regarde, et la diversité non seulement féminin et masculin, mais entendons-nous, aussi, nous desservons une communauté de consommateurs aujourd'hui qui est ethnique, et ça, c'est quelque chose qui est très important pour nous.

827   Est-ce qu'on a encore du travail à faire? Absolument, je ne vais pas vous le cacher, mais je ne suis pas seule comme exécutive au Québec et aussi au niveau national.

828   CONSEILLERE LAMARRE : Merci de me rassurer. En tout cas, vous allez être deux entreprises là. La tradition est déjà en place chez Astral. Bon, vous confirmez, Madame Turcotte, que c'est aussi le cas chez BCE. Alors, je vous encourage à continuer.

829   Ce sont toutes mes questions, Monsieur le Président.

830   LE PRÉSIDENT : Merci beaucoup.

831   Nous pourrions tous faire mieux à ce titre, je crois, de part et d'autre de la table.

832   Donc, on était censé prendre une pause à compter d'une heure. Il reste cinq minutes.

833   On peut commencer un peu?

834   CONSEILLER PENTEFOUNTAS : Oui, oui.

835   LE PRÉSIDENT : Oui. O.K.

836   CONSEILLER PENTEFOUNTAS : On va prendre de l'avance. La semaine risque d'être longue si on commence déjà à prendre des pauses.

837   LE PRÉSIDENT : Oui.

838   CONSEILLER PENTEFOUNTAS : Alors, d'abord, je voudrais remercier monsieur Parisien. Je suis content de voir que vous acceptez des conditions de licence qui ne sont mêmes pas exigées. C'est toujours le fun quand on donne plus que le client demande.

839   Une question importante à monsieur Frappier, qui n'a absolument rien à voir avec le sujet du jour : Est-ce que les messieurs Roy et Tremblay vont être sur le même panel?

840   M. FRAPPIER : Je t'en reparlerai au break.

--- Laughter

841   CONSEILLER PENTEFOUNTAS : O.K.

842   Alors, procédons à l'éléphant dans la pièce, je dirais peut-être plus l'ours dans la pièce parce que je vois mal comment on peut rentrer dans une pièce un éléphant.

843   Dans la région qui est desservie par Northwestel, il y a une question d'un petit 40 millions, et ça peut être questionné de plusieurs angles. Commençons d'abord avec l'idée de supplémentarité.

844   Est-ce qu'on ne peut pas dire clairement, Monsieur Bibic ou qui que ce soit d'autre qui veut répondre à la question, que ce sont des dépenses qui font partie des coûts d'exploitation de cette business qui est acquisition d'Astral ou non?

845   MR. COPE: I am extremely hopeful that the Commission will see that this is an investment that will be incredible for our youth in the North but that will be the Commission that will have to make that call. We respect that.

846   This will not happen if this is not approved here. It's been 20 -- 30 -- someone help me out here, from '85 to today. So our industry is a wireless industry from '85 --

847   COMMISSIONER PENTEFOUNTAS: Twenty-seven.

848   MR. COPE: -- 27 years -- 27 years since wireless started in Canada. The most deep-pocketed companies in the country are in the wireless industry and no one has found a way to get to that last few percentage we have left to get to for wireless coverage. This will give broadcast to wireless. We will have youth having access to iPads and TV at a level that we all have.

849   Some people have implied this is something that Bell would do otherwise. As we just said, it's been 27 years. It will be long, long before anyone -- because economics don't work. This is a very rare opportunity. It will be the Commission's discretion on this. We understand that.

850   And I'm a little bit shocked that everyone in Northern Canada isn't just absolutely thrilled with this as a possibility, and if that's not where people want to go, then we'll be fine. We thought it was a very creative way to get youth to have access to broadband TV technologies. That's something that the industry has not been able to make work for 27 years.

851   So we'll leave that. We're not going to die on a sword over that issue because I think it's a great benefit for everyone in Canada. I think the Prime Minister's recent trip, if he had known ahead of time, he might have loved to even announce it. It would have been great for there. So we'll leave that to everyone else to decide.

852   COMMISSIONER PENTEFOUNTAS: So you don't see it as a regular cost of doing business up there, Mr. Cope?

853   MR. COPE: Absolutely not.

854   COMMISSIONER PENTEFOUNTAS: And you don't also see a problem given our 2011 decision, the Northwestel decision, that basically indicated that -- and I have a quote here that I think I'm better off quoting so I don't mess it up.

855   And basically -- and I actually have it in French. Je vais continuer en français.

"Alors, les actionnaires de Northwestel ont profité du cadre réglementaire de plafonnement des prix bien plus que les consommateurs." (Tel que lu)

856   Dans ce contexte -- et là, je rajoute -- il paraît très étrange que le Conseil puisse approuver une telle dépense comme faisant partie d'un avantage tangible suite à notre décision qui est très récente. Je ne sais pas si vous étiez là, Monsieur Bibic, mais vous ne trouvez pas ça étrange qu'on approuve une telle proposition suite à notre décision?

857   M. BIBIC : Monsieur le Vice-Président, le paragraphe que vous avez... ou la phrase que vous avez lue, la décision de 2011 qui porte sur le cadre réglementaire qui s'applique à Northwestel, nous a demandé de déposer un plan de modernisation du réseau au niveau du réseau filaire, et c'était pour le but de s'assurer... le Conseil voulait s'assurer que Northwestel rencontre les obligations réglementaires qui s'appliquent à toutes les entreprises titulaires, en anglais the basic service objective.

858   Donc, on parle de... You know, we're talking about plain old telephone service, White Pages, access to long distance, dial-up Internet, touchtone, enhanced calling features and access to operator, and there were some communities in Northwestel territory that didn't have access to those aspects of the basic service objective. There were some switches that hadn't been replaced in a very long time.

859   And what we did, we stepped up to Northwestel, stepped up to the plate and filed a modernization plan as requested.

860   Ce qui ne fait pas partie de votre question, parce que votre question se pose uniquement sur le 40 millions, mais il ne faut pas oublier que le plan de modernisation indique que Northwestel a l'intention dans les cinq prochaines années de dépenser 234 millions de dollars pour rencontrer les exigences de ce que le Conseil nous a demandé.

861   Ce que le Conseil a demandé à Northwestel dans la décision de 2011, on va l'accomplir avec 234 millions de dépenses. Le 40 millions, c'est pour offrir le service large bande, que ce soit filaire ou sans fil, dans toutes les communautés du Nord.

862   CONSEILLER PENTEFOUNTAS : Je pense que le temps nous chasse, à moins que monsieur Cope veut... Unless you want to add something, Mr. Cope, I think we're out of time.

863   THE CHAIRPERSON: We can come back after.

864   COMMISSIONER PENTEFOUNTAS: We'll come back.

865   THE CHAIRPERSON: Unfortunately, for reasons beyond our control we have to take a break between now and 4:00.

866   I will warn people that we may actually work a little later this evening just to see how far we can do. We'll see how we go. We might actually have to start a little earlier tomorrow morning as well to catch up.

867   I apologize but it really is outside our control.

868   Donc, on va prendre une pause jusqu'à 4 h 00, et comme on l'a déjà remarqué sur des Tweets, je respecte le début de l'audience. Donc, on va reprendre à 4 h 00 précisément. On risque de travailler un peu plus tard ce soir et on verra à ce moment-là. Je l'annoncerai si on commence plus tôt demain matin.

869   Donc, à 4 h 00 ici.

870   M. BIBIC : Est-ce qu'il serait...

871   LE PRÉSIDENT : A l'ordre, s'il vous plaît. A l'ordre.

872   Monsieur Bibic.

873   M. BIBIC : Oui. Est-ce qu'il serait possible de considérer...

874   LE PRÉSIDENT : A l'ordre, s'il vous plaît.

875   M. BIBIC : On revient à 4 h 00, bien compris. Est-ce que ça serait possible d'avoir une petite pause entre la fin de la partie 1 et notre présentation sur le dossier CKJM?

876   LE PRÉSIDENT : Certainement.

877   M. BIBIC : Merci.

878   LE PRÉSIDENT : La séance est levée jusqu'à 4 h 00.

--- Upon recessing at 1303

--- Upon resuming at 1558

879   LE PRÉSIDENT: A l'ordre, s'il vous plaît.

880   Donc, on va recommencer l'audience et merci encore pour accommoder l'empêchement que nous avions.

881   Et je passe la parole au vice-président.

882   CONSEILLER PENTEFOUNTAS : Merci, Monsieur le Président.

883   Alors pour retourner sur la question de la supplémentarité, je pense que vous avez eu la chance de répondre.

884   Je ne vais pas m'attarder là-dessus. Mais juste pour être clair, suite à la décision 2011-711, la modernisation du réseau de Northwestel a été ordonnée par le Conseil.

885   Jusqu'ici, on s'entend là-dessus?

886   Et suite à ça, vous avez déposé un plan de modernisation. C'est exact?

887   M. BIBIC: C'est exact.

888   CONSEILLER PENTEFOUNTAS : A l'ordre de 233 millions?

889   M. BIBIC: Deux cent trente-quatre, oui.

890   CONSEILLER PENTEFOUNTAS : Question: Est-ce que le 40 millions dépend de l'approbation du plan de modernisation global ou est-ce que ça peut être une initiative qui peut se tenir à elle seul?

891   M. BIBIC: On va procéder de toute façon avec le plan de modernisation de 234 millions, sujet, bien sûr, à la décision du CRTC. Puisqu'on l'a déposé, j'imagine, à un moment donné, il va y avoir une audience là-dessus, que ce soit oral ou par écrit.

892   CONSEILLER PENTEFOUNTAS : Je ne lirai pas d'autre chose dans le commentaire d'un moment donné, mais ça va.

893   M. BIBIC: Non, non, c'est parce que...

894   CONSEILLER PENTEFOUNTAS : Au niveau des...

895   M. BIBIC: A un moment donné.

896   Donc, le plan de base va procéder.

897   CONSEILLER PENTEFOUNTAS : Oui.

898   M. BIBIC: Si vous refusez... donc, si vous refusez le 40 millions qu'on propose aujourd'hui, on procède avec le plan de modernisation de toute façon.

899   CONSEILLER PENTEFOUNTAS : Le problème avec 40 millions, Monsieur Bibic, c'est que le Conseil ne peut pas accepter comme avantage tangible tout projet qui est conditionnel à l'approbation d'une autre demande qui n'a pas encore été examinée.

900   Un ne dépend pas sur l'autre dans le sens que si vous approuvez le 40 millions d'aujourd'hui, on va procéder et on va desservir chaque communauté dans le Nord avec services large bande, que ce soit sans fil ou filaire.

901   M. BIBIC: O.K. C'est assez clair.

902   CONSEILLER PENTEFOUNTAS : Autre question sur le 40 millions, bon, requise le faut. Il faut que ces questions soient posées pour compléter le dossier et pour répondre à certaines questions qui ont été soulevées.

903   Il y a l'impression qui peut être donnée que c'est une tentative ce 40 millions-là de ce que certains peuvent décrire de «Big bang Bell», d'offrir un avantage concurrentiel en utilisant les fonds issus de la transaction ou de l'acquisition d'Astral par Bell.

904   Ça revient à une question que j'ai posée ce matin quant à l'initiative intéressée.

905   Et que diriez-vous à ceux et celles qui disent, bien, c'est Bell qui essaie de s'offrir un avantage face à des plus petits joueurs qui n'auront même pas la chance de rentrer dans le marché du Nord-Ouest canadien?

906   M. BIBIC: On parle de comme 96 communautés. On parle des communautés avec 20 foyers, 200 foyers, 75 foyers.

907   Je peux vous donner des données, si vous voulez.

908   Avec le projet qu'on propose de 40 millions que... je voudrais nommer le projet Astral, on va pouvoir desservir 47 communautés avec le service sans fil d'une nouvelle génération.

909   De ces 47 communautés aujourd'hui, il y a 25 des 47 qui n'ont pas de service sans fil du tout, du tout. Et 22 des 47 communautés ont que du service sans fil CDNA.

910   Donc, on dirait... CDNA, c'est pas les services aux nouvelles générations qui permettraient aux communautés d'avoir accès à ces réseaux de radiodiffusion et du contenu qu'on peut consommer sur une plateforme large bande.

911   Donc c'est ça. On parle de communautés de ce genre-là, toutes petites communautés qui n'ont pas accès à ces services aujourd'hui, qu'il faut pour faire partie d'une communauté de radiodiffusion moderne.

912   CONSEILLER PENTEFOUNTAS : Ça ramène à une autre question qui a été soulevée. Et je pense que la personne qui l'a le mieux énoncée, c'est le maire de Dawson City Peter Jenkins qui dit quele 3G, le 4G par exemple, c'est un luxe. Et avant de courir, il faut commencer à marcher.

913   Et ce qu'il faut dans le Nord, c'est un service à un coût abordable, un service plus fiable et plus de bandes passantes.

914   Vous avez fait mention de ça.

915   Alors, je retourne sur la question de 3G et 4G. L'investissement dans le sans-fil par rapport à l'investissement qu'ils peuvent offrir au Nord-Ouest canadien, des services à coût abordable, fiables et plus de bandes passantes.

916   M. BIBIC: Bon, premièrement...

917   CONSEILLER PENTEFOUNTAS : Et je cite un des maires qui vit la situation de très proche.

918   M. BIBIC: Bien, on rencontre ces critères ou ces conditions.

919   Premièrement, les communautés qui n'ont rien vont avoir accès à un service larges bandes.

920   CONSEILLER PENTEFOUNTAS : O.K.

921   M. BIBIC: Deuxièmement, ceux qui ont accès à l'internet aujourd'hui, on va augmenter la bande passante. Donc, il y a 45 communautés qui ont accès à du service - bien, il y a 20 communautés, par exemple, qui ont service à un accès maximum, un service de vitesse maximum de 1.5 MB et ce sera augmenté avec notre projet à 5.

922   Donc, ceux qui ne sont pas desservis, on va les servir.

923   Les communautés qui ont un service de 1.5 MG, ça va être augmenté à 5.

924   Et en ce qui concerne les coûts ou le prix, le prix au détail, ce que North Westel a l'intention de faire, c'est de charger le même prix dans ses communautés qu'ils le chargent ailleurs dans son territoire pour le service qui est équivalent.

925   CONSEILLER PENTEFOUNTAS : Vous avez également essayé de faire le lien entre cet investissement-là de 40 millions et le système de rediffusion canadien, surtout dans le Nord.

926   Et le fait que ça peut offrir ces services, du contenu qui est offert sur CTV, sur Astral et autre, dans le Grand Nord.

927   Et si on voulait véritablement faire ce lien et ce rapprochement, les gens diront, bien pourquoi ne pas investir dans le câble Northwestel, Northwest Cable. Pourquoi ne pas investir dans le câble plutôt que d'investir dans la bande passante?

928   M. BIBIC: Là, je vais vous revenir sur la question vendredi, mais je ne crois pas que le service de câblodistribution de Northwestel dessert chaque communauté.

929   Vraiment, les petites communautés duquel on parle dans certaines des communautés, il faut les desservir avec le sans-fil. C'est le seul moyen qu'il va avoir, qui ferait du sens vrai.

930   Donc, on peut pas desservir avec un réseau de câblodistribution là où il y en a pas.

931   CONSEILLER PENTEFOUNTAS : Si l'idée est d'offrir ces services aux Canadiens qui habitent dans le Nord, et si l'idée de l'initiative n'est pas de l'ordre intéressé, n'est pas self-serving, que diriez-vous de mettre ces sommes-là dans un fonds qui sera géré indépendamment de Bell?

932   M. BIBIC: Écoutez, I mean that's -- I'm going to answer this one in English.

933   COMMISSIONER PENTEFOUNTAS: Feel free.

934   MR. BIBIC: Okay, thank you.

935   Look, what we're proposing here, I actually consider it kind of a once-in-a-lifetime opportunity to really connect these communities and, you know, if we're going to have a public subsidy mechanism, that should be the government's task, not BCE's. What we're talking here is a public benefit.

936   We understand the policy and the history of the policy of directing 10 percent of the value of a transaction to initiatives which are incremental and in the public interest and serve the broader community that we're intending to serve through the broadcasting system.

937   So if it's a question of being a pseudo-government subsidy, then we would withdraw the proposal and direct it to other things.

938   COMMISSIONER PENTEFOUNTAS: Fair enough.

939   MR. BIBIC: But we will have lost the wonderful opportunity for the consumers, the creators, the communities in these areas, who, frankly, without this, will probably never be able to participate in a modern broadband and broadcasting ecosystem.

940   So that will be the opportunity lost. Another opportunity for the broadcasting system would be seized with an alternative proposal that we would come to you with.

941   COMMISSIONER PENTEFOUNTAS: I don't understand how the creators would lose out on --

942   MR. BIBIC: Well, the folks up there who want to engage and create content and communicate with their brethren in the south of Canada or around the world. We're talking about the creators in those communities, not just the consumers of content in those communities. It goes both ways.

943   CONSEILLER PENTEFOUNTAS : O.K. J'ai bien saisi le sens de votre réponse, mais juste pour terminer sur quelques questions et quelques interrogatives qui ont ressorti de votre document.

944   Il y en a également d'autres qui disent qu'on est en train de contribuer à un secteur, un bénéfice, à un secteur qui est exempté du système comme tel. Ça revient à la question du câblo tantôt.

945   Comment répondriez-vous à cette proposition?

946   M. BIBIC: Bien, c'est dans l'approbation de l'acquisition de CTV l'année dernière.

947   CONSEILLER PENTEFOUNTAS : 2011.

948   M. BIBIC: 2011 et celle de 2010 avec Shaw Canwest. Il y a une portion des fonds, des bénéfices tangibles qui ont été alloués au contenu digital, new media.

949   Donc, ça s'est fait déjà auparavant. C'est dans le même genre de...

950   CONSEILLER PENTEFOUNTAS : On garde ça à 10 pour cent. Il y a une espèce de...

951   M. BIBIC: Oui, ça c'est bien compris. Mais là on parle d'une question d'infrastructure.

952   CONSEILLER PENTEFOUNTAS : Et deuxièmement, il y avait une affaire qui est arrivée une fois dans la vie moderne d'un pays. On est allé d'un système analogique à numérique.

953   Et on a mis une certaine somme suite à l'acquisition de Shaw par... de Canwest par Shaw pour ces fins-là. C'est ce qui a augmenté un petit peu le taux usuel. On s'entend là-dessus?

954   M. BIBIC: Oui, on l'a fait aussi avec l'acquisition de CTV par BCE, aussi avec les... il y a un montant de 60 millions qui a été alloué à la capacité du service satellitaire de Bell télé.

955   CONSEILLER PENTEFOUNTAS : O.K. C'est ça. O.K.

956   Dernier point sur ça.

957   Il y en a également, ceux et celles qui aimeraient ça avoir un équilibre entre les deux langues, surtout en tenant compte du fait que deux tiers des actifs à peu près, que Bell est en train d'acquérir d'astral, se passe en français.

958   Et qu'une tentative doit être mise en place pour essayer de refléter ça dans les avantages tangibles.

959   Et quand on rajoute ce 40 millions, ça crée un déséquilibre considérable.

960   Et il y en a, ceux et celles qui peuvent dire que ça sera fait certainement par des Francophones qui vont bénéficier de ce 40 millions-là. Et conséquemment, ça doit aller dans la colonne des services qui ne sont pas d'ordre francophone.

961   Est-ce que Bell est le moindrement préoccupé par ce déséquilibre?

962   M. BIBIC: Bien, je ne crois pas qu'il y ait un déséquilibre du tout si vous, soit vous avez accès à notre déclaration d'ouverture ce matin. Il y a l'annexe2.

963   CONSEILLER PENTEFOUNTAS : M'hmm.

964   M. BIBIC: Et vous voyez qu'on a indiqué que les bénéfices nets, il y aurait un montant de 180.5 millions de dollars qui serait dirigé vers la télévision et en effet, 67 pour cent des sommes seraient pour le contenu français, francophone.

965   CONSEILLER PENTEFOUNTAS : Avant le changement, c'était avec 140. Alors le 40 millions additionnel, ça ira complètement...

966   M. BIBIC: Oui. Là, on est rendu aux deux tiers.

967   CONSEILLER PENTEFOUNTAS : Je suis d'accord avec vous.

968   Si on continue les avantages tangibles et on regarde les «Festivals du film», il y avait un sept millions qui est dédié à des «Festivals de films». Et vous avez mis ce sept millions-là dans les avantages à l'écran et non pas dans les avantages sociaux.

969   Est-ce que vous avez une façon de justifier de mettre cette somme-là dans les avantages à l'écran et non pas sur les avantages sociaux?

970   Parce que ça, ça crée un déséquilibre, si c'est le cas.

971   M. BIBIC: Bien, je crois pas que ça... On peut le mettre sous les avantages sociaux si vous voulez en bout du compte.

972   CONSEILLER PENTEFOUNTAS : Oui, vas-y.

973   M. BIBIC: En bout de ligne.

974   Si on inclut le montant d'argent qu'on propose pour les «Festivals de films», ça nous donne 74.4 pour cent des montants qui seraient pour le contenu sur l'écran.

975   Et si on l'élimine, bien... si on considère que le sport ou l'appui des festivals devrait être un avantage social, le pourcentage serait 71.6 pour cent.

976   Donc, ça n'a pas vraiment un impact majeur si on le considère...

977   CONSEILLER PENTEFOUNTAS : Non, je comprends. Surtout maintenant que vous avez rajouté le 40 millions.

978   M. BIBIC: Oui.

979   CONSEILLER PENTEFOUNTAS : Puis c'est bien. Ça rentre dans la catégorie des lapins ou des lapinets, si vous voulez, de ce matin, suite aux commentaires du président.

980   Alors, ça vous laisse un certain écart entre ce qui est dépensé habituellement sur l'écran. Vous serez d'accord avec moi sur ce point-là?

981   M. BIBIC: Pardon?

982   CONSEILLER PENTEFOUNTAS : D'habitude, on arrive à 85 pour cent entre les avantages sociaux et les avantages à l'écran.

983   M. BIBIC: Ah, c'est pas... Mais je dirais que le Conseil a certainement clairement indiqué auparavant qu'il a une préférence pour que la majorité des fonds soient alloués pour le contenu sur l'écran, malgré que le 95 - 15 pour cent n'est pas une politique ferme.

984   Et en effet, on a discuté des deux transactions récentes, BCE, CTV et Shaw Canwest où les montants étaient...

985   CONSEILLER PENTEFOUNTAS : Inférieurs.

986   M. BIBIC: Inférieurs à 80 pour cent.

987   CONSEILLER PENTEFOUNTAS : Quand vous avez parlé des festivals, est-ce que vous avez la liste des festivals dont vous avez l'intention d'encourager par cette somme-là?

988   M. BIBIC: On n'a pas encore déterminé les festivals. On n'a pas encore fait de décision formelle là-dessus.

989   CONSEILLER PENTEFOUNTAS : O.K. Penseriez-vous avoir une meilleure idée d'ici la fin de la semaine?

990   M. BIBIC: On pourrait le faire, oui.

991   CONSEILLER PENTEFOUNTAS : Et également, nous indiquer dans quelle langue le partage de cette réunion va se faire, si ça va être moitié/moitié ou non.

992   M. BIBIC: D'accord. Mais pour...

UNDERTAKING

993   CONSEILLER PENTEFOUNTAS : Je pense que ça l'a rentré ce matin?

994   M. BIBIC: Oui. Si vous voyez l'annexe 2, le montant est un peu inférieur... le montant est rendu un peu inférieur à cinq millions: 4.2 millions en anglais, 0.7 million en français. C'est une question du nombre de festivals qu'on a en anglais, et non de festivals qu'on voit en français pour les films.

995   CONSEILLER PENTEFOUNTAS : Et sur la question de la supplémentarité, ne diriez-vous pas que d'habitude, surtout Astral et même Bell aurait déjà investi cette somme envers des festivals canadiens de films?

996   Ça n'a pas toujours été quelque chose que vous faites dans le cours de vos affaires habituelles?

997   M. BIBIC: Non, mais on appui, on appui plusieurs festivals de films. On comprend bien que le film est important en ce qui concerne la radiodiffusion, c'est très important pour Astral, ça l'a été pour Bell aussi.

998   On a souvent appuyé les «Festivals de films» et souvent ça a été en utilisant les bénéfices nets.

999   Il y a eu des transactions précédentes pour Astral et pour Bell et il y a plusieurs des allocations qui vont prendre fin bientôt et on pourrait peut-être continuer à appuyer ces «Festivals de films».

1000   Et, je vais vous revenir vendredi avec une liste qu'on propose.

1001   Et aussi, on apprécie bien l'obligation que les dépenses soient en supplément.

1002   CONSEILLER PENTEFOUNTAS : O.K. Pour y arriver à l'initiative pour l'éducation santé mentale. Et la question se pose en plusieurs...

1003   Comment est-ce qu'on fait pour relier cette initiative à la radiodiffusion, pour moi et d'autres qui ont lu le document que vous avez fourni au Conseil, c'est pas tout à fait clair.

1004   Alors, je vous donne l'opportunité de nous éclaircir sur ces points-là.

1005   MR. BIBIC: Okay. On that one if you allow me in English again.

1006   So there was some confusion probably --

1007   COMMISSIONER PENTEFOUNTAS: There was some back and forth as well.

1008   MR. BIBIC: There was some back and forth and some confusion, probably lack of clarity in our initial supplementary application.    I think we've made it quite clear in the reply submission of August 20th what we are proposing here is to dedicate these funds -- so we're talking here of $3.5 million -- exclusively to on-screen programming related to the mental health issue. So it's completely on screen and it's going to support a wonderful initiative.

1009   COMMISSIONER PENTEFOUNTAS: A wonderful initiative, I agree. Initiative louable, sauf, est-ce que ce n'est pas quelque chose qu'on fait dans le cadre de nos contributions envers des oeuvres caritatives?

1010   MR. BIBIC: This will be over and above the commitment that Bell has made to support mental health over a period of five years.

1011   And, as Kevin points out to me here, we also committed that all this content will be independently produced.

1012   COMMISSIONER PENTEFOUNTAS: Okay. And made available to all?

1013   MR. BIBIC: Well, it depends what the -- so, for example --

1014   COMMISSIONER PENTEFOUNTAS: It won't be simply public service announcements, I mean?

1015   MR. BIBIC: No, no. Let's say it's a documentary on mental health --

1016   COMMISSIONER PENTEFOUNTAS: Yes.

1017   MR. BIBIC: -- and it airs on CTV or Discovery -- it will air only on Discovery or CTV, et cetera, but CTV or Discovery is available to all BDUs who want to carry it.

1018   COMMISSIONER PENTEFOUNTAS: Okay.

1019   MR. BIBIC: Now if there's an online component or a new media component to that, it would be available as well but it would be in full respect of good business logic and of course CRTC's VI rules.

1020   COMMISSIONER PENTEFOUNTAS: And some kind of tie to broadcasting?

1021   MR. COPE: Yes. And I just want to make sure -- in fairness to the Commission, I understand how unusual the request is, so let me make it clear.

1022   This in now way whatsoever impacts the $50-million commitment and the ongoing commitments that Bell has made in the area of mental health at all. So we're not asking for any substitution at all.

1023   What we're saying, as Mr. Bibic has said, is if we can develop some content through the benefits package, then if it's that cause, then that's a benefit we think to all Canadians. But again, we'll leave that at the discretion of the Commission.

1024   CONSEILLER PENTEFOUNTAS : O.K. Pour retourner sur le 40 millions, 40,1 qui a été proposé ce matin, que vous avez rajouté à vos avantages tangibles de 140 ou 139 millions d'il y a quelques mois, est-ce que vous provenez à cette somme-là en rajoutant exclusivement les services en copropriété d'Astral, Historia, Série+, Télé Tune?

1025   Est-ce que... comment est-ce que vous arriviez à ces chiffres-là?

1026   M. BIBIC: Ce qu'on a fait...

1027   CONSEILLER PENTEFOUNTAS : Mis à part les copropriétés.

1028   M. BIBIC: C'est les copropriétés. C'est la valeur des copropriétés, des services francophones et anglophones d'Astral.

1029   CONSEILLER PENTEFOUNTAS : O.K.

1030   M. BIBIC: Et on a pris 50 pour cent de la valeur étant donné qu'Astral est propriétaire à 50 pour cent de ces services-là.

1031   Et ça, ça donne un montant... le montant additionnel de 40.2.

1032   CONSEILLER PENTEFOUNTAS : Et l'évaluation est issue de l'étude de Price Waterhouse ou ailleurs...

1033   M. BIBIC: C'est exact. C'est exact.

1034   CONSEILLER PENTEFOUNTAS : Et est-ce que ces sommes-là vont aller à des producteurs indépendants? Est-ce que c'est la nature de votre engagement?

1035   M. BIBIC: je ne crois pas que le montant... tout le montant au complet, mais la prépondérance irait à la production indépendante.

1036   CONSEILLER PENTEFOUNTAS : Et ça a été déposé ce matin ou est-ce que c'est du travail qui reste à faire?

1037   M. BIBIC: Bien, il y a 40 millions: 20 millions des 40 millions seraient alloués aux nouveaux services de canal des nouvelles qu'on a proposés ce matin.

1038   CONSEILLER PENTEFOUNTAS : Ah!

1039   M. BIBIC: Donc, la moitié serait...

1040   CONSEILLER PENTEFOUNTAS : Dans les productions.

1041   Kevin, is that going to be PNI money?

1042   MR. GOLDSTEIN: Sorry. I'll give you the breakdown of where it's going to go, the $41.2.

1043   COMMISSIONER PENTEFOUNTAS: Great. Thanks. In all fairness, because it is new and no one else has sort of had a chance to look at it.

1044   MR. GOLDSTEIN: So $20 million to the new French-language news service; $10 million to Canada's 150th celebration, split $5 million English, $5 million French --

1045   MR. CRULL: I am very sorry. That's documentary PNI independent.

1046   COMMISSIONER PENTEFOUNTAS: That $10 million?

1047   MR. CRULL: Yes.

1048   COMMISSIONER PENTEFOUNTAS: Okay.

1049   MR. GOLDSTEIN: And an additional $5 million to the broad French-language PNI envelope.

1050   COMMISSIONER PENTEFOUNTAS: Okay.

1051   MR. GOLDSTEIN: Plus $6.2 million to social benefits initiatives.

1052   COMMISSIONER PENTEFOUNTAS: Oh, that's the other question. That $6.2 million in terms of social benefits. First of all, on the PNI, you know we love PNI.

1053   So now back to the social benefits on that $6.2 million.

1054   Avez-vous d'autres choses à mettre autour de ce 6,2 millions? Parce que j'ai pas vu exactement où ça va aller, ces sommes-là.

1055   M. BIBIC: Ça, on pourrait le faire vendredi aussi.

1056   CONSEILLER PENTEFOUNTAS : D'ici vendredi, on va avoir une réponse à ça?

1057   M. BIBIC: Plusieurs propositions très valables. Il va falloir...

UNDERTAKING

1058   CONSEILLER PENTEFOUNTAS : O.K. Sur les sommes qui vont être dédiées ou allouées à votre service de nouvelles franco-canadiennes, il y a 10 millions, là, si j'ai bien compris -- ou 20 millions, pardon.

1059   M. BIBIC: Vingt millions.

1060   CONSEILLER PENTEFOUNTAS : Mais ce service-là, n'eut été de la transaction, vous ne l'auriez pas lancé?

1061   Is that incremental? I mean do you understand -- the point I'm trying to make here, Kevin, is that you're using tangible benefits to launch a new service. It has a taint or a scent of self-serving.

1062   MR. CRULL: There's no question --

1063   COMMISISONER PENTEFOUNTAS: I'll let you answer that.

1064   MR. CRULL: There's no question that this would not happen without the tangible benefits. It's a dilutive business case and it wouldn't make sense for us to do it. So there's no plans and I don't see it happening without it. I believe that Astral prior to this has looked at it for some time as well.

1065   COMMISSIONER PENTEFOUNTAS: Ergo the incremental nature of the spend?

1066   MR. CRULL: Yes, absolutely.

1067   CONSEILLER PENTEFOUNTAS : Monsieur Parisien?

1068   M. PARISIEN : Non, c'est exactement ça.

1069   CONSEILLER PENTEFOUNTAS : C'est exact, O.K.

1070   Et le 150, ce serait bilingue. Il va y avoir des documentaires et autres j'imagine sur...

1071   M. BIBIC: Je pourrais demander à Rick Brace peut-être d'expliquer un peu plus ce qu'on a l'intention de faire autour du 150e.

1072   CONSEILLER PENTEFOUNTAS : Brièvement, tant et aussi longtemps que...

1073   MR. BRACE: This is incredibly exciting for me, Mr. Commissioner.

1074   We sat down and thought, you know, what can we do that's going to be very special and certainly incremental to what we would normally do and leave a heritage to the country of Canada, and so we've conceived a project here called "Canada 150," the working title at this point in time that will really look through various projects, at the achievements, the heroes, the struggles and certainly the heritage of this country.

1075   It will start 150 days prior to July 1st, 2017 -- so 150, so February 1st -- leading up to the actual Canada Day, where of course we would do a major production honouring Canada's birthday. But there are several components along the way. For example --

1076   COMMISSIONER PENTEFOUNTAS: I don't want to interrupt you and we love anything Canadian, but you would do that anyways on Canada Day, on the 150th?

1077   MR. BRACE: We haven't to this point in time.

1078   COMMISSIONER PENTEFOUNTAS: You haven't made those plans?

1079   MR. BRACE: That's right.

1080   COMMISSIONER PENTEFOUNTAS: I understand the documentaries and that's honourable, to honour and document great achievements by great Canadians, but I want you to sell me on the incremental aspect of the spend.

1081   MR. BIBIC: Mr. Vice-Chairman, this is incremental -- this would be an incremental spend over and above our CPE and PNI obligations under GLR - Group licence renewals.

1082   So the point is we are going to be spending these on-screen monies over and above that PNI obligation and -- it is going to be independently produced. And what we are proposing is a suite of programming around Canada's 150th, at which we are not planning to do otherwise, but that is not the -- the point is not where and how or what kind of programming; although this is really exciting. The key point for incrementality is that this is over and above our regulatory PNI obligation.

1083   MEMBER PENTEFOUNTAS: Okay; thanks so much.

1084   Just briefly on -- so l'aspect peut-être intangible des bénéfices; vous avez mentionné qu'un des bénéfices est intangible, si vous voulez; que vous allez offrir de la concurrence, surtout au Québec, face à Quebecor. Vous les avez décrits comme un géant et l'argument peut se faire.

1085   Mais comment voyez-vous cette concurrence-là? Parce que si on regarde les propriétés d'Astral et de Bell combinées, et je dirais qu'il constituera une force dans le domaine spécialisé; tandis que TVA, leur force est vraiment dans du conventionnel.

1086   Je ne vois pas comment cela constitue une véritable concurrence - I don't know if Kevin wants to answer the question - I don't see the true competitive nature of the offer, given that they are concentrated on conventional, by far, and your strength will be in specialty services.

1087   MR. CRULL: Well, I think from the viewer's perspective and the consumer's perspective, that is a distinction that they don't make. They watch television and they consume entertainment news and sports programming. And increasingly, the Commission is, I think, well aware of the shifts in viewing habits.

1088   But certainly, when we look at consumer choice with the remote control in their hand; that those choices aren't made with regard to whether it is a specialty or conventional channel.

1089   The consumer benefits -- I would like for -- I think that Mr. Greenberg or Mr. Parisien can speak to the difference in their ability to compete with Quebecor in this new organization versus being alone. But we think the consumer benefits are significant, and I think that it is useful just to tick through, I think, because the list is long and it was central, absolutely, to our strategic rationale for the transaction.

1090   Significant new content that would be produced and in fact new production initiatives with Cirque du Soleil and others. We expect that -- not just new content on existing channels but we expect new channels to be made available to consumers to satisfy more of their viewing needs.

1091   Of course, the tangible benefits is a significant investment in and of itself, and the multi-platform initiative that was announced this morning is a consumer benefit by which, after significant effort by all of the existing participants, nobody has found a business model that makes sense of the capability to put the pieces together to offer the consumers a solution such as this.

1092   And then finally, I think that that what is really relevant is -- we have talked a lot about competitive aspect of this, but the stimulation that that causes; that the domino effect on investment and improvements in content and in quality of programming and in new services --

1093   We saw TVA Sports get created and launched largely after we announced our DS-2 and we think that Bell's commitment to CTV and launching our DS-2 triggered that, which again is a domino benefit to consumers of this competitive environment.

1094   So they are significant and I think these do come about as a result of a transaction like this, not as a result of normal organic operations.

1095   MEMBER PENTEFOUNTAS: But the net impact of this domino effect, given your strategy, would be to weaken conventional television in Quebec even further.

1096   MR. CRULL: Well, I think that the record is pretty profound and clear when you look at the popularity of TVA in French-language television. I think that when you look at the top 100 television shows viewed in the province, correct me if I am wrong, some --

1097   MR. COPE: 105 -- Vice-Chair, do not ask my President to talk about how he is not going to be competitive against Quebecor, please, because that is absolutely how he is going to make his living; it is to make sure, absolutely, that the consumer chooses to watch our product and content over TVA's product and content.

1098   So I am not going to let him explain how he is not going to do that

1099   MEMBER PENTEFOUNTAS: I look at the numbers at least twice a week in Quebec in terms of ratings and who is doing what. So I am fairly well aware of -- well-versed on what is going on.

1100   That being said, there will be a weakening of conventional television if you succeed in your strategy; not that there is anything wrong with that, but that is my -- given the state of conventional television today - and you know it better than most, Mr. Crull, given your valiant efforts with conventional television in English Canada.

1101   MR. CRULL: I think -- I understand the concern. I think that one would observe that Quebecor has invested in specialty channels of their own and has gotten carriage on Bell TV, of all of those. So they have broad carriage in the province and it is -- they are mending their mix through those investments as well.

1102   But -- look; I think in French television and the province is so unique, as the Vice-Chair knows, that it is going to be a long time, I think, before conventional television in French language suffers the same kind of profit challenges as in the English market.

1103   But undeniably, niche programming and new choice in specialty is serving viewers, which is causing them to watch new sources and it is causing them to watch less of the mass-produced primetime-type programming. And that is a trend that we think is understood.

1104   MEMBER PENTEFOUNTAS: So the trend would hopefully be that we would be attracting new viewers; taking them off the YouTube page more so than going after the TVA clientele?

1105   MR. CRULL: No question that the younger demographic --

1106   MEMBER PENTEFOUNTAS: I don't mean to give you the right answer, just --

1107   MR. CRULL: Yes -- Well, no question that the multi-platform initiative we have talked about this morning.

1108   MEMBER PENTEFOUNTAS: Yes.

1109   MR. CRULL: What we didn't get in is it is very much geared towards that younger demographic and keeping them in the system.

1110   MEMBER PENTEFOUNTAS: -- I am sorry; just -- go.

1111   MR. COPE: Just -- a little earlier on, just to frame. I mean if you think of the competitor dynamic in Quebec that will take place; I think competitive intensity for advertisers will go up; in other words, TVA will realise that Bell is really after that advertisement revenues, so there will be advertising competition. What competition? Obviously, for the end-users, you are inferring in terms of what we are going to do, so the consumer piece; competition for staff; competition for content; every level of competition will increase and improve in the province of Quebec as a result of Bell and Astral coming together.

1112   So I think that -- you know, you were asking the question initially: Is there a benefit with the separation of the conventional and specialty? I think what you actually have is the market will become more competitive, clearly, on those four elements.

1113   MEMBER PENTEFOUNTAS: I appreciate the commercial approach; sometimes you lose track of that in the regulatory world and you have been sort of hammering on that since this morning.

1114   That is fine and I think it will be a plus to the system if we can bring in new viewers and retain the viewers that we have.

1115   On your multi-platform project that was mentioned this morning; does that require that you have content in both languages for it to launch?

1116   MR. CRULL: Does it require it? No. Is it part of the plan? Absolutely. We absolutely believe that satisfying both languages with a solution like this is the right way to serve the clients and that the properties that we have together; absolutely.

1117   MR. COPE: So, you know, if you look at the launch of that product against Netflix; Netflix internally, unless I am wrong, as of today, does not have a French offering in the marketplace; it is English. So clearly, to offer a Netflix competitor; we will be launching this. We have talked about the real importance of the English pay services combined with CTV's own English side. And the unique part of this, of course, is being able to do it both in French and in English as a result of this merger.

1118   So the answer really is, from my end: Nothing is required on either, but to have a Netflix competitor, we have to have English and to have something new and exciting in the province of Quebec as a result of this is bringing these two assets together. And I think that will again - back to your earlier comment - I think that it will just intensify competition in the province of Quebec.

1119   MEMBER PENTEFOUNTAS: And has there been any thought given to the fact that it will be a bilingual service to attracting French Canadian audiences to English Canadian content and English Canadian audiences to French Canadian content?

1120   MR. CRULL: Well, certainly, I know it has been a long-standing effort in the industry for content to be able to cross -- be truly bilingual. I think of Bon Cop - Bad Cop and initiatives of this sort in the past.

1121   MEMBER PENTEFOUNTAS: It is about the only true success thus far, unfortunately.

1122   MR. CRULL: That is right, so we are looking for number 2.

1123   But it is something that is part of the vision, both through our multi-platform initiatives but also through our relationships with producers, both in the province of Quebec as well as throughout Canada.

1124   MEMBER PENTEFOUNTAS: And can you -- Monsieur Parisien, vous vouliez rajouter?

1125   MR. PARISIEN : But it is our priority to give a very good -- the best possible service in French; that is the objective; and have the best possible service in English.

1126   Obviously, there would be cross-overs; there have always been; TMN have always aired good Quebec-origin films and translated, and vice-versa.

1127   MEMBER PENTEFOUNTAS: I watch it.

1128   MR. PARISIEN: And we would continue doing that. But our priority would be to have a very good service in French and a very good service in English.

1129   CONSEILLER PENTEFOUNTAS : Oui, je comprends, mais ce serait quand même une idée et un effort louable d'essayer de --

1130   M. PARISIEN : Oui; tout à fait. Et on va essayer de -- et on va faire cet effort, c'est évident.

1131   CONSEILLER PENTEFOUNTAS : -- de traverser ses frontières linguistiques --

1132   M. PARISIEN : Oui; en espérant qu'il y a plus de films qu'un par année qui peuvent le faire.

1133   CONSEILLER PENTEFOUNTAS : Oui; qu'une par génération qui peut le faire.

--- Laughter

1134   MEMBER PENTEFOUNTAS: Back to this $80 million -- il y avait un 80 millions qui a été annoncé vers le 20 août ou dans ce coin-là, qui n'a pas été vu ailleurs. Y a-t-il une manière de mettre un petit peu de chaire autour de cet os-là? De quoi s'agit-il, Monsieur Bibic?

1135   M. BIBIC : Une grosse partie du 80 millions étaient les montants dans la proposition -- dans les tangibles -- les (indiscernible)

1136   CONSEILLER PENTEFOUNTAS : Les 40 millions qui avaient été annoncés ce matin?

1137   M. BIBIC : Non, non --

1138   CONSEILLER PENTEFOUNTAS : Est-ce qu'on retire cela du 80 millions?

1139   M. BIBIC : Non; cela, c'est du surplus, là.

1140   CONSEILLER PENTEFOUNTAS : OK.

1141   M. BIBIC : Le 80 millions faisait référence à la proposition de bénéfices net qu'on avait avant et la grande majorité du 40 millions était les bénéfices -- du 40 millions; étaient les bénéfices net qui allaient être dédiés au contenu francophone. Et il y avait un autre montant - que je ne veux pas annoncé - mais il y avait un autre montant qui serait des investissements additionnels de Bell envers du contenu francophone, ici à Montréal et au Québec.

1142   Et maintenant, le montant a augmenté. Maintenant, naturellement, on est rendu à un montant qui excède 90 millions maintenant.

1143   CONSEILLER PENTEFOUNTAS : Mais d'après vos calculs - puis je ne veux pas me perdre dans les chiffres, là, parce que ce que je veux essayer de comprendre; ces 80 millions, d'où cela sort? Parce que pour moi, cela est tombé du ciel en plein été, puis c'est toujours le bienvenu.

1144   Sauf que si je regarde l'offre initiale; l'émission d'intérêt national, 60 millions.

1145   M. BIBIC : Il avait 75 millions dans l'offre -- il y avait 75 millions dans l'offre initiale pour le contenu francophone.

1146   CONSEILLER PENTEFOUNTAS: Oui; tout à fait.

1147   M. BIBIC : Et on allait ajouter à l'interne un autre cinq millions de dépenses pour une autre initiative qu'on avait en tête.

1148   CONSEILLER PENTEFOUNTAS: Alors le 80 millions qui a été annoncé faisait déjà partie de l'offre initiale que vous avez déposée plus tôt cette année?

1149   M. BIBIC : Donc pour répondre d'une différente façon; si on émettait ce communiqué de presse aujourd'hui --

1150   CONSEILLER PENTEFOUNTAS : Oui?

1151   M. BIBIC : -- on dirait : au-delà de 90 millions sera investi par Bell Média dans du contenu francophone.

1152   CONSEILLER PENTEFOUNTAS : OK; OK. There is no new money there? In that $80 million that was announced this summer?

1153   MR. BIBIC: Well --

1154   MEMBER PENTEFOUNTAS: Besides this morning's top-off?

1155   MR. BIBIC: The new -- the $80 million was $75 million that we would invest incrementally as a result of this transaction, because of a tangible benefit.

1156   MEMBER PENTEFOUNTAS: It was already part of the proposition --

1157   MR. BIBIC: It was already part of the proposition, but there was an extra $5 million on top of that, which led us to the 80.

1158   MEMBER PENTEFOUNTAS: OK, which --

1159   MR. BIBIC: Since then, there have been more investments. There has been the Cirque du Soleil announcement.

1160   MEMBER PENTEFOUNTAS: Yes.

1161   MR. BIBIC: And today, the extra $40 million --

1162   MEMBER PENTEFOUNTAS: The Cirque du Soleil is part of the tangible benefits?

1163   MR. BIBIC: No; that is -- you were asking about the 80 million.

1164   MME TURCOTTE : Non, c'est -- Monsieur le Vice-président, c'est un 15 millions additionnel qu'on veut investir dans une co-production; dans une compagnie conjointe avec le Cirque du Soleil, mais un 15 millions qui vient de Bell, qui est au-dessus et au-delà de tous les bénéfices.

1165   CONSEILLER PENTEFOUNTAS : OK. Alors on est rendu à 95 millions?

1166   MR. BIBIC: So --

1167   CONSEILLER PENTEFOUNTAS: Du côté francophone.

1168   MME TURCOTTE : On a 90 plus; on a 90 ici qu'on vous propose tu côté francophone dans les bénéfices tangibles, et on a 15 millions qui est additionnel pour la propriété conjointe avec le Cirque du Soleil.

1169   CONSEILLER PENTEFOUNTAS : Cirque du Soleil? Aucun rapport avec les avantages tangibles qui --

1170   MME TURCOTTE : Aucun rapport avec les avantages.

1171   CONSEILLER PENTEFOUNTAS : Bien, en tout cas, c'était peut-être juste moi qui étais confondu quand je lisais cela cet été, mais cela porte à confusion quand on fait cette annonce-là et --

1172   M. BIBIC : On recommence à neuf. Aujourd'hui, l'engagement de Bell pour le contenu francophone est au-delà de 100 millions. Le 90 millions que vous voyez; 89.35 millions que vous voyez maintenant à l'annexe 2; il y a un autre cinq millions; et le 15 millions à propos du Cirque du Soleil. Donc la question --

1173   CONSEILLER PENTEFOUNTAS: On a commencé à 75 - juste pour être clair, Monsieur Bibic - on a commencé à 75 millions dans votre proposition initiale, en français. On a rajouté cinq millions cet été; l'annonce qui est apparue dans les journaux, sans plus de détails.

1174   M. BIBIC : C'est exact.

1175   CONSEILLER PENTEFOUNTAS : Mais on a rajouté un 15 millions avec cette co-production, collaboration avec le Cirque du Soleil.

1176   MME TURCOTTE : C'est bien cela.

1177   CONSEILLER PENTEFOUNTAS: On est rendu à 95? Et --

1178   M. BIBIC : Et on ajoute le montant -- les sommes additionnelles de bénéfices net; le 20 million pour le Canal Nouvelles, et cetera.

1179   CONSEILLER PENTEFOUNTAS : Pour les nouvelles franco; on est rendu à 106? OK.

1180   M. BIBIC : On va -- j'ai une bonne idée : vendredi, on vous revient avec une autre annexe et on va tout détailler.

1181   CONSEILLER PENTEFOUNTAS : OK.

1182   M. BIBIC : On va vous montrer.

1183   MR. COPE: Okay. I just want to make sure you haven't spent more money than I think I have spent, too; I want to see the page now too.

--- Laughter

1184   MR. COPE: I am trying; it is not easy.

1185   MEMBER PENTEFOUNTAS: And you also mentioned, Sir, that sort of multi-platform approach and it goes to a lot of what has been said about un comportement anti-concurrentiel; this sort of anti-competitive behaviour that has been enunciated, avec raison ou sans, par d'autres -- quelques-uns de vos concurrents.

1186   Et qu'est-ce qui a empêché Astral - et ce sera peut-être une question à Monsieur Greenberg et à Monsieur Parisien - d'être présent sur les quatre fenêtres qui ont été mentionnées par Monsieur Cope plus tôt ce matin? Pourquoi faut-il s'aligner avec Bell pour pouvoir réussir dans du sans-fil, en tant qu'exemple?

1187   Et je veux qu'on s'adresse plus précisément sur les allégations ou les accusations de la part des concurrents de Bell que vous êtes mieux d'être branché avec eux sinon votre contenu, là, cela va avoir de la misère à voir le jour dans les plateformes autres que la télé comme tel?

1188   M. PARISIEN : Moi, je vais répondre à la première partie de votre question : pourquoi Astral ne fait pas cela?

1189   CONSEILLER PENTEFOUNTAS : Oui.

1190   M. PARISIEN : Et puis vais Bell répondre sur les accusations.

1191   J'ai fait allusion ce matin -- vous savez, il y a des projets chez Astral qui sont en marche pour avoir une application avec The Movie Network et HBO.

1192   CONSEILLER PENTEFOUNTAS : Go?

1193   M. PARISIEN : Oui. Et cela,c'est poussé à la limite de nos ressources, de nos moyens, de ce qu'on peut faire. Et mise de côté la question des droits, pourquoi ne pas aller sur les autres fenêtres, les autres plateformes, et cetera -- on ne peut pas aller plus vite qu'on va là. On fait le maximum de ce qu'on peut faire chez Astral, ce qui est déjà, je considère, beaucoup, quand je regarde le paysage canadien.

1194   Et si on veut faire l'application française, francophone, de ce même service-là, c'est d'autres argents, d'autres investissements, d'autres ressources, et c'est juste une question de temps -- on ne peut pas tout faire à la fois, et c'est ce qu'on a décidé de faire. On faisait The Movie Network puis on faisait HBO. Peut-être que dans un an ou deux on aurait fait le français. Et après cela, on aurait passé peut-être à d'autres plateformes que la télé.

1195   Mais l'arrivée de Bell dans le portrait; juste à cause de la profondeur, les ressources, les technologies, l'expertise qu'ils ont; cela ne fait qu'accélérer ce qu'on peut faire, nous autres, sur ces plateformes-là.

1196   CONSEILLER PENTEFOUNTAS : Mais est-ce que la profondeur de vos poches qui vous empêche de le faire, Monsieur Parisien?

1197   M. PARISIEN : Non; c'est une question --

1198   CONSEILLER PENTEFOUNTAS : Ou le fait que vous n'êtes pas intégré?

1199   M. PARISIEN : Non; c'est une question de choix, OK? A un moment donné il y a tant -- il y a une enveloppe budgétaire et de capital de temps et -- qu'on peut juste choisir certains des projets, puis on en a plusieurs qui sont en marche. Mais on ne peut pas tous les faire en même temps. Puis c'est cela, la vraie raison pour Astral. Astral a eu ce comportement-là sans être intégré du tout. Ce n'est pas une question que Bell est intégré qui change quelque chose; c'est la profondeur.

1200   CONSEILLER PENTEFOUNTAS : Question de ressources?

1201   M. PARISIEN : Voilà.

1202   CONSEILLER PENTEFOUNTAS : Je retourne à la profondeur des poches qui manque.

1203   M. PARISIEN : Oui, mais -- je comprends quand vous parlez --

1204   CONSEILLER PENTEFOUNTAS : Puis il y a une expertise qui s'ajoute à cela?

1205   M. PARISIEN : Je comprends quand vous parlez de profondeur des poches puis je ne peux pas le nier; c'est vrai que c'est là, mais il y a aussi l'expertise, les connaissances. Bell fait de la recherche et du développement dans plusieurs domaines dont on va pouvoir profiter sur le cellulaire, la mobilité, que nous, on ne serait jamais allé.

1206   Mais présentement, on va commencer les discussions avec eux autres; comment mettre nos produits sur la mobilité; ce qu'on n'aurait pas pu faire tout seul; pas du tout.

1207   Je vais laisser Bell continuer.

1208   MR. GREENBERG: Before Bell, if I could interrupt for second, Mr. Vice-president?

1209   MEMBER PENTEFOUNTAS: Please do.

1210   MR. GREENBERG: I think it is misunderstood, the problems facing us, to grow. And that if this deal doesn't happen -- we have looked for two years, as has every independent broadcaster and BDU in this country, to try to get services like a Netflix application in Canada. None of us had found it viable. It would be impossible for us and years would go by, and we would lose the chance to repatriate money to the Canadian broadcast system. It would disappear, as it has -- just look at the growth in your own report, of Netflix. How it has grown from a year ago until today, and probably will continue to grow if we don't do anything about it. If we don't offer Canadians an alternative, they will keep migrating and then it is going to get compounded by other large American firms like Google; like Amazon; and like iTunes.

1211   MEMBER PENTEFOUNTAS: I understand that, but the evidence has shown thus far that it has been complimentary growth on the part of Netflix.

1212   MR. GREENBERG: Well, you know, I don't know if you read reports, but as an example, if you look at the last --

1213   MEMBER PENTEFOUNTAS: I try.

1214   MR. GREENBERG: Well, this one happens to be by Scotia Bank; it is not my own. If you look at what happened at the growth of pay TV over the last four years as compared to this year; it has stalled.

1215   MEMBER PENTEFOUNTAS: I heard that; yes.

1216   MR. GREENBERG: So what happened? There's been growth; it is now stalling; and if we don't do anything, it will decrease. And if we are all sitting here thinking that everything is okay and -- the horse will have left the barn and then it will be too late. Because once the rights are gone, they are gone for five and ten years.

1217   If we cannot afford to buy those rights, there won't be a viable pay system.

1218   MEMBER PENTEFOUNTAS: I don't want to do the (indiscernible) over again, but is that a viable model, Netflix, at eight dollars a month, given that they bought those properties when they were sort of a penny a pound library stock and you are dealing primarily in premium content, on your HBO and TMN services?

1219   MR. GREENBERG: If you look at the press release from Netflix two weeks ago; their objective is to buy first-run programming to show it around the world at the same time. If we don't react to that, we will lose that first-run programming. If we lose the first-run programming, then what is the value of Canadian pay TV?

1220   MEMBER PENTEFOUNTAS: And scale will help you compete on that front?

1221   MR. GREENBERG: The scale is the only way that we can compete.

1222   MEMBER PENTEFOUNTAS: Okay; thanks, Mr. Greenberg.

1223   Mr. Cope, just briefly on --

1224   MR. COPE: Just on the second part of your question.

1225   CONSEILLER PENTEFOUNTAS: Yes; please, if you want to touch on that; I could repeat it, but go ahead.

1226   MR. COPE: Yes; the second part of your question I think -- and obviously, Kevin and Mirko I think will want to make some comments about the version of commercial disputes with Bell as a seller of content to competitors in the market and also other BDU's; that is what you were talking about had asked the question on.

1227   MEMBER PENTEFOUNTAS: Right; anti-competitive sort of practices, to the point where an independent giant, such as Astral, may feel compelled - these are not my words, but I think this gives you a chance to set the record straight; a lot has been said over the last few months; that the offer isn't there for someone like Astral and certainly not for a smaller content provider - you had mentioned (indiscernible) and others - to find a window, a multi-platform proposition for their product, because Bell almost always stands in the way and protects its own content.

1228   MR. BIBIC: So --

1229   CONSEILLER PENTEFOUNTAS: It is worse than you thought, hey?

1230   MR. BIBIC: Well -- yes; our Bell Mobility retail content offer, as George mentioned earlier, does not contain only Bell Media product. In fact, we carry a wealth of content from the ATN- the Asian Television Network; we have a BlueAnt product out there; we had Astral product well before we ever had any discussions to acquire Astral.

1231   MEMBER PENTEFOUNTAS: And you arrived at reasonable commercial terms that allowed you to do that?

1232   MR. BIBIC: Well, of course. For now, I am talking, of course, as the wireless distributor now, Bell Mobility, having done deals with Asian Television Network, Astral, CBC, BlueAnt; their content; add it, then we acquired CTV; put the CTV content on there, the conventional stations and TSN and RDS and The Comedy Network and MuchMusic, and we went out, again, as a distributor. We went out and got NFL content and NHL content.

1233   So we have been able to do those deals commercially.

1234   Now as a content provider, Bell Media has been trying to reach deals to supply content to other Canadian wireless providers, and George talked about the price that we had been asking. In fact, we reached a deal with Videotron. They carry on their wireless service; TSN; TSN 2; RDS and RDS 2.

1235   Now that was the sweetest services that was most relevant to their client-base here in the province, not Comedy Network, et cetera, but they have four core services on their wireless service.

1236   So, we've done deals with others besides Bell Mobility as a content supplier and we've done lots of deals as a distributor with independent programmers for mobile content.

1237   MR. COPE: But also I think the question -- the question also was about, just so I clarify, also in our role as a BDU on the TV side.

1238   And earlier on we had indicated the amount of content that we're distributing as a BDU perspective being -- carrying the most content of any BDU in Canada.

1239   And, Mark, I'll let you --

1240   MR. BIBIC: That's right. On terms of the independent programmers. So, not to, you know, again to go through the detail --

1241   CONSEILLER PENTEFOUNTAS : I understand answer and I had that answer before.

1242   MR. BIBIC: Okay. You had the answer before.

1243   CONSEILLER PENTEFOUNTAS : More specifically on the other platforms, the non-television platforms -- non-linear avenues that are available to content providers, you know, and Astral is one example, but there are others, smaller perhaps even we can call them weaker players that find it daunting trying to get their content onto your mobile platforms.

1244   MR. BIBIC: Oh, and that's the one where we've done deals with--

1245   CONSEILLER PENTEFOUNTAS : If you want to answer that, Mr. Cope, go ahead.

1246   MR. COPE: Well, just as other wireless carriers that have no mobile TV platform today available to customers and maybe they ought to look at entering into the marketplace. It's an incredible market, it's growing fast and, as we said, all of our content's available.

1247   MR. CRULL: Well, look, I can just say as a supplier to the mobile team, I see them all the time, they are hungry for more content and building that portfolio. So, I think that anybody who has had trouble getting on, they may have trouble reaching commercial terms, but obviously the team in mobility has been able to do that with a lot of independent suppliers and they're hungry and paying for content to put on that platform.

1248   CONSEILLER PENTEFOUNTAS : Well, thank you so much.

1249   LE PRÉSIDENT : Merci. One of the challenges of adding tangible benefits in the first day of the presentation is exactly where we are now.

1250   We have a bunch of interveners that are coming after you and you're proposing to give details of exactly how and when all those new benefits will be spent at the reply stage when it will be a bit late.

1251   Is it possible to accelerate that to Tuesday.

1252   MR. BIBIC: We can do it, we can do it tonight.

1253   MR. CRULL: Yes.

1254   MR. BIBIC: No problem. Now, on that, I took to heart your comment about, you know, the comment les lapins du chapeau.

1255   I do want to say in our defence on this, it was -- the issue of whether or not the value of the joint venture should be added to the tangible benefits was an issue that was squarely on the record that every intervener who was interested had an opportunity to comment on.

1256   So, in terms of that aspect of it, they certainly haven't been denied any due process. But I take your point about being able to (indiscernible) to the specifics now. We will put something on the record for them.

1257   THE CHAIRPERSON: So, what we would need exactly may be a new breakdown of all the tangible benefits as well as the payment schedule you're proposing in detail.

UNDERTAKING

1258   THE CHAIRPERSON: But also about 20 -- about 50 percent of that additional 40-million, if I'm not mistaken, is related to the news channel and when asked whether it's incremental you made some allusions that that had been studied and did not pan out.

1259   Could you provide us any documentary evidence to establish that in fact that has been done. It's not that I don't want to take you at your word, but I wouldn't mind being able to verify that, that in fact you had done some studies and that it was not and that this is indeed incremental.

UNDERTAKING

1260   MR. CRULL: Well, I think I'll let Mr. Parisien answer for Astral. I think in confidence, if we could do that, we'd be happy to show the business case that without the benefits boost to this that it would not get funded, that it wouldn't work. We'd be happy to share that.

1261   But on the part of Bell Media, this is the first time that we've put our head against this and, again, the business case would not proceed without that support.

1262   THE CHAIRPERSON: Okay. Well, you know our rules. So, if you want some confidentiality, you know how to go about doing that, but I do think we need some evidence -- independent evidence beyond your proposal so that we know --

1263   MR. COPE: Mr. Chair, I'm happy to give any type of affidavit you need to confirm that BCE had no intention of launching a news French channel until the incremental benefits conversation began at BCE.

1264   THE CHAIRPERSON: Okay.

1265   MR. COPE: I'm happy to give that undertaking in the role as an officer of the corporation.

1266   THE CHAIRPERSON: Well, as I said at the beginning, it's your burden of proof, so if you think you need to put that on the record, you're choice to put that --

1267   MR. COPE: Oh, sorry, I thought you asked us for evidence, so I was going to do that.

1268   THE CHAIRPERSON: I did. I mean, the nature of the evidence you wish to put is up to you, it's your burden of proof.

1269   MR. COPE: Okay, thank you.

1270   THE CHAIRPERSON: And if you want to do that through an affidavit or some other document --

1271   MR. COPE: Sure.

1272   THE CHAIRPERSON: -- it will help the credibility because it is 50 percent of the amount you're proposing.

UNDERTAKING

1273   THE CHAIRPERSON: So, I'll now pass --

1274   CONSEILLER PENTEFOUNTAS : Si vous permettez...

1275   LE PRÉSIDENT: Oui.

1276   CONSEILLER PENTEFOUNTAS : On the schedule, I'm very sorry, on the payment schedule you had started at 10, you adjusted it to seven. Given the fact -- and the payment schedule at seven was based on the fact that most licence's duration was seven years -- given the fact that following the group licensing decision of last year the duration is down to five years and we may shortly be at three years, we don't know where things are going to go, I mean Rogers is at three years but they're not part of group licensing.

1277   What would Bell's reaction be to paying off their benefits in the five-year term and not seven?

1278   MR. BIBIC: Well, except that, you know, our licences were renewed last year, so we're already got four years left, so if we said -- so, benefits packages have never been co-terminus with licences because you never get, you know --

1279   CONSEILLER PENTEFOUNTAS : Not co-terminus, but the duration was based on the duration of licences.

1280   MR. BIBIC: Well, except that transactions don't happen to align perfectly with the day of licence renewal, so you always have the benefits packages happening at some point during the course of your licence and bleeding over into the next licence term.

1281   So, I don't see why they have to be spent over the course of --

1282   CONSEILLER PENTEFOUNTAS : But if you do five years or seven years it won't make a difference, it's going to be bleeding over into your next term, Mr. Bibic.

1283   MR. BIBIC: Well, and the policy has been typically seven years.

1284   CONSEILLER PENTEFOUNTAS : Would the position of Bell be that they would find that unacceptable?

1285   MR. CRULL: I think, Mr. Vice-Chair, on the acceptability, I would say that we have a very large pool of benefits now from the CTV transaction and from this transaction, and I think in the interest of, you know, of first of all selecting the highest quality projects, we don't want to be in a position where we're throwing projects into the marketplace just because we have to meet a schedule.

1286   I believe that it's getting to a point where we may be pushing ourselves into those kinds of decisions and I actually think for the system a bit of longevity is a big benefit as well as being able to absorb it with the best projects.

1287   CONSEILLER PENTEFOUNTAS : Yeah. No, the recent acquisitions, there's a flood of money in there right now and that the system would benefit by having that pushed off --

1288   MR. COPE: Yeah. One of the reasons Bell and, again, Commissioner, we've proposed seven years, so obviously we're -- if we propose seven years we're comfortable with it and, quite frankly, it was my office with the concept as CEO. We just, a year ago, $245-million for the CTV.

1289   CONSEILLER PENTEFOUNTAS : Mm-hm.

1290   MR. COPE: This is another $240-million. We might want to step back and say an ecosystem with $490-million might be better served over 10 years than seven. Under the contemplation of the size of the Canadian industry, I know these were percentages of deals, but the magnitude of these deals were probably never contemplated in the percentage that are used.

1291   So, the only reason we put 10 years forward was to try to make sure we're not all sitting here as an industry eight years from now and saying, what just happened?

1292   So, I'll leave that. That was why it was put forward. We're happy to make it seven years, we're happy to discuss nine or 10 if the Commission felt it was a better ecosystem, because what should not be lost is the $245-million that we're also in the middle of distributing plus the initial money we're distributing as a result of the MLSE transaction.

1293   There's a lot of money in the system, we want it used efficiently and productively and I'll leave that to obviously the role of the CRTC.

1294   CONSEILLER PENTEFOUNTAS : I'm not sure if our forefathers foresaw seven or $8 billion worth of acquisitions in a two-year period of time.

1295   Notwithstanding that fact, there are inflationary realities that diminish the amounts if you, si tu -- if you push it off over 10 years or seven years or five years.

1296   And that's what some of the people that are opposed to the acquisition would bring forth as an argument.

1297   That inflationary reality makes the tangible benefit of 200 or 300-million today worth a lot less in 10 years' time. And I just wanted to give you a chance to respond to that.

1298   MR. COPE: I would remind everybody to look at the U.S. Treasury rates today and CPI in that conversation. But I think, again, we're comfortable with the seven years, I put it is a very view of the industry. The industry would be healthier to have $490-million distributed over a decade. We're comfortable with seven years. I think it's an error, but, of course, we'll support it as we're sitting here making recommendations we think are best for the broadcast system.

1299   I can, of course, understand someone who's getting some money wanting it faster, but there will be a year eight and there are not many Astrals in Canada that remain, we just all have to step back and think about it. That's why we proposed the 10 years. That's why it was proposed.

1300   CONSEILLER PENTEFOUNTAS : Thank you.

1301   THE CHAIRPERSON: Thank you.

1302   Commissioner Denton.

1303   COMMISSIONER DENTON: Well, aren't we lucky that we live in a system where we have tens of millions of dollars to invest in art, so this is good.

1304   CONSEILLER PENTEFOUNTAS : Hundreds of millions.

1305   COMMISSIONER DENTON: Hundreds.

1306   So, gentlemen, we're now at that portion of the discussion where in order to establish tangible benefits, we must establish the value of the transaction.

1307   And, so, my questions will bear on the value of the transaction and, as you might expect, we have a few differences of interpretation. But we're sort of at that stage where I'm reminded of that phrase by the U.S. senator, you know, a billion here, a billion there, pretty soon you're talking serious money.

1308   And I'm glad to see, Mr. Bibic, that you have had your illumination on the way to the hearing, so that joint ventures are no longer a portion of the questions I need to ask. So, we've got that one out of the way immediately. Congratulations.

1309   The issue that we're dealing with, just to make sure we're talking about the same thing, we are talking -- we have had the benefit of reading the valuation of the Regulated Broadcasters' Undertakings, et cetera, by Price Waterhouse Coopers and it is that report that I shall be referring to.

1310   But my questions are at a sufficiently high level that I'm sure you'll be able to answer them without direct reference. So, when I speak of the valuation report, that's what I'm referring to.

1311   In the valuation report, a market risk premium of 5.5 percent was used and this, I am led to understand, was based on the record in Canada and the United States. A market risk premium of 5 percent would have been derived or used if the report had based itself entirely on Canadian sources and this figure of 5 percent is based on decades of Canadian financial results.

1312   So, the first question that comes to mind is: why did you feel it appropriate, necessary or desirable to use a figure based on a combination of U.S. and Canadian results?

1313   MR. BIBIC: So, we'll hand these over to Ken Goodwin of PWC.

1314   MR. GOODWIN: Hi. Thanks for the question.

1315   I think, first of all, I need to clarify that when we're talking about the equity risk premium, what we're really talking about is the premium over which investors want over, say, a risk-free rate of return. So, just by getting into the equities market you're going to want more of a return for bearing the risk of being in equities.

1316   COMMISSIONER DENTON: Granted.

1317   MR. GOODWIN: Our approach to this was not U.S. versus Canada. I mean, I could walk you through why we think that markets are actually linked together and capital flows between U.S. and Canadian equities.

1318   Really the purpose in the 5.5 was to reflect the fact that given current market conditions we think there's actually more of an incremental return that's required because what you've seen in the market is such a huge drop in the risk-free rate of return.

1319   So, really what we're reflecting in the report is what we call a conditional equity risk premium that will change depending on where the market's at at any particular point in time.

1320   The 5 percent gives more of a view of very long run situation and, as you put it, you know, decades of information, but transactions take place at distinct points in time and market conditions change, as do expectations on a go-forward basis.

1321   I would also say, too, that when we were here 18 months ago for the CTV report, we did also put forward an equity risk premium of 5.5 percent, basically for the same reasons, which is where we thought the current market was at.

1322   And I think the other thing to remember, too, is that when we prepared the valuation, we did so on the basis of valuing all of the components of the business and every component of the business received the same equity risk premium. So, if we're going to take that equity risk premium down, you're going to result in a situation where all of the values in the report are going to go up and you'll have a scenario where all of sudden the valuation report doesn't reconcile to the actual value that was agreed by the buyer and the seller.

1323   COMMISSIONER DENTON: But a more cynical interpretation is possible, that if you increase the risk, you're going to lower the net present value and that's lowering the tangible benefits.

1324   MR. GOODWIN: Well, no, but this isn't something that's being done to skew valuation from a tangible benefits associated business unit to one that's not. We used the 5.5 everywhere in the valuation report, so whether we're valuing the out-of-home business, online, pay TV, radio, it's the same issue.

1325   COMMISSIONER DENTON: Yes, but over which period would this 5.5 percent apply, because as of when did -- this is basically an adjustment from, say, 5 percent of the risk which is a figure predicated on decades of financial results and now you're saying, not so, we think the more appropriate rate is 5.5 percent reflecting risk.

1326   MR. GOODWIN: Well, I guess just to try to clarify, what we're saying is that -- I mean, we wouldn't disagree that if you're looking at an unconditional -- and sorry, this is getting really technical.

1327   COMMISSIONER DENTON: Let's go.

1328   MR. GOODWIN: So I'll try to keep it at a high level.

1329   COMMISSIONER DENTON: Let's dig in. Let's go there.

1330   MR. GOODWIN: Okay.

--- Laughter

1331   MR. GOODWIN: So, if we're talking unconditional equity risk premiums, which is not concerned about the current state of the markets, the PWC view is 5 percent.

1332   But the PWC view is also that current markets matter and given where we're at with equity returns and what's going on, that 5.5 is a better representation of what people expect rather than the 5.

1333   Because what's going on in the background here is that the risk-free rate has dropped considerably over the last couple of years, but that doesn't mean that people are all of a sudden expecting less from their stock portfolio. I mean, you've only got to look at what's happened in the stock markets over the last couple of years to know that that's not the case.

1334   And I guess the other thing is that we've prepared the valuation on the basis that we know that $3.4 billion was paid, we made the adjustments for the leases which is consistent with the CRTC's policy. The answer has to come back to the 3.4, and we arrive at this --

1335   COMMISSIONER DENTON: Could you explain the 3.4 -- oh, sorry.

1336   MR. GOODWIN: Yeah, $3.4 billion. So, whether we used 5 or 5.5, we've still got to come back to $3.4 billion.

1337   I guess -- so, what I'm trying to argue is that, yes, I believe that the 5.5 is the relevant measure using conditional equity risk premium, but we use that 5.5 on every single business unit that gets valued and we're reconciling to the amount that was paid, being the $3.4 billion.

1338   COMMISSIONER DENTON: Well, as a matter of curiosity, you know, when market returns are so low, when people are offering bonds at almost negative interest rates, why are people now becoming entitled to higher returns at 5.5 percent than the historic at 5, if they're investing in the market at all?

1339   MR. GOODWIN: Well, I'm not trying to say that shareholders are getting more of a return. I guess what I'm saying is if you've seen a drop in the risk-free rate on a 20-year basis from four down to two, that investors aren't thinking that they need 2 percent less than the market. You know, they are taking less but there's a slight premium over that baseline that people are looking for.

1340   MR. COPE: If it's of any help at all, I think even PWC of course would make its comments, but also if you just generally -- when we're talking to the investment banking community and Bay Street in Toronto, one of the fundamental issues is this cost of equity, how do we adjust for the low risk return calculation versus this, and this general concept of this premium has been added in in these calculations because people recognize that, I think as you've raised, it's not normal times and what we've done historically, so, there's been this additional premium added to that.

1341   The fact that PWC is recommending 5.5, we'll leave that to the experts, but this isn't a concept that -- I have seen this from other investment banks as well, talked to this point.

1342   COMMISSIONER DENTON: I think it's one of these issues about which rational disagreement may ensue, but it strikes me that one of these things is -- here is a figure that's based on what you had to earn over decades and a statistic which is based over decades of risk and now you're saying, no, gentlemen, you must accept that the risk is now higher than it has been relative to a figure that was established over decades, and that's basically your proposition.

1343   MR. GOODWIN: Well, I think we have to step back just a bit too and recognize that the equity risk premium is only one of several assumptions that go into coming up with the discount rate --

1344   COMMISSIONER DENTON: All right.

1345   MR. GOODWIN: -- value. What I've tried to articulate is that -- well, first of all, I think I'd just like to remind the Commission that, you know, we used 5.5 percent in the CTV valuation that we prepared for the purposes of the benefits package and at that time the notion of the 5 percent wasn't challenged.

1346   You know, there's going to be a range of rates that are reasonable. The PWC view, not just for this file but for any of the files that we're working on right now, is that if we're talking about conditional equity risk premium, which is the route that we're going, given the patterns that we're seeing in the markets and what's happening with values, is that the 5.5 percent is the right number.

1347   And I guess I must stress that this isn't -- this assumption isn't moving value from an unregulated -- sorry, isn't moving value from a regulated business to an unregulated business within this exercise because it's being applied consistently across every element of the valuation that's being conducted.

1348   COMMISSIONER DENTON: Yes. Okay. So, basically then as between our interpretation of where this thing has been historically, you're making the assertion that we now need to increase our appreciation of the risk by half a percentage point from 5 to 5.5 in respect of changes in the market.

1349   And we would say by contrast, no, this is a figure established over a long period of time and which ought to remain stable.

1350   MR. GOODWIN: Well, I mean, you're going to find all kinds of debate about this topic, both amongst academics and investment bankers. I know we spent a considerable amount of time in and around the credit crisis trying to figure out the right way of dealing with what was going on in the market and this is what our Canadian firm came up with is the best course of action.

1351   So, you know, we feel comfortable that the 5.5 percent is correct. It takes into account a variety of things, not just historical returns, but also expectations on a go-forward basis.

1352   COMMISSIONER DENTON: Okay.

1353   MR. GOODWIN: And I think that's one of the other important things to keep in mind is that if you're referencing decades of results, you are talking about history; whereas valuation has got to be focussed on what's happening on a go-forward basis. And that's one of the elements that we take into account when arriving at our 5.5 percent.

1354   MR. COPE: And from BCE's perspective, we would obviously hope that the Commission would find an acceptance of something a number of months ago with the CTV acquisitions, the discount rate, the fact that the 5.5 percent was accepted would be consistent, would probably have been expected that BCE would use, therefore, that same -- unless we thought the markets had dramatically reduced in terms of risk and, you know, we leave it to a panel of CEOs at Canadian banks to talk about their models of what would happen in the previous hundred years or what actually really did happen. They're quite different.

1355   COMMISSIONER DENTON: I'm going to leave this issue for our financial people to deal with, about we do not necessarily accept the 5.5 percent rate and we may have some thoughts on that to present.

1356   MR. GOODWIN: But if I may, if you're not going to accept the 5.5 percent, what do you do about the fact that if you rerun the model you're going to end up with a value that's more than what was paid?

1357   COMMISSIONER DENTON: I'm going to leave that to later consideration.

1358   MR. GOODWIN: Okay. But I don't mean to be --

1359   COMMISSIONER DENTON: Don't tell Mr. Greenberg.

1360   MR. GOODWIN: Yeah.

1361   COMMISSIONER DENTON: Okay.

1362   MR. GOODWIN: I mean, I don't mean to be disrespectful and I'm not trying to be, I guess what I'm trying to put out before the Commission is that, you know --

1363   COMMISSIONER DENTON: I've been around numbers long enough to know that they are generated to produce the results that are needed to be done. So, don't worry about it.

1364   MR. GOODWIN: Okay.

1365   COMMISSIONER DENTON: I'm going to go to a different portion here that is -- I thought it was of some interest.

1366   One of the essential assumptions of the valuation report is that Astral's broadcasting assets are more risky than the level of the overall industry and the result of additional risk results in the use of a business-specific risk premium in addition to the market risk premium which translates into a lower value of the broadcasting assets.

1367   Now, as everybody in this room is aware, Astral has been an extremely well-run company and that it has had profit margins that were significantly higher than their average industry margins.

1368   So, the mind naturally wants to know, inquiring minds want to know: what are the additional risks premiums not present in the market that would justify a particular risk premium for Astral?

1369   MR. GOODWIN: So, I think that one thing you've got to keep in mind when you're talking about this incremental risk premium, and again, the incremental risk premium is something that we think about, you know, in addition to whatever we're getting back through our market research.

1370   But one of the key things in our due diligence is getting an understanding of where historical results have been, what are the expectations in the forecast, and how is the business doing against those forecasts.

1371   So part of our exercise in figuring out whether or not there needs to be an incremental adjustment to the discount rate is effectively figuring out whether or not we think, you know, Astral is going to hit its plans.

1372   Based on the discussions that we had, we saw that there were some specific risks that were present and that, you know, in our view was going to make hitting some of those plans difficult. And the only way to compensate for that, short of redoing management's work, which isn't our role, is to make an adjustment for the risk.

1373   As an example, you can see on the Pay TV side that the subscribers and the subscriber revenue have been threatened by the OTT issue, and if you're looking at Specialty, for example, Pick-and-Pay is having an impact, Pay is having an impact, particularly in Québec. Those kinds of things make hitting forecast more difficult, which is why we make that kind of an adjustment.

1374   COMMISSIONER DENTON: All very rational, except for the fact that when we consider that overall industry margins for Pay, Pay-Per-View and Video-On-Demand and Specialty Services were between 25 and 28 per cent, while the number of Astral's profit margins exceed 35 per cent and even are around 30 or 40 per cent. So we're talking about a profitable company here, and more profitable than the rest -- than other players in the same industry.

1375   MR. GOODWIN: So the question of whether you're going to make an adjustment to the discount rate isn't just one about profitability, it's about the ability to meet that profitability on a go forward basis and whether or not historical results are going to continue -- sorry, forecast results are going to continue in the manner in which they have historically.

1376   So it's really about us looking to the future and looking at those forecasts and saying: Do we think that those numbers are going to get hit? What is it about the business that's specific to it that isn't represented in some of the comps, and what kind of an adjustment do we need to make?

1377   COMMISSIONER DENTON: But why would Astral specifically expect risk factors be greater than that for the other players in the same broadcasting industry in Canada?

1378   MR. GOODWIN: Well, I can speak to Pay English as an example, at the risk of repeating myself. What we could see there is that Astral is unique, a unique player and it's, you know, focused on the Pay TV market. What we could see in the forecast was that it was going to be difficult to hit the subscribe revenues that they thought they were going to hit and as a result, we make an adjustment.

1379   Again, on the French side, Pick and Pay is having an impact even on some of the other services, say in the JVs, like Teletoon. Again, the subscriber expectations, etcetera, weren't being hit.

1380   It's very much focused on the specifics of the forecast that we see. I mean, clearly if we had a forecast that suggested no growth versus a theoretical forecast with 10 per cent growth for the same business, one forecast is riskier than the other.

1381   We can only make that assessment against the company that we're actually valuing. We can't, as part of our exercise, get into the forecast of all the comps.

1382   One of the things we do to try to get comfortable with the end result, to see whether or not our assumptions are reasonable on the DCF, and you can see this in the report, is we do a secondary approach. So we've looked at enterprise value with multiples, we've looked at transactions, we've looked at the public markets, and we've come up with a valuation that supported the DCF.

1383   In response to one of the intervener's submission, we actually show that if you look at the multiples on a normalized basis, we're giving ten times or better to the television assets, which is a really good multiple. That's indicative of a very strong business.

1384   COMMISSIONER DENTON: Okay. All very true and important, but are you saying that the risks specific to Astral are greater than those present in the same broadcasting television market?

1385   MR. GOODWIN: I mean, certainly we try to pick costs that are as representative of the business units that we are trying to value. We can't find exact comparables.

1386   I guess what I'm suggesting to you is that when we looked at the forecasts and we looked at the risks associated with those forecasts, we can't do that with the comps. We felt that we needed to make an adjustment.

1387   It's a very difficult question to answer because it's linked or it has to be linked to the forecast financial information that's being used to run the valuation.

1388   COMMISSIONER DENTON: There's some increased risk and you felt you needed to make adjustments.

1389   MR. GOODWIN: Correct.

1390   COMMISSIONER DENTON: Okay.

1391   MR. COPE: If it's helpful, the view of the invest community generally of the acquisition of Astral, literally every analyst knows this is a higher risk for BCE than the acquisition of CTV was. And the recognition of that was because some of the unique competitive dynamics we spent the day talking about vis-à-vis over-the-top and the specific asset pool that Astral has and by bringing together CTV and Astral under one asset, in a way over time to mitigate those risks.

1392   But there was a resounding, in fairness, from the investment community's perspective, that this has some risks attached to it that we didn't have in our first acquisition. We certainly looked at it that way and I think in one sense, in fairness to Mr. Greenberg, not to put him on that spot, as a selling shareholder, he knows that there are some structural issues underpinning his decision to sell his business and bring above scale.

1393   COMMISSIONER DENTON: Absolutely. We don't doubt that there are risks that this industry is facing. The question is the premise that Astral is more risky than comfortable.

1394   MR. COPE: Right. And I'm saying specifically to their asset pool relative to say what the CTV asset pool was at the time we acquired that, it was a general view that there probably isn't more risk. Of course the market's evolved since then, with the over-the-top things we spent time talking about.

1395   Also as an industry in Canada that has, I think we all know as we become vertically integrated by very large players and of course one supported by the Canadian government, which would have obviously therefore be a very large player, witness the Olympics, I think it would be fair to say that an independent broadcaster like Mr. Greenberg would be viewed as a higher risk than a broadcaster now like Bell or Rogers' assets or Shaw's assets or Québec's assets.

1396   COMMISSIONER DENTON: Point taken. In relation to English radio, you explained that there was pressure on revenues and margins due to new entrants in Calgary and Edmonton. Except for two AM stations in these markets, Astral's other four stations have significant profit margins.

1397   Could you explain how the impact of entrants on these stations could significantly impact on the overall performance and risk of the 63 English language radio stations.

1398   MR. GOODWIN: I don't have that specific detail with me, but what I can tell you is as it related to the valuation of the English language radio stations, there were really two things that were impacting the achievability of the forecast, when you compare them to the historical results. One, as you mentioned, is the new entrant in Calgary and Edmonton which were taking share away from Astral's existing stations.

1399   There were also rating issues with some of the English language stations again where listenership was dropping and it was putting some pressure on advertising revenues, and there were attempts to rebrand that were beginning to take traction but it was taking time.

1400   COMMISSIONER DENTON: Well, I think there are visible things. We're looking at Astral as an extremely well organization. We look at its figurers, they're comparable to others in the industry, they're doing better. If we look at how they do overall, they're doing very well.

1401   I think we're probably not able to assent to all the propositions being put forward here about the nature of Astral's special risks. I think that's our problem.

1402   We think the place and the companies are very well managed and that we appreciate the increase of risk in the business as a whole when it comes to a cross telecommunication and broadcasting undertakings.

1403   MR. GOODWIN: Yes.

1404   COMMISSIONER DENTON: But when it comes to something specific to Astral, its performance speaks for itself in terms of whether it is particularly risky.

1405   MR. GOODWIN: I guess just stepping back for a second, if you look at the implied multiples that come off the valuation that we prepared, within the TV business generally the implied multiple is just over ten times EBDA. In the radio business on a French and English combined, it's over ten.

1406   I mean, you don't give a ten times multiple to a business that's under duress, so I'm not trying to give anybody, the Commission, the impression that the business was going down the tubes. I mean, certainly we value the business as if it's a going concern.

1407   Perhaps valuations are -- they sound negative because we're trying to justify why we're going off a norm, but I have to keep stressing that the valuation can't take place in a vacuum just by looking at comparables. The DCF, which is your preferred approach, must take into account the forecast and the risks of achieving those forecasts, and that's primarily the reason why we had an adjustment.

1408   But if you just step back and look at the reasonability of the result through the multiples and then you also recognize that we've been able to reconcile back to the $3.4 billion that was paid, we're certainly comfortable with the valuations of those regulated assets that will drive benefits, that they make sense.

1409   COMMISSIONER DENTON: This is only reasonableness here about which we're discussing, and we note that you said the valuation is going off the norm.

1410   We're just going to leave that for a moment and we're going to do my last point of questioning.

1411   Mr. Cope, earlier today you have said, and I paraphrase you because I didn't get it exactly, but basically: We have to distribute basically over four screens to make the transaction work.

1412   Really one of the cores of what you're doing of the synergy between the two companies is that there is going to be synergy and there will be -- it's better that the two of you combine and it will be more profitable for BCE in the future.

1413   And yet, you indicated that at the time of the purchase, BCE had not assessed the synergies due to multi platform distribution of Astral's programming.

1414   In the brief, BCE talks about improving its ability in the flexible delivery of programming over multiple platforms.

1415   So this mention of these kinds of things leads one to believe that these synergies have now been assessed. So, are you stating that -- well, can you comment that there will be synergies available from multiplatform delivery of Astral's programming over BCE's platforms?

1416   MR. COPE: I will start with our valuations then I'll comment.

1417   MR. GOODWIN: I guess, just stepping back, you know, the valuation was done as at March 16th, which was the date of the announcement which we understand to be the Commission's practice around the timing of when these valuations get done.

1418   I mean, certainly BCE had done an assessment of the synergies and done some work to quantify them, and we took those into account when we did an analysis of those synergies along with all the other due diligence that we did as part of the file. And there was a significant number, over $30 million worth of synergies that were included in the valuation and then put forward. I mean, certainly any of the work that we did at the time the deal was announced was suggesting that, yes, the multi-screen benefit is a possibility, and it was part of the strategy, but there was nothing that had been quantified built into the pricing or somehow left on the table that was going to impact what we had to do.

1419   Certainly when we step back and look at the implied multiples on each of the valuations that we've done and the fact that we've reconciled to follow the various pieces back to the total, we're comfortable because if you're going to move value from one bucket -- sorry, let me start that again. If you're going to move the valuation up on one particular asset group, something's got to go down, and we've done a bottom's up valuation on everything within the company and are comfortable with where we sit.

1420   I'll now let Mr. Cope answer.

1421   MR. COPE: If I could just -- at the very beginning of your question you said I said something about the analysts at the time of the acquisition; you were referring to --

1422   COMMISSIONER DENTION: No. Just this morning -- well --

1423   MR. COPE: You said at the beginning back when we acquired Astral I said something about limited synergies? I'm sorry.

1424   COMMISSIONER DENTON: It said that you had not assessed synergies, you did multiplatform distribution of Astral's programming.

1425   MR. COPE: At the time of the acquisition.

1426   COMMISSIONER DENTON: Yes.

1427   MR. COPE: Yes. And at the time of the acquisition and from the invested community perspective we did say -- we were asked a very specific question on synergies. I know the valuation that's been used I think was the $30 million, which is very interesting because it's numbers that both Mr.Greenberg and I chatted about, but from the investment community perspective, what we were trying to put forward to the community was, again this is about opportunity for us to drive growth given the valuation premium we're paying for the company.

1428   Once you get paying ten times multiples for these assets, you're paying a premium, so part of our thinking subsequent to that clause is what do we do to drive synergies. At this point, we can see our way through to $30 million.

1429   We would like to always do better than that. We're hoping we don't need to do better than that so we can drive this through top line revenue not through cost reductions which of course as we all know are quite painful in the industry to go through.

1430   Hopefully that's helpful.

1431   MR. CRULL: Commissioner Denton, I think I might understand what you're getting at. The synergy, if you speak of it as a --

1432   COMMISSIONER DENTON: I don't want to -- I'll let you get on with it but really this is not too sophisticated an analysis. You guys are better off together than you are apart, and somehow that must have come into the calculation of what buying Astral is worth. And we want to make sure that this is properly accounted for in our understanding of the value of the transaction.

1433   MR. COPE: Okay. So to answer, these assets generally trade at 7 to 8 times even (indiscernible) multiples as public companies when they're acquired. We're now paying 10 times more but we're paying a premium. That premium reflects many thoughts in our strategy reflected in the full price by the professional valuators, and so our ability to pay a multiple of two to two and a half time the normal trading multiple to that company is absolutely based on the fact that we believe we can drive shareholder value bringing these two assets together.

1434   On the cost synergy number, what's been used is 30 million which is consistent with what our view was at the time of just subsequent to the acquisition. We typically don't disclose synergy numbers to the investing community right at the day of an acquisition; (1) you're not cleared, (2) you want to do the work and (3) you're held to them forever. So you're better to reflect on them before you do that.

1435   COMMISSIONER DENTON: Okay. I'll have more in a moment.   

1436   Sir, you were speaking.

1437   MR. CRULL: Well, I don't want to answer a question if you're not asking it. I thought that you --

--- Laughter

1438   MR. CRULL: I thought, Commissioner Denton, I was hearing to the multiplatform implemental benefits --

1439   COMMISSIONER DENTON: Yes, you were.

1440   MR. CRULL: -- an upside that you were probing on. And I think as we've described extensively in the trends in the business and things of that sort, it's very important to note that our multiplatform initiative, while a tremendous benefit to the system and to consumers, is really about being competitive, remaining competitive as the market changes.

1441   I don't see this as a change to the trajectory of the overall business, but what I see it is required to remain competitive and to deliver the trajectory that's been assumed in the business plans.

1442   It will be dilutive financially for a long time, the multiplatform initiative on its own, but it's vital to protect the core business, and that's why we're taking it to the market the way we are.

1443   COMMISSIONER DENTON: Okay. Now here comes the homework part of the question.

1444   Would you please indicate if you'd be prepared to identify the synergies, to provide the associated values in an Excel unprotected spreadsheet, allocate it between each of the Astral business segments, and these synergies should take into account all benefits to be derived from the transaction, for programming costs and buying as much for BCE's programming services as for Astral's programming services.

1445   In other words, we're asking for an exhaustive -- telling us what the synergies are and what they're worth.

UNDERTAKING

1446   MR. COPE: This is where I delegate homework.

1447   COMMISSIONER DENTON: Absolutely; you're the boss.

1448   MR. CRULL: This is not a tomorrow morning task.

1449   THE CHAIRPERSON: Tell us what you think you could reasonably do.

1450   MR. GOODWIN: If I may, what's the expected output from this as far as the Commission is concerned, because I think the way PWC got itself satisfied about the valuations of the individual business units was to, as I described, take into account the synergies that were in fact known and taken into account. We did the DCF, we did our market research, we assessed the forecast. We used a secondary approach where we looked at multiples that are being paid in open market transactions, and then we made sure that the valuation on an overall basis reconciles.

1451   So through this process what I'm envisioning is a hope perhaps that, you know, value will go up for the regulated base, which may increase the benefits, but on the other hand, something's got to go down in the equation.

1452   We're happy to provide the assistance, I guess, we're just looking for a little direction as to what you're hoping to see from it.

1453   THE CHAIRPERSON: Well, that will be for us to decide. And I understand your point and your perspective and you've put it on the record, that's excellent. We probably need a better sense from you when you in fact get that information available to us.

1454   MR. CRULL: Mr. Chair and Commissioner Denton, if I could, I think that because we have to undertake to do the piece of work, I think that a bit of work has been done on the $30 million and we understand those cost synergies in the organization. There is not any work and it would be speculative to the point of dart throwing and in fact I'm not sure justified to assume future programming cost synergies and things of that sort.

1455   You mentioned some line items that aren't anticipated to be specific benefits, so I'm not sure that those would be included in that spreadsheet. But the $30 million has been something that has been started to be operationalized and identified.

1456   THE CHAIRPERSON: I understand that in certain circumstances that you'll be able to tell us that it's impossible to do that. Fine, just say that.

1457   COMMISSIONER DENTON: I think on certain points our experts will talk to your experts and straighten it out, but I think that we want to know the value of the synergies, and I have one more question in relation to that when we've finished this present exchange.

1458   THE CHAIRPERSON: On the deadline for returning it, maybe you could tell us tomorrow morning by when you'll be able to.

1459   MR. BIBIC: One last thing and not to belabour this too much, but I was whispering with Ken that the 30 million is already reflected in the valuation report filed with the Commission, and in detail.

1460   MR. GOODWIN: Yes. There were a few deficiencies questions on that point where I believe the 30 million was broken down into the buckets that had been identified, so you have that already. I think what you don't have and what I'm hearing from BCE is what they haven't done yet is the programming by-side, which I think is being asked.

1461   COMMISSIONER DENTON: That is my understanding of what is being asked.

1462   MR. BIBIC: So I think the answer for now, and we'll come back again tomorrow, is you have it. We'll go back through it, go over it, and if there's something we're missing we'll say this is what you're missing, we'll give it to you. But otherwise we might just rely on what we've already filed, which I believe was given in the spreadsheet.

1463   MR. GOODWIN: In deficiencies.

1464   MR. BIBIC: And in an unprotected form.

1465   COMMISSIONER DENTON: In the brief, you also spoke of an increased cost certainty and efficiency in program buying. And the list of synergies that's provided to the Commission does not seem to include such synergies. Is this correct? And if so, please comment on these synergies and why they were excluded. These are synergies in relation to increased cost uncertainty and efficiency in program buying.

1466   MR. COPE: Are you talking about earlier today with that comment?

1467   COMMISSIONER DENTON: Yes, I am.

1468   MR. COPE: What I said, just to make sure it's very clear because someone mentioned it, what we said is the ability, whatever the cost of content, would be independent for Astral trying to compete with Netflix, versus having the BCE piece of that puzzle as we go forward in the industry.

1469   Everyone could probably imagine logically that maybe that content cost will be more contained in Canada with the sale or BCE buying all that content than Astral and BCE trying to do it separately. That's the point. So content costs are going up.

1470   One of the problems with the model in this entire industry is the contents costs are going up and of course VEUs(ph) don't want us passing that price through. We understand that, that's the middle point of the model, but the cost of the content is going.

1471   We believe as content costs continue to move up in terms of buying content outside of Canada, that the two assets coming together have a better opportunity to contain those costs than if we were independent. We're not anticipating a reduction in cost as a result of this merger. What we're saying is, our ability to compete in scale is improved, and I'm assuming we can see why that naturally would be a benefit at the end to the end user in Canada, because that will hold prices down for the consumer. I mean, that's where we were trying to get this morning at the comment. Hopefully that's helpful.

1472   MR. GREENBERG: I think there is a misunderstanding here. The costs of programming are not going to decrease.

1473   From a national perspective, the reason why this is a scale that is important here, is we can, by being together by more than just the pay rights. To do an Netflix offer, we couldn't on our own do it because it's not only the movie product we need, we need the product that we don't have any rights to, which is TV product in second and third windows.

1474   So, it's a matter of going to a supplier and giving him an offer for Canadian rights in more than one window. If we are in a position to only have financial fund for the pay window is where we will be outbid. So, we are not going to pay any less, but at least we won't -- we will be able to compete and not lose that programming, therefore no --

1475   COMMISSIONER DENTON: I believe you have CC issue exactly and it is that kind of synergies that we're interested in.

1476   MR. GREENBERG: But that's not a synergy from saving money.

1477   COMMISSIONER DENTON: No, it's not a synergy from saving money, it's a synergy from being larger.

1478   MR. GREENBERG: Well, it's not -- it allows us to protect the Canadian broadcast system and protect therefore our business. If we lose --

1479   COMMISSIONER DENTON: We are talking about the same thing, you've got it. That's exactly what we are looking at and for.

1480   MR. GREENBERG: The synergy is to protect our business. There is no decrease in program costs is my point.

1481   COMMISSIONER DENTON: Taken. Understood. Mr. Chairman, that completes my questions.

1482   THE CHAIRPERSON: Thank you.

1483   Mr. Greenberg, I would just like to go back to this file in the 5.5 and by the way it's very useful to have your professional opinion on these files, so thank you for being part of this.

1484   If I am not mistaken, and I am just looking for a quick answer here because the day has been long, your view is that 5.5 is the better number. Is that correct?

1485   MR. GREENBERG: Yes. We think that given --

1486   THE CHAIRPERSON: That's yes?

1487   MR. GREENBERG: Yes.

1488   THE CHAIRPERSON: That's correct?

1489   MR. GREENBERG: Yes.

1490   THE CHAIRPERSON: Yes, Okay. But are you saying that 5 per cent is unreasonable?

1491   MR. GREENBERG: Well, my point was if you wanted to use five in this valuation, then you need to recognize that by rerunning our models, okay, you are going to end up with a value that's more than $3.4 billion. So, what's then incumbent and every single value is going to go up in the report, so I think what would be incumbent on somebody if they didn't like 5.5 because you've got to go back and revisit all of the other components of the assumptions that make up the discount rate because we've picked the 5.5 in conjunction with every other piece of diligence that's got to go into the report.

1492   THE CHAIRPERSON: And it's in that sense that using five per cent may be unreasonable, unless you go and do that.

1493   MR. GREENBERG: Correct.

1494   THE CHAIRPERSON: Okay. I think I get that now.

1495   MR. GREENBERG: Thank you.

1496   THE CHAIRPERSON: Commissioner Menzies.

1497   COMMISSIONER MENZIES: Thank you. I have a number of questions starting with some of your housekeeping regarding radio tangible benefits and then on to compliance and journalistic independence and some other things. So, I'll start with hopefully a couple that can get the yes and no answers, so and I design to keep a tidy record at this stage.

1498   We need to confirm with you that the value of the radio tangible benefits you were proposing to allocate to French language initiatives would be proportional to the value of the French language assets as determined by the Commission.

1499   MR. BIBIC: The valuation says 30 per cent francophone radio where benefits allocation is 29 per cent. So, we are basically right on.

1500   COMMISSIONER DENTON: Right. And so, if we come to another determination, you will remain proportional?

1501   MR. BIBIC: We will remain proportional.

1502   COMMISSIONER DENTON: Okay. Thank you. And we need a -- and some of this might have been touched on earlier, but just to clarify that we were talking about radio as well as television with the Chairman's questions, there is a -- we would like more detail on the types of eligible CCD initiatives that you have in mind for allocating the discretionary tangible benefits of the one per cent or 10.1 million $ I think by the current calculation?   

1503   MR. BIBIC: Okay. Commissioner Menzies, what we will try to do is give you that information for tomorrow morning, just like we will for the more fleshed out package on TV.

1504   COMMISSIONER DENTON: Okay. That would be helpful. And if you could include in that what concrete measures you would put in place to ensure those initiatives are currently and will remain eligible in the future, that would be helpful.

1505   MR. BIBIC: Hopefully, we can do that.

1506   COMMISSIONER DENTON: Okay.

1507   MR. BIBIC: Yes. I will take that undertaking.

1508   COMMISSIONER DENTON: If you can't do that by tomorrow morning --

1509   MR. BIBIC: We will let you know why.

1510   COMMISSIONER DENTON: -- can you undertake to do that eventually?

1511   MR. BIBIC: Absolutely.

1512   COMMISSIONER DENTON: Okay. Thank you. And sort of in that area, I am curious going through some of the interventions and other things that -- there was an intervention from the National American Alerting System and I am curious to know what your thoughts were on that, in part because this has some history with -- the Commission has been sort of promoting this for about ten years this idea and given that some would argue that if a broadcasting system, regulated broadcasting system and government agencies are useful, they might be useful in providing and letting people know when a tornado is coming and that sort of stuff.

1513   And I just want to go back to a quote from the -- I think it's Mr. Paul Armstrong at Pelmorex Renewal hearing, February 2011, says, on hand-off from Mr. Engelhart from Rogers:

"Bell Canada is developing alerting solutions for both our IP-TV and satellite operations. On DTH, we have already conducted a live test on our system. We have come equipment on site and more on order. We are developing software enhancements, etc, etc..."

1514   Where are you with that and did you not see an opportunity with this tangible benefits package to assist in the advancement of a national public warning system?

1515   MR. BIBIC: Well, we -- I can't answer where we are on the specific comments that Paul Armstrong made on behalf of BC and Bell in that proceeding, so I have to get the right facts before I give an answer on that specific question.

1516   COMMISSIONER DENTON: Okay.

1517   MR. BIBIC: A question I think is Jacques had --

1518   MR. PARISIEN: I can just reassure there the Commission that we have at Astral offered to support the system when they are ready to involve us and we are just waiting for them to reach out and I am sure Bell is probably in the same category. And we have, as you know, also committed to the Amber System across the country and we are actively involved in that also.

1519   MR. BIBIC: And Commissioner Menzies, and I won't go on long here on this at all, but I think it's important for the Commission to understand the philosophy we use and the principles we use to develop the package that we put before you, and it was to keep the Commission's, you know, expressed strong preference for on-screen content.

1520   We think we've met that ideal, to keep close if not exactly, well it's exactly to the relative valuations split French English for TV and radio; that's principle number 2 and we wanted to remain faithful to the Astral genres and that's why you see funding for feature films, film festivals. You see youth, you see music. That was the philosophy while keeping to the nuts and bolts of incrementality and benefits funds to --

1521   COMMISSIONER DENTON: I understand that there is lot of pressures from lots of worthy causes.

1522   MR. BIBIC: And that's it. And so, we said the best way to do it is to keep to the principles that I have expressed. So, that might be a general answer to your question about why we didn't direct money specifically to that one.

1523   COMMISSIONER DENTON: Okay. Thank you. Just going back to the other parts if I -- I'm quite sure I didn't mention this before, when you get back to us with the details on the tangible benefits, the CCD initiatives, can you provide details within that or let us know when you can provide details in it on what details you propose to include with the proposed annual report on the allocation of those discretionary radio tangible benefits?

1524   MR. BIBIC: Yes.

1525   COMMISSIONER DENTON: That would flesh that out. Thank you.

1526   And you might make comment in there too to what extent you might find the proposed allocation and mechanisms as a condition of approval? How you might -- whatever mechanisms you use to allocate those funds might be a condition of approval. I would just like your comment on it one way or the other.

1527   MR. BIBIC: You mean in terms of spreading it over a certain number of years? Is that what you mean by allocation?

1528   COMMISSIONER DENTON: Yes.

1529   MR. BIBIC: Okay. We will have a full schedule on that.

1530   COMMISSIONER DENTON: Okay.

UNDERTAKING

1531   COMMISSIONER DENTON: Some other matters of -- Here, in your reply to issues raised by Union des consommateurs, you say that your influence over news and public affairs is nowhere near that of Quebecor? Apart from size and only a minor -- you have only a minor role of print investor. How would you describe the difference between your approach to news and that of Quebecor? So, apart from ownership, what kind of diversity would you bring to the marketplace?

1532   MR. CRULL: Commissioner Menzies, I am not sure that I understand the question. I think that in the French market, we would say that currently we don't participate in any news sources other than in English and the French language and so, I am not sure I understand the question. If you could rephrase it.

1533   COMMISSIONER DENTON: People have different approaches, right, different audiences that they seek, different ways that they present an uncovered news. Some people, as was articulated by a former colleague, Michel Morin, in a Bell hearing, there is a difference between reading news and finding news, in terms of some operations may simply be a news reading allocation passing along news that has been uncovered and developed by other people, by other services, etc. Others may be investigative or -- the term used often is "enterprise" of people going out and digging things up, some people seek a certain demographic or a psycho graphic audience. There is probably an example of Quebec Corp that you can think of. And others use other psycho graphic and demographic, so what sort of -- how would you, if I were a consumer, and let's take the French language example -- how would I differentiate between I like your show or whether I like Quebecor show?

1534   MR. PARISIEN: Well, if I can start the answer, Commissioner, I can relate to what we already do and what we will continue doing and I think what could also be, pending your approval, the service that we will be offering in Quebec, the all news service, we have 35 journalists in this province working for us and we have people on both parliamentary offices, in Quebec and in Ottawa, and we do live news, which is typical of obviously radio being present in the community and reporting what's happening at the moment.

1535   We do on site coverage also, obviously, and it is used on a system where there is sharing. That's what I referred to this morning as the BURLI system that's pretty unique to us. I don't think there is many other broadcasters, certainly in this province that use it. We do breaking news because we have news by the hour, if not more often when there is a special issue or special event that comes up.

1536   It's always up to the minute refresh, that's not something that works in a loop or something that is repeated, except during the night obviously. And we target our news cast to a demo of our product. So, if you have a radio station which is willing 25-54, the news will be written and drafted in a way that it appeals to that audience and if it's a younger audience, we will target the younger audience.

1537   That's the way we do it. We adapt the content to the audiences that we have, which I think is different than what Quebecor does.

1538   COMMISSIONER DENTON: So, each individual operation is doing its own twist on the news?

1539   MR. PARISIEN: Absolutely.

1540   COMMISSIONER DENTON: Okay. So, there is no central -- actually help me on the detail that -- what's your structure then for that news. Who reports to whom if there is a reporter that's at the radio station?

1541   MR PARISIEN: We have a newsroom in every market and the newsroom reports to the programming manager of that market.

1542   COMMISSIONER DENTON: A newsroom in every market, not a newsroom at every station?

1543   MR. PARISIEN: Well, it implies every station obviously. There is one newsroom sometimes for two radio stations.

1544   COMMISSIONER DENTON: That's it.

1545   MR. PARISIEN: But in the market, there is a newsroom in every market.

1546   MR. BRACE: And, Commissioner, I have been around news for a long long time throughout my career and certainly in working with my new colleague and I hope to work with him a lot more in the future, Mr. Parisien, and looking at the market here and listening to the great advice, we feel there is a tremendous niche for our service that is really the breaking news, 24 hour, headline type service that can differentiate itself quite frankly from, you know, the very good job that LCN is doing, that RDI is doing, and that's certainly much different than what you would see on conventional television.

1547   So, it's a different fresh approach, a younger approach, hopefully targeting an audience that may be finding a lot of their news on line that we can maybe repatriate back to a convention or in this case, a specialty type operation.

1548   MR. PARISIEN: So, taking our way of doing it and applying it to this new opportunity.

1549   COMMISSIONER DENTON: Okay. And to give this a little context and I'll follow up with a direct question, part of this comes down to a lot of the major acquisitions that have taken place in the country over the last 10 15 years, they have to be paid for somehow and there is a body of opinion out there and some of it is articulated in the responses and interventions that says that typically, and Mr. Murdoch from CEP would attest to that, that typically and his declining membership that frequently these get paid for by reduced resources and condensed resources in newsrooms.

1550   So, you have stated that your investments in Astral's radio operations will improve their ability to offer news programming, which is -- strikes me as interesting. Can you elaborate on those investments and how they relate to improve these operations?

1551   MR. PARISIEN: The comments we have made this morning concerning improved news facilities and gathering refer to the fact that we will have access to the CTV news structure, the TSN news structure as well as the radio markets where Astral was not present.

1552   But you put all that together not physically, but as a whole company, it does put a lot of news in the system to which we did not have access and we will have access.

1553   MR. BRACE: And the opportunity to really kind of, you know, feed off of the television newsroom that we have in this province albeit it's an English operation, but certainly the editing facilities and a lot of the back office operations is going to help us along with this project, but certainly --

1554   COMMISSIONER DENTON: Sir, if I can, the investment is the purchase?

1555   MR. BRACE: No, no, no, sorry. Did I say purchase? I apologize.

1556   COMMISSIONER DENTON: No; I did. I am just trying to get a handle on exactly what the investment is.

1557   MR. BRACE: Well, the investment to launch the service.

1558   COMMISSIONER DENTON: Okay. Thank you.

1559   MR. BRACE: Yes, the investment to launch the service. So, there are a lot of -- there are a lot of opportunities to feed often from the radio standpoint, from a television standpoint and create something that, as we say if it is we believe new for the market, that can offer something that is not here. And I guess, you know, as kind of an observer, an outside observer more or less, what was really obvious to me when we sat down and thought about this was just a comparison between the number of voices that are available on a daily basis to anglophones in this country as compared to francophones.

1560   And you know, I had a look at the kind of conventional networks that we have across the country and also they come in by the United States, I looked at the specialty services from the United States in Canada and also some that we are getting from foreign countries and did the same thing with the French language newscast that are available, and what was really apparent is that it's way out of balance.

1561   There are more than 25 on a daily basis, more than 25 services that are available to anglophones and only about six for francophones and that doesn't even take into account the local stations, which we've just made that gap way wider. So, you know, in my view, there is a real -- there is a real opportunity here to at least contribute to that.

1562   And I go back even a little bit further and look at, for example, the fact that in the province of Quebec television news has actually been reduced a little bit when "V" was purchased by the Remillards and they were given a little bit of relief for economic reasons on the amount of news that they had to deliver and that continues in their licence renewal, this really does kind of I think answer a need and I would hope it would be welcome.

1563   COMMISSIONER DENTON: But do you think that there would -- or could you articulate how if people in the French market would be getting more, or assuming from your past answer, would be getting more news not only from within their own market, but from the English market as well and vice versa?

1564   MR. BRACE: Well, there is another and it's not a component here. It's not just a question of more and certainly it's more in terms of hours available, but it's also diversity of voices. It really does go to that which is central to what the Commission certainly targets as a key objective and that, for us, is going to be the major difference, another voice, another opinion, another set of journalists in this market that would add to the mix.

1565   MR. CRULL: Commissioner Menzies, I might just add that since Bell has bought CTV, I think that it's worthy for you to look at the track record. We had these discussions when I sat before you on the CTF transaction approval and talked about journalistic integrity, journalistic independence, talked about the CTV news brand and I think that our investments in bringing more local news, as I've said earlier, 17 daily hours of local news in eight markets in the western provinces is a good demonstration and I think that we have, given the freedom of the news organization that continue to do what they do, that brings them leading ratings in most markets and certainly the CTF National News.

1566   That quality will be lent to this French language initiative, the quality, the philosophy, the discipline and undeniably I think that in the marketplace with well financed and two existing deeply entrenched, one of the things that I have become aware of is deeply entrenched news habits are hard to change.

1567   And so, we know we have to have a service that is in this case not just new, but is really relevant to viewers and their needs, in order to change those deeply entrenched habits and give them another voice.

1568   MR. BRACE: And I wouldn't want lost is the fact that the news operation of CTV is vast, I mean, with our bureaux across the country and around the world. The facilities are there, the instalments are there. The ability to bring news in from those areas and feed into this newscast gives us the ability to deliver information that is going to obviously concern the francophones of Quebec, but certainly the national even worldwide in scope.

1569   MR. PARISIEN: And the only news involvement that Astral has it's through radio and without this transaction we could not offer this and service to consumers in Quebec and there is a hole there obviously, Rick referred to it, and I think this is one of the great benefits amongst the others that the transaction bring to this marketplace, the francophone marketplace.

1570   COMMISSIONER DENTON: Sure. And I understand from your comments earlier today that from a global perspective you see yourself as meeting size and mass to compete with the Googles and the Apples and that, but I am sure you understand that any time a large number of news resources fall into fewer and fewer hands, that it makes citizens nervous in terms of that, so -- And there is a couple of examples that were written in. I mean, for instance going back a few years when the CTV newsrooms, personnel on the CTV newsrooms were used for the Save local TV campaign, that made some of those journalists nervous because they were being used as part of a debate or campaign regarding a matter of public policy or Commission policy at least.

1571   So, people have an example, a tangible example of how journalistic resources can be used and you may have a view on other being used today too. But these are not lost on the public and they have perhaps short term benefits but long term consequences.

1572   So, and a couple of interveners here, Benjamin Crane and Mat Ronick argue, and according from their interventions, that your BCE's journalism ethics are questionable as journalists are discouraged from "doing stories that would put Bell services in a negative light". And from "speaking freely about Bell's less enjoyable business decisions even though it might have an effect on the public and are talked about as relevant news on other stations" such as "Bell's desire to flip the English TSN radio station to the French language".

1573   I could go on, but you get the drift?

1574   MR. COPE: Yes. Well, they are completely untrue and CTV news and the quality of news that brings this country is undoubted. I think Canadians would view it that way. If you have seen one thing for sure since BC acquired CTV is the integrity of the newsroom. You would notice an enormous difference in this particular file and that BCE has conducted itself with the ownership of CTV with not a comment that would look pro, con, around this that would look anyway in points by BC because they have no inference in that the integrity of our newsroom will always be honoured and clearly is and I think it will be an enormous benefit to diversity of voices in Quebec where I think it is actually needed and I think it will help enhance competition and consumer choice in Quebec. I think it will be an excellent, excellent part of this transaction, not possible on its own for us, not possible on its own for Astral, but a benefit to people in the Province of Quebec.

1575   And so, you know, the Commission should relax and I'm hoping everyone sees our track record since the acquisition of CTV in that area, as hopefully people will see it as impeccable as it is, because that's how we're running it.

1576   COMMISSIONER MENZIES: Sure. I don't think it's a question of the Commission relaxing, I think it's a question of the public and its perception --

1577   MR. COPE: And I don't think the public's --

1578   COMMISSIONER MENZIES: And I'm not --

1579   MR. COPE: I think the public's perception of CTV is very clear. The watching, the viewership, we have never -- I have never received a CEO note from anyone in Canada on CTV News appearing biased towards Bell since we have -- if anything, it's complements about CTV's news service, Olympic coverage, all those things. I have never once received that.

1580   COMMISSIONER MENZIES: I'm not challenging your integrity because I know that makes people uncomfortable --

1581   MR. COPE: No, sorry, the letter you read out --

1582   COMMISSIONER MENZIES: You never did.

1583   MR. COPE: I'm not saying you are, I apologize, not you at all, the letter you read out, I'm saying it's false, it's infactual, it's unacceptable and it's not accurate.

1584   COMMISSIONER MENZIES: Okay. Fair enough. But it's a view that you've responded to in terms of that, but when things get to a certain size, public confidence in these matters is important and Bell's ownership of CTV is fairly recent, so it's not like -- and I'm sure it's an admirable track record, but it's not very long and a lot of these things can have to do with personalities involved.

1585   And, so, what I'm trying to get at is what sort of structures can be put in place or would you be willing to put in place to ease those public concerns and make sure that should in the future executives less principled than the ones before us might be bound by those rules and not the --

1586   MR. CRULL: Well, Commissioner Menzies, I think there's two points to that question. I can't let it go as the head of Bell Media without adding to George's adamant comments that our news operation operates entirely independent and covers stories one hundred percent based on their view of the journalistic value of that story and covers all perspective and has never one day, or one story had an intervention from this management team. And that's an important thing to note.

1587   Second point is: the transaction that we're here to talk about today. There is no additional news or editorial voice that's added to the Bell Media portfolio on television as a result of this transaction. There's none.

1588   In radio it might be surprising to the Panel to understand that of all the radio stations actually the overlap in markets is quite small between the Bell Media existing radio stations and the Astral radio locations. There's only five markets in the entire country where we, in fact, overlap and those markets are Vancouver, Calgary, Toronto, Winnipeg and Ottawa. So, only five markets where we overlap.

1589   Post the divestiture our share of viewing in those five markets, in three of them because of the nature of the divested stations that we talked about and shared with the Commission this morning, in three of those there's no change in our share of listenership, no change whatsoever.

1590   So, I don't believe that there's any impact on the diversity of news voices in those three markets out of only the five that overlap. In the two markets, it's really a nominal change in market share after the divestiture of stations.

1591   In Winnipeg, our market share goes from 19.6 for Astral to 20.2 for the combined Bell/Astral listener share. In Toronto, it goes from 18.3 for Astral to 21.3.

1592   And I would note that in addition in these markets and in markets all across the country, that more often than not the leader in the market is a company other than Bell/Astral in terms of radio.

1593   So, I don't see, from my objective or subjective viewpoint, I don't see any concern on the news and editorial impact and I can't understand any justification for that. None in television and that's the limited radio.

1594   COMMISSIONER MENZIES: Okay. Just to switch slightly, but still on -- there was a report in Le Devoir this summer about the merging of the French and English newsrooms. Has that taken place; is that accurate, Montreal, sorry?

1595   M. PARISIEN : No. What happened in Montreal is that we moved our English stations from the western part of the city to a building that was completely renovated where we had our French radio stations and they moved just recently two, three weeks ago.

1596   COMMISSIONER MENZIES: So, it's independent operations co-located in the same building?

1597   M. PARISIEN : Independent operations located in the same building. They have Anglophone journalists, Francophone journalists, newscasters for the English stations and newscasters for the French stations.

1598   COMMISSIONER MENZIES: So, and they will stay that way?

1599   M. PARISIEN : They will stay that way.

1600   COMMISSIONER MENZIES: Okay. There's no co-location of television and radio other than in the same building? There's no like structural --

1601   M. PARISIEN : At Astral there is no co-location of television and radio, no.

1602   COMMISSIONER MENZIES: Okay. And Bell, CTV radio and TV?

1603   MR. GORDON: Yeah, there is physical co-location between the operations, but there is absolutely no cross-over between programming and news voices between radio shows.

1604   COMMISSIONER MENZIES: So, sort of shared assignment director or anything like that?

1605   MR. GORDON: Not at all. They're completely distinct businesses, they're completely distinct expectations from a consumer, from a news point of view, so to do the right thing from a business point of view, it's business to keep them separate.

1606   COMMISSIONER MENZIES: Do you anticipate that staying the same, just because there was -- you know, perhaps it was an aside and I'll give you the opportunity to explain it so it doesn't leave the wrong impression -- Mr. Crull made a point this morning that he referenced there wouldn't be a reduction in terms of reporters, I believe you were talking about, but you sort of said there might be opportunities among management in terms of synergies.

1607   And I just wanted to make sure I didn't misunderstand that or whether in terms of merging the operations there might be some synergies among reduced management resources or assignment editor resources or --

1608   MR. CRULL: As far as the news operations and the news director, a distinct and dedicated news director will remain and must remain for the proper operation of each station in the merged organization.

1609   COMMISSIONER MENZIES: Okay, thank you. So whatever you were referring to was at a non-local level or -- not at the local, yeah.

1610   MR. GORDON: Yes. We do share some physical locations between radio and television, we do share some management overlap with general managers and that would be, you know, the main extent of it.

1611   There are some finance, some accounting, some HR overlap between the stations, but from a programming point of view, the stations are completely distinct and separate and will continue to be that way.

1612   COMMISSIONER MENZIES: Okay. Earlier in the day -- and I know it's getting late, that's hard to recall -- there was some reference to a national strategy or national action regarding radio and I'd like to understand that more fully, whether it was just limited to talk about sports radio, for instance, in terms of having various TSNs, or whether that was just something that we may have misunderstood.

1613   Is there a sort of plan to have a national news strategy across the operation?

1614   M. PARISIEN : The only thing I recall is that we did talk this morning about this transaction bringing scale and giving access to radio to more sources of information.

1615   COMMISSIONER MENZIES: Okay.

1616   M. PARISIEN : Especially on the national level, meaning national news, national content. A radio station, I think I gave Calgary as an example, doesn't send the journalists with Mr. Harper when he goes to China, but CTV does. So, that helps us.

1617   COMMISSIONER MENZIES: So that will be more, because in some cases --

1618   M. PARISIEN : Absolutely it will add --

1619   COMMISSIONER MENZIES: -- I'm sure people can talk about it, it actually means less where you have regional voices and they get centralized.

1620   M. PARISIEN : In the case before you, it will be definitely more and we're talking about CTV, TSN and RDS in French and so on.

1621   COMMISSIONER MENZIES: How do we know, because we're talking about this transaction and this is today, how do we know -- how does the public know, for that matter, that these sorts of commitments can stand up over a certain number of years because we hear --

1622   M. PARISIEN : I hear you, yes. The best answer I can give you is, at the end of the day the consumer decides and I have to put the best product out there for the consumer, the listener or the viewer, in this case we're talking radio, it's the listener.

1623   So, if I start messing around with what you're referring to, they won't be there and I will lose advertising and the business model won't sustain itself, and that's the best guarantee you can have.

1624   We need the ratings and the ratings is a good product on air and a good product includes news.

1625   COMMISSIONER MENZIES: Okay. Would you agree to the imposition of the journalistic independence code by COL on radio?

1626   MR. BIBIC: Can we get back to you on that?

1627   COMMISSIONER MENZIES: Yes.

1628   MR. BIBIC: May I reflect with my colleagues on the impact of that?

1629   COMMISSIONER MENZIES: Sure. When will you get back to us?

1630   MR. GOLDSTEIN: Are you referring to the CDSC journalistic independence code?

1631   COMMISSIONER MENZIES: Yes.

1632   MR. GOLDSTEIN: We can get back to you in the morning.

1633   COMMISSIONER MENZIES: Thank you.

UNDERTAKING

1634   MR. GOLDSTEIN: Whether Bell Media would agree to the imposition of the CDSC journalistic independence code by COL on radio.

1635   COMMISSIONER MENZIES: Do you have another one in mind?

--- Laughter

1636   MR. GOLDSTEIN: I was just checking.

1637   COMMISSIONER MENZIES: There's some concern about issues of non-compliance involving a number of Astral radio stations in terms of past eligibility of CCD contributions and filing complete annual returns, for instance, among other.

1638   Some of this appears to have been addressed over the summer in mind with the sort of, nothing clears the mind like a hearing, but we need to know specifically what structural changes Bell will undertake to make sure that this doesn't continue.

1639   MR. CRULL: I think relating to the CCD issues Astral may have had in the past, they were specifically related to a couple of different incidents and are not sort of an ongoing problem. I'll pass it over to my colleague, Madam Laflamme.

1640   MS LAFLAMME: As mentioned on the public record, measures have been taken in place to make sure that this does not happen again. So when we launch a new initiative now we make sure of the eligibility of it, so we consult with the CRTC staff to make sure that this is fine. And we have centralized the initiative and make sure that the regulatory department goes through them and that they are in compliance with the policy.

1641   COMMISSIONER MENZIES: And that's new, is it?

1642   MS LAFLAMME: It is. The centralization, yes, it's new.

1643   COMMISSIONER MENZIES: Okay.

1644   Regarding Canadian content requirements, CRTC staff did a review at three Montreal stations this April and there were some disappointing numbers, in terms of Canadian content.

1645   So what I need to know is what sort of measures are contemplated to ensure compliance, particularly around the areas of French language content, Canadian content and the aforementioned montages?

1646   MS LAFLAMME: Okay. For the record, it's not Montreal stations, though it was one in station Quebec City and another station in Saint-Hyacinthe.

1647   COMMISSIONER MENZIES: I stand corrected.

1648   MS LAFLAMME: Yeah. So measured --

1649   COMMISSIONER MENZIES: I should have checked with CRTC staff before to make sure I was in compliance.

--- Laughter

1650   MS LAFLAMME: Well, for sure it's unacceptable and measures have been put in place again to reinforce.

1651   I'll tell it in French, if you don't mind, because it's --

1652   COMMISSIONER MENZIES: No, please do.

1653   MME LAFLAMME : Donc, nous avons mis des mesures en place. Nous avons encore rencontré... En fait, à Québec, c'est un nouveau directeur de la programmation. Donc, nous lui avons rappelé les règles. Nous l'encadrons davantage, et même, dans ce cas-ci, des mesures disciplinaires ont été donc imposées à notre directeur pour qu'il comprenne bien qu'Astral ne supporte pas ça et Astral veut absolument que les conditions évidemment soient respectées.

1654   Et même chose à Saint-Hyacinthe, des mesures ont été prises auprès du directeur-général. On a eu encore d'autres discussions et je peux vous assurer que ça ne se reproduira plus.

1655   MR. BIBIC: If I may, Commissioner Menzies?

1656   I mean I don't have all the facts at my fingertips on all these instances, but certainly when we come together, you have our total commitment to making sure that we have the right mechanisms in place to make sure that we live up to -- whether it's benefits, payments or other regulatory obligations, I mean we have a stable of 30-plus radio stations today where we make sure we do that. When the two assets combine, should we receive your approval, we'll continue with that and I'll make sure that those remain in place, the mechanisms that Claude discussed.

1657   COMMISSIONER MENZIES: So is there anything to add to the record beyond your replies over the summer, in terms of long-term structural changes or what you've just outlined right now to --

1658   MR. BIBIC: No, what Claude Laflamme indicated to you is the steps that have been taken, and that will continue to be maintained.

1659   COMMISSIONER MENZIES: Thank you.

1660   I just have a follow-up question on an unrelated matter in these matters to help me understand the earlier discussion regarding the Northwestel hearing.

1661   You said that if it wasn't simply a Northwestel initiative, it would be a form of subsidy. I just wanted to clarify further that you said that then, if it wasn't an initiative restricted to Northwestel, you would consider it just like a form of government subsidy and you would withdraw the offer.

1662   MR. BIBIC: Correct.

1663   COMMISSIONER MENZIES: Okay.

1664   Isn't a tangible benefit something that should be of benefit to the system?

1665   MR. BIBIC: Well, this is completely beneficial to the system, in the sense of engaging. I mean the policy says "of benefit to the system, of benefits to third parties directly affected by the initiatives".

1666   If you allocate $40 million to independent production, what happens? What happens is BCE or CTV Bell Media commissions content using benefits moneys from independent producers to create, let's say, programming of national interest, and then that benefits the independent production community.

1667   Then phenomenal content is produced, we put it on one of "our" services, the consumers get to watch and enjoy that, and then, if there's an allocation to new media content, then those benefits get propagated by distribution on multiple screens.

1668   And that's how, you know, if you use that, by analogy, $40 million, if it were allocated to independent production, we would commission the program, we would air it on our service, and then we would make it available to consumers through the distributor of their choice.

1669   COMMISSIONER MENZIES: Right. The key point for you is that you be the distributor.

1670   MR. BIBIC: Well, just like we are the broadcaster of the programming --

1671   COMMISSIONER MENZIES: Yes.

1672   MR. BIBIC: -- we commission, correct, that's the analogy.

1673   COMMISSIONER MENZIES: Yes. I'm just trying to understand your position on that --

1674   MR. BIBIC: Exactly. So it's on all fours --

1675   COMMISSIONER MENZIES: -- that benefits may accrue to others provided you are the pipe that carries it.

1676   MR. BIBIC: Ultimately, if you think about what we're discussing here today with the Northwestel program, who's got the track record in Canada of building wireless broadband and broadband networks to Canadians to 98 per cent of the population? We do.

1677   We can do this fast and rapidly, and we can connect these communities to the broadcasting system the most effectively, the most rapidly, we have the technical know-how, the expertise, the engineers and networks. We can get it done.

1678   COMMISSIONER MENZIES: Okay.

1679   MR. BIBIC: And another reason -- I should have mentioned this earlier when the vice-chair was asking me -- otherwise, if we do it the other way that some have asked for, we're going to be reliving the deferral account model, which I don't think, on this side of the table we want to relive or on that side of the table want to relive, because it's just not going to get done as quickly and as rapidly as we can.

1680   We're proposing to do this over four years. And the vice-chairman asked about, you know, spreading benefits payments over five years. There's an example of one allocation we're prepared to do over a shorter period than seven years.

1681   COMMISSIONER MENZIES: Okay.

1682   Just two more, hopefully quick ones. One is just for clarification on your announcement this morning of your new service.

1683   Is that Canadian content that you're distributing or international content?

1684   MR. CRULL: Both.

1685   COMMISSIONER MENZIES: Is there a percentage of availability?

1686   MR. CRULL: I would expect. I think the Commission well aware of on-demand services, that you can place content in on-demand --

1687   COMMISSIONER MENZIES: Yes. Yes.

1688   MR. CRULL: -- services, but what gets viewed is --

1689   COMMISSIONER MENZIES: You make it available, you can't --

1690   MR. CRULL: -- up to the consumer.

1691   COMMISSIONER MENZIES: Yes.

1692   MR. CRULL: I would expect the proportion of content that's made available would look largely like the proportion that we buy and carry today.

1693   COMMISSIONER MENZIES: Okay, thanks.

1694   My last question is: there's been discussion and there's debate, and you have strong views, and others do too, about the size of your market dominance. This is a question looking forward, it isn't so much about today. But no matter what set of numbers are used, I'm assuming that you intend to grow your business, that you sort of owe that to your shareholders to grow your business, and that part of that you would grow your market dominance -- or you would grow your place in the market over the years.

1695   What happens if you win? Where do you stop?

1696   MR. COPE: Well, absolutely, our job every day is to beat our competitors in the marketplace, that's out intention, to give consumers a choice, and hopefully they'll choose our business.

1697   We're all tired, it's the end of the day, but the words twice were used, "use our market dominance". I don't agree with that at all --

1698   COMMISSIONER MENZIES: I understand that, and let me just clarify that.

1699   MR. COPE: Yeah.

1700   COMMISSIONER MENZIES: I misspoke. "Use your position in the market".

1701   MR. COPE: Right.

1702   COMMISSIONER MENZIES: Okay?

1703   MR. COPE: Yeah. So our position in the market, at 33 1/2 per cent market share -- we talked about that -- from an English perspective, very close to the Shaw/Corus at, I think, 30.2 per cent.

1704   If we're talking about dominant market shares in the TV distribution business, we have people at 70 per cent on the TV. That's where we have some dominance of market share. But we're fighting that, because we've got five TV and all these new great services to compete and offer choice to the consumer.

1705   On the broadcast side, and just struggling back commercially, when you're in these type of market share positions we're talking about, nobody's in a dominant position. The market's competitive. There's 65, 70 per cent choice in each case. And I think, as we mentioned, where there's really an acceleration of your competition in market share is in the Quebec market, where we're going to be, as we said, roughly in this 24-per-cent market share position, vis-à-vis our competitor, will still be larger.

1706   For us, unfortunate. Maybe in this particular hearing fortunate, but unfortunate from a market perspective, and we want to try and grow that share against them, as we know every single day and tomorrow morning, Shaw and everybody's getting up to try to take share against CTV and Astral.

1707   COMMISSIONER MENZIES: Sure. I didn't want to rehash the argument over what the share was --

1708   MR. COPE: Oh, okay.

1709   COMMISSIONER MENZIES: -- I was trying to get into the future.

1710   At what point, 5, 7, 10, 12 years from now, say there's a failure in the marketplace or something, at what point do you think is reasonable for us to say, "That's big enough"?

1711   MR. BIBIC: So Commissioner Menzies, let's start. I'm not going to repeat George's answer, I heard your position, so...

1712   But let me start my answer by saying by no stretch by any measure are we dominant. So when you start from that today, even after this transaction, no dominance, now what happens going forward? If we try, as competitors, to beat the pants off each other and win the viewer, that's good. That increases content. That increases programming choice. That increases the quality of the programming.

1713   COMMISSIONER MENZIES: It's good as long as there's competition. It's not good if somebody wins.

1714   MR. BIBIC: Well, except that the whole point of the competitive process is to try to outdo your competitor, and what will happen is your competitor will then try to outdo you, and there are ebbs and flows. And the Commission did say in the Diversity of Voices, paragraph 84:

"...Commission will not be concerned about increases in viewing share that result from the normal competition for audiences or the introduction of new services."

1715   That's a reflection of the desire that the Commission had -- and I believe still does have -- for all of us to try to outdo each other so that we can bring better options to the consumer. Because if we all get lazy and get happy with the status quo and don't improve the offerings, no one wins.

1716   MR. CRULL: To add to Mr. Bibic, I think that the Commission's memories are fresh of just three or four years ago when there was a very different environment in broadcasting in this country. You had a major bankrupt broadcaster, you had one that was violating bank covenants and required infusions of money, and you had another one, in Rogers, that was, frankly, really not investing and interested in media.

1717   Since Bell has gotten involved, and since Shaw, frankly, bought CanWest and invested there, it has stimulated a reinvigoration of the entire sector to the benefit of everyone. So there's evidence of the theory that has been placed forward.

1718   But I want to respect your question because we did give it thought relative to -- a lot of our discussion is the viewing shares and the participation shares in individual markets and if what you're going at is okay, but we could look at radio individual local markets, we could look at your out-of-home market share, we could look at your specialty and your conventional TV viewing share, and each individually provide comfort, but stacked as a whole, how does that change.

1719   And we undertook to go through a process of looking at each of the constituents and stakeholders and we found that now this horizontal share, being in multiple businesses versus the individual business share, only benefits consumers, creators and advertisers, and really, that horizontal participation we went through doesn't harm suppliers, advertisers, distributors or consumers.

1720   And so if that's getting at what you're at, I find that there's great benefits that accrue.

1721   COMMISSIONER MENZIES: Okay, thanks. I won't belabour it, it's late. Thanks.

1722   THE CHAIRPERSON: All right, I'm seeing people looking tired, so I'm going to provide a bit of hope, light at the end of the tunnel, and tell you where we're heading.

1723   I think Commissioner Lamarre has a few quick follow-ups, the Vice-Chair of Broadcasting has as well, and I think legal counsel has some questions. We will do those and we will adjourn for the evening and start with item 2 at 8:00 tomorrow morning if you're okay with that because I think it's getting to the point where people are tired and it's been a long day for all of us.

1724   Madame Lamarre.

1725   CONSEILLERE LAMARRE : Merci, Monsieur le Président. J'ai promis qu'on serait rapide, et "on" inclut la personne à qui je m'adresse.

1726   Mr. Cope, during your discussion with Mr. Pentefountas, I didn't manage to understand what was the position right now as far as the timeline for the payment of the tangible benefits is concerned. Is it seven years, 10 years or five years?

1727   MR. BIBIC: We will come back in the morning with a fully fleshed-out schedule for each of the initiatives.

1728   COMMISSIONER LAMARRE: Okay. So that's why I have nothing final. Okay.

1729   Madame Turcotte, le consortium avec le Cirque du Soleil va mettre sur pied une production, j'ai bien noté, de 15 millions de dollars?

1730   MME TURCOTTE : C'est-à-dire la contribution de Bell est de 15 millions de dollars.

1731   CONSEILLERE LAMARRE : Ce consortium-là, est-ce qu'il disparaît si la demande qu'on a devant nous n'est pas approuvée?

1732   MME TURCOTTE : Pour l'instant, on va de l'avant avec l'initiative, mais naturellement, c'est quelque chose qu'on va regarder suite aux décisions du CRTC.

1733   CONSEILLERE LAMARRE : O.K. Donc, la réponse c'est peut-être?

1734   MME TURCOTTE : Peut-être.

1735   CONSEILLERE LAMARRE : O.K.

1736   Mr. Crull, I need to check something with you because I think I heard you say something but I'm not sure. I think my internal translation device could be at fault here.

1737   As we were talking about competition, did I hear you say that you were of the view that the announcement of RDS2 triggered the TVA Sports application?

1738   MR. CRULL: I would submit that vigorous competition creates a reaction from competitors and they have to raise their game as well, and we found that the -- probably not the application.

1739   COMMISSIONER LAMARRE: Okay. That's what I wanted to make sure because I --

1740   MR. CRULL: But the timing of the launch -- actually I believe it got to market faster as a result of RDS2.

1741   COMMISSIONER LAMARRE: Okay. Because I checked the record and that's exactly the point of my question.

1742   In all fairness to both Bell and Quebecor, TVA Sports filed its application in 2009. It was made public in December 2009. It was approved sometime in 2010 and it launched about a year later. And RDS2 was announced in May 2011, and, as you're all well aware, being this multiplex of RDS, you did not need to file an application. So I just wanted to get the record straight.

1743   MR. CRULL: Your data is correct.

1744   COMMISSIONER LAMARRE: Thank you.

1745   C'est tout, Monsieur le Président.

1746   LE PRÉSIDENT : Monsieur le Vice-Président.

1747   CONSEILLER PENTEFOUNTAS : Merci, Monsieur le Président.

1748   Who would have thunk my colleague Menzies was an avid reader of "Le Devoir"?

1749   Ceci étant, il y a quelques années, lors de l'acquisition de CTV par Bell, Bell s'est engagée à maintenir en ondes les chaînes 'A', the 'A' channels. Il y avait quatre stations et je pense que l'entente était pour trois ans, si ma mémoire m'est fidèle, même si je ne faisais pas partie de l'audience.

1750   Est-ce que vous seriez en mesure de considérer un temps minimal où vous garderiez ce canal de nouvelles de langue française en ondes nonobstant le succès ou l'échec de la chaîne comme telle? Et vous n'avez pas besoin de répondre tout de suite, mais pensez-y à ça et peut-être retournez demain avec une réponse.

1751   M. BIBIC : Oui. On vous revient demain matin.

UNDERTAKING

1752   CONSEILLER PENTEFOUNTAS : D'accord.

1753   Ça va. Ça complète. Merci.

1754   LE PRÉSIDENT : Donc, je vais passer la parole à mes confrères conseillers juridiques.

1755   MR. McINTYRE: Thank you, Mr. Chair.

1756   I just have, I guess, three questions that I think can be handled as undertakings as well.

1757   The first is with respect to the value of the transaction. In the report it was submitted that subscription services offered by BDUs in relation to Astral's video-on-demand offerings would be excluded.

1758   So we were hoping that you could explain the rationale behind excluding SVOD services or offerings and also if you could provide details about the specific value that was excluded and any revisions to Schedule 13 of the Valuation Report for SVOD and for online and other non-broadcast, that section also of the report, without the SVOD component.

1759   If you could provide that by tomorrow, that would be great.

1760   The second question is about the vertical integration 3:1 linkage rule. There was some discussion about it and there was a staff question dated May 24th requesting confirmation essentially that BCE would be in compliance with that rule if the transaction were approved, but there was no list of the specific service offerings that would demonstrate that BCE would be in compliance. So we're hoping that you could file that tomorrow as well.

1761   MR. BIBIC: Okay. So we are in compliance. So you're asking for the back-up?

1762   MR. McINTYRE: That's right.

1763   MR. BIBIC: Yes. I think we'll need an extra day because the folks aren't here who have that back-up. So we'll work on it throughout the course of the day tomorrow and we'll file it as soon as we can, but I don't think I'll be here at 8:00 a.m. tomorrow with that back-up.

UNDERTAKING

1764   MR. McINTYRE: That's fine.

1765   MR. BIBIC: Yes.

1766   MR. McINTYRE: Okay. And the last undertaking -- and this is not for tomorrow, you will be relieved to know -- this is for Thursday, September 13th and it's a list of staff questions that relate both to the value of the transaction and radio compliance. So I will be providing you with a copy of those at the end of the day today.

1767   MR. BIBIC: Okay. And then the responses will be due Thursday?

1768   MR. McINTYRE: On Thursday, yes.

1769   MR. BIBIC: Okay.

1770   MR. GOODWIN: I can help answer part of the first question around why the SVOD was not in the regulated base.

1771   I mean in that particular case it was excluded because Astral is a content provider to a BDU that provides the service as the licensee. So it's not part of the individual services, at least within Astral's regulated operation.

1772   And similarly, I don't think those types of revenues are recorded on the CRTC returns anyway. So it's not an artificial separation that's being created for the Valuation Report.

1773   MR. GOLDSTEIN: Maybe I can add.

1774   In terms of VOD, as Ken indicated, the provider who provides VOD services and is the licence undertaking is a VOD programming undertaking generally held by the BDUs offering it.

1775   In the case of Astral providing those rights in terms of an SVOD offering, they're providing it as a program rights holder as opposed to a licensee. The licensee who holds that is the BDU who holds the licence.

1776   So they're no different in that case than a Hollywood studio providing rights to a movie to a VOD provider. It's an arrangement to provide a licence of those rights.

1777   MR. McINTYRE: Okay. We accept your response right now, but if you could please provide any supplemental information tomorrow, that would be appreciated. Thanks.

1778   MR. GOLDSTEIN: We can do that.

UNDERTAKING

1779   THE CHAIRPERSON: That's it?

1780   MR. McINTYRE: Yes.

1781   THE CHAIRPERSON: Okay.

1782   Donc, comme je l'ai annoncé tout à l'heure, on va reprendre demain à 8 h 00 avec l'item numéro 2, avec la présentation, qui va vous donner une chance de vous réinstaller.

1783   Je voulais, par contre, remercier les techniciens et les interprètes de bien vouloir rester un petit peu plus longtemps ce soir. Je sais que c'est une particulièrement longue journée pour ces gens-là. Donc, merci beaucoup et à demain matin à 8 h 00. Merci bien.

--- Whereupon the hearing adjourned at 1834, to resume at 0800 on Tuesday, September 11, 2012

REPORTERS

Johanne Morin

Monique Mahoney

Madeleine Matte

Carmen Delisle

Beverley Dillabough

Date modified:

2012-09-10