ARCHIVED - Transcript, Hearing 2 May 2013

Volume 8, 2 May 2013

TRANSCRIPTION OF PROCEEDINGS BEFORE THE CANADIAN RADIO-TELEVISION AND TELECOMMUNICATIONS COMMISSION

SUBJECT:

Applications for mandatory distribution on cable and satellite distribution systems pursuant to section 9(1)(h) of the Broadcasting Act and applications for the licence renewal of independent conventional, pay and specialty television services

HELD AT:

Outaouais Room

Conference Centre

140 Promenade du Portage

Gatineau, Quebec

2 May 2013

Transcription

In order to meet the requirements of the Official Languages Act, transcripts of proceedings before the Commission will be bilingual as to their covers, the listing of the CRTC members and staff attending the public hearings, and the Table of Contents.

However, the aforementioned publication is the recorded verbatim transcript and, as such, is taped and transcribed in either of the official languages, depending on the language spoken by the participant at the public hearing.

Canadian Radio-television and Telecommunications Commission

Transcription

Applications for mandatory distribution on cable and satellite distribution systems pursuant to section 9(1)(h) of the Broadcasting Act and applications for the licence renewal of independent conventional, pay and specialty television services

BEFORE:

ALSO PRESENT:

HELD AT:

Outaouais Room

Conference Centre

140 Promenade du Portage

Gatineau, Quebec

2 May 2013

- iv -

TABLE OF CONTENTS

PAGE / PARA

REPLY BY:

Gatineau, Quebec

--- Upon resuming on Thursday, May 2, 2013 at 0900

11457   LE PRÉSIDENT : Donc, à l'ordre, s'il vous plaît.

11458   Nous amorçons maintenant la Phase III de notre instance, et pour ne pas avoir à le répéter pour tout le monde, évidemment, vous avez jusqu'à 10 minutes pour... Vous n'avez pas besoin de prendre les 10 minutes, mais vous avez jusqu'à 10 minutes pour faire votre réplique, et possiblement, il y aura des questions, mais pas nécessairement, et personne ne devrait lire, d'une façon ou d'une autre, s'il y a ou il n'y a pas de questions, ce que le panel est en train de penser. Vraiment, notre but ici est de compléter le dossier et la preuve dont on a besoin pour amorcer la prochaine étape, qui est l'étape de la délibération du Conseil.

11459   Donc, madame et messieurs de All Points Bulletin/Avis de recherche, allez-y, s'il vous plaît.

REPLY

11460   M. GÉRACITANO : Monsieur le Président, mesdames et messieurs les Conseillers, membres du personnel, je me présente encore une fois, Vincent Géracitano, Président d'Avis de recherche et de All Points Bulletin.

11461   M'accompagnent aujourd'hui, à ma droite, madame Hélène Fouquet, rédactrice en chef de la chaîne ADR, et, à ma gauche, monsieur François Doré, retraité de la Sûreté du Québec et maintenant chroniqueur-analyste en matières policières.

11462   Au cours de cette réplique orale, nous aborderons les points suivants :

11463   - la conformité de nos demandes aux critères énoncés dans la politique réglementaire CRTC 2010-629;

11464   - la question de la publicité à l'antenne d'ADR et APB;

11465   - la question de l'auditoire d'Avis de recherche et de son efficacité dans l'accomplissement de sa mission;

11466   - la question du sous-titrage codé de nos émissions; et

11467   - enfin, la question du mode de financement d'ADR et APB.

11468   Lors de notre comparution, le Conseil s'interrogeait sur la démonstration de notre conformité aux critères de sélection des services 9(1)h) énoncés par le Conseil qui semblait absente de nos demandes.

11469   Je tiens à rassurer le Conseil que nous avons longuement démontré la conformité de la demande d'APB à chacun des critères du Conseil au chapitre 3, paragraphes 23 à 54, de cette demande. Nous avons, par ailleurs, indiqué que cette démonstration s'appliquait mutatis mutandis à ADR, les deux services ayant la même mission et les mêmes engagements.

11470   Sans les reprendre un à un, je rappelle notamment qu'ADR et APB se sont tous deux engagés :

11471   - à diffuser un minimum de 95 pour cent d'émissions canadiennes en journée et en soirée -- d'ailleurs, ADR diffuse présentement 100 pour cent de contenu canadien.

11472   - deuxièmement, à consacrer un minimum de 43 pour cent des revenus bruts réalisés par le service aux dépenses d'émissions canadiennes. Je rappelle qu'ADR présentement dépasse largement cette condition de licence puisque nous consacrons plus de 65 pour cent aux dépenses d'émissions canadiennes.

11473   Par ailleurs, la totalité de ces émissions canadiennes sont des émissions originales en première diffusion produites par et pour le service. Et l'historique d'ADR et APB démontre éloquemment que sans statut 9(1)h), elles ne pourront respectivement survivre et voir le jour.

11474   Je tiens par ailleurs à clarifier les commentaires que j'ai fournis à l'audience concernant les revenus publicitaires projetés pour la prochaine période de licence.

11475   La diffusion nationale d'APB nous permettra :

11476   - un, de convaincre le gouvernement fédéral et les gouvernements provinciaux de diffuser certaines publicités gouvernementales et messages d'intérêt public liés à la mission d'APB; et

11477   - deuxièmement, de solliciter et obtenir certains partenariats d'affaires de prestige.

11478   Les revenus ainsi générés seront modestes, certes, mais, comme l'a souligné le commandant Ian Lafrenière, notre association avec les organismes chargés de l'application de la loi nous oblige à une extrême prudence en matière de publicité commerciale.

11479   MME FOUQUET : Monsieur le Président, mesdames et messieurs les Conseillers, Le Conseil a mentionné lors de notre comparution que certains pourraient prétendre qu'ADR « est un échec au niveau des côtes d'écoute. » Nous nous inscrivons en faux contre cette affirmation.

11480   Nous ne nions pas le fait que notre auditoire soit modeste par rapport à celui des chaînes spécialisées les plus populaires, qui ont elles-mêmes des auditoires modestes comparés à ceux des grands réseaux généralistes.

11481   Toutes les catégories de diffuseurs n'ont pas le même potentiel d'auditoire, et j'ajouterais qu'ils n'en ont pas non plus la même nécessité pour remplir leur mission.

11482   TVA mourrait probablement si sa part d'auditoire au Québec chutait à 5 pour cent, un pourcentage par ailleurs largement supérieur à celui que réussissent à atteindre les chaînes spécialisées les plus populaires, qui vivent pourtant confortablement et réalisent des marges bénéficiaires de 35 pour cent et plus.

11483   Comme vous le savez, Monsieur le Président, CTVM Info publie chaque semaine la part de marché au Québec des chaînes de télévision traditionnelles, spécialisées et payantes qui ont atteint la barre des 0,1 de part d'auditoire. Avis de recherche ne figure pas sur cette liste.

11484   Nous ne sommes toutefois pas seuls à n'y pas figurer. Je dirais même que nous sommes en excellente compagnie avec notamment APTN, CPAC français, AMI-tv et d'autres qui ont pour point commun, outre leurs auditoires modestes, d'être des chaînes reconnues d'intérêt public et de disposer d'un statut 9(1)h).

11485   La question que nous posons est celle-ci : Est-ce que le fait que CPAC français, après 20 ans d'existence, n'ait pas réussi à attirer suffisamment de téléspectateurs pour franchir la barre des 0,1 part de marché rend sa mission de service public moins pertinente? Nous ne le croyons pas.

11486   Et nous ne sommes pas les seuls à le penser puisque les quatre associations qui représentent les consommateurs canadiens dans cette instance ont unanimement reconnu la mission de service public de ces mêmes chaînes, soit AMI-tv anglais et français, All Points Bulletin, APTN, Avis de recherche et CPAC français et anglais, et ils ont unanimement demandé au Conseil de leur accorder ou de maintenir leur statut 9(1)h).

11487   M. DORÉ : La question de savoir si nos auditoires « modestes » nous empêchent de remplir notre mission avec efficacité a aussi été soulevée. La réponse, elle simple, c'est non, absolument pas.

11488   Je peux témoigner des remerciements quotidiens que nous recevons de la part des corps policiers, des familles de personnes disparues, des organisations chargées de la sécurité publique, comme en font foi les nombreuses lettres d'appui déposées pour l'aide considérable apportée par ADR et ses téléspectateurs.

11489   Nous ne pouvons évidemment les énumérer toutes dans le temps qui nous est imparti aujourd'hui. Aussi, nous nous permettons de vous renvoyer à celles énumérées et citées aux paragraphes 2 à 14 de notre réplique écrite aux interventions.

11490   Nous joignons en annexe 2 le document de la GRC qui confirme que 34 pour cent des enquêtes ont été résolues grâce aux informations fournies par les téléspectateurs d'ADR.

11491   M. GÉRACITANO : J'en viens maintenant à la question des exemptions demandées à la politique du sous-titrage codé. Bien que, de façon générale, cette politique s'applique à tous les services de catégorie A et B, je constate que le Conseil y consent parfois des exceptions.

11492   Ce fut le cas récemment pour MusiquePlus et Musimax. Le Conseil a exempté ces services de l'obligation de sous-titrer codé les vidéoclips de langue anglaise qui peuvent représenter 15 pour cent et plus de leur programmation totale, car le coût de ce sous-titrage serait prohibitif.

11493   Je souligne en passant qu'en 2012 ces deux services ont réalisé des revenus combinés de 22,5 millions de dollars comparativement à 1,7 million pour Avis de recherche.

11494   Dans ce contexte, il nous semble que notre demande de nous exempter de l'obligation de sous-titrer codé les émissions en direct ou quasi direct n'avait rien de déraisonnable.

11495   Cela étant dit, je suis conscient de l'importance que le Conseil accorde à cette question. Donc, tel que prévu dans sa demande initiale, APB s'engage à sous-titrer codé 100 pour cent de sa programmation dès l'an un.

11496   Grace à une réévaluation de nos procédures ainsi que la synergie avec APB, ADR a trouvé une façon plus efficace pour fournir le sous-titrage. Donc, si le Conseil le juge absolument nécessaire, ADR s'engage à sous-titré l'entièreté de sa programmation.

11497   Par contre, nous demandons au Conseil, étant donné ses faibles revenus annuels, de lui permettre d'atteindre cet objectif uniquement en l'an deux. Au cours de la première année, notre engagement serait de sous-titrer codé 70 pour cent de notre programmation, et ce, évidemment dans la mesure où notre demande de hausse de tarif est acceptée.

11498   Vous vous êtes également interrogés à savoir si ce ne devait pas être les contribuables plutôt que les abonnés à la télédistribution qui paient pour les services d'intérêt public comme ADR et APB.

11499   Je vous soumets respectueusement que les organismes chargés de l'application de la loi au Canada relèvent d'une multitude de paliers de gouvernement -- municipaux, régionaux, provinciaux, territoriaux et fédéral -- chacun doté de pouvoirs différents d'imposition et(ou) de taxation.

11500   Vous conviendrez avec moi, je pense, que de tenter d'amener chacun de ces paliers de gouvernement à contribuer au financement d'ADR et APB au pro rata des bénéfices d'intérêt public que chacun en retire serait une tâche titanesque, voire impossible.

11501   J'ai d'ailleurs tenté, au début, d'obtenir des aides financières du gouvernement fédéral, mais en dépit de l'appui du ministre de la Sécurité publique de l'époque, l'honorable Stockwell Day, et sa bonne volonté d'aider, aucun programme n'a pu être trouvé au sein du ministère qui permettait de soutenir financièrement une chaîne de télévision.

11502   Sans compter que, sans l'intervention du Conseil, les EDRs continueraient d'avoir tout loisir de refuser de diffuser ces deux services.

11503   Je vous soumets donc respectueusement qu'ordonner la distribution obligatoire au service numérique de base d'ADR et APB est la façon la plus simple et efficace de leur permettre de remplir leur importante mission de service public.

11504   ADR and APB's mission also goes hand in hand with the CRTC's Three-Year Plan 2012-2015, that is, to create, connect and protect Canadians.

11505   APB's approval will permit a national alliance allowing all Canadians to live in security and to be informed by attracting international partnerships. For example, over a year ago ADR was approached by Homeland Security to broadcast information on terrorists suspected to be living in Canada, only to be disappointed when learning that our service was only available in Quebec.

11506   We are also developing new interactive communications technologies that we are confident will encourage young television viewers to contribute to our community safety by getting them involved in sharing of information.

11507   On another note, the All Channel Alert system offered by Pelmorex differs substantially from the services offered by ADR and APB. Their system consists of a crawler message that would override all television channels to alert the public, for example to a natural disaster or a national emergency.

11508   It would be, however, interesting for ADR and APB to seek ties with Pelmorex. The resulting synergy of the two services would ensure the safekeeping of all Canadians. For example, the ACA would immediately alert all television viewers of a natural disaster and direct them to ADR and/or APB for further information. At that point we could provide our airwaves and our facilities to civil emergency authorities, allowing them to reach out directly to the population.

11509   Finally, what distinguishes our service from most others is that we are not there to entertain, but rather to render a valued service to the community.

11510   Every Canadian may at some point in time benefit from our service, whether you are young or old, white or black, male or female, rich or poor, everyone can be a victim of a crime, everyone may have a loved one go missing, whether a child or an elderly parent.

11511   I recall a number of years ago when a well-known radio host in Montreal who was often critical of government regulations went missing. I had received numerous calls late at night from his friends urging us to get her picture on the air. It is often in such time of need that one truly appreciates a service such as ADR and APB.

11512   Finally, Mr. President, I would like to finish off by quoting a well-known and well-respected authority in the television industry, a person well-known by the Commissioner, Mr. Barry Kiefl of Canadian Media Research Inc.

11513   Mr. Kiefl writes:

"A community channel is not a mass audience channel and audience share is an inappropriate metric for evaluating a channel whose objectives are community service rather than attracting an audience for advertisers."

11514   On that note, I thank you for giving us the privilege once again to be here before you and we are ready and willing to answer any questions that you may have.

11515   THE CHAIRPERSON: Thank you very much.

11516   The Vice-Chair will have some questions for you.

11517   COMMISSIONER PENTEFOUNTAS: Thank you very much and good morning.

11518   I don't know why you would put that reference in paragraph 39 with respect to a host. Unless you put the name, I'm trying to remember who that might be, but it doesn't ring any bells. If you can --

11519   MR. GÉRACITANO: I don't know if it's appropriate for me to --

11520   COMMISSIONER PENTEFOUNTAS: Well, I don't think it's appropriate "tout court," but anyways.

11521   We will start from the back and work our way to the front.

11522   You mentioned a partenariat avec Pelmorex, des discussions avec Pelmorex. Est-ce que vous avez entamé ces discussions-là?

11523   M. GÉRACITANO : Non, Monsieur le Président, on n'a pas entamé ces discussions, mais c'était... je vous donnais à titre d'exemple qu'est-ce qu'on pourrait faire avec les synergies des deux concepts.

11524   Le système All Channel Alert est totalement différent de qu'est-ce que nous offrons, et donc, il pourrait éventuellement y avoir des facilités de mieux servir la communauté canadienne, la grande communauté canadienne, en ayant un genre de... pas nécessairement un partenariat, mais une entente qui permettrait d'exploiter les ondes d'Avis de recherche et de All Points Bulletin.

11525   CONSEILLER PENTEFOUNTAS : Vous êtes prêts à vous engager à communiquer avec les dirigeants de Pelmorex pour discuter du dossier ou de la possibilité?

11526   M. GÉRACITANO : Certainement.

11527   CONSEILLER PENTEFOUNTAS : Et l'inspiration pour ça vous est venue depuis lundi... depuis votre comparution la semaine passée?

11528   M. GÉRACITANO : Non. J'ai déjà fait cette proposition, il y de nombreuses années, devant le Conseil.

11529   CONSEILLER PENTEFOUNTAS : Aux gens de Pelmorex?

11530   M. GÉRACITANO : Non, devant le Conseil.

11531   CONSEILLER PENTEFOUNTAS : Ah, devant le Conseil.

11532   M. GÉRACITANO : Quand l'étude de Pelmorex... ou la demande de Pelmorex était à l'étude, on l'avait déjà présenté devant le Conseil.

11533   CONSEILLER PENTEFOUNTAS : C'est bien.

11534   Vous avez déjà mentionné de l'intérêt de la part des autorités américaines.

11535   Is that what you are referring to, the Homeland Security request, or were there other interests, other -- I think I have already asked the question.

11536   MR. GÉRACITANO: The interest on the part of Americans --

11537   COMMISSIONER PENTEFOUNTAS: Yes.

11538   MR. GÉRACITANO: -- is we had been contacted, for example, by people over at "America's Most Wanted" who see the concept of the channel as a wonderful idea that they would like to import to the States.

11539   Homeland Security did indeed come to our office about a year ago and wanted us to broadcast information of suspected terrorists. The whole concept of what we are doing is beautiful to them. The possibility to reach out to a nation with information that is pertinent to Homeland Security, that is pertinent to the security of all Americans, is of great interest to them.

11540   COMMISSIONER PENTEFOUNTAS: Okay. Homeland Security wasn't willing to contribute towards your budgets in helping them?

11541   MR. GÉRACITANO: If I may give you an example, Mr. Vice-President --

11542   COMMISSIONER PENTEFOUNTAS: All I want to know is, is there a possibility for you to find independent revenue streams to help you in your financing through these interconnections with American authorities?

11543   MR. GÉRACITANO: To find a revenue stream isn't -- it's not just a question of revenue. Even if we find $100 million tomorrow and I win the jackpot and I have $100 million in my bank account, nothing guarantees that the BDUs will broadcast the channel.

11544   COMMISSIONER PENTEFOUNTAS: Yes. But I'm not on that issue, I'm on the issue of financing.

11545   MR. GÉRACITANO: If I may answer your question, we had exhausted all possibilities, we had gone through the office of the former Public Safety Minister who did everything possible to try to get us the help that we needed.

11546   COMMISSIONER PENTEFOUNTAS: Yes, I understand that. Yes.

11547   MR. GÉRACITANO: And there aren't any programs that will help a television channel.

11548   COMMISSIONER PENTEFOUNTAS: Yes. It's just a shame that a lot of provincial leaders, and even federal leaders support your initiative, and I think your entire budget is $8 or $9 million and there is no way of getting some of their finances or resources to help support the cause.

11549   MR. GÉRACITANO: Even if we would find the resources, which I believe would be impossible, we would still have to deal with the BDUs.

11550   COMMISSIONER PENTEFOUNTAS: Okay.

11551   MR. GÉRACITANO: And what do we do -- if I may give you an example, what do we do in the event where, say, the City of Montreal or Montreal Police is willing to contribute and the City of Laval, which is just right across the river, says no and a child goes missing from Laval. Do I tell the parents of that child, "Sorry, your city didn't contribute to our funding so we won't air the picture of your child"? It has to be -- when we deal with national security it's a matter that is of everyone's interest and everyone has to be united.

11552   COMMISSIONER PENTEFOUNTAS: Right. But you will agree with me if there is a child missing in Laval, that will be one of the top stories in the evening news and the all day news services as well in Quebec as an example?

11553   MR. GÉRACITANO: I disagree.

11554   COMMISSIONER PENTEFOUNTAS: Okay.

11555   MR. GÉRACITANO: The simple question is that the numbers are there. It is impossible for --

11556   COMMISSIONER PENTEFOUNTAS: Are you telling me that missing children -- a child goes missing today in Laval and it won't be a first story on TVA, SRC, CFCF, Global in Montreal?

11557   MR. GÉRACITANO: Statistically speaking, Mr. Vice-President, there are over 6,000 to 7,000 children that go missing in Quebec, there are on average about 25 young people a day, not counting the elderly. It is impossible for the traditional media to broadcast information on all these children. They will pick a select few.

11558   And keep in mind that after the child has gone missing and they have reported that one or two incidents on that particular day, tomorrow's news that child is history. You won't see that child's picture on the air again.

11559   COMMISSIONER PENTEFOUNTAS: Okay.

11560   MR. GÉRACITANO: And that's where we come in. We rebroadcast information. We will take the pictures of those missing kids, whether they disappeared yesterday, last month or a year and a half ago.

11561   COMMISSIONER PENTEFOUNTAS: Okay.

11562   MR. GÉRACITANO: That is the beauty of our service.

11563   COMMISSIONER PENTEFOUNTAS: You rebroadcast to less than .1 percent of the viewership.

11564   MR. GÉRACITANO: I don't have -- if the Commission has statistics to show that we broadcast to less than .1 percent I would be interested to see them.

11565   We are not measured by BBM for the simple reason -- actually two reasons, the costs of being measured exceed the $10,000 a year.

11566   Second, for a market such as Quebec the pool or the sample size is small and so the statistics don't do it justice. I would be more than willing to read or share with you another note made by --

11567   CONSEILLER PENTEFOUNTAS : Tout ce que je fais, c'est vous citer votre paragraphe 14 :

« CTVM Info publie chaque semaine la part de marché au Québec des chaînes de télévision traditionnelles, spécialisées et payantes qui ont atteint la barre des 0,1 de part d'auditoire. Avis de recherche ne figure pas sur cette liste. »

11568   M. GÉRACITANO : On ne figure pas sur la liste parce qu'on n'est pas abonné au service BBM, et comme je vous le soulignais, Monsieur le Vice-président, on n'est pas abonné pour la simple et bonne raison que les coûts de s'abonner sont excessifs pour une petite chaîne comme la nôtre, et, deuxièmement, statistiquement parlant, ça ne rend pas justice.

11569   Et si vous permettez, je pourrais vous citer une intervention devant un Standing Committee qui a été faite par M. Kiefl devant des parlementaires, et, si vous permettez, je vais vous citer...

11570   CONSEILLER PENTEFOUNTAS : Si c'est très rapide...

11571   M. GÉRACITANO : Oui, oui.

11572   CONSEILLER PENTEFOUNTAS : ...parce que nous sommes tous conscients du fait que c'est très difficile de mesurer en bas d'un certain niveau d'auditoire la cote d'écoute.

11573   M. GÉRACITANO : Statistiquement parlant, je pense qu'il serait pertinent que je vous cite le paragraphe de monsieur Kiefl qui a été fait devant les parlementaires.

11574   CONSEILLER PENTEFOUNTAS : O.K. Vas-y.

11575   M. GÉRACITANO : Donc, je vais couper...

"There are two rating systems in Canada..."

11576   Ça, ça date, puisque maintenant, il y en a seulement un. Mais à l'époque, il y avait... Il dit :

"There are two rating systems in Canada, one run by Nielsen, the other by BBM, and they measure CPAC as a whole; they don't distinguish between the English and the French versions of it. If you want to look at the francophone audience by region, it can be done, but sample size is a problem. The audience of CPAC relative to major networks, like TVA or CTV or CBC, is small, and these rating systems have been designed for the major networks."

11577   Et je crois avoir donné une reference à ce passage, mais...

11578   CONSEILLER PENTEFOUNTAS : Je suis entièrement d'accord avec vous et avec la déclaration que vous venez de lire.

11579   Oui, Madame.

11580   MME FOUQUET : Monsieur Pentefountas, si je peux me permettre d'ajouter.

11581   Je sais que les cotes d'écoute semblent être une préoccupation pour vous, mais j'aimerais juste apporter le point suivant. Si un seul enfant qui est porté disparu est retrouvé grâce à ADR, c'est extraordinaire.

11582   CONSEILLER PENTEFOUNTAS : Ça vaut la chandelle. C'est noté. Ça va.

11583   MME FOUQUET : Exactement. Et c'est ce qui est arrivé dans un cas qu'on vous a cité la semaine dernière.

11584   CONSEILLER PENTEFOUNTAS : Non, non, je comprends.

11585   Sous-titrage, est-ce qu'il y a un changement dans votre position?

11586   M. GÉRACITANO : En effet, il y a un changement. Tout d'abord, j'aimerais clarifier. Je me suis peut-être mal exprimé la semaine dernière.

11587   Il n'a jamais été question de s'éviter le sous-titrage pour APB. Le sous-titrage pour APB était à 100 pour cent, et on était prêt... on acceptait de faire le sous-titrage. On avait demandé une exemption pour Avis de recherche pour les émissions qui étaient en direct ou quasi direct.

11588   Le changement qu'on a apporté, on a trouvé une meilleure façon de faire le sous-titrage. Donc, la partie de notre programmation qui constitue un genre de babillard, bulletin board if you wish, on a trouvé une façon que si on modifie notre façon de faire, on pourrait automatiser le sous-titrage. Donc, les coûts seraient minimes.

11589   CONSEILLER PENTEFOUNTAS : Parce que déjà c'était tout un défi si on tenait compte de vos chiffres, puis on a fait l'exercice la semaine passée d'y arriver.

11590   M. GÉRACITANO : Sur les chiffres que j'avais originalement, on nous évoquait un montant de 6 dollars la minute, que je trouvais excessif. Donc, depuis, qu'est-ce qu'on va faire, c'est on va s'engager à faire le sous-titrage nous-mêmes et pas payer une firme à l'extérieur. Donc, on va engager le personnel nous-mêmes et faire le sous-titrage pour les émissions en direct.

11591   Pour revenir au sous-titrage des fiches, qu'est-ce qu'on appelle les fiches ou le babillard ou le bulletin board, qui représente 50 pour cent, ça, oui, même si on le faisait nous-mêmes, ça représentait un montant excessif. Par contre, en faisant des modifications sur notre façon de faire et ayant un équipement, une pièce d'équipement qui nous manque, ça va permettre de lire le texte que nous avons déjà. Le texte va -- pardonnez mon anglicisme -- crawler en bas de l'écran.

11592   Donc, le texte, le contenu, la partie narration qui est déjà écrite, qui fait partie d'un dossier, d'une fiche que vous allez voir en ondes, va être déjà disponible, et nous allons l'automatiser en faisant des modifications à notre système pour que le système de sous-titrage va être capable de lire automatiquement, sans l'intervention de personne. Donc, le fichier qui est déjà existant, le fichier de texte qui est existant sera lu en bas de l'écran pour le sous-titrage, et ça, ça n'implique aucuns frais supplémentaires.

11593   CONSEILLER PENTEFOUNTAS : Et vous avez découvert cette nouvelle manière de faire depuis la semaine passée?

11594   M. GÉRACITANO : L'idée nous est venue la semaine passée.

11595   CONSEILLER PENTEFOUNTAS : O.K.

11596   M. GÉRACITANO : Également, j'en ai profité pour parler avec d'autres personnes, d'autres qui ont beaucoup plus d'expérience que moi, ici dans la salle, qui ont apporté à mon attention que les prévisions qu'on nous avait données de 6 dollars la minute étaient excessives.

11597   La raison pourquoi on nous avait donné ce montant de 6 dollars la minute pour faire le sous-titrage, au début, on m'évoquait que du côté anglophone, il y a des logiciels qui existent qui sont plus performants et qui sont plus adéquats pour faire le sous-titrage, mais du côté francophone, ces mêmes logiciels ne sont pas aussi efficaces ou ne sont pas aussi accessibles, et donc, c'était le montant qu'ils nous avaient justifié.

11598   Mais je suis le premier à dire que je trouvais le montant exorbitant, et je suis content d'avoir trouvé une autre façon de le faire. Mais c'est ça la beauté d'être ici, c'est qu'on rencontre d'autres personnes qui ont beaucoup d'autres expériences, et ça nous permet de découvrir des choses qui nous permettent de rentabiliser et de faire... de streamline, si vous voulez, nos dépenses pour être capable d'offrir un service à un très bas prix.

11599   COMMISSIONER PENTEFOUNTAS: We are like a trade show, these hearings.

11600   MR. GÉRACITANO: We should have these trade shows a little more often, Mr. Vice-President.

11601   COMMISSIONER PENTEFOUNTAS: There is one other adjustment that I noticed -- et corrige-moi si je me trompe.

11602   Il y a des revenus nouveaux que vous venez d'annoncer au paragraphe 7, des partenaires d'affaires de prestige, des annonces publicitaires des gouvernements, que ce soit fédéral ou provincial.

11603   Is that also new?

11604   MR. GÉRACITANO: No, those were listed. I possibly didn't explain myself properly last week when I was referring to advertising revenues.

11605   COMMISSIONER PENTEFOUNTAS: Is that new money that you realized you would have if you had the All Points Bulletin?

11606   MR. GÉRACITANO: No, that money --

11607   COMMISSIONER PENTEFOUNTAS: The National Footprint, is that new or is that --

11608   MR. GÉRACITANO: No, that was in our initial business plan, I just didn't explain it properly last week, and I apologize for not being as clear. I hope I have clarified the point.

11609   The money that we were looking at was possibly getting -- once we are across Canada, getting the implication of governments who want to advertise with some of their public service announcements.

11610   COMMISSIONER PENTEFOUNTAS: Okay. But you have no firm commitment on that.

11611   You don't have any paper behind this undertaking?

11612   MR. GÉRACITANO: No, we don't have any paper on it, but we suspect, just like any other channel that is able -- or any other service that is able to deliver a channel from coast to coast, that we will, then, be attracting potential advertisers, advertisers in the sense of government advertisers, who will be interested in associating themselves with us and providing us advertising revenues.

11613   COMMISSIONER PENTEFOUNTAS: It would have been interesting to have secured some kind of commitment in the event of a national footprint, but --

11614   MR. GÉRACITANO: I cannot secure a commitment because we are not there. Being only in Quebec, unfortunately, limited the potential of getting advertising revenues from federal or provincial agencies.

11615   COMMISSIONER PENTEFOUNTAS: I understand.

11616   MR. GÉRACITANO: If you refer back to our initial plan, we had projected some advertising revenues in -- I believe it was as of Year 3.

11617   COMMISSIONER PENTEFOUNTAS: I remember that.

11618   MR. GÉRACITANO: We are anticipating 5 percent. That may be optimistic, it may be pessimistic, I'm not sure. But we, at least, included that amount.

11619   And keep in mind that whatever advertising dollars we do generate from government bodies will be put back in the form of public expense or expenses in production.

11620   So we are reinvesting in and improving our service, and making our service a top-class service right across the country.

11621   COMMISSIONER PENTEFOUNTAS: Great. Thank you so much, Mr. Géracitano.

11622   MR. GÉRACITANO: Thank you.

11623   THE CHAIRPERSON: Thank you very much. Those are our questions.

11624   We will now move to the next panel, which is Stornoway Communications.

11625   Please come forward.

--- Pause

11626   THE CHAIRPERSON: Good morning. Welcome again. When you are ready, please go ahead.

REPLY

11627   MS FUSCA: Good morning, Mr. Chair, Vice-Chair, Commissioners and Staff. We appreciate the opportunity to reply to interventions filed in the FUSION application.

11628   First, we wish to thank all those who supported FUSION -- municipalities, educational institutions, both at the high school and college and university levels, not-for-profit organizations, independent community channels, businesses, producers, and consumers.

11629   We particularly thank the many supporters who took the time out of their busy schedules to be here last week to show their interest and support for FUSION.

11630   They have contributed to our market research. In many ways, they were our market research. They are the evidence of FUSION's ability to meet the needs of the Act. They understand FUSION and appreciate the extent to which FUSION will fill a void in the Canadian broadcasting system.

11631   They know that FUSION will reflect their communities and give them a meaningful voice on national television, as well as on the Internet.

11632   They also know that FUSION will provide skills, training and experience in content and technology creation, both of which will lead to employment opportunities.

11633   We have already lined up many contributors, should FUSION be licensed.

11634   Of course, we also wish to reply to negative intervenors, to those who have claimed that FUSION does not fill an exceptional need in the broadcasting system and does not meet the criteria of the issuance of a 9(1)(h) Order.

11635   We have identified three overarching needs, and developed a proposal to meet them.

11636   First, there is no place within our broadcasting system where Canadian youth can engage in the democratic process using tools that, according to a plethora of respected studies, they embrace -- interactivity and on-the-go availability.

11637   Second, there is a need to provide a venue for local reflection that is fast disappearing in the television broadcasting system.

11638   FUSION can contribute in an exceptional manner to its delivery, as it engages communities across Canada and links them through one channel, with 20 professional producers and 210 stringers in the field.

11639   Third, FUSION producers and stringers will provide an opportunity to break down cultural silos.

11640   FUSION is a unifying service that will link English and French-speaking Canadians, Aboriginals, immigrants and new Canadians by engaging them together on the most important information and entertainment platform in the world -- television.

11641   MR. PULUMBARIT: At this point, we would like to review how FUSION works and meets the needs we have identified.

11642   FUSION's broadcast signal contains one central screen and eight side screens. The central screen is where the main topic is explored. The side screens are where other video, audio and text content appear that contribute to the main topic.

11643   For example, if the main topic is genetic engineering, the FUSION host will appear on the central screen, along with an advocate for genetic engineering and one against.

11644   You are in Moncton, comfortably sitting on your sofa, watching the show on TV, and you want to ask a question.

11645   Using your smartphone, you text your question into FUSION and, once it is vetted by FUSION staff, it appears on one of the side screens, and the host and guests respond.

11646   At the same time, in Victoria, Julia is watching the show on her laptop at a local coffee shop. She sees your question and decides that she wants to follow up on the responses to you.

11647   She uses Skype to get involved, and appears in another one of the side screens.

11648   To respond to Julia's comments, one of our field producers appears on another side screen, from a lab at the University of Calgary, along with a specialist who demonstrates some of the research that is underway there.

11649   In the meantime, Tom from Halifax is also watching, and he decides that he wants to take issue with Julia's comments. He calls in using his telephone.

11650   In another one of the side screens, we see a map of Halifax with Tom's name, and we listen to his comments.

11651   Martine, also an avid Skype user, gets involved from Montreal. She agrees with Tom and provides her comments in French, and FUSION simultaneously translates them into English.

11652   Martine and her comments appear in another side screen.

11653   How about me? I am watching the show on my living room TV with a few friends. What we see is an orderly, seamless exploration of a topic that includes contributors from across the country -- contributors using video, audio and text to engage with FUSION and with each other.

11654   Because of the way it is technologically constructed, and because it is live, FUSION enables Canadians to contribute to programming and to engage with each other 24 hours a day, 7 days a week, the only service in Canada designed to do so.

11655   Those interveners who see FUSION as a service better suited to the internet haven't understood that the internet is used by FUSION as the connecting technology to television, not as the platform for the service. In other words, the internet provides a link connecting Canadians to the FUSION television service and to each other.

11656   This is how youth and a large, growing number of Canadians want to use these media.

11657   FUSION is a contemporary television concept designed to meet Canadian media needs as the Canadian broadcasting system evolves. Ensuring that the system remains vibrant and healthy and open to a diversity of voices in ownership will result in a vibrant and healthy democracy.

11658   With 100 percent Canadian content, a CPE of 700 percent and the diversity of voices that it brings to the broadcasting system, FUSION clearly contributes in an exceptional manner to the objectives of the digital basic service, and to the objectives of the Broadcasting Act.

11659   While BDUs were asked on a number of occasions, the public is no further ahead than before these hearings, as to how the composition and price of the basic service are determined, and what the impact of licensing new services would be on the basic service fee.

11660   What we did learn is that content costs do not comprise a significant portion of the basic service. Moreover, it is likely that BDU-determined fees for basic service will continue to increase, regardless of whether or not the Commission renews or accords any new licenses under 9(1)(h).

11661   We also discovered that some services are not available a la carte, thereby limiting consumer choice.

11662   During this proceeding and for the past several years, the BDUs have told the Commission that their customers can choose competitive, unregulated options if they are unhappy with the regulated system. Yet, vertically-integrated services continue to populate the basic service and to increase its cost, while BDUs are asking that either no services are granted 9(1)(h) status or that only a few with no cost are granted that status.

11663   One cannot help but wonder if the BDU contribution to this process is simply a matter of doing and saying whatever it takes to ensure the protection of their own interests. It was particularly enlightening but sad to note that within the binders full of documents submitted by BDUs the word "culture" was scarcely mentioned.

11664   MS FUSCA: Thank you, Frank.

11665   Those interveners who continually call on the Commission to allow the "market" to determine the course of our system, should be reminded that one of the most common and misleading economic myths is the idea that the free market exists in some natural world, separate from government. In this view, government rules and regulations only "interfere" with the natural beneficial workings of a market that prospers best when government leaves it alone.

11666   This misconception is particularly significant where the broadcasting system is concerned, given VI market power, the size and sparse population of Canada and their impact on costs.

11667   It is essential that the system is open to independents who, with the support of tools such as 9(1)(h), have the ambition and wherewithal to be the next generation of leaders in the Canadian media landscape.

11668   When an exceptional application such as FUSION is presented to the Commission, it should not be dismissed, as some would suggest, simply because its success depends on the issuance of a 9(1)(h) Order. This legislative tool was provided to the Commission precisely to ensure that, at its discretion and when the public interest warrants it, certain services are distributed on the terms and conditions it deems appropriate.

11669   The internet is not functionally displacing television as an important information and entertainment provider but, rather, the two types of media complement each other.

11670   FUSION utilizes the internet in an innovative way to enhance television and the Canadian system's market position.

11671   Television must evolve from its current state to provide the kinds of content reception services to which people have become accustomed if television and our broadcasting system are to compete effectively.

11672   The Canadian system needs to support consumer trends and innovations like FUSION if it is to continue to be relevant. It needs a new configuration of how content is created and delivered.

11673   Two of the interveners, namely Rogers and TELUS, admitted that the system needs more non-linear, multi-platform content. Our funding agencies understand these market realities and are including second screen content requirements alongside television production. And when Michael Hennessy of the CMPA referred to the tsunami that will hit our System he was specifically referring to the shift in new media models and consumption trends. FUSION can be our system's response to these new market realities.

11674   In conclusion, making "connected TV" happen is both a major opportunity and a challenge for network operators, system developers and integrators, content providers and creators.

11675   However, FUSION is ready to deliver interactive, multi-platform television seamlessly. Your support can open the gate and enable Canadians to create and deliver a global first!

11676   THE CHAIRRPERSON: Thank you for your presentation.

11677   Madam Poirier?

11678   COMMISSIONER POIRIER: Did you give your names for the record?

11679   MS FUSCA: Oh, I'm so sorry.

11680   COMMISSIONER POIRIER: Yeah.

11681   MS FUSCA: Martha Fusca.

11682   MR. PULUMBARIT: Frank Pulumbarit.

11683   COMMISSIONER POIRIER: Thank you very much. I have one question for you.

11684   Is there in the Broadcasting Act an article to rely on where it is requested to provide a service dedicated mostly to a group of persons based on age?

11685   MS FUSCA: I noticed you asked the question before and I've been thinking about that.

11686   No, it doesn't identify age specifically. Having said that, I don't know that it specifically applies to genre -- gender, right?

11687   In other words, we have had hearings some time ago when we recognized that there might be an important reason to have a television channel for women, a television channel for children, a television channel for men.

11688   So I don't -- and in fact, I think if we think about it, there has been a lot of discussion vis-à-vis, you know, channels that target an older demographic. I think that part of the problem in our system, and one of my own personal passions for at least the last 13 or 14 years has actually been youth.

11689   I have four children. I see how they function. Because their mother is a political junkie, a public policy junkee they are a little more familiar.

11690   But there are an awful lot of kids we know they are not engaged. Their numbers have gone down. We have stated this before that, unlike previous generations, as we got older we did become more politically engaged. They're not. And this has been happening for the last, I would say, three to three and a half generations.

11691   I think we need to be concerned. What happens when in, you know, 30 years from now, 20 years from now -- never mind -- we have a very small pool of individuals from whom to choose in a vibrant, healthy democracy?

11692   COMMISSIONER POIRIER: Just another question then.

11693   Those you mentioned are not distributed on the 9(1)(h) -- are not mandatorily distributed, okay. So I wonder, the issue you face, the challenge you face, I would say, isn't it more a distribution issue with -- and a relation with the BDUs?

11694   MS FUSCA: Yes, but that's really quite apart and aside from, you know, what we're doing here today. I think that if you take -- you have to take a look at the service as a whole. You know, we're not simply catering to youth.

11695   In fact, one of the things that's going to be really important is that while youth enjoys engaging amongst themselves, I mean, the important thing is really the engagement between, you know, youth and the older demographic. It's the older demographic right now that's in power. Their needs, desires, issues, concerns really don't go anywhere unless the older people, you know, do something about it. That's part of the reason why they've, you know, disengaged.

11696   But when back in 2008 after the BDU and specialty hearings and the fallout, from my perspective of those hearings, was published, it was very clear. There was a clear signal there by the Commission that they would actually entertain the possibility, given the evolution of our broadcasting system, you know, 9(1)(h) services.

11697   We took that incredibly seriously. So we spent virtually almost two years thinking about, you know, what contribution could we make that would be extraordinary. This wasn't simply, you know, a Category B or a Category A even service.

11698   And I think that when you look at it holistically, when you look at what it does, you know, for the youth demographic, what it does for local reflection, we were trying to identify, you know, where there were weaknesses, where there were holes in our broadcasting system.

11699   And then, when you look at the shift that's going on -- and I think that, interestingly from my perspective, and I do watch a lot of television, CBC is doing a pretty good job in the notion of you know, second screen engagement but FUSION is that next step.

11700   And as I've said before, either Canadians take the initiative to develop a global first -- I mean there is so much material I could give you. But the EU is actually funding different initiatives, okay, to do exactly what FUSION is doing. There is that one step up because they want to use the technology to make the smart TV really smart, because it really isn't that smart yet, right?

11701   So what we're doing as broadcasters is bringing something -- I think frankly FUSION is extraordinary. I don't just think that. I know that FUSION is extraordinary.

11702   Originally, when we applied back in 2010 it was delayed. It was -- I think you asked in the previous round -- about the fees. We recognized that it was 45 cents. It was a little bit expensive. We went through the technological rebuild and decided that there was a different way of coming at it that would actually reduce the price.

11703   I just want to share with you. It took me two years to find the people that could actually put this together, all right, and we had a patent, in fact, filed for this. Because typically what happens is television people work here, the internet people work here, the mobile people work here, and it was folks that actually deliver the Olympics as part of our team. You saw it, the panel. It was the people who put together the Olympics to broadcast worldwide that we actually had to commission to put the system together to deliver the service.

11704   So it is extraordinary. It should be a 9(1)(h). It doesn't have to be a 9(1)(h) forever. You know, we know that there was -- we were asking for seven years. We know that you keep asking the five year question. We can do it for the five years.

11705   We don't need to come back, but we absolutely can't do without it. We really can't. I wouldn't be here otherwise.

11706   COMMISSIONER POIRIER: Thank you very much.

11707   MR. PULUMBARIT: May I please add one point to this?

11708   THE CHAIRPERSON: Quickly, please.

11709   MR. PULUMBARIT: You know, looking at the service from a holistic perspective and looking at it as a structural response to what people are looking to do these days, those two years between 2010 and now 2013, three years now, into 2013 were very important watershed years as it related to how people use technology.

11710   People used, even in that time, people used technology in a very different way than they do it today and the people that used that technology were much more of a niche than they are today and they will -- two things will continue to happen.

11711   That niche will continue to disappear and become more general and the programming offerings will become more rich and will become more seamless in between all of the different media and how they interrelate.

11712   But that will only happen if the system can support it because the -- because the effort to put the infrastructure together as Martha has said, you know, is not an easy one. It will require some vision and some trial offer and the support from a structural perspective.

11713   But we really think that we have put something together that is interesting, that is extraordinary, and responds to the structural change that we are seeing. And with your support we can try it out and really put something together.

11714   THE CHAIRPERSON: Thank you. Thank you, I think we understand your position.

11715   I will remind everyone though the purpose of the reply is to reply to the interventions you received and not to reargue your entire case. So, I would ask everyone to be very focused in their answers. Thank you very much.

11716   MS FUSCA: Mr. Chair, I apologize if we went a little off sight, but we did that specifically because when I wasn't in the room, I was actually watching on television, and there did seem to be some -- I don't know if it was intended confusion or confusion about, you know, what the service actually is. So, that's why we spent a little more time clarifying.

11717   THE CHAIRPERSON: That's fine. Thank you very much.

11718   MS FUSCA: Thank you.

11719   THE CHAIRPERSON: The next intervener will be intervening by teleconference?

11720   THE SECRETARY: Teleconference.

11721   LE PRÉSIDENT : Okay. Donc c'est les gens du...

11722   LA SECRÉTAIRE: Oui, c'est monsieur Barr, Télévision des ressources naturelles .

11723   LE PRÉSIDENT : Oui, d'accord.

11724   LA SECRÉTAIRE : Est-ce que vous nous entendez? Êtes-vous connecté?

11725   M. BARR : Oui, oui, oui, je vous entends.

11726   LA SECRÉTAIRE : Parfait. Alors, vous pouvez y aller. Vous avez dix minutes.

REPLY

11727   M. BARR : Oui. Bonjour, monsieur le président, bonjour messieurs les commissaires. Je me permets maintenant seulement de répondre à quelques intervenants des BDUs.

11728   Donc, Telus a dit à un moment donné: "Were a programming service offered to be distributed on basic at no cost, it might make sense to provide the additional value to the customer. By including it on basic and -- "

11729   Ce que je veux dire, bien voilà, on est... on est gratuit, donc quasiment on vient dans l'esprit de ce que Telus a dit devant le Conseil.

11730   Maintenant, en addition, je ne sais pas si ce sera accepté, mais je me permets de le mentionner pareil, c'est que suite aux questions de monsieur le commissaire Simpson, on a réussi d'embaucher la maison Harris/Decima pour faire un sondage sur notre service et il y en a, grosso modo, à peu près 60 pour cent des Canadiens qui sont intéressés d'avoir un service gratuit de télévision dédié aux ressources naturelles.

11731   Il y en a un très grand pourcentage dans les provinces de l'Atlantique, c'est 67 pour cent, en Colombie-Britannique c'est 64 pour cent, en Ontario 63 pour cent.

11732   Donc, si ces chiffres sont considérés par le Conseil, on apprécierait énormément si ça serait accepté, on pourrait déposer le document tout de suite après notre intervention.

11733   Maintenant, toujours pour compléter notre réponse pour Telus, c'est qu'ils disaient dans leurs interventions qu'ils ont peur que notre programmation sera redondante.

11734   Donc, je me permets de vous dire que selon des chiffres qu'on a réussi à avoir entre le mois d'octobre et le mois de... fin février, donc ça inclut les fêtes traditionnelles d'hiver, il y en a eu 129 153 articles en français et en anglais dédiés aux ressources naturelles. Donc, je reviens sur le chiffre, 129 153 et, pardon, pour les ressources naturelles. Donc, c'est sûr qu'on ne se pose pas la question de la redondance de notre programmation.

11735   Par contre, si on se fie à d'autres chaînes spécialisées, les Sports Extrêmes, par exemple, ont eu seulement 4 600 mentions dans la même période de temps et ça c'est comme un exemple.

11736   Donc, c'est ça ce qu'on voulait dire à propos de Telus. On est très conscient que ce qu'ils ont déclaré devant le Conseil en ce que ça concerne les services distribués gratuitement, ça va se faire et que, voilà, je pense qu'on mérite votre attention là-dessus.

11737   Maintenant, ce que ça concerne Rogers, c'est qu'on est arrivé de lire la transcription de monsieur David Purdy et on arrive toujours à réaliser qu'ils ne comprennent presque rien de ce que c'est notre chaîne et ils disent qu'on est une chaîne d'"infomercials". Donc, c'est sûr qu'on est vraiment vraiment très malheureux d'entendre ça.

11738   Je ne veux pas vraiment insister sur les autres chaînes, mais je pense que le canal de Tourisme, de voyages se font pour diviser le "advocacy" de leur industrie. Le Food Channel, la même chose, les chaînes de rénovations de maisons ça fonctionne.

11739   Mais nous, j'insiste, comme on a dit dans notre présentation initiale, c'est qu'on n'est pas une chaîne de la promotion des compagnies qui oeuvrent dans des domaines surnaturels, mais une chaîne d'information et de documentaires sur des sujets liés aux ressources naturelles.

11740   Donc, ça, ce n'est pas seulement les mines et le pétrole qui sont les ressources naturelles, ce sont les parcs, ce sont les lacs, c'est la richesse, ce sont les gens qui habitent dans ces régions-là. Ce sont les autochtones qui sont impliqués dans tout le processus et la synergie des... disons, même que je n'aime pas le mot, disons, d'exploitation des ressources ou de vraiment durables plutôt.

11741   Donc, c'est ça, je suis... on est en train d'assumer que Rogers n'ont vraiment pas compris vraiment ce que c'est le sujet de la chaîne.

11742   Donc, pour COGECO, on a constaté que le monsieur vice-président qui se présentait devant vous, il savait pas combien ça coûte d'opérer un canal. Là, on se pose la question, on se dit par une logique de base, c'est que si c'était si cher que ça un vice-président aurait dû savoir le chiffre.

11743   Donc, j'imagine que les chiffres ne sont pas vraiment extraordinaires parce que si c'était des chiffres extraordinaires, c'est sûr que le vice-président senior de chez COGECO aurait dû savoir combien ça coûte.

11744   C'est la même chose que le monde de Rogers ont parlé de leurs coûts d'opérations. Donc, dans cet esprit-là, ça peut répondre aussi.

11745   Maintenant, en terminant, c'est qu'on veut vous dire qu'on espère que vous comprenez où on essaie de faire notre message fort et du coeur qu'on pense qu'on est exceptionnel parce qu'on est unique dans le monde.

11746   On pense qu'on est exceptionnel parce qu'on donne 100 pour cent du contenu canadien. On n'a jamais diffusé que du contenu canadien depuis qu'on existe. On est exceptionnel parce qu'on va... on veut promouvoir et on fait la promotion des grandes valeurs canadiennes, des grandes richesses canadiennes, des relations avec les peuples autochtones.

11747   On a la diversité linguistique et de plus, c'est que d'abord on est gratuit et, de plus, c'est que nos annonceurs plutôt sont quasiment des nouveaux annonceurs qu'on amène dans l'industrie des communications, donc vraiment on ne dérange personne, on ne va pas piger dans les assiettes publicitaires des grandes agences qui ont déjà leurs clients.

11748   On vient avec EDNR avec toute une palette d'annonceurs qui d'habitude n'annoncent pas beaucoup sur les autres chaînes.

11749   Donc, qu'est-ce que je voulais vous dire en terminant, c'est qu'on vous demande humblement de nous accorder la chance de montrer qu'on est un canal qui peut amener la fierté de tous les Canadiens et qui s'engagent devant vous publiquement de respecter et même de dépasser toutes les normes et les exigences du Conseil.

11750   C'est sûr qu'après ce que monsieur le commissaire a posé comme question, avec nous, les charges avec les BDUs, donc j'allais mentionner seulement un tout petit peu, là, pour ne pas vraiment mettre la journée au complet, c'est que c'est très difficile pour nous si on n'a pas un 9(1)h) là de montrer qu'est-ce qu'on est capable d'amener la fierté dans tous les foyers canadiens qui veulent nous... qui veulent nous regarder.

11751   Et, aussi, qu'il y en a déjà de l'intérêt démontré par l'Australie, l'Afrique du sud et l'Allemagne de reprendre quelques-uns de nos programmes, mais comme on n'est pas... le signal n'est pas montré sur le satellite présentement, c'est sûr qu'on ne peut pas les satisfaire.

11752   Mais ce que je veux dire -- c'est ma dernière phrase -- c'est qu'on a l'opportunité d'être de fiers ambassadeurs des valeurs canadiennes, du multiculturalisme, de tout ce que c'est beau dans ce pays-là.

11753   Je vous remercie.

11754   LE PRÉSIDENT : Merci bien, monsieur, pour votre intervention. Monsieur Simpson aura une question, mais il va la poser en anglais. Si jamais vous ne la saisissez pas, je peux vous l'interpréter.

11755   M. BARR: Oui.

11756   COMMISSIONER SIMPSON: Good morning, Mr. Barr. It's Commissioner Simpson. Actually it's not a question. It's just a thank you on behalf of the Commission for keeping the majority of your remarks focused on the interventions against your application and it was much appreciated. That's it. Thank you very much.

11757   LE PRÉSIDENT : Alors, c'est un remerciement donc, pas autant une question. Donc, merci bien pour avoir participé.

11758   M. BARR : Non, non. J'ai bien compris, il n'y a pas de... there is no problem.

11759   LE PRÉSIDENT : O.k. D'accord. Je comprends bien. C'est qu'en téléconférence l'interprétation n'est pas toujours disponible.

11760   Donc, merci bien. Ce sont nos... nous n'avions pas plus de question pour vous. Merci pour avoir participé à la Phase III de l'instance.

11761   M. BARR : On vous remercie de nous avoir accordé ce privilège-là et on espère que si le Conseil dans sa sagesse décidera de nous donner la chance de démontrer qu'est-ce qu'on peut faire, on va impressionner beaucoup de monde, dans le bon sens du mot.

11762   LE PRÉSIDENT : Vous n'êtes pas le seul à faire part de ce voeu. Donc, merci bien.

11763   The next intervener, please.

11764   LA SECRÉTAIRE : Alors, j'inviterais maintenant les gens de Sun News.

11765   I would now invite Sun News to take place.

--- Pause

11766   THE CHAIRPERSON: Welcome back. Once you've had a chance to settle down, please go ahead.

REPLY

11767   MR. SASSEVILLE: Mr. Chairman, Mr. Vice-Chairman, Commissioners, good day. My name is Serge Sasseville and I am the Senior Vice President, Corporate and Institutional Affairs, of Quebecor Media.

11768   Please allow me to introduce my colleagues who have joined me today:

11769   - on my left is Julie Tremblay, Chief Operating Officer of Sun Media Corporation;

11770   - next to her is Luc Lavoie, responsible for Development at Sun News;

11771   - on my right is Kory Teneycke, Vice President, Sun News; and

11772   - on his right is Hugues Simard, Vice President, Finance, Sun Media Corporation.

11773   I would like to start by thanking you for taking the time to consider our application and for your many questions over the course of these hearings.

11774   I will now turn things over to Mr. Teneycke who will deliver some prepared remarks.

11775   MR. TENEYCKE: Thank you, Serge.

11776   We have closely observed the interventions made on our application and taken the time to consider them carefully. We have listened intently to both the questions and comments made by the Chair and Commissioners throughout the course of these hearings.

11777   With these things in mind, we would like to respond to a few matters brought forward by interveners as well as provide absolute clarity on what some of the proposals made here would mean for Sun News.

11778   One thing that stands out from the intervention period was the spirited defence of "free market capitalism" provided by the cable and satellite companies. Their basic argument is that granting 9(1)(h) status impedes consumer choice and is a violation of "free market principles."

11779   But how "free" is this market? As Simon Houpt recently wrote in the Globe and Mail:

"Canada's TV distribution system is nothing close to a free market. It is a government-regulated oligopoly..."

11780   In Canada, our cable and satellite providers operate in a realm protected from foreign competition and in which foreign ownership is severely restricted. Allowing foreign competitors like Comcast and Time Warner into the market would be consistent with free market principles and would clearly improve choice for consumers. But that is not the law. In Canada, our law puts Canadian cable companies first. And the quid protectable quo is they are required to put Canadian TV first.

11781   So to the throng of cable company lobbyists who want a free market system, I say: "You first."

11782   And how "Free" is the news genre in Canada?

11783   While there are many local and international news options available to Canadians, there are only three English-language national all-news channels in Canada. One of these three "competitors," the CBC, gets 55 percent of its ratings from main network programming produced with the help of a $1-billion per year taxpayer subsidy.

11784   The CBC News Network also receives a carriage fee of $0.63 a subscriber, double the national average and more than six times that given to Sun News, meaning that cable and satellite subscribers get to pay twice for "The National," pay twice for "The Nature of Things," twice for "Marketplace" and twice for "the fifth estate," once on their cable bill and once on their tax return. And regardless if they like or agree with or watch the CBC, they pay and payment is mandatory.

11785   Some will say the CBC is different, and that may be, but clearly giving one of three competitors in a market a billion dollars a year creates a massive distortion.

11786   We believe Sun News would thrive in a true free market, but we don't have one. We have a market dominated by linear broadcasters and BDUs and a market in which bundling results in customers paying for a large number of services they don't watch. Like it or not, that is how the market operates today.

11787   Thankfully, we have checks and balances built into the system. One is the Broadcasting Act itself and another is the CRTC and the process that we're currently engaged in.

11788   The Commission has correctly pointed out that commercial need is not a qualification for 9(1)(h) under the Broadcasting Act. Rather, the Act requires Canadian content that makes an exceptional contribution to the "political, social and economic fabric of Canada."

11789   As we have demonstrated at length in our application, Sun News exceeds the criteria laid out in section 3 of the Broadcasting Act. However, let me take a brief moment to give one example.

11790   As we speak, Sun News has five reporters and three camera crews covering the B.C. provincial election campaign. For someone living in Ontario or Nova Scotia or for someone living in B.C., to be able to access in-depth political coverage of their province's provincial election on a daily basis is exceptional. It is exceptional because no other news network is doing that.

11791   This is just one small example but it speaks to the larger point. Sun News is not simply, as some critics have tried to portray it, providing right-wing commentary. The vast majority of our broadcast day is dedicated to providing hard news reporting, like that that we are describing in British Columbia.

11792   And I think we are doing a pretty good job. The head of the B.C. Legislative Press Gallery, Rob Shaw, recently called Sun News' coverage of the B.C. election campaign the best on TV.

11793   But back to our main application.

11794   Sun News did not participate in this process with a request for a "must offer" licence. Rather, we have put in a request for a 9(1)(h) order for mandatory distribution as part of digital and analog basic.

11795   We have noted the Chair has asked many interveners their view on "mandatory offering" as opposed to "mandatory carriage." This is in essence the granting of a Category A licence as opposed to a 9(1)(h) order.

11796   As we have detailed in our filings, the challenge with BDUs goes far beyond them "offering" the channel. It is also about where they are offering it, in how many homes is it actually being carried and at what price.

11797   When it comes to distribution, Sun News needs to be treated in a manner that is similar to other Canadian English-language all-news channels and in a manner that is similar to the Atlanta-based CNN.

11798   With respect to price, Sun News is currently receiving an average distribution fee of $0.097 per subscriber. This falls far short of the average price for English-language all-news channels, which is $0.33 a subscriber. A "must offer" order would not compel BDUs to increase the price they currently pay for Sun News.

11799   We heard that some BDUs claim that the "average" price is too aggressive for a new channel. Fine. Sun News is asking for a fee that is just over half that amount at $0.18 a subscriber, a very reasonable and justifiable figure.

11800   When it comes to carriage penetration, such an order may result in a minor improvement by adding BDUs like TELUS and MTS. However, it is difficult to imagine a scenario where market penetration exceeds 55 percent of combined digital and analog households. This is simply not enough households to compete, especially given the demographics of Sun News viewers which skew towards basic and basic analog cable for reasons of age and income.

11801   Others have suggested Sun News should simply resolve its problems using an existing complaint resolution mechanism at the CRTC. However, the resistance we have encountered is not from a single BDU, it is from every BDU. Their resistance is so deep and at so many levels, it would require a near endless series of "undue preference" complaints to resolve. This concept is not realistic from a regulatory standpoint, nor is it workable for Sun News as a business.

11802   So let me be very clear: A "must offer" licence would not have a meaningful impact on the current trajectory of Sun News and would inevitably lead to the closure of the station.

11803   Let me repeat: A "must offer" licence would be a death sentence.

11804   We have applied for full 9(1)(h) status because we need full 9(1)(h) status. This need is not theoretical. It is based on our real-world experience with BDUs in what can best be described as a deeply flawed market when it comes to new entrants to the news genre.

11805   We have applied for full 9(1)(h) status because we qualify for full 9(1)(h) status under the Broadcasting Act. As we said in our earlier presentation, if we don't qualify, then no one does.

11806   At the same time we recognize and support the efforts of the CRTC to move towards a more market-based pricing and distribution system, and in advancement of this goal we suggest the 9(1)(h) status only be granted to new entrants on a temporary basis, for five years, and then only to those channels that meet the exceptionally high threshold laid out in the Broadcasting Act.

11807   In closing, let me take this opportunity to thank the tens of thousands of Canadians who took the time to write the Commission on our behalf and a special thank you to those interveners who took the time to appear as witnesses at these hearings.

11808   And thank you, Mr. Chair, Mr. Vice- Chair, Commissioners and all the people behind the scenes at the CRTC for your time and your professionalism throughout this process.

11809   Godspeed with your deliberations and we hope you find merit in our application. We hope you put Canadian TV first. Thank you.

11810   THE CHAIRPERSON: Thank you very much for that.

11811   This has been very clear and there's just a couple of areas I would like to clarify to make sure we have a complete record.

11812   The first issue is something that struck me, I was thinking about all this and you're the only applicant that's related to a BDU. You're part of the larger Quebecor group that, let's face it, has a large media footprint both in terms of the newspapers but also its conventional and specialty licences in the country, and it's not so much to say that BDUs aren't entitled to seek a 9(1)(h), it's more that I'm thinking about the Commission's broader policy of looking at media groups.

11813   There was a time, 20-30 years ago, we would look at each licence individually and look at their profitability, but there's been a sea change, I'd say over a decade ago, where we look at broadcasting groups as a whole. We realize that if an AM station is unprofitable, it is perhaps within a larger group of companies, the FM stations may be making some money. The same thing happens when there's a group of radio-television, radio-television BDUs, radio-television newspapers.

11814   So I understand your position that going forward you will be in a deficit position as an individual service, but you are part of a large media group, some would say empire, and there can be cross-financing, could there not be?

11815   MR. TENEYCKE: Well, I would point out that while our company is as you described, that is within the confines of the market of Quebec, that we do not have broadcast assets in the way that, say, CTV has, and Bell has through CTV or Rogers has through City News or Shaw has through Global in the English Canadian market.

11816   In terms of how this business operates in the market, it operates far more as an independent. Where are the synergies with an existing conventional broadcaster for Sun News. They just don't exist. We don't -- we are not in that situation.

11817   You know, I think if you are looking at how this business functions in the market, insofar as there is a relationship within the corporate family it's with Sun Media newspapers and if you are looking at where is there value being derived, it's hard to say that there is any synergy there from a financial perspective that would offset the sort of losses that we are talking about.

11818   We provide some video content to the Sun Media websites for sure. The cost of producing that content, if you are looking at it from a Sun Media perspective, far exceeds the value it brings in in terms of online advertising.

11819   So there isn't a synergy or relationship of the type that you would find between LCN and TVA within our company, that doesn't exist, and it doesn't exist in the way that it would between CTV and CTV News Channel or CBC and CBC News Network or Global and news assets that might aspire to have.

11820   If we were simply as a company sticking to Québec I don't think we would have any problem with the BDUs. The fact that we are stepping outside of our traditional market is where the problem lies.

11821   THE CHAIRPERSON: Okay. I thought somebody else was reaching for a microphone there for a second.

11822   You mention in your presentation that you are having difficulty as a Category C news service to negotiate access to some of the broadcast distribution undertakings, whether it's cable or satellite, under terms that from your perspective makes sense. They have another perspective, but from your perspective does make sense.

11823   One of the interveners pointed out, I think it was TELUS, that ironically but for the fact that the Commission had created Category C licences for new services and opened up you may never have actually gotten the licence you have now and, in a sense, once you have gotten it now you are trying to undo part of the framework that is a more open market for Category C's which is market-based when it comes to access, but you are not -- you are taking the good part, but not taking the downside of the Category C, that is, it is market-based system.

11824   MR. TENEYCKE: Well, as I think I laid out in my presentation just now, it's not a market-based system and that is in fact the problem.

11825   I appreciate that the Commission is trying to move towards a more market-based system and insofar as it's doing that we support and encourage it, but for there to be a properly functioning market there has to be a way for new entrants to actually realistically come into that market and I submit to you that aside from very regional local news channels there is no method by which a new national all-news network can enter this market, because the interest of the individual BDU's is to kill it.

11826   If you are Rogers and you are launching City News in the Ontario market where you are the overwhelmingly dominant player, yes, you can essentially self-grant 9(1)(h), if you are Shaw in the B.C. market and you want to start BC 1, you can essentially grant yourself 9(1)(h), but if you are any one of those companies or if you are Videotron in Quebecor and you want to start a national all-news channel, you do not have a market that will, I believe, allow you to enter.

11827   So what kind of free-market puts up regulatory and other barriers of such a nature that it's impossible for new entrants to actually come in? It's not a properly functioning market.

11828   I think that Cat C is not a bad concept; I think Cat C, once you are actually established in the marketplace is something that functions reasonably well, like I would suggest the move to Category C has not harmed the existing players in the market who are established because they have an audience and for cable companies to delist them would be a problem for their customer base. So you actually have more of a real market there.

11829   But for new entrants it doesn't work and I don't think it would work for anyone else either. It's sort of a balance of power system within the cable oligopoly where you are not going to see people wanting to allow national all-news channels of this nature to exist.

11830   So hence we say five years, because we think that's an adequate period of time to expose the channel to Canadians and to establish a market, and at that point put us in the Category C designation and allow the market to function. We believe that's workable for us, we think it would be workable for other applicants who meet the true tests of 9(1)(h), and we believe that it does nudge the market in the direction that the Commission wants to go. But we think it actually enhances it because you are getting new entrants and at the end of the day, either you think more competition is good or you don't, but more competition in the news genre is good.

11831   It's good for Canadians. It is a way -- it's the only way that you are going to force other existing players to improve their performance and their offering, it's the only way that you are ever going to have a chance to have more Canadians watching Canadian all-news channels than U.S. all-news channels. It's a good thing for the market for us to be in the market, but we need to have an on ramp and we believe the policy framework around this is extremely consistent to that that the government has taken with the wireless spectrum auction, you know, have a way for new entrants to get in and then have a competition within that pool once people have actually had an opportunity to enter it.

11832   THE CHAIRPERSON: But you are essentially asking us to undo the Category C news category which --

11833   MR. TENEYCKE: No, we are asking --

11834   THE CHAIRPERSON: -- just let me finish.

11835   MR. TENEYCKE: Sure.

11836   THE CHAIRPERSON: -- which by its nature -- and that was the regulatory bargain at the time -- you did not have access rights.

11837   And you mentioned Rogers and vertically integrated companies but, you know, there is TELUS not vertically integrated, MTS not vertically integrated that also have difficulty accepting your service. I mean it's not just a vertically -- large vertically integrated companies that have their own news services, there are others in the system that also have rights and obligations in the regulatory bargain. And Category C was never conceived -- the very licence you have was never conceived as one with access rights.

11838   MR. TENEYCKE: Well, I would point to in the hierarchy of the world of Ottawa there is the black letter law of the Broadcasting Act and then there is Regulations and then there are decisions on a more one-off basis that are drawn from those other two.

11839   If you are looking at the objectives of the actual black letter law of the Broadcasting Act, I think the path is very clear, there is a quid pro quo in the system. The quid pro quo is BDUs are -- face that they exist in their current form because we keep foreign competitors out; the quid pro quo for the government protecting cable and satellite companies from foreign competition is that they put Canadian programming at the top of the list. They are not doing that. They are not doing that for us, they are not doing that for others.

11840   So irrespective of whatever licensing framework the Commission is using today, that has evolved and changed a whole lot over time, but it's still supposed to reflect the objectives of the Broadcasting Act. It's still supposed to reflect the law of the land. And whether or not the Broadcasting Act is the best -- you know, is a great piece of legislation, this is something that was conceived and passed before the dawn of the Internet, doesn't really matter, the law is the law and it references that important quid pro quo relationship and it's not being met.

11841   So Category C, I appreciate its importance and the thought behind it towards moving towards a market-based pricing system, but we don't have a real market. We don't have a real market-based pricing system, but we do have a Broadcasting Act that has very clear objectives around Canadian content and what constitutes exceptional. We meet those criteria so let us into the market.

11842   THE CHAIRPERSON: Just so I understand what you have just been saying, are you suggesting that we are obligated under the Act to provide you 9(1)(h)?

11843   MR. TENEYCKE: Well, this is obviously something that's left to interpretation and that you are the ultimate deciders as to whether or not that's the case, but that is certainly our brief and that is certainly our argument.

11844   THE CHAIRPERSON: I would have thought that you have a burden of proof it brings on you to prove that you --

11845   MR. TENEYCKE: Well, we obviously believe that we have proven that, but you will be ultimately the decider of that, Mr. Chair.

11846   THE CHAIRPERSON: I just wanted to make sure I was understanding exactly what you were saying there.

11847   MR. TENEYCKE: Correct.

11848   THE CHAIRPERSON: Okay.

11849   My last subject matter --

11850   MR. SASSEVILLE: If you allow me, Mr. Chairman?

11851   LE PRÉSIDENT : Oui.

11852   MR. SASSEVILLE: I just want to clarify one thing. Aside from what Kory just said about the Category C all-news channel, our main argument in front of the CRTC is that we respectfully submit to you that we meet all the criteria for a 9(1)(h) order. That's the main argument.

11853   THE CHAIRPERSON: And that's the part I was wanting to clarify, and I certainly got that, that you are making the case, you have put your evidence forward, you have put your arguments as best you can and we will consider that, but the burden is on you to establish that.

11854   MR. TENEYCKE: Correct.

11855   MR. SASSEVILLE: I agree.

11856   MR. TENEYCKE: Yes.

11857   THE CHAIRPERSON: The last subject I wanted to discuss with you was this notion of news neighbourhoods. I think I may have taken you a little bit by surprise when you appeared the first time with that subject matter.

11858   You will recall that this is an approach the FCC looked at in a major transaction, precisely for similar issues of market power exercised by vertically integrated distribution undertakings that also find ways to ensure that their news services have better carriage, and so forth.

11859   Now that you have had a look -- had time to examine that -- and I take your point about foreign news services perhaps and we are trying to gather a record on that to see exactly what the situation is in terms of channel placement and wholesale rates -- now that you have had a chance to look at that -- and keeping in mind what I have said earlier, that I am a supporter of a very healthy marketplace of ideas in the Canadian broadcasting system so that all the views are there and Canadians can choose the views that they want -- in light of all that, have you had a chance to reflect a little bit more on that and have a view?

11860   MR. TENEYCKE: Yes. I think we would look at it from a sort of a bigger picture level in the sense that our application speaks strongly to the issue of dial placement and that it does matter. Listening to the testimony of others, I think we saw some confirmation of that from BDUs in various points that they are moving dial placement around for a bunch of reasons, but with the general acceptance that lower dial placement matters and a more established long-lasting dial placement matters in terms of audience.

11861   Insofar as you group similar channels together on the dial, you are certainly helping the case of new entrants in the sense that you are putting them next to their competitors and I think that is a workable approach for channels such as ours. It's one of many possible approaches that the Commission may want to entertain, but it puts you in the same neighborhood of similar channels and addresses sort of the core issue that we are talking about, which is individual BDU's putting properties that they own ahead of properties that they don't own in terms of distribution and dial placement, or putting foreign news channels in more advantageous positions than domestic channels.

11862   You know, if everyone is sort of together, well, you are basically eliminating that advantage or disadvantage and you are also limiting the ability of BDUs to move your channel around in a manner that, whether it's intent or not, is highly disruptive to your audience and your ability to build and grow an audience.

11863   So I think it is certainly helpful and a step in the right direction, but I don't think in terms of things that we are talking about and wanting to advance, we are not being highly prescriptive in this area. We think there are many ways of skinning that particular cat and we leave it to your judgment to find the best one.

11864   THE CHAIRPERSON: So I take it obviously your first preference remains the current application you have before us?

11865   MR. TENEYCKE: I don't think it's a hill for us to die on, Mr. Chair.

11866   THE CHAIRPERSON: Okay.

11867   Now, you made some points -- and this is not so much a question as a statement. I know that in a -- I take your point, it's not a fully deregulated marketplace, but it's on a trend, but it does involve mechanisms for undue preference. I understand your point of it being daunting to imagine having to bring those with various individual BDUs, but I just wanted to say that my experience is that you choose one, the Commission is seized of it, makes a determination and you will be surprised how it may cascade across the industry. So I wouldn't -- je ne baisserais pas les bras -- I wouldn't give up on the undue preference as a regulatory tool.

11868   MR. TENEYCKE: Just with respect to this -- and we are obviously not here to comment on other channels, but I would point out a distinction between our project and a lot of the other projects that are being talked about in this realm.

11869   We are actually in the market today. We have spent north of $40 million on this project, we lost $17 million last year. The time value of saying that we are going to spend another year or two in a series of complaints and regulatory processes to try to gain access to the market in a fair and equitable way is just not sustainable from a business standpoint. You know, I just don't think it's realistic for us as a business to pursue that road, which is why we are clearly saying, if that's the path that the Commission is going to take, well, you know, it's not going to work for us and the net result of that decision will be no Sun News.

11870   So I know that's a tough message, but I don't want to create a false expectation in these hearings as to where we are going and what we are looking at. We are not a paper project, we are a project that is actually in the field. We have given Category C a shot. You know, we have played along the lines that the Commission has laid out, we are here telling you that for new entrants it doesn't work and we believe we qualify for 9(1)(h), we are here at 9(1)(h) hearings, 9(1)(h) is the obvious solution for us.

11871   THE CHAIRPERSON: Right. So you are ready to throw in the towel only after two years.

11872   Because there are a lot of companies that have to spend a great deal -- you know, in a digital economy, that have to spend a great deal of time defending their intellectual property in court, that's part of the business. And it's only been two years.

11873   MR. TENEYCKE: Well, it's two years with a very clear indication. I'm going to hazard a guess after my remarks this morning, our relationship with BDUs will not improve.

11874   We have an impasse. If someone does not want to have a deal with you, they are not going to reach a deal with you.

11875   THE CHAIRPERSON: But I will put it to you that what they are saying is they don't want to necessarily take the deal you are offering, it's not that they -- I mean it is a negotiation. I think there was evidence on the record from TELUS for instance saying that they would be willing to carry you. Maybe not where you want to be carried, but that's the way of the world, isn't it.

11876   MR. TENEYCKE: Well, yes, there are negotiations and then there is non-serious negotiations.

11877   If I offered to buy my neighbour's house for $100 and he says no, are we in a negotiation? If I say, "Oh well, I will double it, I will give you $200 for your house", are we negotiating? You know, it's not a serious negotiation.

11878   It's not a serious negotiation, not only with TELUS and MTS, you know, we basically drew a line at that point, but it's not a serious negotiation when we are getting one-sixth of what CBC is getting, when we are getting less than one-third of the market average for English all-news channels, Canadian all-news channels. It's not a serious negotiation, Mr. Chairman.

11879   You know, these are smart and sophisticated people, as I'm sure you know and recognize and appreciate, they know what a 9.7 cent average does to our business. They know it's a death sentence. They understand that and there is no way by which you can turn 9.7 cents into $.18. Like it's just not going to happen.

11880   THE CHAIRPERSON: That's all very interesting, but it's anecdotal right now and were we to be seized by an undue preference proceeding we would get the evidence, know exactly what was happening

11881   I'm not disputing that you are having difficulty negotiating, but to say that they are almost, I think what you are suggesting, negotiating in bad faith, there is a process about it.

11882   MR. TENEYCKE: I'm saying it pretty bluntly.

11883   THE CHAIRPERSON: Yes. But this isn't -- we are not seized of that aspect of this.

11884   MR. SASSEVILLE: Mr. Chair, we would like to clarify one point. When we are talking about undue preference I think that Luc Lavoie said it last week when we appeared in front of you, we gave you examples of what we qualified as undue preference on a business level. Those were examples that may respect the threshold of not being undue preference on a regulatory level, but we felt that those were examples of undue preference on the business level and that's mainly the problem that we are facing right now.

11885   THE CHAIRPERSON: Yes. I remember that evidence from Monsieur Lavoie.

11886   All right. Those are our questions. Thank you very much for participating.

11887   We will take a short 10-minute break at this point, so we are adjourned until -- okay, 10:45. I will be generous with an extra 2 minutes, it's more like 15, but anyway, 10:45.

11888   Thank you.

--- Upon recessing at 1033

--- Upon resuming at 1046

11889   THE CHAIRPERSON: Order, please.

11890   Madam Secretary...

11891   THE SECRETARY: We will now hear Education through Media.

11892   Gentlemen, please introduce yourselves for the record. Then you may proceed with your 10-minute presentation.

REPLY

11893   MR. SMALL: Thank you, Mr. Chairman, Mr. Vice-Chair, Commissioners, Commission Staff, and fellow applicants.

11894   My name is Jason Small, and I am the Executive Director of Education through Media, the licence holder of Dolobox TV.

11895   With me is my colleague Mark Prasuhn.

11896   We will respond to the interventions presented in this hearing as they relate to our application for 9(1)(h) status for Dolobox TV.

11897   Our focus is on five key areas:

11898   First, the Dolobox service, focused on youth, programmed by youth, and engaged with youth, meets the exceptional criteria and represents an extraordinary need.

11899   Second, mandatory carriage for a single licence term is justified for Dolobox TV to get established, especially as a charity, where all of the profits are channelled back into programming.

11900   Third, Dolobox TV is national in scope and intends to secure partnerships with youth organizations and post-secondary institutes across the country.

11901   Fourth, we will be innovative in the manner in which we coexist with the Internet and deliver quality TV programming, largely from Canadian sources.

11902   Lastly, subscribers of all ages think that this service is needed, and most endorse it, even if it is mandatory and costs a few pennies a month.

11903   The BDU intervenors have argued that Dolobox TV does not fulfil CRTC criteria for 9(1)(h). In reply, we noted the Commission's desire that this composition of digital basic service should be informed by the policy objectives of the Broadcasting Act.

11904   In our submission, the availability of Dolobox TV on basic would make a direct and immediate exceptional contribution to safeguarding, enriching and strengthening the cultural, social and economic fabric of Canada.

11905   The programming planned for Dolobox is varied and comprehensive, provides a balance of information and entertainment programming at an affordable cost, and will be drawn from local, regional, national and international sources.

11906   Dolobox TV's exceptional contribution is threefold:

11907   First, it is exceptional not because it targets youth, but because its focus is on Canadian youth as content creators, creating content that is relevant to youth. Dolobox will do more than simply fill a programming gap aimed at youth audiences.

11908   Our supporting intervenors noted that youth voices and stories are largely missing from the Canadian broadcasting system. While programming in certain genres is targeted to youth audiences, there is virtually no programming made by youth.

11909   Little, if any of the programming offered by incumbent broadcasters speaks with authenticity and relevance to Canadian youth, whether they be from marginalized or more advantaged communities.

11910   Second, it is exceptional at this time because of the way in which youth consume television at the same time as being on the Internet. Our research demonstrated that youth still watch a lot of television, but the Internet is assuming greater importance to their everyday living. This channel will be programmed with that duality in mind.

11911   Dolobox is not a TV channel wondering how to incorporate the second screen. It will be designed as television for which the second screen experience is baked into the service itself.

11912   Dolobox is the right vehicle to address TV's relevance deficit for Canadian youth.

11913   Third, Dolobox is exceptional because it is responding to an extraordinary need of Canadians. When polled, 62 percent of Canadians of all ages said there was an extraordinary need for a service like Dolobox. Not surprisingly, the response of younger Canadians was even higher.

11914   Canadians of all ages recognized the social value of such a channel, presumably, whether or not they watched it.

11915   The Dolobox inspiration is a social one -- harnessing Canada's youth in expressing themselves, learning a craft and life skills, and getting trained in creating product that is broadcast on air.

11916   By giving youth access to the Canadian broadcasting system and a means to create programming for the system, we will make an exceptional contribution to Canadian expression, attitudes, ideas, values and artistic creativity of a key underserved group.

11917   Moreover, all of this programming will represent exceptional commitments to original first-run programming, given that new shelf space and resources will be earmarked for exhibiting and creating content made by youth.

11918   Commissioner Poirier raised the question earlier this week, and earlier today, as well, as to whether a service aimed at one specific audience segment, in this case youth, should be considered for mandatory basic distribution, as all Canadians would have to pay for a service that only serves a portion of the population.

11919   I would like to make these points in response:

11920   First, most services that have already been granted 9(1)(h) status serve a specific subset of the population -- while not age specific, serving minorities of other stripes, like linguistic -- French speakers outside Quebec -- Aboriginal, or disabled --hearing and sight impaired. Indeed, to meet the criteria that a service demonstrates extraordinary need among the intended audience, it is a prerequisite that the service be targeted to a specific portion of the population.

11921   We concur with Ms Williams of Shaw Media, who said on Monday that "general interest services clearly do not satisfy the Commission's [9(1)(h)] criteria as they serve a mass audience."

11922   The CRTC has used 9(1)(h) to ensure that underserved groups who have common issues, interests and challenges have a forum within the Canadian broadcasting system. Dolobox TV will reach out to a specific youth audience segment -- and is open to youth creators -- a group not currently reflected in the Canadian broadcasting system.

11923   Therefore, access to Dolobox TV by all BDU subscribers and access to youth creators would, in and of itself, result in an exceptional contribution to the objectives in section 3 of the Act.

11924   Second, our survey results demonstrate that the appeal and reach of Dolobox TV extends well beyond the youth cohort. Canadians generally understand the importance of investing in our youth and see Dolobox TV as such an investment.

11925   As Charles Falzon of Ryerson stated, "the programming will be of interest not just to youth, although it's youth-focused."

11926   Relative to the costs of remediating the negative consequences of youth disengagement, it is a very modest financial imposition on basic subscribers.

11927   Finally, during our presentation last week we addressed why we believe a not-for-profit is the optimal ownership structure for a 9(1)(h) service. Mandatory carriage is most suited to services that are advancing specific public policy objectives in an exceptional manner. As charitable organizations, all profits are ploughed back into programming.

11928   Ms Dinsmore of Rogers stated that the spirit of 9(1)(h) is best served by "a non-commercial service that wouldn't otherwise be made available in the system for those in communities that are not otherwise served."

11929   MR. PRASUHN: Although the service is starting from a Toronto base, a national presence and engagement is essential to realize its mandate, and will be the channel's top priority.

11930   Dolobox has existing relationships and will consummate a wide variety of additional partnerships with youth-oriented NGOs and charities, such as the Boys and Girls Clubs of Canada, which has 99 chapters across the country, and with other educational institutions across Canada. In so doing, Dolobox TV will tap the energy and creativity of youth from coast to coast to coast and enable a national conversation among youth that is rare in the current broadcast landscape.

11931   Professor Charles Davis of Ryerson, on Tuesday, explained that Dolobox will be seeking post-secondary partners similar to Ryerson across the country, in order to follow and implement that partnership model.

11932   In addition, Dolobox TV has national importance because releasing content on a national broadcaster with curation and quality standards bestows credibility and validates the creative efforts of youth in ways that the Internet cannot.

11933   As Mr. Flex stated on Tuesday, "Dolobox TV will give young people a relevant platform for engagement, inspiration and aspiration."

11934   Many of the BDU intervenors have argued that UGC content in the Canadian broadcasting system is not "exceptional". This is a misunderstanding on their part, we believe. The programming on our schedule will be comprised of a curated UGC strand, twinned with more "traditional" long-form, produced and acquired, content.

11935   It will then be linked to online second screen experiences, so as to maximize interactivity and engagement with the youth audience.

11936   Examples of this type of programming can, indeed, be found in Appendix C of the letter we sent to the Commission on August 24th of last year.

11937   Mr. Andrew Cromey also provided detailed information about this programming approach during our Phase 1 appearance last week.

11938   In summary, this approach will result in a programming service that will be perceived as a high quality service for its market, at an affordable rate.

11939   As Mr. Falzon noted, youth "are creating product that we never would have imagined at that same age 20 years ago. We feel this is the voice of Canada and it is an important part of the investment in the future." We believe this is innovation.

11940   Dolobox TV is predicated on innovation, experimentation and flexibility -- the same attributes that have driven the rapid growth and success of online media. Our regulated broadcasting system has lagged somewhat in these areas and is falling behind.

11941   We believe that Dolobox TV can make a contribution to redressing that innovation gap.

11942   Certain intervenors argue that all existing services with 9(1)(h) status should remain in place indefinitely and no new services should be added. We believe that this "status quo in perpetuity" approach is unwarranted and contrary to the innovation and flexibility originally envisaged by the Commission when digital television was introduced.

11943   9(1)(h) should not be a privilege enjoyed in perpetuity. In bringing forward our request for only a single term of 9(1)(h) status, which would enable our service to actually launch, we are practising what we preach. We are confident that, once Dolobox TV is actually made available, it will find and build an audience through its uniquely relevant offering and won't require mandatory carriage after the initial term.

11944   During the intervention stage the Commission also heard from BDUs that there are many elements contributing to the cost of basic and that the premise of a linear markup or direct relationship between the cost of individual programming services and the pricing of basic is overly simplistic or even inaccurate.

11945   BDU intervenors, including Shaw and MTS, were clear that the price of basic is driven by a number of factors, and that the addition of new services by way of mandatory carriage 9(1)(h) orders would not necessarily cause the price of basic to increase -- and, conversely, that the removal of existing 9(1)(h) services would not necessarily result in a price decrease.

11946   BDUs also acknowledged that relatively few consumers take only the basic package. They view basic as a "loss leader" and, in many cases, make little or no margin on the sale of basic packages. This is actually consistent with statements made in past proceedings.

11947   For example, in Broadcasting Regulatory Policy 2008-100, the Commission noted that "most BDUs...submitted that there was no evidence that subscribers wanted a small basic service...approximately 95 percent of their customers [at that time] subscribe to packages over and above the basic service."

11948   Given all of these comments during the past few days in this proceeding, we conclude that the issue of price sensitivity has been somewhat overstated, and that a service such as Dolobox TV, with a very modest wholesale rate -- 6 cents, increasing later in the term to 8 cents a month -- would not materially impact consumers.

11949   In fact, as a unique channel which Canadians broadly recognize the need for, as shown in our survey, we believe that Dolobox TV would be perceived by consumers as adding value to their television packages.

11950   MR. SMALL: To conclude, as someone for whom a CRTC hearing is a new experience, I would like to thank the Commission for the opportunity to present our application. This is clearly a time of both crisis and opportunity for the Canadian broadcasting system. I believe that the Commission has the opportunity through this hearing, and through our application, to foster innovative and new Canadian content without increasing costs to the consumer beyond a very modest amount.

11951   Commissioner Poirier asked one of our intervenors whether he was aware of another channel elsewhere in the world like Dolobox TV, and why Canada should be the first to launch one.

11952   Had I been asked, I would have answered the question exactly the same way as Mr. O'Doherty did: Dolobox TV is a unique opportunity "that we need to seize as a country and as a generation."

11953   The Commission can take a leadership role with a unique television channel that will unlock the transformative potential of media production and distribution for Canadian youth.

11954   Thank you for the opportunity to submit these comments in reply.

11955   THE CHAIRPERSON: Thank you very much. You have done a very good job, because the two questions that we would have wanted to explore, you have answered in your presentation this morning, so we have no other questions for you. Thank you very much.

11956   MR. SMALL: Great. Thank you.

11957   MR. PRASUHN: Thank you.

11958   LE PRÉSIDENT : Donc, Madame le Secrétaire, nous allons entendre CPAC maintenant?

11959   LA SECRÉTAIRE : Oui.

11960   Cable Public Affairs Channel, please approach the presentation table.

--- Pause

11961   LE PRÉSIDENT : Bonjour, mesdames et messieurs. Bienvenue, et quand vous serez prêts, vous pouvez procéder. Merci.

REPLY

11962   MME WATSON : Merci.

11963   Merci, Monsieur le Président, Monsieur le Vice-président, mesdames et messieurs les conseillers. Je m'appelle Colette Watson et je suis présidente et directrice générale de CPAC.

11964   Je suis accompagnée, à ma droite, de Jeremy Clark, directeur, Réseau et Programmation de CPAC; de Patricia Hutton, directrice, Finances et Administration; et de Joel Fortune, notre conseiller juridique, à ma gauche.

11965   Notre intervention aujourd'hui sera brève.

11966   In this hearing, CPAC is seeking the renewal of our licences to operate French and English-language services and the extension of the existing distribution order relating to CPAC.

11967   CPAC has followed the intervention phase with interest. CPAC is very pleased by the support for our application expressed by both Houses of Parliament and the consumer organizations participating in this proceeding.

11968   No intervenor in this proceeding has specifically opposed CPAC's proposed licence renewal, our request for the extension of the existing distribution order relating to CPAC, or our proposed wholesale fee increase of 1 cent for the renewal term.

11969   CPAC would like to reiterate its commitment to captioning all programming on the licensed service, in both official languages, subject to getting relief from certain captioning standards.

11970   As the Commission knows, CPAC's programming is unique and unscripted. In order to provide closed captioning for 100 percent of our programming, in the original and translated version, and precisely because CPAC is Canada's only licensed bilingual service, CPAC respectfully requests relief from the lag time standard and from the correction standard for closed captions.

11971   Also, we explained in our original application why pop-on captioning for English-language long form programming is not well suited to CPAC's service.

11972   CPAC understands the importance of making our programming available in both official languages, with captioning also in both official languages. Last week I understated our accuracy rates. Our English accuracy rate exceeds 98 percent, and our French accuracy rate is 91 percent.

11973   The requests we have made regarding the application of closed captioning standards to CPAC will permit us to provide this service.

11974   We have attached to this presentation a summary of these proposals for your reference.

11975   Au nom de CPAC et de celui des membres de son conseil d'administration, je tiens à remercier le Conseil de nous avoir donné l'occasion de présenter notre demande. Nous répondrons avec plaisir à toute autre question.

11976   LE PRÉSIDENT : Merci beaucoup, Madame Watson, mais il s'avère que vous avez répondu à nos questions déjà. Donc, nous n'aurons pas de questions pour vous à ce moment-ci. Donc, on vous remercie beaucoup pour votre présentation et d'avoir participé dans notre instance. Merci.

11977   The next intervener, please.

11978   THE SECRETARY: I would now invite Accessible Media to come forward.

11979   THE CHAIRPERSON: Welcome back. I would ask you to identify your panel, so that the transcript reflects the right intervenors. Please go ahead.

REPLY

11980   MR. ERRINGTON: Thank you, and good morning. My name is David Errington, and I am the President and CEO of Accessible Media Inc., or AMI.

11981   To my right is Line Gendreau, our VP of Finance.

11982   To Line's right is Alain Strati, a Director of the AMI Board of Directors.

11983   And to the far right is John Melville, Vice-President of Programming and Production.

11984   And to my left is our counsel, Rob Malcolmson.

11985   Before beginning, I would like to thank all of the intervenors for supporting our application for the renewal of our services, and the French service, and, most importantly, the four intervenors who came here on Tuesday, who took time out of their day, and for the efforts they made to come and explain to you the positive impact that our services have on their lives and their families' lives. So, thank you.

11986   Mr. Chairman and Commissioners, we are pleased to appear before you in reply to respond specifically to two issues raised by the Commission during our presentation-in-chief.

11987   First, you asked if we were prepared to make a commitment to French-language independent producers regarding productions to be commissioned for broadcast on AMI-tv Français.

11988   Second, you asked if we could reconsider the proposed wholesale rate for AMI-tv Français, in light of the fact that the proposed 30-cent rate is 33 percent higher than the current rate for our English network.

11989   For the record, our intention has always been to use French-language independent production companies for all of the independent productions that we will commission for broadcast on AMI-tv Français. We would therefore be prepared to accept a condition of licence requiring that all independently produced programming that is broadcast on AMI-tv Français throughout the licence term shall be sourced exclusively from French-language independent production companies based in the province of Quebec or in French-language communities outside the province of Quebec.

11990   A copy of the proposed condition of licence is attached as Appendix A to our presentation.

11991   We have also given great consideration to the Commission's concern that the proposed wholesale rate for AMI-tv Français is higher than the rate currently charged to BDUs for the anglophone service.

11992   In response to the Commission's concerns, we are now proposing that the rates for each of the English and French services be adjusted to 23 cents per subscriber. This proposal equalizes the wholesale rates payable by anglophone and francophone subscribers in their respective language markets, and ensures that there is no difference in the wholesale costs of the service in either linguistic community.

11993   Finally, we have heard the comments from some parties regarding carriage on mandatory basic services on exempt BDU systems. For the record, we are requesting digital basic carriage on all BDU systems, licensed or exempt, save and except for exempt systems with less than 2,000 subscribers.

11994   We trust that we have responded appropriately to the Commission's concerns, and would be pleased to answer any questions.

11995   THE CHAIRPERSON: Again, you done very well in answering the questions that we were about to ask. That's excellent, so we have no questions from the Commissioners or from legal staff.

11996   Thank you very much.

11997   MR. ERRINGTON: Thank you.

11998   THE SECRETARY: Thank you very much.

11999   If Mr. Evan Kosiner is in the room, I would invite him to come forward.

12000   THE CHAIRPERSON: Welcome back. I understand that you don't have a written text. That's fine, you don't need one. So, please go ahead.

REPLY

12001   MR. KOSINER: At this point I don't have a formal presentation, I am mainly here to answer any questions that you might have.

12002   I did want to make note of one thing that came up the other day regarding Rogers, in their intervention.

12003   I understand that there was a concern of yours about how long it has taken to bring descriptive video out to market, and what I got from them -- I am kind of seeing that a described video guide could be almost like an insurance policy, in that four years down the road, it could give them an incentive -- that our service would have some built-in obsolescence, and if we were no longer needed, it would give them the incentive to come to you and say: We no longer need this service because we are already out to market with some sort of other product or guide.

12004   Besides that, that is really my only comment that hasn't otherwise been provided in writing.

12005   THE CHAIRPERSON: I have just one question. By the same token, another way that one could address what you have just been discussing is that we could wait for two years, because two years isn't necessarily a long time, and see what comes of it, in terms of perhaps a technological solution by the BDUs.

12006   MR. KOSINER: Very fair.

12007   With that said, I believe from what they were saying that it is more likely three to four years, if not longer than that.

12008   And for anyone who is visually impaired in Canada, from what I see, and from what I gather, waiting another two to four years, or however long that period is, is a long period to wait.

12009   What is proposed to you currently is something that would fulfill that need in the interim.

12010   THE CHAIRPERSON: Fair enough.

12011   MR. KOSINER: Thank you.

12012   THE CHAIRPERSON: Thank you very much. Those are our questions.

12013   We will go to the next reply.

12014   THE SECRETARY: I would ask Takten Gyurmey Foundation, EqualiTV, to come forward.

12015   I am not sure if the panel for EqualiTV is in the room.

12016   Sir, are you part of the panel for EqualiTV?

12017   Yes, you are. All right.

12018   THE CHAIRPERSON: The rest of the panel is not here.

12019   Est-ce que les gens de Vues et Voix sont là?

12020   Est-ce que vous êtes prêts à procéder à ce moment-ci?

12021   Alors, approchez la table, s'il vous plaît.

--- Pause

12022   LE PRÉSIDENT : Merci. C'est bien madame Théodore, hein, si je me rappelle bien? Oui.

12023   Alors, merci de nous accommoder. Donc, lorsque vous serez installée, vous pouvez procéder. Merci.

REPLY

12024   MME THÉODORE : Monsieur le Président, mesdames et messieurs du Conseil, alors, je suis Marjorie Théodore, PDG de Canal M, la radio de Vues & Voix.

12025   J'aimerais d'abord commenter certaines des préoccupations exprimées par les distributeurs et les organismes d'intérêt public à propos de l'octroi d'une ordonnance de distribution obligatoire au service de base numérique et aussi du tarif obligatoire par abonné par mois.

12026   Premièrement, quelques intervenants ont affirmé que les requérants qui sont devant vous à cette audience ne devraient pas obtenir par ordonnance ce qu'ils n'ont pas pu obtenir par négociation avec les distributeurs.

12027   Selon eux, les services spécialisés devraient s'appuyer sur les forces du marché pour négocier leur distribution plutôt que de s'attendre à ce que le CRTC le fasse pour eux. Ou même, ce devrait être les prêtes bancaires aux entreprises qui devraient assurer la viabilité, et non une ordonnance.

12028   Or, reconnaissons que Canal M est bien loin d'être un média de force commerciale. Si on laissait les forces du marché déterminer sa distribution, Canal M pourrait être orphelin. Dans les faits, le Conseil intervient dans ses actions là où les forces du marché ne suffisent pas. C'est là vraiment toute l'importance de son approbation sur la distribution obligatoire.

12029   Certains -- pas tous, loin de là -- mais certains en rajoutent même, en disant que cette obligation ne doit pas être accordée pour des services à segments très particuliers. C'est l'auditoire qui devrait déterminer si un service est d'une importance exceptionnelle pour les Canadiens.

12030   Je peux voir dans une certaine mesure comment cela peut être vrai, car notre auditoire et le nombre de francophones ayant un handicap visuel ou un autre type de limitation fonctionnelle déterminent tout à fait que Canal M est d'une importance exceptionnelle. Je dirais toutefois que ce public constitue bien plus qu'un segment particulier, car ce public est fort important.

12031   Je vous rappelle qu'un Canadien sur sept vit avec une incapacité. Cela dit, laisser à seul l'auditoire de masse déterminer l'importance exceptionnelle des services, ce serait abandonner Canal M aux forces du marché.

12032   Deuxièmement, des intervenants ont dit que plusieurs requérants n'ont pas fourni de preuves suffisantes. Selon certains d'eux, la distribution obligatoire est en contradiction avec les objectifs de la politique de radiodiffusion du CRTC, avec le choix des consommateurs, ainsi qu'avec le caractère abordable des services.

12033   Je crois que la demande que nous avons déposée, de la page 17 à la page 21 du mémoire supplémentaire, répond à chacun, et j'insiste, à chacun, des sept critères que le Conseil avait déjà annoncés pour évaluer les demandes pour renouveler l'octroi de l'obligation de distribution au service de base numérique.

12034   Par ailleurs, le libre marché peut offrir un choix de services de programmation grand public en vertu de leur attrait commercial, mais le libre marché pourrait exclure Canal M du choix que peuvent obtenir les auditeurs.

12035   Troisièmement, les distributeurs disent qu'une ordonnance de distribution obligatoire entraînerait une hausse des coûts. Ils disent que tout cela pourrait conduire certainement aux consommateurs à couper certains de leurs services de programmation, et même à fuir le système de diffusion traditionnel pour aller vers des services non réglementés.

12036   Or, avec une augmentation de deux cents, la hausse des coûts que causera Canal M sera infime. Rien à craindre de notre part là-dessus. Puis-je même vous dire que ce ne sera pas Canal M qui amènera les abonnés à couper certains services discrétionnaires et, encore moins, à les faire fuir vers Internet ou les...

12037   LE PRÉSIDENT : Madame Théodore, piano.

12038   MME THÉODORE : Ah! bon.

12039   LE PRÉSIDENT : Un petit peu moins vite pour les interprètes.

12040   MME THÉODORE : Merci. Et, encore moins, à les faire fuir avec Internet ou les satellites étrangers pour leurs services de radiodiffusion.

12041   Passer de deux cents par abonné par mois à quatre cents, c'est une augmentation de 100 pour cent, certes, mais tout ce que nous demandons, c'est un financement à la même hauteur que les services anglophones équivalents offerts par AMI Audio qui touche quatre cents de redevance.

12042   Enfin, je remarque que certains intervenants, notamment MTS Alstream, TELUS et Cogeco ne s'opposent pas au renouvellement de l'ordonnance de distribution obligatoire de Vues & Voix. Cogeco a même affirmé qu'il serait équitable et inapproprié de remettre en cause le statut de distribution actuel des six services existants qui ont le statut de distribution obligatoire.

12043   J'aimerais maintenant témoigner ma reconnaissance aux très nombreuses personnes qui ont appuyé notre demande. Le Conseil a sûrement pris bonne note. Dans son commentaire, Marie-Thérèse Toutant a fait un vibrant appel pour une plus grande solidarité dans nos communautés, qu'importe le statut social ou le handicap. Et je la cite:

« L'intégration dépasse les ajustements techniques de certains appareils ou d'aménagement de l'environnement de travail. L'intégration sociale passe également par l'INFORMATION qui permet une certaine éducation quant à la signification de l'inclusion sociale.
Ainsi, le Canal M, la radio de Vues & Voix, permet à un public canadien varié, dont font partie les personnes ayant différents handicaps, la possibilité de s'inspirer des propos ou de l'engagement de leurs pairs. De plus, Canal M est également un outil qui aide les auditeurs à accéder à une plus grande autonomie, à faire des choix éclairés et être pleinement actif dans la société. »

12044   Pour sa part, Gaston Loubier a affirme :

« Canal M, pour moi, est mon seul lien avec mes semblables. »

12045   Au fait, tous les intervenants de ces audiences sont des parties prenantes. C'est-à-dire que chaque partie tient dans ses mains une part dans cette entreprise qu'est ce service aux personnes handicapées de langue française : soit Canal M, les télédistributeurs, les organismes de défense de l'intérêt public, les communautés, les élus et le Conseil. Le service ne peut qu'être assuré par la collaboration de toutes ces parties qui se sont manifestées à cette audience. J'en profite d'ailleurs pour les remercier chaudement.

12046   Pour terminer, madame la conseillère Louise Poirier nous a demandé d'apporter une réflexion sur les critères de succès.

12047   Comme nous en avons convenu la semaine dernière, un abonnement à BBM coûterait trop cher et ne nous assurerait pas d'atteindre un bon échantillon de la communauté que nous desservons.

12048   Par contre, ce que nous pouvons vous offrir comme indice de succès, c'est la rétroaction de nos auditoires et de notre communauté :

12049   Une moyenne de 13 000 personnes écoutent mensuellement les émissions sur le site, sans parler des auditeurs qui écoutent via le câble et par satellite.

12050   Au cours des cinq derniers mois, nous avons gagné plus de 600 abonnés Facebook ainsi que 440 abonnés Twitter - et cela continue d'augmenter de semaine en semaine.

12051   Les auditeurs se manifestent au téléphone, par courriel, sur les réseaux sociaux et lors de nos sorties, entre autres, au Défi Sportif, au Salon Prendre sa place, dans le cadre de la Semaine des personnes handicapées et au Salon du livre de Montréal. Les auditeurs ont également apporté par centaines leur appui au renouvellement de la licence de la radio.

12052   Nous recevons aussi chaque semaine les communiqués de dizaines d'organismes du milieu des personnes handicapées qui nous informent de leurs activités et services.

12053   Plus de 400 abonnés reçoivent l'infolettre hebdomadaire de la radio qui et reprise par plusieurs organismes du milieu pour informer leurs membres.

12054   En l'espace de deux ans, la radio a réuni une équipe qui comprend des personnes non voyantes et à mobilité réduite et des dizaines de collaborateurs du milieu des personnes handicapées et communautaires, de la santé, de l'éducation, des technologies, partenaires et collaborateurs qui constituent notre comité aviseur.

12055   Plus de 40 organismes du milieu ont apporté leur appui à Vues & Voix pour le renouvellement de sa licence. Parmi les plus importants, mentionnons le Regroupement des aveugles et Amblyopes du Québec (RAAQ) qui regroupe 12 associations régionales, la Confédération des organismes des personnes handicapées du Québec (COPHAN) qui regroupe 52 organismes et regroupements régionaux ainsi que l'Association des établissements de réadaptation en déficience physique du Québec qui offre des services à 77 000 personnes vivant avec une incapacité significative.

12056   Dans la prochaine année, la radio mènera une offensive de communication afin de mieux faire connaître la radio au public qu'elle dessert. À la suite de quoi, la radio mènera un sondage auprès des auditeurs afin de mieux connaître ces derniers et de répondre à leurs besoins. Nous en profiterons également pour fournir ces chiffres et profils d'auditeurs aux annonceurs et partenaires de Canal M, la radio de Vues & Voix.

12057   Donc, je vous remercie infiniment de votre écoute et si vous avez des questions, je suis disponible.

12058   LE PRÉSIDENT : Madame Poirier.

12059   CONSEILLÈRE POIRIER : Oui. Merci, madame Théodore, d'avoir répondu à quelques-unes de mes demandes plus spécifiquement. J'ai deux brèves questions.

12060   La première, vous dites dans votre document passer de deux sous à quatre sous pour vous ramener équivalent à AMI. Est-ce que vous considérez que vous nous avez présenté une preuve suffisante pour justifier une augmentation de deux sous, autre que celle de vous comparer à AMI et de dire, on veut avoir le même tarif qu'eux?

12061   MME THÉODORE : Oui, tout à fait. C'est l'argument que j'ai apporté aujourd'hui dans ma réplique, mais nous avons... nous sommes conscients d'avoir donné des preuves suffisantes pour l'augmentation parce que nous avons présenté une radio inclusive qui serait une plate-forme et aussi l'augmentation aussi et l'enrichissement de notre programmation.

12062   CONSEILLÈRE POIRIER : Est-ce qu'un montant inférieur à une augmentation de deux sous pourrait être considérée par la Commission, à votre avis? Par exemple, monter à 0,2.5 sous ou 0,3 sous?

12063   MME THÉODORE : Bon, c'est sûr que lorsqu'on fait une demande on s'attend à ce que la Commission réponde à cette demande, c'est-à-dire que vous... selon ce que nous avons déposé, mais nous c'est sûr que notre demande et ce que nous avons évalué au niveau des budgets d'augmentation de la plate-forme du programme que l'on prévoit pour la radio, bien c'est les deux sous supplémentaire, en effet.

12064   CONSEILLÈRE POIRIER : Merci beaucoup.

12065   MME THÉODORE : Merci.

12066   LE PRÉSIDENT : Merci bien, madame. Ce sont nos questions.

12067   Madame la secrétaire, prochaine intervention.

12068   LA SECRÉTAIRE : Oui. J'invite maintenant les gens de TV5.

12069   LE PRÉSIDENT : Bonjour, madame Gouin et monsieur Houle. Donc, allez-y quand vous serez prêts.

REPLY

12070   MME GOUIN : Monsieur le président, avant de commenter certaines interventions orales, je voudrais aborder deux points.

12071   Premièrement, je voudrais remercier chaleureusement les 5 343 intervenants qui ont pris la peine d'appuyer notre projet.

12072   L'immense majorité de ces appuis, plus de 5 200, sont venus de simples citoyens et consommateurs, francophones et francophiles. Nous avons reçu également un appui très large du milieu de la production indépendante francophone ainsi que des associations représentatives des communautés francophones et acadiennes de partout au pays.

12073   Je tenais à leur signifier aujourd'hui notre reconnaissance et à leur permettre de tout mettre en oeuvre pour être à la hauteur de leurs attentes élevées, si notre demande est acceptée.

12074   Deuxièmement, j'aimerais apporter quelques précisions à la réponse que nous avons fournie aux questions que madame Poirier et vous-mêmes avez soulevées lors de notre comparution. À savoir, s'il n'était pas inapproprié de conférer un statut 9(1)h) à un service dont un des deux canaux sur lesquels il entend déployer sa programmation globale, a un faible contenu canadien.

12075   Je tiens d'abord à rappeler qu'il y a es motifs de politique publique qui justifient que le service TV5 actuel consacre une large portion de sa programmation à des émissions internationales de langue originale française.

12076   Lorsque le service a été initialement autorisé, l'objectif était de permettre aux Canadiens d'avoir accès à un minimum d'émissions internationales de langue originale française. Et ce, afin de faire contrepoids à la présence très importante d'émissions internationales de langue anglaise, principalement américaines, qui leur étaient proposées via la télédistribution.

12077   De l'avis du Conseil, l'approbation de TV5 allait contribuer de manière significative à accroître la diversité de programmation offerte aux téléspectateurs de langue française.

12078   Ces objectifs de politique publique et d'accroissement de la diversité de la programmation nous semblent aujourd'hui plus pertinents que jamais.

12079   En effet, depuis 1987, l'offre de chaînes et d'émissions internationales de langue originale française est demeurée plus ou moins stationnaire. Alors que l'offre de chaînes et d'émissions internationales de langue anglaise n'a cessé de s'accroître à un rythme presque effréné.

12080   Dans ce contexte, la contribution que le volet international du Nouveau TV5 sera en mesure d'apporter à la diversité de la programmation offerte aux francophones canadiens est donc, à notre avis, plus pertinente que jamais auparavant.

12081   En ce qui a trait au contenu canadien global de Nouveau TV5, je voudrais souligner que nous ne retranchons rien aux obligations actuelles de TV5. Nous ajoutons un second canal, à la programmation entièrement distincte, qui aura un contenu canadien d'au moins 75 pour cent. Avec, pour résultat, que Nouveau TV5 diffusera donc chaque année six fois plus d'heures de contenu canadien que le TV5 actuel. Ce n'est pas une mince augmentation.

12082   Basé sur un solide plan d'affaires, nous avons fait le choix stratégique de proposer un pourcentage de dépenses de programmation canadienne plus grand que le pourcentage de diffusion de contenu canadien.

12083   Et ce, parce que notre ambition est d'offrir aux producteurs francophones de tout le pays les moyens de réaliser des émissions de grande qualité, attrayantes et compétitives, et de genres variés. Des émissions qui peuvent être déclinées sur d'autres plate-formes et qui ont de réelles possibilités de rayonnement international.

12084   D'autres ont choisi plutôt de faire du volume, en s'engageant à financer 1 144 heures d'émissions originales canadiennes en première diffusion par année. Et ils ont soumis, en conséquence, une grille dont la programmation originale canadienne est composée à près de 75 pour cent d'émissions de services et de magazines.

12085   Très sincèrement, nous sommes sceptiques sur la capacité d'une telle programmation de répondre aux attentes des téléspectateurs francophones que nous avons directement interrogés. Tout comme au désir de diversification de leurs activités qui anime un grand nombre de producteurs indépendants francophones.

12086   En résumé, le projet Nouveau TV5 tente de répondre à un ensemble de préoccupations en regard de l'état et du fonctionnement du système de radiodiffusion de langue française:

12087   La première, exprimée dans votre rapport de 2009, est la sous-représentation au sein de ce système, à la fois du reflet des communautés francophones en situation minoritaire et des émissions réalisées par les producteurs qui y sont implantés.

12088   La seconde est la montréalisation des ondes, c'est-à-dire la sous-représentation des émissions produites hors Montréal au sein de ce même système, que le Conseil a réitérée lors du renouvellement de licences des principaux groupes de radiodiffusion de langue française.

12089   La troisième est le déséquilibre profond qui existe depuis des décennies, et qui ne cesse de s'accroître entre l'offre d'émissions internationales de langue originale anglaise versus celles en français.

12090   La quatrième est la volonté exprimée par le Conseil en 2010 de concentrer sa réglementation, non plus sur la diffusion, mais sur la création d'émissions canadiennes de grande qualité, qui soient en mesure de tirer leur épingle du jeu dans un univers en profonde mutation, marqué par le fractionnement des auditoires et des offres multi plate-formes diversifiées.

12091   Enfin, la cinquième est celle exprimée par les francophones en situation minoritaire eux-mêmes, qui veulent une chaîne interrégionale qui présente une programmation diversifiée et de haute qualité, qui reflète la totalité de la francophone canadienne et qui soit largement ouverte sur le monde. Une chaîne qui insiste sur ce qui unit tous les francophones, sur ce qu'ils ont en commun et non sur ce qui les uns des autres.

12092   Nous avons conçu notre projet pour qu'il prenne en compte et apporte une réponse crédible et responsable à cet ensemble de préoccupations. Tout en nous assurant que nous aurons les meilleures pratiques de gouvernance afin que tous les francophones, qu'importent leurs origines géographiques, soient partie prenante du Nouveau TV5. Et ce, au moindre coût possible pour les consommateurs.

12093   En ce qui a trait aux interventions en opposition, venues pour la plupart des EDR, nous y avons apporté une réponse détaillée dans notre réplique écrite.

12094   Monsieur le président, vous avez à quelques reprises soulevé la question de savoir si le fait qu'un service est à but lucratif ou non devait être pris en compte dans l'analyse du Conseil.

12095   Tout comme Cogeco, nous croyons que c'est un facteur qui mérite considération. Ce n'est pas le seul facteur évidemment, ni un facteur décisif, mais c'est un facteur pertinent. Les OBNL, comme TV5, offrent au Conseil et aux consommateurs l'assurance que la totalité de leurs revenus seront affectés à leur activité statutaire et qu'aucune partie de ceux ci ne servira à l'enrichissement d'actionnaires privés.

12096   Enfin, en réaction à certaines interventions, je trouve très important de rappeler que l'engagement de TV5 à l'endroit de la francophonie ne remonte pas au dépôt des projets en mai 2012. C'est notre raison d'être depuis 25 ans.

12097   Nous n'avons pas non plus attendu votre rapport de 2009 pour nous engager concrètement auprès des francophones vivant en régions ou en situation minoritaire.

12098   Depuis 2003, dans les limites de nos moyens, mais en dépassant largement nos conditions de licence, nous avons financé et diffusé plus de 100 projets de production régionale, par le sujet ou l'origine de production, et oeuvré avec pratiquement tous les producteurs francophones hors Montréal et hors Québec.

12099   Notre projet n'a pas non plus été conçu en vase clos, dans une quelconque arrière-salle montréalaise. Il s'est d'emblée inscrit dans le prolongement des relations étroites que nous avons développées avec les communautés francophones et les producteurs qui y oeuvrent.

12100   Il s'est construit et il a évolué d'abord et avant tout en fonction de ce que les francophones en situation minoritaire, puis l'ensemble des francophones du Canada, nous ont dit lors des groupes de discussion et à travers notre sondage national. Ce sont eux qui ont modelé le projet Nouveau TV5 et c'est pour eux que nous voulons le mettre en oeuvre.

12101   Et si notre demande est acceptée, nous continuerons évidemment à les consulter et à les impliquer, comme nous le faisons déjà et comme nous nous y sommes engagés formellement.

12102   Premièrement, en assurant un lien quotidien et permanent entre Nouveau TV5 et les communautés francophones en situation minoritaire, via nos bureaux régionaux qui offriront une vraie décentralisation des opérations de programmation.

12103   Deuxièmement, en mettant sur pied le Comité consultatif de programmation qui nous a été demandé par plusieurs intervenants du milieu associatif.

12104   Troisièmement, en approfondissant nos activités numériques et de nouveaux médias au sein de ces communautés, via notamment Francolab et le Fonds TV5 pour la création numérique.

12105   Quatrièmement, en réalisant chaque année un sondage ou une enquête qualitative auprès des téléspectateurs de la chaîne pour connaître leurs réactions à notre programmation et nous ajuster en conséquence.

12106   Car si nos 25 ans d'expérience nous ont appris quelque chose, monsieur le président, c'est qu'on fait de la télévision pour les gens, pour répondre aux besoins et attentes de ces êtres humains concrets et complexes que sont les téléspectateurs devant leur petit écran.

12107   En terminant, monsieur le président, je voudrais souligner que le présent processus est sans doute la dernière chance dont disposent les francophones des régions hors Montréal et hors Québec de se voir offrir une chaîne qui va consacrer la majorité de ses budgets de programmation originale canadienne à refléter leur situation, leurs réalisations, leurs aspirations et leurs attentes.

12108   Une chaîne qui, ce faisant, va favoriser le passage de l'industrie de la production indépendante hors Québec à un nouveau stade de développement, tout en encourageant l'éclosion d'une nouvelle génération de créateurs, de producteurs, artistes et artisans en français.

12109   Il serait extrêmement dommage que ce rendez-vous historique soit manqué.

12110   Je vous remercie de votre attention.

12111   LE PRÉSIDENT : Merci beaucoup. Monsieur le vice-président.

12112   CONSEILLER PENTEFOUNTAS : Merci. Monsieur Houle, Madame Gouin, merci beaucoup, c'est toujours clair. Je ne vais pas revenir sur la question qui a été posée par madame Poirier sur une fusion possible, si je lis bien votre document c'est deux services qui se marient très mal. C'est assez clair.

12113   Mais pour retourner brièvement sur les EDRs et les discussions qu'on a déjà eues sur le statut d'offre obligatoire. Si vous voulez tout simplement adresser cette question-là que vous n'avez pas adressée dans votre document.

12114   MME GOUIN : Alors, dans... excusez.

12115   CONSEILLER PENTEFOUNTAS : Vas-y. Non, non, vas-y.

12116   MME GOUIN : Je vais vous laisser terminer, monsieur le vice-président.

12117   CONSEILLER PENTEFOUNTAS : Non, non, tout à fait.

12118   MME GOUIN : Alors, je pense que notre réplique écrite étant très clair par rapport aux enjeux qui avaient été mis de l'avant par les EDRs, ce que j'ai été très contente d'entendre pendant presque toute la semaine de répliques des EDRs, c'est véritablement que sur le projet de TV5, il n'y avait aucun problème de capacité à l'exception d'un EDR qui voyait dans un terme relativement moyen, c'est-à-dire un an, la possibilité d'offrir le projet de Nouveau TV5.

12119   CONSEILLER PENTEFOUNTAS : Et sur le statut d'offre obligatoire et non pas d'offre en vertu de 9(1)h), est-ce que vous voulez retourner sur cette question-là?

12120   MME GOUIN : Je pense que nous avons fait la démonstration, monsieur le vice-président, que le projet que nous avons devant vous est un projet qui, comme vous l'avez vous-même... le Conseil l'a lui-même souligné dans son Rapport de 2009, que la condition gagnante pour que ce projet puisse se matérialiser, était véritablement par la distribution obligatoire.

12121   CONSEILLER PENTEFOUNTAS : Est-ce que vous voulez rajouter quelque chose? Ça va?

12122   M. HOULE : Simplement que l'offre d'accès soulève toute une série de problèmes au niveau de la tarification, au niveau des différents... chaque EDR peut proposer une disposition différente.

12123   Donc, c'est à peu près impossible de faire un plan d'affaires à partir d'autant de variables et aléatoires.

12124   CONSEILLER PENTEFOUNTAS : Ce n'est pas une option viable pour votre proposition.

12125   M. HOULE : Non.

12126   CONSEILLER PENTEFOUNTAS : Merci beaucoup. Merci, monsieur le président.

12127   LE PRÉSIDENT : Je pense que je lis entre les lignes, mais j'aimerais... Madame Gouin, vous avez été dans le domaine de la télévision depuis plusieurs années, si vous aviez à décrire à quelqu'un les deux services en terme de la facture visuelle et le contenu?

12128   MME GOUIN : Avec les 25 ans d'expérience de télévision, avec les 25 ans d'expérience de productions que j'ai personnellement en télévision, quand on regarde les budgets qui sont alloués entre le « à l'heure », entre le projet de TV5 et l'autre projet, c'est une différence fondamentale sur ce qui va apparaître en ondes.

12129   On s'est permis des petits calculs parce que je pense qu'à la lumière d'une remarque qui avait été faite par l'Association des producteurs francophones du Canada qui nous a dit hier que leurs membres avaient produit 151 heures l'année dernière de productions originales, on a donc voulu voir à quoi ça pouvait ressembler de répondre à une offre qui correspond à un volume aussi important, 22 heures par semaine, 52 semaines par année, à quoi ça pouvait ressembler en terme de disponibilité de budget à l'heure.

12130   Alors, pour ce qui est du projet ACCENTS, ça représente à l'heure 23 000 $ de l'heure pour une production, alors qu'on parle pour TV5 d'à peu près 78 000 $ de l'heure.

12131   Naturellement, je n'ai pas en main toutes les ramifications du plan d'affaires du projet ACCENTS. J'ai vu comme vous leur plan d'affaires; je n'ai pas le détail opérationnel de ça.

12132   Mais il est évident que pour une chaîne qui débute, qui n'a pas accès non plus aux fonds actuels et ça va faire... prendre quelques années avant qu'ils puissent développer accès à ce fonds, ce qu'on va voir en ondes, puis je ne veux pas que le projet ACCENTS voit ça d'une façon négative, mais c'est une réalité de production, vous allez voir des émissions de ce qu'on appelle dans notre métier de jardon, le "show de chaise" versus l'offre de TV5 qui est inscrite, et puis là autant dans les rencontres de groupes que dans le sondage, les francophones nous ont dit: On veut des émissions de qualité et de haute qualité. On va vouloir se comparer aux meilleures productions que l'on voit au Canada anglais et aux États-Unis parce que c'est à ça que nous sommes exposés et nous voulons être fiers de la chaîne qui va correspondre à nos attentes.

12133   Alors, vraiment c'est une question de chiffres. Pour nous, si l'image est là c'est ça. C'est une capacité de livrer véritablement un produit et de donner aux producteurs les véritables moyens de produire des émissions de grande qualité, diversifiées et qui répondent aux attentes des différentes communautés.

12134   M. HOULE : Si je peux ajouter un point.

12135   LE PRÉSIDENT : Oui.

12136   M. HOULE : Monsieur le président, juste une précision.

12137   Le 23 000 $ c'est si on prend la totalité des sommes du budget de programmation canadienne d'ACCENTS à la troisième année par rapport à l'engagement de... mais, évidemment, la totalité du budget de programmation ne pourra pas être affecté entièrement à des émissions originales. ACCENTS va devoir également acheter des émissions pré-existantes pour alimenter sa grille.

12138   Si on présume -- il n'y a pas d'engagement d'ACCENTS, mais si on présume qu'ACCENTS va comme nous dépenser 75 pour cent de son budget pour des émissions originales, ça ramène le budget horaire dont va disposer ACCENTS à 14 000 $, comparé à 78 000 $ pour nous, qu'on anticipe pour les émissions originales en première diffusion chez TV5.

12139   Dans l'univers de productions actuelles, 14 000 $ de l'heure, surtout si on fait le genre d'émissions qui ne sont pas accessibles, qui ne sont pas admissibles, pardon, au Fonds des médias du Canada ou dans certains cas, au programme de crédit d'impôt et où il faut donc payer une large part du coût total de la programmation, c'est très peu.

12140   Donc, nous, on a simplement fait le choix, suite aux rencontres qu'on avait eues avec les francophones et, ensuite, le sondage, de dire, ils veulent une programmation diversifiée et ils veulent de la programmation originale pour enfants, des dramatiques, des variétés, beaucoup d'émissions d'intérêt national, des grands documentaires, il fallait mettre un budget conséquent avec cette demande-là.

12141   Et pour nous, l'équation entre les budgets qu'entend consacrer ACCENTS et les demandes des consommateurs ne nous semble pas fonctionner.

12142   LE PRÉSIDENT : Une autre question puis je vais passer la parole à madame Poirier, je pense qu'elle a une question aussi.

12143   Encore, je sais que vous marchez sur des oeufs là, parce que vous ne voulez pas vous attaquer entre vous, mais on ne peut pas... on ne peut pas prendre des décisions justes sans avoir les faits.

12144   Donc, vous avez décrit la facture visuelle des deux chaînes. Certains intervenants disent qu'on devrait, à un moment donné, couper le cordon d'un tarif garanti sur 9(1)h), donc mettons qu'on regarde dans l'avenir des deux hypothèses, votre demande et la demande d'ACCENTS, laquelle des deux chaînes à votre avis aurait une meilleure chance de transférer son appui financier vers un appui commercial de publicité?

12145   MME GOUIN : Je ne parlerai pas d'ACCENTS, mais je vais vous parler de la proposition et du plan d'affaires que nous avons déposés.

12146   Nous avons pris le pari que nous bâtirons des parts de marché avec le Nouveau TV5 qui feront en sorte que, éventuellement, nous aurons la capacité d'aller rechercher de plus en plus de revenus publicitaires pour les deux chaînes afin d'éventuellement être capable d'enrichir toute la programmation canadienne qui pourra être produite pour ce Nouveau TV5.

12147   LE PRÉSIDENT : Madame Poirier.

12148   CONSEILLÈRE POIRIER : Un seul sujet. C'est un sujet qui a été évoqué par beaucoup des groupes qui ont présenté et même par les gens d'ACCENTS, à l'effet qu'ils veulent une TV, oui, qui est pour eux, mais par eux aussi.

12149   Aujourd'hui, vous avez en partie répondu à ça dans votre dernière page en parlant de comités de toutes sortes, mais n'empêche, j'ai senti dans les groupes et, entres autres, chez ACCENTS qu'ils ne veulent pas que leur chaîne soit dictée par des gens de Montréal dans un premier temps, et ils veulent sentir les communautés vraiment qu'elles sont parties prenantes de cette télévision-là, peut-être quitte à ce que la qualité soit moins bonne.

12150   Qu'est-ce que vous répondez à ça? Est-ce que vous pensez que ce que vous nous offrez là c'est un début, c'est une fin? Est-ce que vous avez des intentions de faire en sorte que ces groupes-là se sentent parties prenantes plus que ce qu'ils nous ont dit jusqu'à présent?

12151   MME GOUIN : Madame Poirier, je vais me permettre une réponse en deux temps.

12152   La première, nous avons dans notre réplique écrite pris l'engagement de revoir avec le Conseil d'administration les questions de gouvernance.

12153   Nous sommes très conscients qu'il y a une espèce d'ombre du fait que, effectivement, ce projet semble émaner de Montréal. Mais le projet tel qu'il est conçu a été conçu avec les gens que nous avons rencontrés. Nous l'avons fait en fonction de leurs attentes et nous avons l'intention de le réaliser avec eux et pour eux.

12154   Nous sommes conscients que -- et c'est pour ça que nous avons acquiescé rapidement à la demande de certaines associations d'avoir un comité de programmation -- parce que pour nous c'est important effectivement d'avoir et d'être plus près encore des sensibilités et des expertises et des expériences que nous pourrons aller chercher avec des membres de la communauté.

12155   Mais encore plus important, nous aurons des bureaux régionaux qui tous les jours vont être avec les communautés francophones et pour les communautés francophones et qui auront le pouvoir décisionnel au niveau de la programmation des orientations qui vont être prises dans le fonctionnement et la fabrication des émissions. Et ça, pour moi, c'est extrêmement important.

12156   Et si vous regardez notre feuille de route, la feuille de route de TV5 avec des moyens réduits, nous avons quand même depuis dix ans dépassé de façon très importante les attentes du Conseil en terme de la programmation que nous avons et qui provient des producteurs en milieu minoritaire.

12157   La francophonie c'est l'ADN de notre chaîne. Pour nous, faire des émissions qui reflètent les attentes et les aspirations des communautés francophones et faire en sorte que ces contenus-là soient vus non seulement au Canada, mais si on peut partout dans le monde, c'est vraiment notre mission d'être.

12158   Alors, j'espère véritablement, et c'est l'engagement que TV5 prend aujourd'hui, c'est que non seulement ce seront des émissions qui seront faites avec eux, pour eux, mais qui seront d'une très grande fierté à regarder cette nouvelle chaîne si le Conseil nous octroie cette licence.

12159   CONSEILLÈRE POIRIER : Merci beaucoup, madame. Merci, monsieur le président.

12160   LE PRÉSIDENT : Merci. Ce sont nos questions. Merci beaucoup.

12161   On va passer à l'autre... aux prochaines demandes... demanderesse, la partie demanderesse.

12162   LA SECRÉTAIRE : Oui, qui est ACCENTS et les gens sont ici dans la salle, la Corporation de télévision francophonie canadienne.

12163   LE PRÉSIDENT : Un instant. Madame Gouin, vous vouliez ajouter quelque chose?

12164   LA SECRÉTAIRE : Oh, pardon.

12165   MME GOUIN : Oui, je voulais vous dire... Non, non, c'est parce que j'ai oublié de remercier le personnel tantôt puis j'ai oublié de vous remercier. Ça a été deux semaines superbes. Merci.

12166   LE PRÉSIDENT : C'est gentil. Le personnel travaille très fort à ces audiences. Merci.

12167   Donc on va aller à la demande de la Corporation de la télévision francophonie canadienne.

--- Pause

12168   LA SECRÉTAIRE : Quand vous êtes prêts, messieurs, s'il vous plaît, présentez-vous aux fins du dossier. Vous avez 10 minutes.

12169   LE PRÉSIDENT : Bonjour, Monsieur Matte et Monsieur Sauvé. Bienvenue. Allez-y, s'il vous plaît.

REPLY

12170   M. MATTE : Merci.

12171   Monsieur le Président, Madame Poirier, Monsieur Pentefountas, Madame Molnar, Monsieur Simpson, je m'appelle Guy Matte et je suis le président de la Corporation de la télévision francophonie canadienne ACCENTS, et je suis accompagné de Claude Sauvé, notre directeur général.

12172   ACCENTS, comme vous le savez, vise à obtenir du CRTC une licence de radiodiffusion pour une entreprise de programmation dans le but d'offrir un service de télévision qui reconnaît et explore la diversité des voix francophones en milieu minoritaire à travers le Canada.

12173   D'abord, nous tenons à remercier tous les intervenants qui appuient notre demande. Non seulement un très grand nombre d'individus vivant en milieu francophone minoritaire nous appuie mais aussi des télédiffuseurs comme TFO, des producteurs d'émissions, des associations comme On Screen Manitoba, la Fédération des communautés francophones et acadienne du Canada, l'Association canadienne-française de l'Alberta, l'Alliance des producteurs francophones du Canada, dont plusieurs de ses membres individuels, la Société nationale de l'Acadie, et l'Association acadienne des artistes professionnels du Nouveau-Brunswick, ainsi que des élus de nos institutions démocratiques, des écoles et des enseignants, et des responsables d'institutions gouvernementales tel que le Commissaire aux langues officielles.

12174   Malgré les appuis à notre projet, la plupart des distributeurs canadiens s'oppose par principe à toutes les demandes de distribution obligatoire présentées dans l'avis de consultation CRTC 2013-19, au nom du libre choix des consommateurs de services télévisuels et du statu quo.

12175   Certains, comme Rogers Communications, prétendent que seulement de nouveaux services ayant un mandat de service public et offrant une programmation unique non disponible ailleurs auprès du système de radiodiffusion canadien peuvent satisfaire les critères élevés de la politique réglementaire 2010-629.

12176   D'autres, comme Shaw Communications, reconnaissent le rôle structurant qu'APTN joue auprès des communautés autochtones et métisses et acceptent que son statut soit reconduit.

12177   Or, ACCENTS veut lancer un nouveau service offrant un mandat d'intérêt public axé sur une programmation unique, sans publicité, largement absente du système canadien de radiodiffusion. Et ce faisant, il désire créer un écosystème de production et de diffusion télévisuelles auprès des communautés minoritaires de langue française, semblable à celui créé par APTN pour les communautés autochtones et métisses.

12178   Au cours de son interrogatoire du 24 avril dernier sur la nature du service qu'ACCENTS offrirait, madame la conseillère Poirier nous a demandé de proposer des conditions de licence concernant trois sujets :

12179   - la production d'émissions canadiennes pour la jeunesse;

12180   - les dépenses sur les émissions canadiennes en proportion de nos revenus bruts; et

12181   - la part des producteurs indépendants en milieu minoritaire francophone dans notre grille horaire.

12182   Tous les jours, ACCENTS s'attend à diffuser des émissions pour la jeunesse. Parmi ces 21 heures de programmation hebdomadaire, nous estimons être en mesure de financer en moyenne une série originale pour la jeunesse par année au cours d'une période de licence de sept ans. Chaque série comprendrait 13 épisodes d'une demi-heure produits en milieu minoritaire.

12183   Or, ce dernier engagement ne pourrait probablement pas être réalisé au cours des deux premières années de la période. Ainsi, nous proposons d'étaler la production de telles séries de la façon suivante : 0, 0, 13, 13, 13, 26, 26 demi-heures par année sur la période de la licence.

12184   En résumé, ACCENTS serait prêt à accepter une condition de licence voulant qu'elle investisse dans un total de 91 demi-heures d'émissions originales de langue française pour la jeunesse sur sept ans.

12185   Dans sa présentation orale du 24 avril dernier, ACCENTS a proposé de consacrer aux dépenses sur les émissions canadiennes au moins 80 pour cent de ses dépenses totales en programmation pendant chaque année de radiodiffusion en cours. Notre engagement est calqué sur une condition de licence imposée au réseau TVA dans la décision CRTC 2012-242 et nous serions prêts à l'accepter comme condition de licence. Pour un service généraliste comme ACCENTS, cette condition est plus appropriée qu'une exigence reliée aux revenus bruts, caractéristique des conditions appliquées aux services spécialisés de catégorie A.

12186   De fait, à l'heure actuelle, aucune licence de service généraliste ou éducatif francophone n'est assujettie à une condition de licence qui lie ses dépenses sur les émissions canadiennes aux revenus bruts du service.

12187   Cela dit, alternativement, en deuxième choix, nous serions prêts à accepter la condition de licence suivante : Au cours de chaque année de radiodiffusion à partir de la troisième année de la période de sa licence, ACCENTS consacrera à l'investissement dans des émissions canadiennes ou à leur acquisition au moins 55 pour cent des revenus bruts de l'entreprise de l'année de radiodiffusion précédente.

12188   M. SAUVÉ : ACCENTS s'engage à soutenir l'émergence et la consolidation des maisons de production indépendantes dans les provinces où vivent les communautés francophones et acadiennes en situation minoritaire. En effet, ACCENTS croit qu'il est essentiel de donner prioritairement la parole à ces communautés et d'offrir à leurs réalisations une plateforme médiatique professionnelle qui leur permettra de participer comme citoyens à part entière de ce pays.

12189   Dans notre présentation orale du 24 avril dernier, nous nous sommes engagés à confier à l'industrie de la production indépendante en milieu minoritaire hors Québec, soit en solo, soit en partenariat, soit en coproduction majoritaire avec des producteurs québécois, au moins 75 pour cent de notre programmation canadienne. Nous serions prêts à accepter cet engagement comme condition de licence.

12190   ACCENTS aimerait aussi apporter quelques précisions aux questions soulevées lors de sa comparution devant le Conseil le 24 avril dernier.

12191   Dans sa politique réglementaire 2010-629, le CRTC a établi comme critère qu'une requérante à la distribution obligatoire doit :

« ...fournir la preuve, par exemple par des études sur les auditoires potentiels, qu'il existe un besoin de nature exceptionnelle du public cible pour le service qu'elle propose. »

12192   Un sondage d'opinion peut s'avérer utile à cet égard, mais il ne faut pas sous-estimer les énormes obstacles à l'utilisation d'un tel outil pour mesurer l'intérêt en milieu minoritaire francophone d'un service comme ACCENTS.

12193   Par exemple, le service de sondage BBM ne mesure les régions canadiennes que deux fois par année et ne fait aucun profilage des francophones en milieu minoritaire. La dispersion de ces communautés à travers le Canada et, par conséquent, les coûts exorbitants associés à un sondage capable de générer des résultats significatifs rendent l'entreprise pratiquement inatteignable pour nous.

12194   Cela étant dit, il y a maints indices d'un intérêt considérable pour un nouveau service comme ACCENTS. Dans ses rapports au Gouvernement du Canada de 1998, de 2001 et de 2009, le CRTC lui-même l'a constaté.

12195   Dans les six premiers mois de 2012, nous avons tenu des rencontres avec un total de 42 organismes des communautés francophones et acadiennes à caractère national, provincial ou territorial qui appuient notre projet.

12196   Lors de la présente instance, plus de 5,000 individus sont intervenus pour appuyer le service proposé par ACCENTS.

12197   Enfin, selon un sondage en ligne mené pour TFO en avril 2013 auprès de 1,157 enseignants et professionnels du milieu scolaire, 91 pour cent des répondants exprime un intérêt pour un service qui explorerait la diversité des voix du fait francophone en milieu minoritaire, et 66 pour cent serait d'accord pour payer un supplément de 25 sous de sa facture mensuelle afin d'y avoir accès.

12198   Au cours de la période de sa première licence, ACCENTS, en consultation avec d'autres télédiffuseurs indépendants dans une situation similaire, trouvera une façon de mieux mesurer son auditoire.

12199   Le plan d'affaires d'ACCENTS prévoit un service d'intérêt public sans publicité commerciale, qui, à ce titre, ne jouera pas dans la platebande publicitaire des services généralistes et spécialisés existants.

12200   D'ailleurs, dans sa décision 2002-377 concernant la distribution obligatoire de CPAC, le Conseil a constaté que l'obligation faite à CPAC de ne diffuser que des messages de commandites limités permettrait de s'assurer que la distribution obligatoire de CPAC n'aurait aucun effet indu sur les autres services.

12201   Il y a plusieurs autres raisons de ne pas diffuser de la publicité.

12202   Dans son mémoire du 6 juillet 2011 concernant le renouvellement du réseau TVA, et malgré le peu d'exigences à son égard, Québecor Média a expliqué qu'elle n'était pas en mesure de rentabiliser l'exploitation élargie hors Québec depuis son instauration et qu'il était impossible pour TVA d'investir dans la bonification de la programmation, soit 26 heures par année, l'excédent de revenus liés à une telle exploitation étant inexistant.

12203   En ce qui concerne APTN, quoiqu'il diffuse de la publicité commerciale depuis 1999, à l'heure actuelle cette activité ne génère qu'environ trois millions de dollars par année.

12204   Pour sa part, TV5 Québec Canada, qui propose deux services francophones desservant tout le pays, ne prévoit en moyenne que 312,000 dollars de revenus publicitaires hors Québec par année sur sept ans, à peine plus qu'ACCENTS prévoit au moyen de messages de commandite.

12205   Il n'en reste pas moins qu'ACCENTS s'engage à explorer davantage la question de la publicité et, au cours des trois années suivant l'approbation de sa demande, d'en faire rapport au CRTC.

12206   L'infrastructure à mettre en place pour administrer ACCENTS et développer la programmation est beaucoup moins imposante que celle d'une station qui diffuse en direct parce que nous ne produirons pas d'émissions.

12207   D'un point de vue technique, nous prévoyons une salle de montage pour produire notre habillage et nos autopromotions, une salle de numérisation pour recevoir les contenus des différents producteurs indépendants, et un réseau informatique qui permettra à notre personnel de visionner ces contenus de leurs postes de travail à Ottawa.

12208   Après l'approbation ultime de chacune des émissions, un fichier numérique sera acheminé vers notre centre de diffusion qui assurera la mise en ondes selon l'horaire prévu et sous notre entière responsabilité, peu importe l'endroit où le centre est implanté.

12209   Si le Conseil approuve notre demande avant la fin août prochain, nous serons en mesure de lancer ACCENTS d'ici septembre 2014.

12210   Guy.

12211   M. MATTE : En conclusion, Monsieur le Président, membres du panel, certains semblent douter de notre capacité d'établir une nouvelle chaîne. Pourtant, l'équipe qui s'est présentée devant vous le 24 avril dernier possède toute l'expérience nécessaire pour mettre en oeuvre ce projet. Appuyée par TFO et la Société Radio-Canada, ainsi que les producteurs membres de l'APFC et l'ensemble des membres des communautés vivant en situation minoritaire, ACCENTS possède toutes les qualités pour concrétiser ce service.

12212   Comme APTN vous l'a expliqué lors de sa comparution mercredi dernier, quand il a lancé son service en 1999, il y avait moins de 10 producteurs autochtones au Canada. Aujourd'hui, il y en plus de 115. Avant que le Conseil ne rende sa décision de distribution obligatoire d'APTN, les autochtones du Canada étaient invisibles à eux-mêmes et à leurs concitoyens dans le système de radiodiffusion canadien. Ce n'est plus le cas aujourd'hui.

12213   Enfin, les abonnés aux entreprises de distribution devraient-ils payer pour financer -- vous l'avez posé -- une chaîne télévisuelle que certains ne regarderont pas?

12214   Au Canada, aucune chaîne de télévision sur le service de base n'est syntonisée par tous les Canadiens, et encore moins celles qui bénéficient d'une ordonnance de distribution obligatoire.

12215   C'est l'article 9(1)h) de la Loi sur la radiodiffusion qui permet au Conseil d'obliger ses titulaires à offrir certains services de programmation selon les modalités qu'il précise. ACCENTS remplit tous les critères du Conseil étayés dans la politique réglementaire 2010-629 et plus particulièrement ceux reliés à « la dualité linguistique, y compris l'amélioration du service offert aux communautés de langue officielle en situation minoritaire. »

12216   À ce jour, la télévision francophone au Canada est essentiellement axée sur le Québec et laisse peu de place aux communautés francophones de l'extérieur du Québec, en particulier aux heures de grande écoute. ACCENTS propose un service généraliste qui vient compléter l'offre de service télévisuel de langue française sur le territoire canadien en offrant une programmation largement absente du paysage, soit le reflet des communautés francophones en situation minoritaire. Il constituera un service géré par et pour ces communautés, qui pourront finalement se voir et s'entendre, être vues et entendues par leurs concitoyens canadiens.

12217   Monsieur le Président et membres du panel, ceci complète notre présentation, et c'est avec plaisir que nous répondrons à vos questions.

12218   LE PRÉSIDENT : Merci beaucoup.

12219   Madame Poirier.

12220   CONSEILLÈRE POIRIER : Oui.

12221   Merci, messieurs Matte et Sauvé. J'ai deux questions.

12222   La première : J'aimerais que vous clarifiez la place que le Québec va avoir dans la production parce qu'il a semblé y avoir, en tout cas de ma part, une incompréhension exacte de vos intentions. Alors, pouvez-vous mettre ça au clair?

12223   M. MATTE : Oui, Madame. Claude, allez.

12224   M. SAUVÉ : Pour nous, tout le projet est basé sur l'écoute, d'être à l'écoute et de répondre aux besoins premiers des communautés vivant hors Québec avec leurs préoccupations. C'est évident que la relation avec les Québécois, puis la relation entre le Québec et le reste du Canada, est une partie tout à fait importante de ça.

12225   Donc, dans notre projet, de toute façon, on a besoin d'avoir le support, un, des producteurs québécois. Comme on dit dans notre projet, on dit que 75 pour cent de notre programmation sera faite en collaboration, pas nécessairement entière, mais aussi en partenariat avec d'autres producteurs, donc, ce qui laisse, en partant, au moins 25 pour cent de contenus qui pourraient être produits par les producteurs québécois.

12226   Ceci dit, je vous donne un exemple. Si on donnait... Puis je ne vais pas me positionner moi-même là-dessus, mais il y a un débat actuellement au Canada par rapport à l'assurance chômage puis aux changements qui sont faits.

12227   Il serait très possible qu'un producteur comme Vic Pelletier à Matane décide de nous proposer un documentaire ou une série qui parle de cette situation-là dans la région de Gaspésie et qui serait tout à fait propice et d'intérêt pour l'ensemble du public cible qu'on vise, qui sont les communautés francophones hors Québec, et vice versa. Et c'est là qu'on veut voir un peu le pont se bâtir entre les communautés du Québec et les communautés hors Québec, et les communautés francophones et acadienne hors Québec.

12228   Donc, je ne vois pas de problématique à ce niveau-là. Donc, on est très inclusif de la présence du Québec, autant au niveau production qu'au niveau intérêt, puis de bâtir le pont entre les communautés.

12229   CONSEILLÈRE POIRIER : Je veux juste encore plus comprendre. Est-ce que ça veut dire que vous allez prendre possiblement des producteurs du Québec mais dans l'optique d'avoir des sujets qui touchent les gens de l'extérieur du Québec?

12230   M. SAUVÉ : Ça peut être un oui. À prime abord, notre intérêt est de répondre aux intérêts, aux aspirations des francophones vivant en milieu minoritaire. Donc, oui, il y aura toujours... Encore là, je vais vous donner mon expérience personnelle, Madame Poirier.

12231   Quand j'étais à TFO, on a fait des productions, notamment avec Vic Pelletier, avec plusieurs producteurs québécois, mais on s'assurait d'avoir la présence de... que le sujet soit traité selon l'axe souvent des préoccupations des communautés vivant à l'extérieur du Québec. Ça ne nous a pas empêché de le faire à maintes et maintes et maintes reprises, et le talent et la qualité des producteurs québécois ont été reconnus de différentes façons à de multiples occasions, et c'est évident qu'on va s'appuyer là-dessus pour bâtir notre programmation.

12232   M. MATTE : Je vais vous donner un autre exemple.

12233   CONSEILLÈRE POIRIER : Oui.

12234   M. MATTE : Je vais ajouter un exemple. Dans la Fondation canadienne pour le dialogue des cultures, nous avons établi des partenariats entre les communautés francophones et les villes et villages du Québec.

12235   Par exemple, la communauté francophone de la Saskatchewan est liée avec la communauté francophone des villages de Baie-Saint-Paul. Il y a eu des Fransaskois qui se sont rendus à Baie-Saint-Paul, des gens de Baie-Saint-Paul qui se sont rendus en Saskatchewan. Ça n'a pas fait l'état d'aucune émission sur un réseau national, alors qu'on a créé des liens entre des communautés.

12236   Je pense qu'une chaîne comme ACCENTS, ça serait à la base même de son travail de pouvoir faciliter et encourager ce type de création, ce qu'on a fait d'ailleurs avec les gens de la Colombie-Britannique avec la communauté de Drummondville.

12237   Alors, il y a des sujets qui sont intéressants pour les deux communautés, qui sont enrichissants pour les deux communautés, et certainement que ça va être exploité.

12238   CONSEILLÈRE POIRIER : Et mon deuxième sujet, et loin de moi de vouloir mettre en opposition les projets, mais c'est dans le but de mieux comprendre chaque projet.

12239   Vous étiez dans la salle lorsque madame Gouin a, entre autres, parlé... je pense c'est 23 000 dollars ou 14 000 dollars de l'heure versus 78 000 dollars de l'heure, donc, un reflet dans la qualité de la production, et on a parlé de shows de chaise.

12240   Vous avez entendu mieux que moi, donc, je ne veux pas rapporter les paroles à nouveau, mais j'aimerais vous entendre à ce sujet-là.

12241   M. MATTE : Claude.

12242   M. SAUVÉ : Je vais vous faire un aveu : Oui, il va avoir des émissions de type magazine à notre antenne. Et je vais vous faire un autre aveu : Il y en a à Radio-Canada, il y en a à TVA, il y en a à V, il y en a à d'autres services aussi. Donc, ce n'est pas mal.

12243   Et effectivement, le budget de programmation a été bâti... C'est difficile de prendre un budget puis de faire juste une moyenne. Il y a des productions qui vont nous coûter... On prévoit faire de la dramatique à partir de la troisième année. On sait tous combien ça coûte faire de la dramatique. Donc, c'est sûr qu'il y a des projets qui vont coûter plus cher, et il y en a d'autres qui vont coûter moins cher.

12244   Il y a toute une partie de nouvelles qu'on a commencé à discuter avec Radio-Canada, qui prévoit qui va faire... Quand on regarde l'ensemble, je trouve ça un peu malhabile et malaisé, quand on n'a pas le détail du budget de programmation, d'arriver à des grandes conclusions basées là-dessus.

12245   Je vous assure qu'on est en mesure de produire en fonction de ce qu'on a mis dans notre plan d'affaires; 1 144 heures à terme, du moins après... à partir de notre troisième année de licence, est tout à fait réalisable et réaliste dans le contexte qu'on est là, et ça ne veut pas dire qu'un show magazine...

12246   Puis encore là, c'est très présomptueux de dire qu'une émission magazine parce qu'elle viendrait hors Québec qu'elle ne serait pas nécessairement intéressante. Il y a des émissions magazine de type « Combat de chefs » à Radio-Canada ou ailleurs, à TVA, qui sont tout à fait pertinentes et qui plaisent à un public, puis elles ne sont pas nécessairement mauvaises pour autant. Donc, je trouve ça très présomptueux.

12247   Non, ça ne sera pas uniquement que des grands documentaires qui viennent d'Europe ou d'ailleurs qu'on va retrouver sur nos ondes. Il va y avoir des émissions de services mais qui sont tout à fait pertinentes et qui répondent aux besoins.

12248   D'ailleurs, dans un des sondages, je crois que c'était... Là, je ne voudrais pas mêler mes sources. Mais même la communauté elle-même parle qu'un des besoins qu'ils ont, c'est, oui, il y a les nouvelles, mais tout l'aspect affaires publiques qui ressort, puis c'est un élément clé de l'ensemble des préoccupations qui sont sorties des rencontres qu'on a eues un peu partout.

12249   Donc, ça en prend des émissions de magazine, et oui, ça va en prendre quelques shows de chaise, mais ça aussi, il y en a quelques-uns dans d'autres antennes, et je ne suis pas gêné de le dire.

12250   CONSEILLÈRE POIRIER : Merci beaucoup, messieurs.

12251   LE PRÉSIDENT : Madame Poirier a posé la question que j'étais pour poser.

12252   M. SAUVÉ : Est-ce que vous me permettez un ajout additionnel?

12253   Puis ceci dit, avec tout le respect que j'ai pour madame Gouin, puis j'en ai beaucoup, on se connaît depuis très longtemps, j'ai été un peu préoccupé par les questions à savoir c'est une entreprise qui part de zéro, qui part de rien. Je vous ferais remarquer que l'ensemble des chaînes à travers le Canada, dont APTN, dont d'autres, ont commencé à zéro. Donc, ce n'est pas quelque chose de nouveau.

12254   En termes d'expertise, vous avez rencontré monsieur Gratton. Je pense que je n'ai pas besoin de faire le profil de monsieur Gratton, qui a participé au lancement de la télévision payante au début des années quatre-vingt, à Bravo, qui a été président du conseil d'administration de Téléfilm.

12255   Moi-même, j'ai oeuvré... je pourrais même vous parler de l'ancêtre de TV5, qui s'appelle TVFQ 99. Je peux vous parler de TVSQ, TVSQ qui sont les ancêtres de RDS puis Canal Famille. J'ai personnellement lancé aussi la télévision sur demande avec Vidéotron. J'ai lancé du numérique chez Vidéotron. De l'expertise dans notre groupe, on en a aussi. De la télévision, on en a fait.

12256   La communauté, les producteurs à travers le pays... puis j'en ai encore qui m'ont téléphoné pas plus tard qu'hier, qui me disaient : « Claude, on est en mesure de produire et de le faire. On l'a, l'expertise. On est capable de le faire. » Il y a des gens partout, des anciens de Radio-Canada, des anciens de TFO, qui partout sont prêts à donner de la formation puis à bâtir l'industrie et qu'on fasse comme APTN a réussi à faire avec la communauté autochtone. Alors, je tenais à le préciser parce que c'est un élément qui ressort.

12257   Et dernière petite chose. Je vous promets que c'est la dernière.

12258   TV5 pose beaucoup de questions, mais je vais juste vous poser une question, une dernière. Si, il y a cinq ans, six ans, lors de la dernière fois, le Conseil aurait remis la licence 9(1)h) à TV5, est-ce qu'aujourd'hui ils seraient revenus devant vous pour avoir une licence pour les Franco-Canadiens complètement à part? Je fais juste vous demander de poser la question. Merci.

12259   LE PRÉSIDENT : Merci. Vous êtes, de toute évidence, très passionnés pour votre projet, comme beaucoup de demandeurs dans notre instance.

12260   Merci beaucoup. Ce sont nos questions.

12261   Nous allons prendre une pause jusqu'à 13 h 15 cet après-midi.

12262   M. MATTE : Et merci aussi, Monsieur le Président. Je signale « Monsieur le Président. » Je veux le dire parce que je me rappelle que j'ai fait un impair lors de la dernière fois. Je vous remercie, Monsieur le Président et membres du Conseil pour l'attention que vous portez à cette demande extrêmement importante pour l'ensemble des communautés francophones et acadienne. Bonnes délibérations.

12263   LE PRÉSIDENT : Merci bien.

12264   THE SECRETARY: Mr. Chairman, I would just like to mention that we will start with EqualiTV after lunch.

12265   LE PRÉSIDENT : Merci beaucoup.

12266   So a quarter past 1:00. Thank you.

--- Upon recessing at 1209

--- Upon resuming at 1316

12267   THE CHAIRPERSON: Good afternoon.

12268   À l'ordre, s'il vous plaît. Donc...

12269   We'll hear now from EqualiTV group. So please identify your panel and go ahead.

REPLY

12270   MR. GIACOMINI: Good afternoon, Mr. Chairman, Mr. Vice-Chair, Commissioners and staff, and thank you for the opportunity to reply to the interveners and the Commissioners' questions and comments.

12271   As you know, my name is Walter Giacomini, CEO, Vice President. With me is:

12272   - Jerry Ford, Administration Officer;

12273   - Manuel Canales is next to him, Managing Director and Program -- Chief Strategist;

12274   - Suzanne Coy, Director of Development: New Programming and Apprentice Training;

12275   - And Frances Lazzaro, Director of Corporate Development and Planning.

12276   EqualiTV was licensed September 19, 2008 with a Broadcasting Decision CRTC 2008-26, Category 2 specialty service. See our Appendix A:

"The licensee shall provide a national English-language Category 2 specialty programming service devoted to programs related to disability issues and to the support of people with disabilities in Canada."

12277   Jerry?

12278   MR. FORD: In their interventions all of the major organizations and major BDUs intervened against us and our submissions. As we proceed now we will provide you with some background and some responses to their specific interventions.

12279   For example, Shaw, who is one of the largest BDUs, vertically- integrated broadcasting companies in Canada, said in their written intervention that:

"EqualiTV has not provided sufficient evidence demonstrating its exceptional importance to the achievement of the objectives of the Act, which require the broadcasting system to make programming accessible to persons with disabilities, rather than to provide content that specifically targets this demographic, as the applicant suggests."

12280   We differ with this very much. Our CRTC license mandate provides that EqualiTV programming service is:

"devoted to programs related to disability issues and to the support of persons with disabilities in Canada"

12281   -- which is contrary to Shaw's intervention.

12282   Furthermore, when we scrutinize Shaw broadcasting's vertically integrated services with its subsidiaries and so on, we find that there is much that is missing. They have not complied in their Corporate Annual Reporting.

12283   Really, it suggests that they are doing very little to incorporate persons with disabilities and disability issues in their programming and in their overall approach to serving the Canadian public.

12284   In their interventions, TELUS, which is another one of the large BDUs and vertically integrated broadcasting companies -- they say in their interventions that there was a survey conducted by the Strategic Counsel that said that only 14 percent of respondents supported mandatory distribution of this channel. That of course is true.

12285   But the important thing to remember is that 14 percent of the people that were polled chose EqualiTV ahead of a number of other organizations that are applying for mandatory distribution.

12286   We are ahead of TV5 which registered 12 percent; Vision TV which registered 11 percent; FUSION 11 percent. AMI TV has registered at 9 percent. ACCENTS is at 9 percent as well.

12287   14 percent is, in fact, ahead of five of the other respondents or applicants in this competition.

12288   In their intervention Rogers, who is another one of the "biggies" and probably one of the most visible, I suppose, they say that in their interventions that -- and they say a couple of things:

"EqualiTV provides programming that is already widely available on a variety of other Canadian television services."

12289   Well, that's something that we beg to differ with because the kind of programming we are talking about providing does not exist. If it existed and were broadcast that would be a different matter.

12290   But the programming that is suited for disability people, for persons with disabilities and their families, their caregivers, the other five million people that are impacted by disability other than those that have the disability, those people are not being served because there is no such programming available.

12291   Rogers goes on to say that they have:

"...invested significant funding in the production and airing of programming on our community channels that depicts Canadians living with disabilities."

12292   Well, that does not warm my heart. Community channels serve a very limited market. A very limited number of people watch them. We are talking about companies that have a mandate to broadcast across this country.

12293   Persons with disabilities exist across this country. Every geographic region has to be addressed. If we allow them to broadcast a community channel in Toronto that's specific to the Toronto market and use that as an excuse for not serving our community, we are doing many millions of people a great disservice.

12294   Furthermore, Rogers' diversity management program is not set up to expand and include more people with disabilities. It's only trying to not shrink their existing program commitment.

12295   Rogers is asking for praise for not doing something. If you read the CAB regulations they're basically applauding themselves for not depicting people with disabilities as gimps, for not depicting people of colour as someone that is not a full citizen. This is not what we need in this country.

12296   What we need is affirmative action. We need a disability channel that can affect -- make people feel proud of their position as Canadians because they can take a full stand, represent themselves as full citizens.

12297   Rather than making television accessible for people with disabilities we have to integrate people with disabilities in television. That is what EqualiTV is all about. We are committed not only on programming but also to what we are doing in terms of involving people at all levels.

12298   Rogers says EqualiTV is not contributing programming that is not already available, but again that's the same comment that we had from Shaw and their community channels.

12299   When we look at the vertically integrated -- Rogers broadcasting's vertically integrated report on equitable portrayal -- I think I've said enough on that. Their situation is simply not enough.

12300   MR. GIACOMINI: "Exceptional", Commissioner Molnar said. See paragraph 3271 of the transcripts of the oral submission:

"Right. So one of the criteria is to provide evidence that the service is making exceptional commitments to original, first-run Canadian Programming, as it is said:
'Specifically, the applicants must demonstrate that the commitments it intends to make to original first-run Canadian programming through exhibition and expenditure justify its exceptional nature.'"

12301   Commitments: Commissioner Molnar questioned us in regards to our commitments. See paragraph 3347 of the transcripts of our oral submission.

12302   We are committing to producing $21 million worth of original programming and we are committing to approximately $6 million to acquire programming that will be repurposed through closed captioning and descriptive video of the subscription fees that we would be receiving, assuming 25 cents.

12303   We are committing to exhibit all Canadian programming that we are getting our hands on or producing.

12304   In answer to Commissioner Molnar's questions regarding that we will begin or launch original programming, we currently have partial funding for 10 projects which will start June the 1st of this year.

12305   We are in contract as broadcasters for six half-hour episodes for a sitcom called "KIDSTOWN" which is being shot presently in Oakville, Ontario which is to be launched also in June. We are speaking to several TV producers across Canada in and about shows and ideas for shows in various stages of development.

12306   We are committing 75 percent of all the monies that we are going to programming and at least 60 percent original Canadian programming.

12307   Please see our Appendix K. See our Appendix F for our specific commitments.

12308   Jerry?

12309   MR. FORD: We have had some intervention from an intervener who has created a great deal of fuss about personal matters with respect to the governance of EqualiTV.

12310   To preface that, I should mention that this was a core group that tried to take over EqualiTV and failed. Her intervention was one that was totally unwarranted.

12311   We, at EqualiTV International Foundation, have complied fully with every legal and regulatory requirement. We welcome the opportunity to deal with these issues openly, including having our records scrutinized by the proper regulatory authorities. And I will, in fact, be communicating directly with those regulatory bodies to ascertain that this is done.

12312   At the same time, we will be initiating action in the courts to deal with the civil issue that has been raised by Ms Kong.

12313   MR. GIACOMINI: I would like to thank Robert Soucci at ATOP Broadband BDU for sticking with us since 2011 and continuing to offer us innovative services and potential reach across Canada, as you can see in our Appendix G.

12314   During our oral presentation last week, we were asked by the Commission an undertaking. Can you please see Appendix E In reference to sections 3389 to 3399 of the oral CRTC presentation?

12315   Any questions?

12316   THE CHAIRPERSON: Well, you, through your presentation, I think, answered a lot of questions and I don't think we have -- oh, Commissioner Molnar, yes, has a question.

12317   There you go.

12318   COMMISSIONER MOLNAR: I'm sorry, just to follow up on the very end of your presentation where you were asked the undertaking, have you submitted that undertaking?

12319   MR. GIACOMINI: Yes, we did.

12320   COMMISSIONER MOLNAR: Or do you want to give us the answer here?

12321   MR. GIACOMINI: Yes, we do have it. We do have closed caption.

12322   COMMISSIONER MOLNAR: Okay, thank you.

12323   THE CHAIRPERSON: Thank you very much. So again, you've answered a lot of the points that were raised during the Phase 1 and 2 of the proceeding and we thank you for that. So we have no further questions at this phase.

12324   MR. GIACOMINI: We thank you for having us here.

12325   THE CHAIRPERSON: Thank you very much.

12326   So now we'll go to the next presenter.

12327   THE SECRETARY: Yeah, the next presenter would be the Canadian Punjabi Network.

--- Pause

12328   THE CHAIRPERSON: So, gentlemen, welcome back. As you know, I'll ask you to identify yourself and make your presentation, please.

REPLY

12329   MR. DHILLON: Mr. Chairman, my name is Tarsem Dhillon. I am CEO of Canadian Punjabi Network.

12330   - On my left is David Keeble who handles research and regulatory affairs for the network.

12331   - On my right is Bhupinder who handles marketing.

12332   Mr. Chair, we would like to address two main issues in reply.

12333   We believe that applications with no subscriber fee should be considered carefully since the cost of basic is clearly important to Canadians. The BDUs have tried to downplay the value of having no subscriber fee, implying that zero fee services have been rejected by the public and will still add substantially to the cost of basic.

12334   We will address these issues.

12335   We also believe that CPN meets both the criteria of the Commission's 9(1)(h) policy and other needs expressed by BDUs. The BDUs' opposition to CPN may arise from a lack of understanding of the need for CPN in the Punjabi community and in Canada.

12336   MR. KEEBLE: The BDUs argued that no applicant in this hearing received more than 50 percent support from the Canadian public based on the Strategic Council report.

12337   However, that report evidently did not test the Canadian Punjabi Network's appeal with the public. On pages 28 and 29 CPN is listed among the services that were tested, but when the results for individual networks are reported, CPN is not there.

12338   The results do not include any zero-fee applicants. For individual services they report only on those which have a wholesale rate.

12339   CPN was included in the bundle of services tested on page 17, but in that question respondents were told that all services would have a price per month, although CPN and others do not.

12340   The BDUs have therefore provided no evidence that the public opposed CPN. Either they chose not to ask about CPN, knowing that the public is not opposed to services that carry no fee, or they did ask, and chose not to report the results, for the same reason.

12341   MR. DHILLON: And indeed, there were members of the public who opposed CPN at first, thinking that all the applicants were asking for a wholesale rate. In the written reply phase, we informed them that CPN is not asking for a fee.

12342   We are happy to tell you that we have received two letters from interveners changing their position. For example, from Mike Motek:

"Thank you, Tarsem. Given your response I now support your application. Good luck with it!"

12343   MR. VIRDI: You know that CPN is entirely funded by advertising. As requested, CPN has already filed its undertaking demonstrating commitments of $876,000 in advertising contracts.

12344   We are confident that we will exceed our advertising projections. If there was any concern that our revenues would not be sufficient to fund the programming we have planned, this should remove it.

12345   It also removes concerns about broadcasting experience. Broadcasting depends on two skills, the ability to make good programming and the ability to sell advertising. We have clearly proven our ability to sell advertising and we have decades of production experience on our team.

12346   MR. KEEBLE: Naturally, the Commission is concerned with whether its decisions in this hearing will add to the cost of the basic service. While CPN and some others have no subscriber fee, the BDUs argued that even those channels would add cost to basic.

12347   The Commission therefore tried to determine what it costs a BDU to add a channel to basic. That enquiry met with little success.

12348   Starlight noted the number of 16.2 cents per subscriber per month as the "value of a channel" from a late 1990s analysis. Rogers updated that, building up to 31 cents with inflation. But this was on a full-cost basis for a beachfront analog channel. They did not say that 31 cents was the incremental cost of adding a digital channel.

12349   At the end of the day no BDU actually named a real incremental cost for adding a channel to digital basic.

12350   However, the Commission also asked all BDUs if they were paid for carriage by any services, and all the major BDUs agreed that they were. No price was mentioned for buying basic carriage except by Natural Resources Television, who named "half a million dollars" as the fee asked by Rogers. This number was not disputed.

12351   So taking that cost as a starting point, we submit that it must represent the full cost to Rogers of adding a channel. We do not believe that Rogers would subsidize such a service, so $500,000 must cover all their incremental cost and some profit.

12352   What does that amount to on a per-subscriber basis? Rogers reported 1.773 million digital cable subscribers last quarter. Sp the "per-subscriber per month" cost of an added digital channel can be no more than 2.3 cents.

12353   In short, the evidence on the record suggests that the per-subscriber cost of adding a zero-fee channel is not significant and should not be a barrier to licensing services that have no subscriber fee.

12354   MR. DHILLON: We believe it is clear that CPN makes an exceptional contribution to the goals of the Act and the goals of the basic service, but it also meets the objectives that BDUs set out in their oral appearances here.

12355   The distributors cited several additional elements that they wanted in 9(1)(h) services.

12356   For example, Shaw wants to grow their basic service. CPN will do that by attracting viewers who have already left the Canadian system in order to get Punjabi services from U.S. satellites for free. CPN would be new and different and exclusively offered by Canadian BDUs.

12357   Why, then, are BDUs opposed to CPN? Why has no distributor come forward to say CPN doesn't need a 9(1)(h) order? We would be happy to carry them? The absence of evidence on the record suggests two possible explanations.

12358   MR. KEEBLE: It is noteworthy that all the BDUs high standards for basic carriage disappear when a service offers them money. TELUS even said:

"Certainly if a service is offering to pay us, or offering a valuable service at no cost, it makes eminent sense to include it for all of our subscribers."

12359   So it is clear that a programming service can buy its way onto basic without being exceptional in any way. One must ask the question: Is this the real reason why BDUs have opposed everyone?

12360   There is another explanation, however, that distributors simply don't take the idea of third-language services on basic seriously. If, as they said, a service "obviously does not need the requirements", why offer evidence? They really need to think again.

12361   BDUs have commented that if CPN is approved, basic will become unrecognizable because of a flood of similar applications which the CRTC cannot refuse. We have noted before that we don't think there will be a flood; the tests are hard to meet and any applicant must prove need.

12362   But one must also ask: Why shouldn't the basic service be different? Why shouldn't it make a stronger contribution to Canadian expression and reflection by carrying a third-language service?

12363   MR. DHILLON: As Deepa Mehta pointed out:

"In 30 years, every fourth Canadian is going to be non-Caucasian ... How are they going to see themselves reflected in our films?"

12364   A StatsCan study projects South Asian population tripling in size by 2031.

12365   The question is surely not, "Why should the basic service include third-language minorities?", but, "How can it fulfill the goals of the Broadcasting Act without serving significant minorities?"

12366   Of course, there are limits. The resources are available in the system, but CPN uses no system resources except for technical capacity. The capacity is not an issue for BDUs in the markets where CPN seeks carriage. CPN will be entirely supported by the economics of the Punjabi community. It will add to no one's cable bill, it will cause no cord-cutting, it will use no tax dollars, and it seeks no guaranteed business plan.

12367   All CPN is asking for is the chance to put itself before the public, to be accessible to its community, and only in those markets where the Punjabi-speaking community is large. It is asking to get that chance through a 9(1)()h order because there is no other way. Without access to basic it cannot serve the community and it cannot get access to basic through negotiation.

12368   MR. KEEBLE: As English and French Canadians, we give lip service to the idea that we live in a new Canada, transformed by immigration, but we do very little about it. If the new Canada is to be successful, it must start to serve and to integrate the large new third-language communities.

12369   Commissioner Poirier has noted the importance of having minority language services actually reflect minority communities, not simply provide programming in the language of that minority. She is right. To say otherwise is to say that Punjabi-speaking Canadians should expect no more from their system than programming from India.

12370   This is the exact equivalent of saying that English-speaking Canadians should be happy with just the BBC, that French-speaking Canadians should be happy with just France 2. The whole point of the Broadcasting Act is that we need to do more.

12371   MR. DHILLON: CPN offers Canadian programming when very little Canadian programming, and no programming in certain categories, is available to Punjabi-speaking Canadians. CPN is exceptional; it is a step in the right direction; it is a new idea and an idea whose time has come.

12372   THE CHAIRPERSON: Thank you very much, gentlemen. Your presentation was very complete and addressed all the issues that we wanted to discuss with you so it's not necessary for us to ask any questions at this stage.

12373   So thank you.

12374   MR. DHILLON: Thank you. I would like to say at the end, a very good experience, a truly Canadian regulatory experience with the Commission here.

--- Laughter

12375   THE CHAIRPERSON: That's kind of you to say.

12376   Thank you for participating in the process.

12377   MR. DHILLON: Thank you.

12378   THE CHAIRPERSON: Thank you.

12379   THE SECRETARY: Thank you very much.

12380   The next presenter would be the Canadian Movie Channel, Starlight.

12381   Also for the record, Mr. Chairman, I omitted to mention earlier that CBC on behalf of ARTV will not be appearing in Phase III.

12382   THE CHAIRPERSON: Welcome back, gentlemen.

12383   Please identify the panel for the purpose of the transcripts. It's not that we don't know you, it's just that it helps the stenographer keep you in order in assigning the names to the right interventions when you speak.

12384   Go ahead. Thanks.

REPLY

12385   MR. BOLEN: Thank you.

12386   Good afternoon, Mr. Chairman and Members of the Commission. My name is Norm Bolen. With me today, from my far left, are Rick Anderson, Hussain Amarshi, Robert Lantos. On my right, Grant Buchanan and Mark Musselman.

12387   In regard to the questions and undertakings from our appearance last week, we have filed a detailed written response with you today as requested and our written reply to all interventions was filed on March 18th. It is 74 pages long and is responsive to all of the key issues raised.

12388   We will therefore devote our oral reply today to some matters that interveners raised in their appearances.

12389   MR. AMARSHI: Mr. Chairman, my fellow shareholder Victor Loewy and I have collectively been distributing films for over 50 years and we have distributed the majority of Canadian feature films. Last week, I heard a description of a mythical subscription VOD service that promises to offer access to all Canadian films over the Internet on a revenue-share basis at $2.00 a month, more than four times the wholesale price of Starlight.

12390   Film distributors never sell films for a subscription VOD service on a revenue-share model. I have sold many programs to Netflix, for example. They acquire all their programming by paying a substantial license fee. So the proposed business model you heard last week is pure fiction; it won't work.

12391   I also want to comment on Rogers' numbers with respect to their VOD platform. They implied that 11 percent of orders, or about 3.5 million out of 32.6 million orders, last year were for Canadian feature films.

12392   Based on discussions with relevant distributors, the real number of paid transactions for Canadian feature films on Rogers VOD last year was approximately 200,000. This could very well have been just 20,000 Canadians each ordering 10 movies a year. This is a far cry from any notion of 3.5 million orders. That larger number included all the free streaming of programs on the premium pay channels' subscription VOD services.

12393   So any suggestion that the advent of VOD somehow makes Starlight unnecessary is completely mistaken. VOD only works for films you have heard about and, of course, it costs $4.00 or more a title. And as the survey noted at page 65 of our written reply demonstrates, over 75 percent of Canadians tell us that they are unlikely to use VOD.

12394   MR. BOLEN: Let me add a word about promotion.

12395   When I went on the Rogers VOD website yesterday to check on their promotion of feature films, of the first 50 films promoted, only one was Canadian, "PeeWee", and it showed up on the ninth page as number 45. And Shaw's VOD website promoted one Canadian film, "Take This Waltz", out of an even longer list.

12396   VOD is a useful, complementary tool for a minority of Canadians who can afford it. For the other 75 percent, we need to talk about access on television.

12397   In that regard, the supply figures that have been advanced by Rogers and others are ludicrous. It's as if there are Canadian feature films everywhere on TV. There aren't, as our evidence shows and as anyone with a television set knows. Our written reply provides the real numbers based on program logs filed with the Commission. The evidence shows that there are thousands of Canadian films never shown, while the few that are available are not promoted, are not curated, are not shown at a reasonable hour, and are generally not accessible at a cost that the average consumer sees as affordable.

12398   To appreciate why, let me quote from the transcript of Rogers Senior Vice President David Purdy's presentation on October 29, 2012 at the ICC Conference in Ottawa.

"... films will continue to be sort of pushed off the broadcast schedule and even off many of the specialty channels' schedules"

12399   The Citytv program logs on the CRTC website bear this out. In calendar year 2012 there were 16 airings of Canadian theatrical films. Airings of Canadian theatrical films have declined by 75 percent on Citytv over the last four years.

12400   And Citytv's view is shared by the other Canadian broadcasters who have abandoned Canadian feature film in favour of series and it is why Rogers successfully argued last year that the condition of license that used to require Citytv to show a Canadian film every week in prime time, at least 104 hours a year, be removed from the Citytv licence.

12401   You will recall the intervention of Kealy Wilkinson who counted the feature films on Canadian conventional and specialty services in Toronto on the weekend of February 2nd and 3rd of this year. She found 150 American movies, but not a single Canadian one. This is why we need Starlight.

12402   The appearance by REEL Canada made it clear what happens when Canadian high school students are actually presented with access to Canadian films. The overwhelming response is along the lines of, "Where can I get more of these?" As shown by REEL Canada, this is true of teachers, of new Canadians and, very importantly, of young Canadians. Through our promotion budget, we will support organizations like REEL Canada in a way that highlights both the Starlight service and the films we exhibit.

12403   I also want to address the notion that our projected expenses were too high. We have already rebutted that contention at pages 62 and 63 of our written reply. In fact, when you also include our costs of remastering older films, which we fully intend to do, our expenses are quite conservative.

12404   MR. LANTOS: Mr. Chairman, Commissioners, while entirely predictable, the BDUs' opposition to our 100 percent Canadian movie channel is short-sighted and regrettable. Their negativity is in equal measures self-serving and self-defeating. They could have chosen to woo their customers with an exciting new service which delivers high quality, culturally compelling Canadian entertainment of the sort they cannot inexpensively get anywhere else. Instead, the BDUs chose to sermonize about affordability, yet they never addressed the fact that they are the gatekeepers and it is they who control pricing.

12405   We agree that affordability is an issue for subscribers. Starlight represents superb value. A wall-to-wall Canadian movie service available for less than $6.00 a year, half of the cost of a single movie ticket or the price of a single VOD rental.

12406   There is really no justification for burdening the consumer by doubling the wholesale cost, as PIAC correctly noted in its intervention. The evidence that we supplied with our survey showed that even at that inflated retail price Canadians like our value proposition and would be willing to pay for the service.

12407   Bien que Starlight soit un projet de langue anglaise, le Québec et ses films de langue française y joueront un rôle de premier plan. Une partie importante de notre programmation est réservée aux films québécois dans leur langue originale. Nous allons financer la production de nouveaux films québécois, surtout ceux des jeunes cinéastes. Nos actionnaires québécois auront une présence importante dans notre conseil d'administration et notre comité de sélection. Et surtout, nous allons exporter -- si je peux me permettre cette expression -- à travers son cinéma, la culture et la langue québécoises, aux consommateurs anglophones dans tous les coins du pays.

12408   MR. MUSSELMAN: Mr. Chairman, you have spoken of an evolution from protectionism to promotionism and we wholeheartedly agree with you. The consumption of feature films is fuelled by marketing more than any other art form.

12409   Some argue that Starlight could begin life simply as an Internet-delivered over-the-top service. This is misguided.

12410   As you know, part of our proposal does involve a digital service delivered over the top, but in today's world without a television channel to support it that service would fail. It would be a recipe for the preservation of the status quo; and the status quo isn't working.

12411   Canadian films would continue to be lost in their own homeland amidst an ocean of heavily marketed foreign content. That is neither protection, nor promotion.

12412   The essence of our vision is to leverage today's market to prepare for tomorrow. By delivering intensely marketed, previously unseen Canadian content to viewers, universally and affordably, we help that content to become better known, better appreciated, and better funded. A 9(1)(h) licence enables Starlight to invest meaningfully and consistently in the funding and the marketing of Canadian movies which in turn will pave the way for a future complementary online service.

12413   We will spend up to $7 million a year to market Canadian films in a manner that has never before been done in this country. We will create a strong and vibrant "Canadian movie" brand. With bold marketing and universal accessibility, we will lay to rest once and for all the myth that Canadian films need to piggyback on Hollywood superheroes.

12414   All of Starlight's promotional activities will be informed by the working group which is currently developing promotional strategies for Canadian screen-based content.

12415   We would embrace a condition of license to enable the Commission to objectively measure our commitment to promotion.

12416   MR. LANTOS: The typical Hollywood blockbuster's marketing budget is $70 million. The spillover effect of these juggernauts into the English Canadian theatrical market has created daunting barriers for English Canadian movies in their quest to reach their own domestic audiences. The theatrical market is not regulated, but broadcasting is. And this makes television the potential equalizer.

12417   Mr. Chairman, Mr. Vice-Chairman, Commissioners, this may well be the last 9(1)(h) hearing which presents a non-recurring opportunity to redress a historic cultural imbalance and fill a major void in our broadcasting system. Starlight fulfils all the objectives you have established for a 9(1)(h) licence, while benefiting all Canadians.

12418   Canadians do not enjoy unfettered universal access to their own films. An incessantly flashing "Access Denied" sign blocks the way. Only the CRTC has the password, the authority and the mandate to override it.

12419   Thank you, Mr. Chairman, and Commissioners. We welcome your questions.

12420   THE CHAIRPERSON: Thank you, gentlemen.

12421   Commissioner Simpson.

12422   COMMISSIONER SIMPSON: Thank you and hello again, gentlemen.

12423   I would like to start with your observation on Rogers testimony regarding the sale on VOD. I need to understand how there could be such a discrepancy. This may be subjective on your part, but it would be still good information.

12424   Their implication of 11 percent of their orders being Canadian and your actual tally through the distributors is so dramatically different, can you help me understand how that may have been subject to some interpretation by them that would have cause for the discrepancy?

12425   MR. AMARSHI: Absolutely. There are two ways in which VOD is measured, the numbers are measured, there is a transactional VOD where everybody puts an order in, pays $4.00 or $5.00 or $6.00, depending what the price of that particular film is, and gets that film.

12426   Then we get a percentage of -- we as distributors Mongo Media, Alliance, EOne, whatever the company is, get a percentage of that revenue. So our number that we present to you is based on what we have seen in terms of revenues that have come to us as distributors. So that's the calculation.

12427   Now, what I suspect is happening is that Rogers -- you know, TMN shows Canadian films, they also allow their subscribers -- there is the percentage that subscribe to TMN -- to see the films that they show on a subscription VOD setup that is managed by Rogers or whoever the service provider is of that particular customer.

12428   So that is probably where most of the numbers are coming from. So if somebody misses a particular film or wants to see a particular Canadian Film three weeks after it has been broadcast on TMN, and as a subscriber of TMN, they will be able to go and see it on the service, but that does not count as a transactional VOD. So that's my explanation.

12429   Robert, did you want to add anything?

12430   MR. LANTOS: Clearly, I mean it's only available -- those titles above 200,000 are only available to subscribers to the expense of pay TV services on Rogers for instance.

12431   COMMISSIONER SIMPSON: I see.

12432   MR. AMARSHI: Yes, I was going to add that.

12433   There is also -- no, there is no clarity about what exactly it is that that 3.5 million number that was used by Rogers refers to.

12434   Our suspicion is that it includes all Canadian programs that can be accessed via the premium pay networks and a variety of other ways, but in terms of VOD transactions, those numbers that we have are the real accurate numbers.

12435   He is not here today, he is in Europe, but Victor Loewy, who is one of our shareholders, he was the Chairman of Alliance until January of this year, the year that Rogers referred to, i.e. last year, he was running the country's biggest distribution company at the time which has the majority of Canadian films under license and the Alliance number for 2012 in turn from Rogers VOD was 130,000 transactions. That's a long way from 3.5 million.

12436   COMMISSIONER SIMPSON: You had said, Mr. Amarshi, that VOD doesn't work on a revenue-sharing model. Is that a categoric statement or is it the greatest percentage of VOD that doesn't work?

12437   MR. AMARSHI: Well, what I had said was it's a subscription VOD model which is what the VMedia's proposal was. Their proposal was that they will charge $2.00 a month, provide full access to all the Canadian films and then they will share revenue with the distributors.

12438   That is akin to saying that, you know, you have an all-you-can-eat buffet and then we will figure out how much parsley you had and how much fruit you had and then we will sort of parcel out the amount of money and then pay back the suppliers. It doesn't work that way.

12439   The way it works is, as I said, Netflix is a real subscription VOD model and the way it works is that they license films from us, and they have licensed a lot of our films, and it is for a period of time, it's for 24 months or 36 months, or whatever it is, and then they provide the whole sort of range of films to their subscribers. If a subscriber does not watch any of our films it doesn't matter, we have got our license fee at the top end. That's how the model works.

12440   So I was just, like -- you know, when V Media was making their presentation, I just did a back-of-the-envelope, quick calculation. There are 3,500 films that we estimate, theatrical feature films and documentaries that we have researched, and that is what Starlight is promising to show.

12441   Assuming an average licence fee of about $10,000 -- and that assumption is based on the very fact that it includes the cost of digitizing, it includes the cost of restoring -- you know, the whole gamut -- we were estimating about $10,000 per film.

12442   So, with the 3,500 films that are in the Canadian library, that is $35 million. That is just the cost of acquisition.

12443   Then you have to factor in the cost of marketing a service like that.

12444   Just to give you an idea, Netflix spends about half a billion dollars in marketing a year. That is just as a contrast.

12445   So, assuming another $5 million, $10 million in marketing costs, operations costs -- I mean, it is easy to assume that $48 million is what they will need -- $48 million to $50 million is what they will need. Based on the $2 model, which is $24 a year, they will need 2 million subscribers off the gate to make it viable.

12446   That is just, back-of-the-envelope, adding some numbers.

12447   Hence, the idea of a mythical -- I mean, to bring in -- and that's to break even. That is my analysis of that proposal.

12448   COMMISSIONER SIMPSON: This is really helpful. Sure, it seems like we are picking on Rogers, but Rogers had uttered that they are going to be beefing up their content on VOD and that by the summer they would be awash in Canadian films, something like 1,000 titles is what they were saying.

12449   What you are saying is, because it is not subscription, it would be on a different model, and it would be pay-as-you-go.

12450   MR. AMARSHI: It is, indeed. It is a transactional VOD model. In fact, they licensed about 40 films from us about a month ago or so.

12451   And I know that when Mr. Purdy was here, he mentioned the fact that they were paying for the digitizing costs and all that stuff.

12452   I mean, the cost, basically, of digitizing current films is about $500, so it's not a huge outlay of cash on their part to add to this.

12453   And these library titles, they have put them on. I have no idea how they are promoting it to get people to subscribe.

12454   One thing which was quite interesting was when Mr. Purdy mentioned about the fact that they are trying to promote Canadian titles on VOD, and he mentioned Deepa Mehta coming and introducing a film and all of this stuff.

12455   I was quite surprised, because that is a film that we distribute, and I wasn't sure exactly what that was. So I checked, and it turns out that it's a 5-second clip that we recorded, and we recorded it for all of the services that were carrying "Midnight's Children". It basically says: Hi, I'm Deepa Mehta. Hello, Canada, I'm Deepa Mehta. Please watch my new film, "Midnight's Children", on Rogers VOD.

12456   That's it. It's a 5-second clip, and that is what goes on the Barker Channel that they mentioned.

12457   So that is completely different from what we are talking about with Starlight. When we talk about doing the whole introduction, that is a substantially different kind of proposition. You know, it's apples and oranges, really, in terms of promotion, when it comes down to Canadian films.

12458   COMMISSIONER SIMPSON: I would like to clarify something from your answer just now.

12459   Did I hear you say, though, that part of your business model is to also go back and pay for the digital remastering of older Canadian product?

12460   MR. AMARSHI: You mean for Starlight?

12461   COMMISSIONER SIMPSON: Yes.

12462   MR. AMARSHI: Absolutely.

12463   COMMISSIONER SIMPSON: Okay, great.

12464   I am sorry to be burdening you with so many VOD questions, because you didn't really come here to talk about VOD, but I have VOD questions.

12465   On the subscription model basis -- where I am coming from is, a lot of the BDUs made a lot of testimony directly toward their interest in VOD. I am now understanding that if it is pay-as-you-go, it really doesn't solve the problem. But if it was subscription, it would go, at least, a long way further toward solving the exhibition problem and the revenue model.

12466   So, if there was a subscription VOD Canadian channel, which would require a rights purchase, or at least, maybe, a partnership where rights could be negotiated, but not put in place until the market test had been accomplished, it might be another way to be able to have Canadians pay, consciously, to watch Canadian content, but have it aggregated in a way that they can get it in a non-linear fashion.

12467   Have you looked at that?

12468   MR. LANTOS: Not yet.

12469   Wearing my hat as a film producer, I think VOD is a very good thing. We don't see that as conflicting with what we do. We see it as a complementary business. But it is a luxurious business.

12470   VOD is not for everyone. It will cost no less than $4 per film, and some of them will cost more.

12471   And the statistics are very clear that the overwhelming majority of Canadians have never used VOD.

12472   So the two go hand in hand. We are offering a 45-cent per month service to show, over time, every Canadian film ever made, as well as new ones that we will finance.

12473   VOD doesn't do that, and it cannot do that.

12474   Now, SVOD, subscription VOD, we have subscription VOD available in Canada today. The Movie Network has it, Movie Central has it, Super Channel has it. In order to access it, though, you have to first buy the premium pay television service, which, once again, most Canadians don't do.

12475   Again, we don't see that as conflicting with us. We are offering an entirely different kind of service.

12476   In their services, the Canadian content is a modest -- to put it mildly, in the case of Super Channel, Canadian movies represent something like 1 percent of their offering. In the case of the Movie Network and Movie Central, it's higher. But, in all cases, it is a modest portion of what they offer.

12477   We are doing something very different here. We are offering only Canadian movies, and we are offering them inexpensively, so that everyone, including a high school kid, who can pay for it out of his allowance, as was mentioned yesterday, can afford it.

12478   MR. BOLEN: Our vision is to reach the largest number of Canadians possible and to give them access to the entire library, and new feature films, to create enthusiasm, support for, and a real appreciation for Canadian films.

12479   This is a bigger, bigger, bigger idea than the idea of putting Canadian films on VOD, which restricts the audience to a very narrow group of people, mostly people who can afford it.

12480   COMMISSIONER SIMPSON: I have two more questions.

12481   Let's flip over and talk about this all happening and becoming wildly successful. Have you considered or contemplated the possibility that if this channel exists and it works, that it doesn't tip the balance in an unintended fashion toward the exhibition of Canadian product on other channels, whether they are pay or basic?

12482   Because the exhibition of Canadian product we want to see everywhere, and we try to mandate it in PNI and other jurisdictions of the Commission, but if you become the game in town; not the only game in town, but the game to the point that you are enjoying revenue, assured revenue, are you not really putting a crimp in your product being exhibited in a fulsome manner on any other channels, ultimately?

12483   MR. BOLEN: I think that the best answer to that question is that the other services have shown very little interest at all in Canadian feature films, so they are not using feature film as a core offering to serve their audiences. It is something that is on the margins of what they offer.

12484   And they have had opportunity over the years to make better use of Canadian film.

12485   And I don't see having a strong independent Canadian film channel having any negative impact on the exhibition of other kinds of Canadian programming. Why would it?

12486   It is certainly not going to reduce the PNI obligation.

12487   They could have chosen to exhibit Canadian feature films as part of their PNI obligation, and they have chosen not to. They have vacated the space.

12488   So I see very little threat that we are somehow going to stop them from continuing to vacate the space.

12489   Mr. Purdy from Rogers made it very clear that this is a downward trajectory. We have seen it over the last five years. There has been a very, very significant decline, as we have shown in our numbers, and it is continuing.

12490   There is no indication that any service in Canada is putting any increased emphasis of any kind on feature film, except when they show up at the hearing when there is a proposal in front of you to do something new, bold and different.

12491   COMMISSIONER SIMPSON: You are saying that it couldn't get any worse, it can only get better.

12492   MR. BOLEN: With regard to feature film -- well, it can get slightly worse. There is very little now to take off the air, there is very little there.

12493   But I don't see the Canadian services suddenly feeling that they are going to be competing with Starlight for Canadian film.

12494   MR. LANTOS: I would like to add, Commissioner Simpson, that we would not be here if Canadian films were widely available and if broadcasters enthusiastically embraced them as a key component of their prime time schedules.

12495   You won't find a Canadian film on CTV or on Global, a network on which, once upon a time, I obtained the licence for Showcase, which used to have two Canadian films a week. It doesn't have any.

12496   You might occasionally stumble on one that they licensed a long time ago and they are burning off inventory, but they are not in that business, and they will be the first ones to tell me, and to tell you, that they think their business model is better served by television series. And that may well be the case.

12497   So we are not here to say that they should change their business practices. Quite the contrary, we are here to say that there is an orphan out there, and we want that orphan.

12498   MR. BUCHANAN: Commissioner, I should add that, should the dream come true, they are being acquired non-exclusively by Starlight.

12499   So should this come to be, what you are talking about, where it is so successful and there is such enthusiasm for Canadian films that other broadcasters want back in, they can do so.

12500   COMMISSIONER SIMPSON: The last question. You had a positive intervention from Telefilm, but it included an expectation that your fund would align itself to the intent and spirit of the CFFF. My question is, should the Commission see positively your application, would this happen or would it be necessary for us to put some type of consultation process in place to ensure that there is sort of a harmonization of differing funds toward a common objective?

12501   MR. BOLEN: I believe that Mark has had some discussions with Telefilm. I haven't really drilled down on that, but we, obviously, would want to collaborate with the key players in the industry, and Telefilm is obviously a key player.

12502   We have said that we want to collaborate with the Working Group on Promotion and so on.

12503   We see ourselves as being a new, significant contributor to the overall success of Canadian content, and we want to engage ourselves. If you feel that there is a condition of licence around that that would make sense, we would certainly look at that. I am not sure exactly what you are suggesting, but I see no obstacle to something like that.

12504   Mark, did you have anything to add about your discussions with Telefilm?

12505   MR. MUSSELMAN: Thanks, Norm.

12506   Commissioner, I would like to answer your question, I just need to understand where you are going a little more.

12507   Are you referring to a harmonization of Starlight's financing to the manner by which Telefilm has traditionally financed, or contributed toward the financing of films?

12508   COMMISSIONER SIMPSON: I will go to the teleprompter here. This is a paraphrasing of Telefilm's submission.

12509   Telefilm encourages Starlight to ensure that its policies through the fund will align to the policies of the CFFF, to leverage resources in the most effective way, and that the CRTC should ensure that a consultation process is put in place to cement alignment of the policies between Starlight, Telefilm and others who support the financing of Canadian film.

12510   So, yes, I guess that I am asking for an undertaking.

12511   MR. MUSSELMAN: Telefilm's raison d'être is to support the production and marketing of Canadian feature films. I think that Starlight aligns quite well with that objective.

12512   If there are particulars that Telefilm wishes to raise with us, in terms of specifics, then we have started discussions with them, and those discussions will continue, because we are both working toward the same end.

12513   If Telefilm in that comment was referring to the manner by which Starlight invests in feature films, we have in our response to the interventions confirmed that we would be open to and enthusiastic about licensing new Canadian feature films on a more traditional basis, acquiring television rights in return for a licence fee.

12514   Again, that aligns with trying to leverage available Canadian financing to facilitate the production of Canadian films, and we are right in lockstep with Telefilm on that objective.

12515   MR. LANTOS: We have no intention of competing with Telefilm for financing films. Telefilm, over the past year, has made its rounds across the Canadian film industry and announced a new strategy, which I endorse, which is to focus their very limited resources -- $60 million a year -- to invest in Canadian films, English and French combined, that have the best chance of reaching a wide audience. In other words, films that are made by experienced filmmakers, with more ambitious budgets, which have significant financing from sources other than Telefilm -- from the private sector, from international distributors, from foreign sales.

12516   That has been their publicly announced strategy.

12517   Our strategy is the exact opposite. Because Telefilm is going in that direction, they have vacated a space, which is the entry level, emerging talent, smaller films, which are now going to have greater and greater difficulty getting off the ground. That is where our focus is.

12518   In no way do we plan to compete with Telefilm. We have had conversations, and we will continue to have them. But we want to do very different things, and I think they welcome that we are going to be occupying a space that they can no longer afford to finance.

12519   COMMISSIONER SIMPSON: Thank you, those are my questions.

12520   THE CHAIRPERSON: Mr. Vice-Chair?

12521   COMMISSIONER PENTEFOUNTAS: Thank you, Mr. Chairman.

12522   Mr. Amarshi, you won't have to remaster 3,500 pieces. Some of them need not be remastered. Is that correct?

12523   MR. AMARSHI: Absolutely. Not all of them are very old. I mean, they are old titles, but there is a range of titles.

12524   COMMISSIONER PENTEFOUNTAS: On your 3,500-title library, how many of those films would need to be remastered?

12525   MR. AMARSHI: We would have to do that analysis once we get to the drilling of that. The assumption right now is that, maybe, there might be a quarter, perhaps 25 percent, or something like that.

12526   MR. LANTOS: The French-language films, in large part, have been remastered, so the remastering is mostly in English, and films that were made prior to the 1990s are the ones where we will be incurring the greatest expense.

12527   COMMISSIONER PENTEFOUNTAS: Do you think we are looking at 1,000 titles, Mr. Lantos?

12528   MR. LANTOS: I don't want to guess, because I don't know the answer.

12529   COMMISSIONER PENTEFOUNTAS: And the cost per title of remastering would be?

12530   I think there was a figure that was thrown out --

12531   MR. LANTOS: It could range up to -- depending on how -- if it is a very old film, in very bad shape, it could go up to $20,000, $25,000. I think that would be rare. In most cases, we are counting on most films being in much better shape than that. Otherwise, we are going to be incurring a lot of costs that go beyond our business plan.

12532   COMMISSIONER PENTEFOUNTAS: I am just curious of what the priority -- how much emphasis will you put on remastering the older films, in terms of the budget that will be allotted toward the remastering process.

12533   Because that will be removed from the commissioning of new films.

12534   MR. LANTOS: No, the commissioning of new films will be segregated. We have an acquisitions budget, and the remastering comes from there.

12535   And those numbers, Norm, I gave them over to you.

12536   The commissioning of original films is sacrosanct. The remastering of old films cannot be flown over into that.

12537   COMMISSIONER PENTEFOUNTAS: Norm, did you want to speak to that issue?

12538   MR BOLEN: Yes. You may recall that when Paul Gratton spoke, he did all the research on the film library of existing titles, and he mentioned that in the first year you would have 700 titles, and then you would replenish your library by about 300 titles per year after that.

12539   So, in your first year, most of your acquisitions budget is going into pure acquisition of existing films, and most of the films that you would acquire in the first year would be those that don't require digital remastering. There would be a few, but as you get into the second year, you have fewer titles, but you have the same amount of money in your budget, so you can start to spend more money on those more expensive films that require the remastering.

12540   So the budget is structured in such a way that we can cover these expenses without taking any money out of the Feature Film Fund whatsoever.

12541   COMMISSIONER PENTEFOUNTAS: And the number of years that would be required to remaster the 700 or 800 films that you wish to remaster, how many years would that take before we have them all remastered and ready to go?

12542   MR. BOLEN: That is a difficult question to answer. I haven't really considered it, but I think you would get that done within the term of the licence, for sure.

12543   COMMISSIONER PENTEFOUNTAS: If you have 800 films at $10,000 a film, that is a big chunk of budget that is going to be chewed up.

12544   MR. BOLEN: Yes.

12545   MR. AMARSHI: Also, the thing is that we are talking about curating the library, so it won't be like we will just be getting everything remastered at the same time, it will be done in phases, at different times.

12546   Some could be remastered at the sixth year of the licence. I think that kind of process will sort itself out.

12547   COMMISSIONER PENTEFOUNTAS: There won't be a rush, and it won't be Priority 1, remastering the pre-1990 films.

12548   MR. AMARSHI: Exactly. We will be curating them thematically or by director, or whatever it is, and there might be some director's work that will be remastered in one chunk, if the emphasis is on a particular year, a particular anniversary, or a particular --

12549   COMMISSIONER PENTEFOUNTAS: But it will definitely be part of the legacy of Starlight at the end of its first term that Canadian films will have been remastered.

12550   MR. AMARSHI: Absolutely.

12551   MR. BOLEN: I would just add one thing, Mr. Vice-Chair. We did open up some discussions with people at the National Archives, who are in the film refurbishing business, and, actually, they are investing some significant money right now in new equipment for digitizing content. We have opened up some discussions with them, and there is a possibility that we may be able to work something out.

12552   One thing to keep in mind, too, is, if you do a large number of these, you would negotiate a bulk arrangement, because it becomes effective for the supplier to do it on a bulk basis, at a lower cost.

12553   COMMISSIONER PENTEFOUNTAS: Yes, Mr. Gratton spoke to us on that issue last week.

12554   Another intervenor spoke about -- and it has come up on a couple of occasions -- your plan about investing -- I am just throwing out a number -- $2 million per film times 10 films, if you have a $20 million per annum budget on the commissioning of films.

12555   The other option is: Why don't you spend $500,000 and partially fund a film, and you will be able to fund more films in that manner.

12556   Do you want to speak to that issue, Mr. Bolen?

12557   MR. BOLEN: I believe that you may be referring to the CMPA intervention, and we have had numerous discussions with them about this question, and we have acknowledged that there is significant value in doing some, in the normal course, licensing of films in addition to running the fully financed film fund, and Robert will give you more detail on that.

12558   We do intend to do some of that licensing, but you have to keep in mind that when you are doing that kind of licensing, there is no guarantee that a film is going to get made. Some films just drop off the agenda, for whatever reason. So you are one of the financiers, but the other pieces don't come together.

12559   You don't get the certainty as a broadcaster that you get by fully financing a film.

12560   Also, there is a limit to the amount of incremental money that there is in the system to supplement any licence fee that we would pay in a combination funding arrangement like that.

12561   So you can't have an unlimited number of films.

12562   There is also a limit to how many new films you can produce and manage as a channel. Producing a feature film is not like producing a television program, it is a lot more complex.

12563   So we see ourselves doing perhaps a new film every two or two and a half weeks, over time, once we get ramped up. That is a significant amount, and that would include a mix of fully financed films and films that are financed in the normal course, a kind of equal mix.

12564   COMMISSIONER PENTEFOUNTAS: But you can offer a greater guarantee that the film will actually be made, instead of investing $500,000 on a film that may -- that money may eventually go down the toilet, if the film is not made.

12565   Is that part of the thinking, that you would have greater control, obviously, over the completion of the film?

12566   MR. LANTOS: We know, if we are going to fully finance a film, other than tax credits, that the film will be made.

12567   If we are a sliver of the financing of a film, then whether it gets made or not, or when it gets made, and therefore when it is available for us to broadcast, is completely outside of our control.

12568   And films having been -- this has been my career for most of my life, and sometimes it has taken me 10 years to get a film made.

12569   It is a highly unpredictable thing, when a film will get made.

12570   We will do both. We will license films for Starlight that are being financed elsewhere, where we will be a subservient financier in exchange for the television rights in Canada. But if we relied exclusively on that strategy, we would have no way to either guarantee that the film's original programming supply would be available when we need it, nor would we be able to select which films get made.

12571   And we have, in-house, a tremendous amount of talented people who are highly qualified to have a say about should this film be made versus that film. This actually allows us to make those choices, and to enact our strategy, which is to encourage emerging talent. This way we have the ability to do that.

12572   The selection committee of Starlight, which will rotate every year, is going to make those decisions. Out of all the submissions, these are the films that get made.

12573   When it comes to licensing, we don't have that degree of strategic control.

12574   COMMISSIONER PENTEFOUNTAS: Right.

12575   You would also agree with some interveners that spoke to the issue, Mr. Lantos, that it would be at least three years before any of your commissioned films would find their way onto the Starlight screen?

12576   MR. LANTOS: That's true. And we don't expect any until the beginning of year three, which is where the licensing of films being financed by others becomes a very important component at the beginning of our licence because we will select -- we will focus on films that have a significant chance of being made right away.

12577   But that's correct, it's in year three that we become fully active on our original programming front.

12578   COMMISSIONER PENTEFOUNTAS: Okay.

12579   And finally, Mr. Buchanan spoke about the dream and talked about "Field of Dreams" and people talked about the fact that there may not be interest for Canadian films, and what if you build this field of dreams and nobody shows up?

12580   MR. BOLEN: Well, the first thing I'd say is I think we've demonstrated in our research that there is interest. I think the Heritage Canada study also demonstrated significant interest. Actually, of all the services presenting to you on 9(1)(h), I believe our surveys and the surveys of Heritage showed support for this idea more than any other idea.

12581   So we're absolutely confident that there is going to be an interest in this channel, particularly since we are going to be promoting heavily, using every clever promotional tool and mechanism that I've ever used in my career and other people in our group have used.

12582   I have a successful track record as a programmer. I have spent many, many years in the promotion of Canadian content. It was one of the things I prided myself on when I worked at Alliance Atlantis and we had very, very many Canadian successes.

12583   I would say that when I started out advocating that some of the top programs on those channels could be Canadian, many people thought I was a complete and utter Pollyanna, and it came to be that not only were many of those programs number one, number two, number three, number four on those channels, they've become top programs in the U.S. market.

12584   So why was that? Because we knew how to promote. We knew how to market. We did things that other broadcasters never did. We created an impression in the marketplace that none had ever done and now they emulate what we did.

12585   We intend to ratchet that up even more. We will be a promotional machine like this country has never seen with regard to feature films and probably hasn't seen with regard to many other kinds of Canadian content and we believe that that will succeed. The content is good.

12586   You may remember Denys Arcand speaking about how audiences in Europe embrace his content on broadcast platforms in prime time and he's a hero over there. He's seen as something of a Canadian star in the European market. There's no reason why we can't translate that into the Canadian market if we provide the exposure to this content that it deserves.

12587   MR. AMARSHI: May I just add one example?

12588   We have a film called "Rebelle", which I'm sure you might know about.

12589   COMMISSIONER PENTEFOUNTAS: M'hmm.

12590   MR. AMARSHI: It was a Canadian entry to the Oscars. It was nominated for an Oscar, won all the Canadian screen awards and the Juno awards. Right now it is on pay television on TMN Movie Central, but after 18 months there is no taker for that film. This is where Starlight comes in. Not only would it program a film like that but it will go to town with that kind of film.

12591   COMMISSIONER PENTEFOUNTAS: Thank you so much.

12592   THE CHAIRPERSON: Just a quick clarification on the remastering.

12593   Who owns the versions, the remastered versions? Is it the original producer or would you take some non-exclusive rights?

12594   MR. LANTOS: We would take non-exclusive rights for Starlight.

12595   THE CHAIRPERSON: Okay.

12596   MR. LANTOS: As for the actual ownership of the physical material, it's an interesting question because it's really more a debate between the distributor and Starlight because the distributor will own the rights. A producer in some cases does, on very old films they may have reverted, but in most cases it will be the distributor. So that's going to be a negotiation. It will be an interesting one.

12597   Hussain.

12598   MR. AMARSHI: Theoretically it is something that will stay with the distributor because he's the rights owner. We can remaster it and it will be part of our sort of give in that we remaster the film but then the distributor will have the right to sell it to other people on exclusivity as well. I mean that's the convention.

12599   THE CHAIRPERSON: Right. And you did mention the projet Éléphant in Quebec where Marie-José Raymond is doing -- with money and kudos to Mr. Péladeau for having financed that project for the preservation of French-language films.

12600   Are those films available -- the versions, the remastered versions -- to you or are they keeping exclusive rights for their platform?

12601   MR. MUSSELMAN: It's my understanding that the actual physical remastered materials are available for licensing. As I understand it again, Éléphant retains exclusive video-on-demand rights in French-speaking Canada. But as far as the physical materials go, I understand that those are available.

12602   MR. LANTOS: I have only produced one film in French in my life. It was my first film and it has been remastered via Éléphant and the rights that they have kept are non-exclusive.

12603   THE CHAIRPERSON: Okay. I just wanted to clear that up because it wasn't clear to me that you had fully done the research on whether the titles would be available. It's one thing to say that you want to put them on, but there's a lot of negotiations left; is that correct?

12604   MR. LANTOS: Well, we have not talked to everybody but we have done quite a lot of talking, and in fact we have done quite a bit of negotiating so that we will be prepared -- should the Commission choose to grant us a licence, we will be prepared to get off the ground and get on the air rather quickly.

12605   We have a great deal of comfort that the library of films available to us relatively immediately is sufficient to supply us for the first few years.

12606   There may be others that are going to be more difficult to obtain, that will require more research, that will require a longer time to remaster or track down the rights, but if we receive a licence we will have a few years in which to do that.

12607   THE CHAIRPERSON: Right. Well, a licence with mandatory distribution, not just a licence, correct?

12608   MR. LANTOS: Correct, yes.

12609   THE CHAIRPERSON: All right. Great. Fair enough.

12610   Thank you very much. Those are our questions from us.

12611   So we will go now to the next applicant.

12612   MR. BOLEN: Thank you very much.

12613   THE CHAIRPERSON: Thank you.

12614   THE SECRETARY: Thank you.

12615   I would now invite APTN to take place.

--- Pause

12616   LE PRÉSIDENT : Bonjour, Monsieur LaRose. Rebienvenue. Donc, comme est l'habitude, je vous demanderais de présenter votre équipe et de faire votre présentation.

REPLY

12617   M. LaROSE : Merci beaucoup.

12618   Bon après-midi, Monsieur le Président, Monsieur le Vice-président, mesdames les Commissaires et Monsieur le Commissaire, et les employés.

12619   My name is Jean LaRose, I am the Chief Executive Officer at APTN.

12620   I am joined today by, to my left, Darcy Smith, Chief Financial Officer; to my right, Monika Ille, Director of Programming, and Joel Fortune, our Legal Counsel.

12621   And also, for the record, we have submitted electronically the undertakings and I have received confirmation of such, that they have been received.

12622   We are very pleased to reply to the interventions filed concerning our application and the comments made earlier this week. We filed a detailed written reply, so we will try to focus here on the most important matters.

12623   First, we at APTN were moved by the hundreds of positive and informed interventions filed by Canadians, both Aboriginal and non-Aboriginal. These interventions have energized us and confirmed APTN's exceptional contribution to the broadcasting system.

12624   By our count, there were 833 interventions; 806 were in support and 676 of these were from individuals and organizations without a direct stake in the broadcasting industry.

12625   On the question of the rate, 189 of the interveners explicitly supported APTN's proposed rate and some said it should even be higher. Another 102 interveners supported all of APTN's proposals. Support for the proposed rate was about even between persons identifying themselves as Aboriginal and non-Aboriginal.

12626   Opposing interventions from the public numbered 16, and only three of these actually mentioned APTN in particular. There were an equal number of interventions from the BDU sector.

12627   Respectfully, therefore, in terms of the interventions received directly from Canadians, support for APTN and our proposals for the next licence term, including our proposed rate, is strong, and opposition from actual individual Canadians is very slight.

12628   On the question of affordability, our proposed wholesale fee of $0.40 is affordable. Just as important, it is an amount that is necessary for APTN to play the role it should as a full, primary level of service for Aboriginal Peoples and also connecting to all Canadians.

12629   We have been guided on the question of affordability by the Broadcasting Act, which states that programming reflecting Aboriginal cultures should be provided within the broadcasting system as resources become available for that purpose.

12630   There are probably many ways to look at the question of resources in the broadcasting system, but I would just point out that the BDU sector is highly profitable. No BDU has said, to our knowledge, that APTN's proposed wholesale fee would make the basic service unaffordable or would actually have a material impact on rates.

12631   In fact, for Canadians as consumers, BDUs have pointed out that the basic service rate is not a question of simply passing on wholesale fees with a mark-up. Rather, the rate for basic reflects many factors and is set in the marketplace, which is increasingly competitive.

12632   I would respectfully submit that the primary impact of our proposed wholesale fee in a competitive market is to ensure that Canadians will see much more and much more exciting programming that reflects Aboriginal Peoples that would otherwise not exist.

12633   APTN is a very successful network. We have not only created an entire industry of Aboriginal producers, we have worked with them to develop their skills to produce incredible programming. All of this comes at a cost. That cost is an expectation of continued improvement in the product that we air each and every day on the four distinct feeds.

12634   Aboriginal and non-Aboriginal Canadians will get much greater value from their basic service because of it. Canadians who want to see Aboriginal Peoples reflected in the television broadcasting system pay for basic service. It is therefore reasonable that a small proportion of that payment go to support Aboriginal reflection and mutual understanding.

12635   APTN already is an exceptional service and we are proud of the fact that with our existing 25-cent rate, we helped to bring an entire cultural sector into existence. We also built a strong and enviable reputation in the broadcasting industry as well as in the news-gathering community and we want to build on that success to keep improving our programming in all respects in the next licence period.

12636   Over the last year alone, APTN caused the creation of 665 hours of original programs, many with additional hours in various language versions.

12637   We estimate that the proposed wholesale fee will nearly double this amount, resulting in the creation of 1,150 hours of original programming each year once the new programs we create go to air and online.

12638   With respect to the question of independent production, our application represents a necessary boost to Aboriginal participation in the broadcasting system and to the independent Aboriginal production sector in particular.

12639   Aboriginal independent producers, by their own accounts, increasingly are shut out of the broadcasting system. Even APTN itself has fewer broadcasting partners than in the past, and the benefits packages that are supporting independent production in other sectors are earmarked to other broadcasters.

12640   APTN projects that the proposed rate increase will result in spending on Canadian programming of approximately $265 million over 7 years. When compared to the total expected revenue of just under $400 million over the same licence period of 7 years, it clearly demonstrates that APTN will plough the lion's share, fully 66.7 percent, into programming and the creation of content to attract new audiences and live up to the expectations that now face us.

12641   That content will be on-air and online and will attract new audiences, Aboriginal and non-Aboriginal, that will propel APTN to new heights. Success creates the need for continued success and APTN plans to live up to that reputation.

12642   In fact, as a quick aside, pretty well everybody in the past two weeks have used APTN as the resource point as to what a service should be.

12643   APTN is a general interest, primary service for Aboriginal Peoples. So this spending is earmarked for new, multi-platform and exciting programming from all genres, as we have set out in our application.

12644   By condition of licence, 80 percent of our programming, other than news, information and sports, will come from independent Aboriginal producers that are not related to APTN, just as it does now.

12645   These are the resources that are necessary to create original programming that is attractive and relevant to our audiences, especially our primary audience of Aboriginal youth between the ages of 13 to 35, and to all Canadians.

12646   Furthermore, as Ms Jamieson noted in her presentation yesterday, APTN has built a solid and well-deserved reputation for credibility with our Aboriginal audience. They know that when they listen to our newscasts, the information they receive is accurate and presents a very credible source of information on events affecting our daily lives. We cannot afford to diminish that credibility and this puts enormous pressure on APTN to keep delivering quality and accurate news content.

12647   Our proposed increase will allow us to hire the reporters, VJs and researchers that are needed to bring the team to a full complement and ensure that we can maintain that high level of accuracy. And as the multiple awards bestowed on our crew clearly demonstrate, APTN is a major trusted news source in Canada.

12648   With respect to the concerns of CMPA, we can confirm the following points:

12649   - First, as we set out in our written reply and reconfirmed just now, APTN has no difficulty in recommitting to our condition of licence that 80 percent of APTN's programming, other than news, current affairs and sports, be produced by non-related independent Aboriginal producers.

12650   - Second, as we set out in our written reply, APTN has no objection to filing annual reports with the Commission regarding independent production activity.

12651   - Third, as we set out in our written reply, APTN is committed to terms of trade discussions and it is APTN that initiated those discussions more than a year ago, which resulted in our proposal to the Alliance of Aboriginal Producers of Draft Terms of Trade on September 24, 2012. No substantive response was provided until April 25, 2013. This was the same day we appeared last week at this hearing. APTN is committed to reaching terms of trade with Aboriginal independent producers as represented by their association, AAMP.

12652   - Fourth, let me move on to Animiki See, APTN's production subsidiary.

12653   The primary purpose of Animiki See is to assist young Aboriginal emerging producers who have immense creative energy but need to develop their skills and portfolio to be able to access the major funding sources.

12654   The secondary purpose is to provide APTN with a production vehicle for some of its major initiatives such as Aboriginal Day Live and to create some content for sharing with our World Indigenous Television Broadcasters Network (WITBN) partners, a network of which APTN is one of the proud founding members.

12655   Some producers see an advantage to work with Animiki See, as you heard yesterday from Charles Clément. Some do not. This is fine with us.

12656   As we explained in our written reply, the amount of programming produced through this production subsidiary is small. It amounts to only 68.5 hours out of more than 1,000 hours of independent Aboriginal production over the last three years, and in all of these 68.5 hours, Animiki See held only a minority interest. The majority interest, in every case, was held by another independent Aboriginal producer.

12657   Clearly, APTN is meeting the condition of licence and Animiki See is a very small player in the scope of productions provided to APTN. We have worked hard to help the Aboriginal production community reach their level of excellence and we have no intention of undermining them in any way.

12658   APTN surpasses its condition of licence to 80 percent independent production from non-related independent producers, not including Animiki See, which is, of course, a related production company.

12659   On a follow-up from our initial presentation, I hope I can clarify why the different regional feeds are important to APTN. The regional feeds allow us to direct Aboriginal-language programming to the most relevant audiences.

12660   For example, on the North feed, we broadcast the most Aboriginal-language programming, and it is in the most relevant languages, such as Inuktitut and Cree. In the East, we put more emphasis on languages spoken in the East, including Innu, Mi'kmaq, Maliseet and Mohawk. In the West, Cree is predominant and we also include Michif, Ojibway, Kwakwala and Coast Salish. This is a key part of what makes each feed important for APTN.

12661   In conclusion, we recognize that the Commission has to balance a range of interests when it makes its decision, including the interests of Canadians as consumers and in their other capacities.

12662   APTN is the only television service in Canada that is meant to serve and reflect Aboriginal Peoples. It was created for that very purpose.

12663   Our application is based on wide consultation with Aboriginal communities throughout Canada and is intended to reflect their needs, and especially the need to reach out, connect and inspire Aboriginal youth. It is intended to provide adequate resources for Aboriginal Peoples to play a full and meaningful role in the broadcasting system, to the benefit of everyone.

12664   As Ms Jamieson eloquently stated yesterday, reflecting, I believe, the views of the Aboriginal population in Canada today:

"We want APTN to grow stronger and we want it to have the resources to continue its important mission."

12665   I thank Ms Jamieson for her inspiring words yesterday, as well as Charles Clément and Ms Barbara Hager for appearing in support of our application.

12666   It has been our privilege to appear before the Commission and we thank you as well, Commissioners, Mr. Chair, Vice-Chair, staff, for the opportunity.

12667   We will now entertain questions.

12668   THE CHAIRPERSON: I only have one question and it relates to the rate.

12669   You remember that in Phase 1 of the hearing -- of course, it's not your preference because that's not what you applied for, you asked for a full 15-cent increase per month per subscriber -- I said, well, if the Commission were to find that that -- I can't remember if that's a 60- or 65-percent increase, anyways it's a considerable increase -- wasn't justified, I said, what would be your priorities and you said that you would just reduce each basket that was driving that increase.

12670   Based on what you heard in Phase 2, do you maintain that same position?

12671   MR. LaROSE: I do. And I think the statement by Ms Jamieson said it best yesterday.

12672   We are the face, the reflection of Aboriginal Peoples in Canada. We are really focused on youth. That's where the focus needs to be and that's where she believes the focus needs to be as well.

12673   We are very focused on our news, our news and current affairs and providing our peoples as well as all Canadians with relevant important information that affect their daily lives, and our programming is a reflection of peoples that are nowhere else reflected.

12674   So I think she said it best by saying that we need the resources to achieve that goal, and those resources are what we have asked the Commission to consider, which is the 15-cent increase.

12675   THE CHAIRPERSON: And if it's not 15 cents, you will just reduce each one proportionately to get that mix?

12676   MR. LaROSE: We will adjust accordingly because our goal will still be to meet those objectives. We just hope we can meet all of those objectives.

12677   THE CHAIRPERSON: Okay. Understood.

12678   Those are our questions, I believe.

12679   MR. LaROSE: Thank you.

12680   THE CHAIRPERSON: Sure.

12681   COMMISSIONER PENTEFOUNTAS: I know we've been down this road before, but you are asking for a 62.5-percent rate increase. Back to the Chair's sort of question --

12682   THE CHAIRPERSON: I think they've answered that on several occasions.

12683   COMMISSIONER PENTEFOUNTAS: You've answered. I guess so. Thank you.

12684   THE CHAIRPERSON: In fairness, I just want to get on with it. This is a reply phase. It's not --

12685   COMMISSIONER PENTEFOUNTAS: Let's get on with it. Thank you.

12686   THE CHAIRPERSON: Okay.

12687   MR. LaROSE: Thank you.

12688   THE CHAIRPERSON: So let's keep going.

12689   Madame la Secrétaire.

12690   THE SECRETARY: Thank you.

12691   I will invite On Purpose TV to take place.

12692   Thank you.

--- Pause

12693   THE CHAIRPERSON: Welcome back. I think you know the routine by now.

12694   Thank you. Please go ahead.

REPLY

12695   MR. THIESSEN: Thank you, Mr. Chairman, Mr. Vice-Chairman, Commissioners, Commission staff, it is a pleasure to return here today to respond to the interventions presented over the past few days and comment on how they may relate to our application for a new 9(1)(h) Video On Demand license called Maximum Television Canada. I have with me Mark Prasuhn, my name is Jeff Thiessen.

12696   As you have heard from many interveners, granting a new service the privilege of mandatory carriage is and should be a rare circumstance. The exceptionality criteria set out in 2010-629 are designed to ensure that in these rare cases there will be an extraordinary benefit to the health of the Canadian broadcasting system and to the fulfillment of the objectives of the Act.

12697   In addition, any new mandatory service must benefit the users of the system by offering a valuable service that does not currently exist and by doing so with minimal impact on the cost of basic service.

12698   We are convinced that the competitive VOD service we have placed before you not only meets your exceptionality criteria but will provide attractive Canadian programming that currently is not available in the system and will do so with no impact on the price of consumers' television subscriptions.

12699   We want to acknowledge and thank the interveners who took the time to comment over the past few days, as well as those who submitted written interventions previously. The public participation in this hearing was extensive. Much of it came from Canadians who strongly expressed their desire to pay only for services that they actually watch.

12700   Since OPTV is applying for a license for a transactional VOD service, we believe that, among all the applicants participating in this hearing, we are uniquely responsive to that consumer demand.

12701   Since our service has no wholesale rate and as we are willing to reimburse BDUs for their actual out-of-pocket costs in delivering our content to subscribers, our application stands apart from the others in having no detrimental impact on consumers. Since there is no cost to the consumer, the terms of our licence cannot be tied to a financial breakeven point, since subscribers are never charged for a service they are not watching.

12702   During the past week, we realized that there may still be some lingering confusion with respect to our proposed means of delivery to the consumer. When we initially applied last year, we presented three options for integration of our service into VI BDU locations. However, our clear and stated preference for integration was Option 3, where OPTV would be granted a VOD licence, be accountable for compliance with all COLs, and have the ability to brand its content offering and make it available to the consumer in a manner comparable to the VI BDU-owned services through co-location.

12703   We wish to make it crystal clear: OPTV requests that if its application is approved, that the COLs governing it focus specifically on the Option 3, deleting all reference to Options 1 and 2.

12704   What you have heard over the past week has, we believe, reaffirmed the central importance of VOD to the future of the Canadian broadcasting system. For example, Shaw executives said that they see VOD:

"... as a competitive weapon against over-the-top competition. So we do spend a lot of focus and resources on that"

12705   And indeed, even in the brief time this hearing has been underway, major developments have occurred in the on-demand space including the NFB's announcement this week of an international OTT VOD service.

12706   We welcome the announcement by Rogers that they are significantly increasing their VOD inventory of Canadian feature films. As our research demonstrated, all the major BDUs have a long way to go in order to offer VOD users a wide range of Canadian choices. In our view, Rogers announcement at the hearing this week simply demonstrates the benefits of competition -- even threatened future competition.

12707   However, our plans to offer an abundance of Canadian films, and a wide variety of other programs, both Canadian and non-Canadian, are not in any way impacted by large-scale acquisition of content by the VI-owned VOD services. We are mindful of what happened in the pay TV sector when an incumbent service bought up exclusive rights to content libraries and hobbled the new competitor. Fortunately, the VI Framework prohibits exclusive rights in VOD so we are already protected from this risk. As you will see, consumer demand for choice has no limit and, as we stated in our presentation, there are thousands of programs and films not currently available in transactional VOD for which there is an audience.

12708   We also note that during the hearing, in exchanges with both Starlight and Rogers, the Chair identified the lack of promotion of Canadian feature films as the main problem faced by this industry. Mr. Chair, we agree. That's why we believe a new VOD service that will prioritize and highlight its Canadian content is essential. In our case, promoting Canadian content will allow us to differentiate our offering from the competition, regulated or unregulated.

12709   The exceptional level of 40 percent Canadian content for our VOD service is not a minimal obligation for us. Rather, it's our competitive advantage. We therefore look forward to helping to realize the Chairman's publicly stated objectives regarding the promotion, rather than the protection, of Canadian content.

12710   MR. PRASUHN: We noted with interest the comments of Shaw Media and other interveners regarding the proposed feature film fund that's part of the Starlight application. Without in any way commenting on the merits of that debate, we would make the more general point that it is very common for CPE obligations to be expended either to support production of content that is specifically intended for the licensee's channel, and/or to support, at least partially, in-house broadcaster expenditures.

12711   By contrast, every penny of our contribution of 15 percent of total gross revenues will flow, without offset or deduction, to the CMF, thereby delivering a more broad-based benefit to the system. The funding will be directed to independent producers and will benefit a wide variety of Canadian broadcasters.

12712   BDU interveners claimed that virtually every application presented over the past couple of week here did not represent an exceptional contribution to the policy objectives of the Broadcasting Act that would justify granting mandatory carriage. For example, Mr. Stevens of Execulink earlier this week said:

"In my own opinion, none of them meet the established criteria."

12713   In our case, we respectfully disagree.

12714   With thousands of hours of Canadian programming, going above and beyond our 40 percent commitment, our service will have an abundance of content reflecting Canadian attitudes, ideas, values and artistic creativity. During our presentation last week, our colleague Daphne Vaz described how OPTV's service will strengthen Canada's cultural, economic and political fabric with varied and comprehensive programming, in both information and entertainment genres. Our programming will be drawn from local, regional, national and international sources; will include educational and community programs; will reflect and contribute to Canada's linguistic duality; and will reflect and contribute to diversity, including the special place of Aboriginal people in Canadian society.

12715   In short, every Canadian, men and women, young and old, newcomers to Canada and those whose roots in this country date back generations, will find content that reflect their choices and their needs, and they will find much more of it than has been provided by incumbent VOD services that are meeting minimal requirements.

12716   We will differentiate our service with our Canadian content and a broadly based "long tail" offering not currently available within the regulated system. As we see it, there are many thousands of programs and films not currently available in transactional VOD for which there will be an audience.

12717   MR. THIESSEN: We urge the Commission to seize the moment while there is still time for a new Canadian VOD service to compete effectively with both the incumbent BDU services and the rapidly growing OTT services. The time to act is now. As Mr. Purdy of Rogers aptly stated on Monday:

"The old-fashioned notion of linear cable television ... is both antiquated and at risk".

12718   We are ready to introduce badly-needed competition in this growing sector immediately and foster a dynamic that will keep the Canadian consumer engaged within the system. This, in our view, is the only way we can ensure that the Canadian broadcasting system built over decades is adjusting to the reality of today and tomorrow and will continue to thrive for years to come. So when you are considering our application, it truly will be a gateway, not a gatekeeper, a gateway for consumers, for broadcasters, for distributors, for producers.

12719   In Canada, the VOD platform is the only sector that does not have effective competition within the regulated system. Competition is no less necessary and desirable in VOD than in any other area subject to Commission jurisdiction. It is time for the Commission to bring the VOD component of the Canadian broadcasting system into the 21st century.

12720   In asking for 9(1)(h) we recognize and acknowledge that there are other tools the Commission might utilize to achieve the same outcome of enabling a service to launch. We respect this is the Commission's determination to make, and are willing to work with any framework which will give our service fair access to all VI BDU subscribers.

12721   You have nothing to lose; Canadian consumers have nothing to lose; it can only be a win for the system.

12722   Thank you and we look forward to your questions.

12723   THE CHAIRPERSON: Thank you very much.

12724   Mr. Simpson...?

12725   COMMISSIONER SIMPSON: Hello gentlemen. A couple of quick questions.

12726   Your Canadian content, your 40 percent, could you refresh my memory as to what percent of content of that 40 percent would be Canadian film versus Canadian episodic for example?

12727   MR THIESSEN: Did you want to address that?

12728   MR. PRASUHN: We would obviously respect the minimums in the framework of course and meet that. Whether we would go beyond that would be a function of what deals we could negotiate with suppliers. As the Starlight panellists talked about, that is a process, it's one the Daphne and I are both very familiar with so we will engage it, but it is hard to predict the exact outcome of that.

12729   The difference certainly between what was floated by the media or some of the other discussions focusing on film of course, if you look at the panoply -- it's self-evident, as you look at the panoply of Canadian content that is created in each year for television in terms of hours it's a massive magnitude of feature film alone.

12730   So we would certainly strive for that, we do see it as a valuable piece of the overall inventory in the mix that we would be promoting, but our offering and our plans go well beyond that.

12731   COMMISSIONER SIMPSON: I will ask you the --

12732   MR. THIESSEN: Sorry.

12733   COMMISSIONER SIMPSON: Sorry, go ahead. Please.

12734   MR. THIESSEN: Could I just add to that?

12735   One of the things that transaction VOD systems best serve is when you are actually running feature films, so it's an important tool for us to achieve our business plan as well. So we would be going forward with a lot of features.

12736   COMMISSIONER SIMPSON: Where I'm coming from with that question, it goes back to the question I asked Starlight, which is: If Starlight was to be granted its wishes and it was to become successful, would it put the thumb on the scale with respect to other services who were offering a high percentage of Canadian content, would it put them at a disadvantage because Starlight is getting must-carry and carriage fees and other services are not.

12737   So would it have a negative impact? Have you done a risk assessment on that?

12738   MR. PRASUHN: We don't think so. I mean, as someone who programmed a linear service in the past that had Canadian feature films as a component of its primetime schedule, I definitely see your point there vis-à-vis existing linear services. I think that's an issue that you have to weight vis-à-vis what Starlight has proposed.

12739   In our case, we are in a different sector with VOD, it's a different space. There are the 8 to 12 films that they propose to make and own exclusively and have exclusive rights over within this country, so that would be obviously a factor, but for the other 3,000 minus 12, or whatever it is, we expect those would be made available to us and that we would compete for those rights in the VOD space.

12740   As Jeff mentioned in the presentation, thankfully the framework that you establish for VI prohibits those players from having the rights exclusively, so our expectation certainly is yes, they would be available to us.

12741   COMMISSIONER SIMPSON: Okay.

12742   MR. THIESSEN: As I understood the presentation this afternoon they were saying there is not going to be an exclusive deal, it will be non-exclusive, so I think actually we are in good shape.

12743   COMMISSIONER SIMPSON: Okay. Thank you very much

12744   THE CHAIRPERSON: Thank you very much. Those were our questions.

12745   Last, but not least -- and I don't think we did this alphabetically, but it would appear that Mr. Znaimer and his team for ZoomerMedia will be our last applicant, so please come up to the table. I have the other joy of being first in the list, so I understand.

12746   Please get ready and make your presentation.

--- Pause

REPLY

12747   MS LAFONTAINE: Good afternoon, Mr. Chair, Members of the Commission and Commission staff. Thank you for the opportunity to appear before you today.

12748   My name is Monique Lafontaine. With me are Moses Znaimer, and to Moses' left is George Kempff, and to my right Mark Lewis.

12749   In responding to the undertakings you requested, we have prepared and are filing a detailed chart which shows the extraordinary contribution that VisionTV makes to support and exhibit unique Canadian programming.

12750   If granted a mandatory distribution order, we will recommit to annual CPE of 51 percent;

12751   We will also commit to exhibit approximately 2,000 hours per year of first-run original Canadian programs;

12752   We will aim to commission about 62 hours per year of original Canadian documentaries;

12753   We are also undertaking a Canadian PNI of 75 percent of CPE;

12754   And we will maintain our Canadian content exhibition requirements of 65 percent of the broadcast day and 50 percent of the evening broadcast period.

12755   After hearing from the BDUs this week our fears remain unabated and here are the reasons:

12756   We have been able to negotiate only one affiliation agreement with the vertically integrated BDUs since we submitted our request for 9(1)(h). Nearly all of our other affiliation agreements with VI and non-VI BDUs have expired.

12757   We have already experienced price reductions in our wholesale fee in the regulated distribution environment. Outside of this hearing, BDUs have indicated that they intend to drop our wholesale fee significantly in our next affiliation agreements. In this hearing, the oral evidence submitted by Rogers and TELUS also indicates that they plan to reduce our rates in the next round of negotiations.

12758   Next, MFN clauses. They still exist in BDU affiliation agreements, despite the Commission's vertical integration policy which states that they are commercially unreasonable.

12759   To our knowledge, a single faith Category B service has been able to access basic by paying millions of dollars per year to BDUs, even though your policy states that single faith programming services must not be distributed on basic.

12760   Salt & Light, another single faith Category B service, does not receive any subscriber revenue whatsoever from BDUs despite having 1.5 million subscribers.

12761   MR. ZNAIMER: Hello again.

12762   We began this hearing by pointing out how different we were from other applicants in that we were already on basic and are neither asking for more money, nor new money.

12763   Sadly, we must close the hearing by pointing out another way in which we are different.

12764   Those who already have 9(1)(h) but are looking for more money may be disappointed to have their expansion plans thwarted, but they will live to fight another day. Those who want to get into basic, while demanding new money, will have their dreams dashed; but all they will lose is their time and a little bit of development money.

12765   VisionTV alone stands to lose our point and our purpose. We aren't imagining things; we are not dramatizing. Rogers and the rest have admitted that they mean to whittle us down one way or another, and by reducing our revenue reduce our ability to compete and to contribute to the Broadcasting Act.

12766   We know you care about independent producers, including ethnic ones, and the documentary filmmakers who rely on us for their livelihoods. And we know you care about the Canadian public, so we think you should care about the huge numbers of them who will see their real choices actually narrowed as opposed to increased if Vision is removed from basic or diminished.

12767   In other words, if you refuse to regulate then the BDU decides and the Canadian Consumer gets less choice. The only way Canadians can have choice when it comes to propositions of high social value is if the Commission decides.

12768   Were the Commission to deny us 9(1)(h), who benefits and who gets hurt? Well, we know who the victims will be, but who will benefit? Only the BDUs, companies that already take in $14 billion a year and report $3 billion a year of profit will simply put more millions in their pocket. There is no Delta. Not a penny will be returned to the consumer.

12769   Please remember that every penny represents a million dollars and every dollar transferred from Vision to a BDU is $0.51 lost to Canadian programming in exchange for $0.05 paid into the CMF or a community channel.

12770   What harm is done if we are simply left alone? Absolutely none. Our $0.12, fixed and never to rise, represents one-quarter of 1 percent of a typical basic subscription and has long ago been drowned out by massive increases for BDU-owned sports properties, American imports and growth in the size of the basic package itself.

12771   The Canadian public does not begrudge us our $0.12. The Canadian public is used to us, likes us and cheers for us because we are alternative and different, because we offer programs and ideas no one else does, and because we spend every penny we take in from that sub-fee and more on Canadian Programming. They look to us, and only to us, for services and sermons, and spirituality, as well as a reliably safe family entertainment that always has a moral centre.

12772   Now some of our critics allege that you don't need basic to do this job. Be bold, be innovative they say, and cut yourself off from the most pervasive medium with the broadest reach and trust instead to new media, the Internet, closed circuit.

12773   Well, in reply we would like to remind everyone that other than Google, Facebook, possibly Twitter and of course the carriers who sell the connectivity, the Internet has been and continues to be a significant loser for everyone else. In any case, these highly specialized, highly expensive technologies are the opposite of what's called for at this time.

12774   The Internet is an atomizing and alienating medium. It is well known to harbour the worst excesses of extreme bigotry and exhortations to gruesome violence. The Internet is where the Boston bombers got their plans for their IEDs; whereas it is Television -- curated, filtered, balanced and regulated -- which is the medium that binds, that brings people together, and where you can actually be exposed to other cultures and other points of view.

12775   TV connects and combines; the Internet fragments and separates.

12776   In reply to Shaw, Rogers and all those who allege that Vision's content does not offer an exceptional contribution meeting an exceptional need, we say VisionTV is an Extraordinary Service that by its mission and format is literally unique.

12777   I don't know how anyone can confront the horrors of the last few weeks, not only in the USA but right here at home, without admitting that a channel that builds bridges between faiths and cultures is of exceptional value and should be out in the open, on basic, for everyone to see. That was the profound insight at the root of the CRTC's original decision to license us and that idea is more relevant than ever.

12778   We have heard from a number of Interveners that nothing has changed since 2007. Surely they are kidding. The world is an even more dangerous place then it was then, with much of the craziness rooted in sectarian violence, making a healing channel like Vision more important than ever.

12779   Canada is a different place, it's more multi-faith, more multi-cultural, more multi-racial and multi-lingual than ever, with immigrants no longer clustered in two or three big cities, but now spread far and wide in every nook and cranny of the country. The best way to get to them, perhaps the only way to give them a voice, affordably, is on basic.

12780   But the biggest change of all, the mother of all changes, is the consolidation and concentration that has left 90 percent of the Canadian public in the hands of a handful of companies, resulting in the opposite of a free market, the opposite of consumer choice.

12781   If the words in the Broadcasting Act, in your Religious Policy, and in other pronouncements the Commission has made regarding Diversity of Voices and Canadian Values are to have any meaning, then the Commission should not leave the right to choose and package, and thus to declare winners, to a handful of self-dealing companies who were once our partners, but are now our competitors and whose negative intentions towards us have been made known.

12782   With the consequences so stark, and after so many years of honourable service, so many license renewals and commendations, it just doesn't seem right that the Commission would just abandon us and our audience to the BDUs tender mercies.

12783   On the other hand, if you stick with us, we promise we will give Canadians a smart, original, made-in-Canada channel; a Channel with a unique calling that we embrace wholeheartedly, and with a format that is novel and increasingly competitive. We have terrific plans for the future and the TV smarts to become one of the world's most interesting and important channels, but we need your mandatory order to get on with it.

12784   THE CHAIRPERSON: Thank you very much. I'm glad you ended up on a more upbeat note there at the end --

12785   MR. ZNAIMER: Right.

12786   THE CHAIRPERSON: -- as the last presenter, but that's fine.

12787   Commissioner Molnar will have some questions for you.

12788   COMMISSIONER MOLNAR: Good afternoon.

12789   So last week you had an opportunity to tell us about your challenges with the BDU and I take it from this you sat through this week and you feel exactly the same. So I think we are quite comfortable in knowing your position as regards the challenges with distribution and negotiating, whether it be basic and whether it be the rate.

12790   Perhaps just tell me, what is your greatest fear after hearing this, is it that the rate will be diminished or is it that you actually will be removed? Because we heard a lot of these BDU's are really quite lethargic.

12791   MR. ZNAIMER: Yes. Yes, there are two ways in which we can be damaged.

12792   One is that our penetration is significantly reduced. That will not only reduce our sub-income, but will devastate our commercial spot revenues and our revenues from block time sales.

12793   The second way in which we can be damaged is we can be left on basic and of course the actual rate comes down.

12794   COMMISSIONER MOLNAR: Exactly. So which of those is it that what you are most concerned of --

12795   MS LAFONTAINE: I believe it's both.

12796   COMMISSIONER MOLNAR: -- that you anticipate could occur?

12797   THE CHAIRPERSON: Based on the evidence that you heard, the most imminent -- the most imminent concerns are bother, that they are going to grind down the price -- they have said that they are contemplating that -- or they will move us. So I would say that we have a concern of both.

12798   MR. ZNAIMER: Well, there are many operators, as you know, and I expect that some will choose one path and some with choose the other, but they seem to be uniform in their intention to give us a haircut.

12799   MS LAFONTAINE: Or a shearing.

12800   COMMISSIONER MOLNAR: Okay. Page 1 of your comments today you said you will recommit to annual CPE of 51 percent.

12801   MS LAFONTAINE: Yes

12802   COMMISSIONER MOLNAR: Have you changed your position?

12803   MS LAFONTAINE: Yes, that's correct. We are submitting that we will contribute 51 percent of our previous year revenues to Canadian programming if we are granted 9(1)(h).

12804   COMMISSIONER MOLNAR: So is that just in these comments today or did you put it in your undertaking or has this been put on the record anywhere besides right now in your comments?

12805   MS LAFONTAINE: It's in our written undertaking that we provided today.

12806   COMMISSIONER MOLNAR: Okay. So I can't actually remember all of the numbers that were in your first proposal. Are there others on here, your exhibition -- are any of these others changed from your initial position?

12807   MS LAFONTAINE: No, this is our initial position.

12808   COMMISSIONER MOLNAR: All except the 51 percent CPE?

12809   MS LAFONTAINE: Yes.

12810   COMMISSIONER MOLNAR: Okay, thank you.

12811   Those are my questions.

12812   MR. LEWIS: If I may add, in the undertakings that we had provided, you had asked us last week to provide a projection if we were to receive 9(1)(h) on basic carriage and the 51 percent is in that scenario that we filed today in response to the undertaking.

12813   THE CHAIRPERSON: Those are our questions. Thank you very much.

12814   Madam Secretary, I believe you have some final comments to make and then I will conclude.

12815   THE SECRETARY: The only thing I have to add for the record is that all interveners who did not appear and were listed on the agenda will remain on the public file.

12816   I would just like to remind the deadline for responses to undertakings was today, 2nd of May, and final written submissions the 9th of May.

12817   That is it for me. Thank you very much.

12818   LE PRÉSIDENT : D'accord.

12819   Donc, en conclusion, j'aimerais évidemment remercier bien des gens qui rendent ces audiences possibles, en particulier les interprètes qui nous permettent de bien nous comprendre.

12820   I also would like to salute the work, and there have been long hours, of the CPAC crew here in the hearing room. I know they are fuelled by doughnuts that I see coming into the room in the morning and that seems to keep them going.

12821   I would also like to thank Commission staff that are here, the staff that are in the public exam room at Headquarters, they are not always visible, and our regional offices as well that make participation of folks out there.

12822   J'aimerais aussi remercier les services de sténographie.

12823   As well, not everybody can attend our hearings here and participate in our hearings, so it is important and we are thankful to the variety of journalists, bloggers and people in the Twittersphere who bring our hearings to larger audiences.

12824   I would like to also thank my colleagues here at the front who spend a lot of hours preparing and sitting in these hearings.

12825   Mais surtout, j'aimerais remercier, d'une part, les parties demanderesses qui ont porté des demandes, qui ont également travaillé très fort pour monter leur dossier.

12826   As well as the interveners. As I mentioned in the opening remarks, we had over 135,000 interveners. This really tested the CRTC's capacity of the public hearing staff to receive and post all these online, but it is a testament to their quality and professional work that they managed to do that, and also the number of participants is a testament to how important this is to Canadians.

12827   So thank you all et merci beaucoup.

12828   Et nous sommes ajournés. Merci.

12829   MME LAFONTAINE : Merci.

--- Whereupon the hearing concluded at 1519

REPORTERS

Lynda Johansson

Monique Mahoney

Jean Desaulniers

Sue Villeneuve

Date modified:

2013-05-02