ARCHIVED - Transcript, Hearing 8 April 2014

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Volume 1, 8 April 2014



Applications for the renewal of the broadcasting licences for English-language conventional and multilingual ethnic television stations and for certain specialty television services listed in Broadcasting Notice of Consultation CRTC 2014-26


Outaouais Room
Conference Centre
140 Promenade du Portage
Gatineau, Quebec
8 April 2014


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


Applications for the renewal of the broadcasting licences for English-language conventional and multilingual ethnic television stations and for certain specialty television services listed in Broadcasting Notice of Consultation CRTC 2014-26


Tom PentefountasChairperson

Candice MolnarCommissioner

Raj ShoanCommissioner


Lynda RoySecretary

Jean-Sébastien GagnonLegal Counsel

Caroline PoirierHearing Manager and Senior Analyst


Outaouais Room
Conference Centre
140 Promenade du Portage
Gatineau, Quebec
8 April 2014

- iv -





1. Rogers Broadcasting Limited7 / 41



4. Muuqaalka Soomaalida (int. 460) 169 / 1150

1. Canadian Interuniversity Sport (int. 344) 177 / 1207

6. Brandy Y Productions (int. 202) 190 / 1287

3. Yee Hong Community Wellness Foundation (int. 331)198 / 1340

2. Aboriginal Peoples Television Network (int. 448)208 / 1395

11. Public Interest Advocacy Centre (PIAC), Council of Senior Citizens Organizations of British Columbia (COSCO) & National Pensioners Federation (NPF) ("PIAC/COSCO/NPF") (int. 495) 221 / 1452

5. Canada India Education Society (int. 311) 245 / 1557

10. Bell Media Inc. (int. 494) 253 / 1618

15. Unifor (int. 521) 305 / 1970

- v -



Undertaking45 / 264

Undertaking62 / 397

Undertaking83 / 533

Undertaking104 / 668

Undertaking158 / 1023

Undertaking159 / 1040

Undertaking165 / 1108

Gatineau, Quebec

--- Upon commencing on Tuesday, April 8, 2014 at 0904

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

2   THE CHAIRPERSON: Good morning.

3   Madame la Secrétaire, ça va?

4   LA SECRÉTAIRE : Très bien, merci.

5   LE PRÉSIDENT : On y va. Good.

6   Alors, bonjour, mesdames et messieurs, et bienvenue à cette audience publique.

7   At this hearing the Commission will consider applications by Rogers to renew licences of 17 television services. These include conventional English-language television services, City, and its multilingual ethnic services, OMNI, as well as its specialty services, The Biography Channel, G4tech TV, Outdoor Life Network, Sportsnet 360, Sportsnet World and Sportsnet.

8   The Commission will also consider Rogers' application to amend the conditions of licence for several of its services, including the OMNI television stations.

9   In particular, the Commission wants to discuss two issues with Rogers. It wants to review the possibility of considering its services as a group and discuss the role of the OMNI services conventional multilingual stations in the communities they serve, as well as the importance of their programming choices.

10   During its last licence renewal in 2011, the Commission decided that due to its structure Rogers would not be considered a group as defined in its Regulatory Policy on the Group-Based Approach. The Commission therefore granted a short-term renewal of three years in order to re-examine whether the group-based approach should be applied to Rogers services.

11   As such, we will examine Rogers' application to consider its City Television Services and its Category A Specialty Services, The Biography Channel, G4tech TV, Outdoor Life Network and Sportsnet 360 as a group.

12   Licensees whose services are considered as a group have specific conditions of licence with regard to Canadian programming and general interest programming expenditure requirements. These licensees also enjoy greater flexibility since Canadian programming expenditures can be transferred from one service to another.

13   Last year Rogers made changes to the programming of its OMNI Multilingual Ethnic Television Services. The Commission is concerned that these programming changes could affect the communities served by these stations. The Commission has decided to take the opportunity provided by this hearing to discuss with Rogers the changes already made and those proposed for the next licence term.

14   As with all public proceedings, the opinions of Canadians are very important in helping us fulfil our legislative responsibilities. We therefore wish to thank all who have agreed to participate in this hearing either by submitting comments or by appearing before us.

15   The panel for this hearing consists of:

16   - Candice Molnar, to my right, Regional Commissioner for Manitoba and Saskatchewan;

17   - Raj Shoan, to my left, Regional Commissioner for Ontario; and

18   - myself, Tom Pentefountas, Vice-Chairman of Broadcasting, and I will be presiding over this hearing.

19   The Commission team assisting us:

20   - Caroline Poirier, Hearing Manager and Senior Analyst, English and Third-Language Programming;

21   - Jean-Sébastien Gagnon, Legal Counsel; and

22   - Lynda Roy, Hearing Secretary and Supervisor of Public Hearings.

23   I would now invite the Hearing Secretary Madame Roy to explain the procedures we will be following.

24   Madame la Secrétaire.

25   THE SECRETARY: Thank you, Monsieur le Président.

26   I would like to go over a few housekeeping matters to ensure the proper conduct of the hearing.

27   When you are in the hearing room we would ask that you please turn off your smartphones as they are unwelcome distractions and they cause interference on the internal communication system used by our translators. We would appreciate your cooperation in this regard throughout the hearing.

28   Participants are reminded that they must be ready to present on the day scheduled or, if necessary, the day before or after depending on the progress of the hearing.

29   You can examine all documents on the public record of this proceeding in the examination room, which is located in the Outaouais Room.

30   Interpretation services will be available throughout the duration of the hearing. English interpretation is available on Channel 1 and French on Channel 2. You can obtain an interpretation receiver from the commissionaire at the front desk of the Conference Centre.

31   We would like to remind participants that during their oral presentation they should provide for a reasonable delay for the interpretation, while respecting their allocated presentation time.

32   Un service d'interprétation simultanée est disponible durant cette audience. Vous pouvez vous procurer un récepteur auprès du commissionnaire à l'entrée du Centre des Conférences. L'interprétation en anglais se trouve au canal 1 et en français au canal 2.

33   There is a verbatim transcript of this hearing being taken by the court reporter sitting at the table to my right. If you have any questions on how to obtain all or part of this transcript, please approach the court reporter during a break. Please note that the full transcript will be made available on the Commission's Website daily.

34   We would like to remind all participants that pursuant to section 41 of the Rules of Practice and Procedures you must not submit evidence at the hearing unless it supports statements already on the public record. If you wish to introduce new evidence as an exception to this rule, you must ask permission of the panel of the hearing before you do so.

35   Please note that the Commission will also be tweeting the documents during the hearing at @CRTCHEARINGS using the hashtag #CRTC.

36   Veuillez noter que les documents seront disponibles sur Tweeter sur le compte du Conseil @CRTCAUDIENCES en utilisant le mot-clic #CRTC.

37   Finally, please note that the parties that undertake to file additional information with the Commission in response to questioning by the panel may speak with the Commission Legal Counsel at the break following their presentation to confirm the undertakings.

38   Now, Mr. Chairman, we will proceed with item 1 on the Agenda, which is a presentation by Rogers Broadcasting Limited on issues related to the proposed group-based approach, concerns regarding the impact of sports programming on Rogers' proposed Canadian programming expenditures (CPE) for the group, the imposition of the Vertical Integration Code of Conduct as a condition of licence, the evaluation of Rogers' compliance with the nature of service definitions for the specialty Category A services G4techTV and Outdoor Life Network, as well as the licence terms for the various services.

39   In addition, the presentation will include matters with respect to programming changes relating to the OMNI multilingual ethnic television stations and requests for licence amendments.

40   Please introduce yourselves for the record and you will then have 30 minutes for your presentation.


41   MR. PELLEY: Thank you.

42   Good morning, Mr. Vice-Chair, Commissioners and Commission staff. My name is Keith Pelley and I am the President of Rogers Media.

43   With me today, starting from my far left, your right:

44   - Madeline Ziniak, National Vice-President of OMNI Television;

45   - Hayden Mindell, Vice-President, TV Programming and Content Media;

46   - Susan Wheeler, our Vice-President of Regulatory Media.

47   From my far right:

48   - Renato Zane, Senior Director of News and Current Affairs, OMNI; and

49   - Navaid Mansuri, our Vice-President of Sports Programming and Operations.

50   In the back row, to my left:

51   - Paritosh Mehta, Director, Independent Production at OMNI;

52   - Joseph Zahn, Business Manager of TV Programming; and

53   - Mona Minhas, our Vice-President of Finance for Broadcasting.

54   Thank you for the opportunity to appear before you to talk about the City and OMNI licences and our commitment to the group-based policy.

55   It is shocking how dramatic the industry has changed since our last renewal and it has happened so, so fast. It's not changing yearly, it's not changing monthly, weekly. It almost seems like it's changing daily.

56   For example, the financial projections we filed in December no longer reflect the current reality. We would be happy to walk you through the changes later on today but we put together a couple of notes and it's mind-boggling. You even just mentioned the reference to Twitter but much has changed since May 2011.

57   In 2011, only 5 percent of Canadians had tablets. Now, one in four has one.

58   There are over 20 million smartphone customers in Canada compared to 9.l million in 2011.

59   In 2011, Netflix had 1 million subscribers. That has grown to an estimated 4.5 million today.

60   Pinterest had 10,000 users. They now have over 70 million.

61   Facebook has over 19 million friends, over half of Canada's population, 9 million of whom log on daily using their mobile device.

62   In 2011, 10 percent of social media users said they use Twitter on a daily basis. That number has now doubled, including use by the CRTC.

63   There have been a plethora of large-scale acquisitions. Bell bought Astral for $3.4 billion. Yahoo bought Tumblr for $1.1 billion. Facebook bought Instagram for $1 billion and recently purchased WhatsApp for an astounding $19 billion. And is seems like everybody is selling advertising on every platform.

64   As I said, the market is changing and it is challenging. Nothing is more challenged than the Canadian conventional television landscape. City and OMNI face very serious financial challenges.

65   Advertising on conventional is declining rapidly. Last year it declined 6 percent. This year has a similar trend and it is not cyclical. This is a structural change as advertising dollars migrate to digital opportunities.

66   City has been in constant struggle financially since we acquired it in 2007. Since buying these stations for $450 million, we have accumulated cash losses of $238 million, losing $42 million last year and $38 million in 2012.

67   Unlike U.S. broadcasters, we do not have access to retransmission fees and must rely exclusively on advertising revenue. It is very tough to compete in the video content space with one source of revenue.

68   There are so many differences that we have with our counterparts south of the border. Canadian broadcasters don't have the same access as U.S. broadcasters to lucrative revenue opportunities like pharmaceutical advertising, estimated to be worth approximately $100 million in Canada, or election campaign spending, which is subject to spending caps. This year's Congressional Election -- and I say the Congressional Election -- in the U.S. is estimated to be $2.4 billion on television advertising.

69   Canadian broadcasters must also compete with a multitude of border stations and distant signals, all offering time-shifted opportunities to watch the same programming. This fragments audiences and dilutes advertising revenue. This doesn't happen in the U.S. because they black out the signals to protect local broadcasters' programming rights.

70   On top of all these challenges, City faces even greater competition as the third- and even fourth-ranked station in some markets. Our limited reach compared to that of CTV and Global usually means our ratings and advertising revenue per show are 70 percent of our competition.

71   A perfect example of this is a show like CBS' "Person of Interest." We aired the first season on City. It performed well but not enough to justify the cost. So we sold it to CTV and ratings shot up 30 percent just because of CTV's reach.

72   Another example is our recent purchase of "Glee," a proven hit on Global, but once it moved to City the ratings dropped by 30 percent.

73   Last year it became pretty clear that we needed to do things differently or we would continue to see a steady decline in City's profitability. Our purchase of the NHL rights provides a plethora of benefits for City, including promotion, revenue and, perhaps most importantly, a chance to reduce our reliance on U.S. programming, because I believe we can no longer compete with CTV and Global for the high-priced U.S. programming.

74   We believe our acquisition of the NHL rights in Canada will have a positive impact on the system and further the public interest by giving Canadians significantly more hockey on conventional television. Twice as much this next season will be on conventional television than currently is on the CBC right now.

75   At our last licence renewal we outlined our plans to expand City, grow our specialty portfolio and build our local markets outside of Toronto. We can report modest success.

76   And with some of these initiatives such as expanding City's footprint into Interior B.C., Saskatchewan and Montreal, launching FX and acquiring The Score, now known as Sportsnet 360, we did make some improvements. Unfortunately, they have not translated into profitability.

77   I'm going to ask Navaid, Hayden and Susan to address the areas outlined in the Commission's Agenda for this hearing, but before I do that, I want to say that we heard you the last time and we have come here today proposing full compliance with the group policy, which requires a minimum commitment to 30 percent in Canadian program expenditures and a 5 percent commitment to programs of national interest.

78   MR. MANSURI: Thank you, Keith.

79   We are pleased that the majority of interveners, particularly those representing Canada's cultural community, have acknowledged our compliance with the group policy and support the inclusion of Sportsnet 360 in the Rogers Group. They clearly recognized that its inclusion will increase Rogers' investments in PNI programming and independent production.

80   We have asked for a two-year licence term expiring August 31st, 2016. This proposed licence term will allow all large broadcast groups and interested stakeholders to participate in a full review of the effectiveness of the group policy and consider any changes that might be required as a result of the performance of all groups over the same five-year period. It will also allow us to make commitments to the new licence term with a full understanding of the regulatory framework that will be established as a result of the Let's Talk TV proceeding.

81   We have heard concerns expressed by interveners regarding the use of our sports programming costs to meet our group CPE. We do not deny that we intend to use the sports programming aired on City and Sportsnet 360 to meet a portion of our 30 percent group CPE. It would be illogical and completely unfair to include Sportsnet 360's revenues in the group and not count expenditures on sports programming towards CPE.

82   The group policy does not limit the type of programming that can be used to meet CPE. If the Commission believes it is necessary to impose such restrictions, which we do not recommend, it should only consider doing so during a review of the policy when it has the opportunity to assess how all groups allocate their CPE. This would include a review of the Bell Media Group, which currently includes sports and news services such as RDS Info, CP24 and BNN.

83   We believe there is very limited opportunity to allocate a disproportionate amount of our CPE on sports programming given we have only asked for a two-year licence term. Most of our programming for the next broadcast year has already been commissioned, including the renewal of our Canadian comedies "Seed" and "Package Deal," and a large portion of our CPE budget is used to meet our local exhibition requirements.

84   MR. MINDELL: Thanks, Navaid.

85   Since our last licence renewal, we have removed all the programming on G4 that the CRTC identified as being non-compliant with its nature of service definition. We have also filed monthly reports to demonstrate our ongoing compliance. Based on this reporting, we believe we had addressed the concerns raised at the last renewal.

86   In a constantly changing TV market, we think it is simply unrealistic to expect a service to take a static approach to its programming. Audience tastes and production cycles vary from year to year, and services must be given the ability to respond to viewers' demands.

87   We've always programmed OLN to comply with its nature of service definition and believe it is in compliance for all the reasons outlined in our application and our response to interveners.

88   If Canadian services are going to thrive in the current environment, we must put consumers' interests at the centre of any interpretation of a channel's nature of service definition. We have not received any complaints from viewers that OLN's programming is not meeting their expectations or interests.

89   Susan.

90   MS WHEELER: In the two instances where the Commission has imposed the VI Code as a COL, it was because the groups involved, Bell and Corus-Shaw, each controlled over 35 percent of the viewing share in the English-language market. This safeguard was deemed necessary due to the fact that both groups exceeded the 35 percent threshold that the Commission identified in its Diversity of Voices Policy as being a concerning level of concentration worthy of careful examination.

91   Rogers Media's viewing share is 9 percent, a quarter of that of Bell or Corus-Shaw. There is no policy or practical reason to impose special rules on a company with only 9 percent viewing share.

92   Some of the independent distributors such as TELUS and CCSA have argued that this measure is necessary in light of our acquisition of the NHL rights in Canada and the potential we have to use these rights in an anticompetitive manner.

93   Imposing the VI Code as a COL on the basis that a licensee controls rights to popular programming would be new policy. Such a significant change in policy should only be considered after a full review of all the popular programming that is controlled by the various broadcast groups and the impact this has had on the system. That would include an examination of Bell's agreements with HBO, Showtime and Discovery; Shaw's agreements with Scripps and A&E for lifestyle programming and Corus' agreements with Nickelodeon and Disney for children's programming, to name a few.

94   We do not deny that our acquisition of the NHL rights for Canada has considerable value and will enhance the value and attractiveness of our Sportsnet properties to Canadian viewers. However, as the smallest media group of all the VI companies, it is simply not realistic to believe that with the only nine percent viewing share in the market that our control of these rights will give us the same leverage as Bell or Shaw.

95   There is simply no evidence on the record of this proceeding that we have acted or intend to act in a manner that violates the VI Code or that our past behaviour merits this level of safeguard.

96   MR. PELLEY: Thanks, Susan. Turning to OMNI, and thank you for expediting our licence discussion a year and a half before it expires. We welcome the discussion regarding OMNI.

97   I have read the record of this proceeding and many of the interventions we have received, both in support and opposition to our licence amendments request. What struck me is that many of the parties objecting to our licence amendments either failed to recognize or are choosing to ignore that OMNI is in a financial crisis and that it really is a changing environment for OMNI.

98   Let me be totally clear, OMNI is not a viable business unless we can do something together to reverse its financial situation. I'm not trying to be dramatic in any which way, this is not the case of us having a bad year or trying to score a competitive advantage, advertising revenue on OMNI dropped from 2011, this year it will be under $35 million. That's 45 million plus in just a couple of years.

99   So how did it happen? Well, the number one reason is OMNI's business model has always depended on reruns of U.S. programming like "Two and A Half Men" and "The Simpsons". So these U.S. programming has subsidized the cost of ethnic and third language programming.

100   However, this programming is now widely available on a multitude of specialty services and over-the-top services like Netflix, border stations, like in Calgary for example "Two and A Half Men" air on six different U.S. border stations. So approximately 70 percent of OMNI's revenue is derived from the sale of U.S. programming. This revenue has declined 40 million or 62 percent since 2011.

101   OMNI was also hit hard by the extension of CTV Two in the Toronto market. This moved OMNI well down advertisers' buying list and, as a result, revenues are over 50 percent less than before the CRTC decision.

102   OMNI is also facing intense competition from multiple sources of ethnic media. Canadian distributors, including Rogers, carry over 130 Canadian and foreign specialty services which, combined with a high level of online consumption, creates significant challenge for OMNI in attracting and maintaining viewers. I know the CRTC licensed two new ethnic services yesterday. This isn't a bad thing for consumers, it just makes it really that much tougher on OMNI. Canadian ethnic specialties like Fairchild and ATN have even a greater impact on OMNI because, in addition to this subscription revenue, they have access to local and national advertising. So with multiple revenue streams, they often discount their local ad rates, which further erodes OMNI's revenue base.

103   And BBM's measurement system does not capture a representative sample of audiences to ethnic programming, making ratings lower than actual tuning. BBM is the only currency -- and that's important to know -- is the only currency used by advertisers and it is based on audience size and reach.

104   And lastly -- and it just seems like keep going on -- lastly, unlike other genres of expensive and underrepresented programming, the CMF only provides $1 million in funding support for Canadian ethnic and third language programming. There is no support for news and information programming and I believe this is something that needs to be addressed.

105   OMNI is part of us, it's part of our culture, it has been part of the Rogers broadcast family for over 30 years. Despite these challenges, we are constantly working on solutions to stabilize these stations. We continue to explore all possible opportunities to make OMNI financially sustainable, but we cannot do so at any cost. Susan...?

106   MS WHEELER: We have made solid commitments to all of the fundamental requirements of the Ethnic Broadcasting Policy, including the provision of ethnic programming, third language programming, Canadian content, both at a local and national level, and a broad service mandate.

107   These commitments either maintain our existing obligations or are consistent with those of Canadian ethnic specialty services. We are simply asking to remove all of the restrictions that are built into these licences to prevent them from being competitive. These include removal of the caps on the amount of programming OMNI can offer in one language, removal of the scheduling restrictions between 8:00 and 10:00 p.m., removal of the requirement that no ethnic and third language programming can be shared between City and OMNI and a reduction in Canadian content levels to those comparable with Canadian ethnic specialty services.

108   While we can't give you evidence that proves beyond a doubt that the COL changes we are asking for will increase revenues and succeed in stabilizing OMNI's financial situation, we know for a fact that OMNI's current licence conditions make it very difficult to experiment with alternate models.

109   For this reason we are prepared to accept a two-year licence term so the Commission has an early opportunity to review OMNI's performance under the new COLs. This will also give the Commission an opportunity to review the Ethnic Broadcasting Policy before considering a longer licence term.

110   We believe this is a reasonable and fair proposal in light of OMNI's very serious financial situation.

111   I would like to ask Madeline Ziniak to outline some of the accomplishments at OMNI that we are the most proud of, and there are many to choose from. Madeline...?

112   MS ZINIAK: Thank you, Susan. OMNI plays a vital and essential role in reflecting and connecting Canada's multicultural and multilingual communities. We have had the privilege of working alongside ethnocultural communities and organizations for over 30 years and strongly believe we have made a meaningful contribution to the engagement and integration of these communities in Canadian society.

113   During its proud history of broadcasting, OMNI has played a critical role in developing ethnic programming in Canada and serving ethnocultural audiences. OMNI has established new standards in journalistic integrity and excellence for Canadian ethnic media. We are an important partner to many different ethnocultural communities through the provision of local news programming and participation in events, festivals and also participating on diverse boards and committees across this country.

114   We believe our record of performance has exceeded Canadian ethnic service standards in terms of the quantity, quality and distribution of Canadian ethnic programming available to consumers. To give you a sense of our investment in OMNI over the last licence term, we have prepared a short video. While it is difficult to capture our personal passion and commitment to the various local communities we serve, this video clearly demonstrates our significant investment in high-quality ethnocultural programming and its wide distribution.

--- Video presentation

115   MS ZINIAK: OMNI connects communities and contextualizes Canada in the language of comfort which we believe makes a positive contribution to developing a healthy Canadian citizenry and serving the public interest. Paritosh...?

116   MR. MEHTA: Thank you, Madeline. OMNI supports three types of Canadian programming, in-house local production such as language newscast and information programs, local independent productions and, third, national independent productions.

117   Since 2002 OMNI has committed and spent almost 65 million in the licensing and development of Canadian ethnic and third language independent drama and documentary productions using OMNI's Tangible Benefit Contributions. With this investment, which is unmatched by any other Canadian ethnic broadcaster, OMNI has played a foundational role in the creation of this type of content in the Canadian ethnic independent production sector. This investment has produced over 600 hours of ethnic and third language dramas and documentaries such as "Canadian Soldier Sikhs", "The Mushuau Innu: Surviving Canada" and "Guilty Until Proven Innocent".

118   Many of the producers I work with are new Canadians and new producers, they have a story to tell and need tools and skills to share with others. This is where OMNI comes in. We work directly with these producers to help them understand complex financing arrangements, script development and budget discipline.

119   Ethnic and third language producers do not work in the same way as English language producers. Ethnic production is usually less structured and would be very difficult to codify. We have a strong and supportive history of working with ethnic independent producers and we see no benefit to having a Terms of Trade Agreement with either a broadcaster or a producer perspective.

120   For these reasons we do not believe that Terms of Trade Agreement is needed to ensure the continued growth and development of Canadian ethnic independent production sectors. Renato...?

121   MR. ZANE: Thanks, Paritosh. OMNI's in-house production has focused primarily on news and information programming. We produce four different daily newscasts, Monday to Friday, in Punjabi, Cantonese, Italian and Mandarin and produce weekly magazine-style information programs for Portuguese and south Asian viewers.

122   We know these programs play an important part in many of the communities we serve by informing viewers of important news and information about their local community and country. For some, OMNI is the vehicle through which new Canadians come to understand Canada's economic, social and cultural policies and practices.

123   The rest of our Canadian ethnic programming is comprised of local, independent production. We use a model where we provide local ethnic producers with airtime and, in return, we share the revenues generated from advertising in the program. This model has worked well, but unfortunately revenues from this type of programming will never be able to sustain our in-house production investments. The success of this model is due in large part to the role of our community liaison officers, independent production co-ordinators. They are full time, local specialists in each of our markets, Vancouver, Calgary, Edmonton and Toronto.

124   The CLOs work directly with local producers and ethnocultural communities from the early proposal phase to help them successfully access OMNI. To give you a better sense of the value of these roles, we have invited our CLOs to prepare a short video that describes what they do for the communities they serve.

--- Video presentation

125   MR. ZANE: As you can see from those clips, OMNI regularly seeks input from local community organizations or representatives, including former members of OMNI's Advisory Council. Their input is invaluable to ensuring OMNI's programming is accurate, relevant and respectful of all ethnic and cultural groups. Keith...?

126   MR. PELLEY: Thanks, Renato. Our staff at OMNI are simply amazing. We are fortunate to have such a committed and passionate management team and staff, true champions of ethnic media now looking for the flexibility to create a roadmap for success, and you can imagine how painful it has been to make some of the cuts that we made last year at OMNI.

127   With respect to our group application, we believe, despite the significant financial pressures facing City, and the relatively small size of our specialty portfolio, that we have made strong commitments to CPE, PNI and independent production that fully comply with the group policy.

128   Contrary to the comments made by some interveners, we are not asking for anything more than what has already been granted to other large broadcast groups. We are happy to discuss changes to the group policy, but think it's only fair that those discussions happen when all the groups are part of the proceeding.

129   I am very worried about the long-term health of the conventional television sector. Some of the trends and shifts I have witnessed over the last couple of years would never have imagined and, just like Blockbuster was wiped out by online VOD, I do worry about conventional television becoming obsolete.

130   In order to navigate these rough waters we need to be nimble and we need to respond quickly to changes in the way that consumers are consuming their media. This requires licence conditions that uphold the objectives of the Broadcasting Act, but at the same time allow for us to respond to competitive changes in the media landscape. That's why buzzing with anticipation is probably the phrase that we are looking forward to participating in the Commission's upcoming "Let's Talk TV" proceeding and will, among other things, urge the Commission to revisit the regulatory framework for television. It will be a much-needed discussion.

131   So we thank you for the opportunity to outline our commitments to both Group and OMNI over the next two years. We believe we have made fair and reasonable commitments that further the public interest despite serious financial issues facing both networks.

132   This concludes our opening remarks and we look forward to answering your questions.

133   THE CHAIRPERSON: We thank you very much. We thank you for your presentation, thoughtful, and we appreciate the work that has gone into it.

134   Mr. Pelley, Ms Wheeler, would you agree with me that hockey programming generally does not need any help getting made?

135   MR. PELLEY: In terms of getting made as far as profitability I would assume that you are talking about?

136   THE CHAIRPERSON: Yes. Thank you for helping me out there.

137   MR. PELLEY: Well, no, I would say the reason that -- what has happened in sports, and you can't just look at hockey, you have to look at sports rights both here and south of the border and sports rights have escalated at a gargantuan rate. When you look at what has happened with the National Football League, MLB, the NBA, NASCAR, all rights have doubled over the last 10 years. That has also happened in Canada.

138   There is now I think in the U.S. 25 national sports networks from the Golf Channel to Tennis Channel to Speed Channel and such.

139   If in fact that was the case, then conventional broadcasting in Canada would carry more sports. They do south of the border because of retransmission fees and other methods of revenue, but they don't here because purely cash in advertising versus rights, they don't necessarily make money and, hence, the reason why CBC was not able to step up to the plate for the National Hockey League deal. This deal was either going to go to Rogers or go to Bell and we thought, well, we just can imagine if it had gone to Bell with already their powerful media portfolio and then having the most coveted content in hockey, we felt that it was something that we needed to be aggressive and fortunately we were successful and, as a result, will change our, I guess, position in the marketplace.

140   But the simple answer to your question is "no". It depends on if in fact you're putting your sports on conventional or you're putting it on speciality and specialty has two sources of revenue.

141   And then you also have to look at this as multiplatform, multiplatform rights.

142   But simply putting -- if you look at CBC over the past number of years they have lost the Grey Cup, they've lost the Brier. They've lost now the National Hockey League, and all based on the fact they've all gone to conventional where there is a second source of revenue -- of speciality, yeah.

143   Does that make sense to you?

144   THE CHAIRPERSON: Back to my question.

145   MR. PELLEY: I didn't answer the question?

146   THE CHAIRPERSON: Does hockey need regulatory encouragement to be produced and broadcast?

147   And I'm including the actual game, the pre-game, the after game and all the other talk and all the other hockey productions that go into the overall sort of hockey environment in Canada.

148   MR. PELLEY: For conventional television, yes.

149   THE CHAIRPERSON: So if there wasn't a requirement to produce and broadcast hockey, it wouldn't be made?

150   MR. PELLEY: No, I didn't say that.

151   I said that hockey could be made. But it could very well, down the road, result in it being available only on specialty television.

152   THE CHAIRPERSON: Ms Wheeler?

153   MS WHEELER: Yeah.

154   In terms of your question about regulatory support, I guess that I'm a bit puzzled as to what you mean by support in terms of it counting towards Canadian program expenditures or any other type of support.

155   THE CHAIRPERSON: Yeah, CPE and PI --

156   MS WHEELER: Right.

157   THE CHAIRPERSON: PNI, sorry.

158   MS WHEELER: So in our view, CPE isn't really a regulatory support. It's just -- it's an obligation that we have as our licence.

159   We would look at Programs of National Interest as being something that is special and targeted for programs that do require special attention and support or that would otherwise not be marked as sustainable.

160   So hockey certainly doesn't fall into that category but we would think that it's a legitimate expenditure on Canadian programming because it is Canadian and it is targeted towards Canadian viewers for their enjoyment.

161   THE CHAIRPERSON: And you don't think the intent and the spirit of the CPE policy is to encourage the production of programming that wouldn't otherwise be made?

162   MS WHEELER: Well, a number of sports services have CPE requirements and those are certainly designed to ensure that there is a requisite amount of Canadian content that is funded on the licence.

163   MR. PELLEY: Well, I take a little bit of exception to that, to be honest with you.

164   Because what we are doing is, and the spirit of the CPE is, in fact, to produce Canadian content that would not be available. And the content that we're providing for the NHL is not available. We are doubling the amount of hockey that is on conventional television.

165   So if you look at what has happened this year, CBC carries a game and they carried the Leaf game and they carry it to 70 percent of the country. And then they carry the Montreal Canadians game to another 15 percent. Then they carry the Ottawa Senators to another 15 percent.

166   Next year there will be 13 networks that carry Hockey Night in Canada. Three of them are conventional networks with TVA, ourselves, City and CBC.

167   So, for example, the Toronto Maple Leaf game that is only to 75 percent of the market this year, will go to 100 percent of the market next year on CBC. And that Montreal Canadians game that is only available now in 15 percent of the market, will go to 100 percent of the market next year.

168   So I don't think there is anything more Canadian than NHL hockey and I think giving Canadians more choice, more flexibility and more coverage on conventional broadcasting is more than in spirit of what the CPE is all about.

169   So I think that our plan is really and strongly favourable to consumers.

170   THE CHAIRPERSON: Ms Wheeler, you mentioned the difference that you saw between CPE and PNI. Would you exclude any hockey-related programming under a PNI regime?

171   MS WHEELER: Yeah, under the Commission's policy, my understanding of why the Commission developed a Programs of National Interest category is that it's for non-market sustainable programming.

172   And certainly hockey is market sustainable when it's on specialty and has two revenue streams.

173   It's probably breakeven on conventional but, certainly, it wouldn't necessarily qualify for a PNI category like dramas or documentaries that are certainly not market sustainable even on a conventional platform.

174   MR. PELLEY: I would say two things.

175   One is PNI stands for Programs of National Interest. I don't think there is anything more of national interest than the National Hockey League and the Stanley Cup Playoffs, but we don't assume that the Commission is going to allow NHL to be considered as PNI.

176   But we would ask that hockey documentaries that we produce on Canadian athletes and heroes be considered as part of PNI.

177   THE CHAIRPERSON: I'm not surprised.

178   So would you consider that documentaries on Canadian athletes, Canadian hockey players should fall under the PNI regime, Madam Wheeler?

179   MS WHEELER: Absolutely. They employ the same type of resources and artistic effort that any documentary would require.

180   THE CHAIRPERSON: And we can see the entirety of the 5 percent PNI spent devoted towards hockey documentaries.

181   MS WHEELER: That's unlikely because the only sports service that we have in our group is Sportsnet 360 and that's a headline sports service. So it's unlikely to air documentaries.

182   But we do have services like OLN and BIO and G4. A hockey documentary probably wouldn't work very well on those services, so it's unlikely.

183   But, certainly, we do intend to make a number of sports documentaries using our benefits funding that was used that was for The Score and for our other -- and for our MLSE acquisition and that was approved by the Commission. It was very clear in our application that we intended to commission sports-related programming.

184   MR. PELLEY: I'm going to --

185   THE CHAIRPERSON: That includes City. Would you agree with me on that?

186   MS WHEELER: Pardon me?

187   THE CHAIRPERSON: That includes City? We could see 5 percent of City's -- the PNI spend on City devoted to hockey documentaries?

188   MR. PELLEY: Okay. So I'm going to say emphatically that can't happen next year. And the reason --

189   THE CHAIRPERSON: I understand you've already commissioned some --

190   MR. PELLEY: And the reason being we've already commissioned "Seed" and "Package Deal".

191   So that wouldn't be -- it wouldn't be feasible. Remember, we're only here looking for a two-year licence.


193   MR. PELLEY: However, having said that, the answer to your question in Year 2 is emphatically "yes", absolutely. If in fact that we decided that that was the best use of PNI, Programs of National Interest, documentaries on Canadian athletes from their hometown, then the answer is yes.


195   MR. PELLEY: Practically it's not feasible. But I mean, practically it's something we wouldn't do.

196   But the answer to your question is, yes, it could happen.

197   THE CHAIRPERSON: And you think that meets the intent and the spirit of PNI and CPE; hockey docs?

198   MR. PELLEY: I do.


200   Maybe, move on to -- you know, you talked about a revenue drop with City. And the Commission's understanding may have been up until recently that the idea of gaining a national footprint for City would help City become more competitive --

201   MR. PELLEY: Right.

202   THE CHAIRPERSON: -- with the CTVs and Globals of this world.

203   MR. PELLEY: Yeah.

204   THE CHAIRPERSON: How is that working out for you?

205   MR. PELLEY: Well, you know, I would say, Mr. Vice-Chair, I think the decision for us to expand was probably five to seven years too late.

206   We expanded into Saskatchewan into the interior of B.C., into Montreal and we haven't reaped the benefits in terms of stealing the advertising share as we did that. Hence, the reason that we stopped the decision to actually come to the Commission to apply for a Maritime licence to further expand.

207   And I think it happened just in, as I call the -- I think it was March 2012 when the advertising market from a conventional perspective started to slide. In previous years in 2009 it was cyclical all through the different years. This, I believed, was a structural change.

208   So when you looked at the actual programming that we were able to compete on -- so now we are competing in Hollywood. We went down and bought high-priced U.S. programming, competed against the likes of CTV and Canwest and 70 percent of the ratings, 70 percent of the revenue.

209   And we have now looked at City over the last couple of years and had to evaluate what we were going to actually do with the network. So we've changed -- we've changed our philosophy.

210   The NHL was a catalyst to do that. It would allow us to significantly reduce our U.S. programming, i.e. the creation of Hometown Hockey on Sunday night will alleviate the need for us in U.S. programming.

211   We do have some other plans which we will not -- we would be happy to discuss with you in camera but won't here, based on the competition.

212   But the reduction in U.S. programming and Hollywood programming is a result of our NHL and it's a change in strategy for us.

213   THE CHAIRPERSON: We can discuss the in-camera session at any point in time. But I just want to move on in terms of City and briefly touch upon OMNI and also hand it over to my colleagues on the OMNI front.

214   And the spend in L.A., would you foresee using OMNI as a secondary vehicle --

215   MR. PELLEY: No.

216   THE CHAIRPERSON: -- for broadcasting your U.S. spend?

217   MR. PELLEY: No. The interesting thing where I see OMNI, I can see OMNI where it's 100 percent ethnic.

218    see it -- again, we've now removed U.S. programming a lot from our schedule at OMNI. We recently cancelled -- was it Judge Judy?

219   What were the three that we just recently cancelled?

220   MR. MINDELL: We cancelled More, Access Hollywood and one other daytime --

221   MR. PELLEY: Yeah. So here is the challenge. Here's the --

222   THE CHAIRPERSON: Quality programming, all.

223   MR. PELLEY: Yeah. So here's the challenge.

--- Laughter

224   MR. PELLEY: Yeah. But here's the challenge. The challenge is with OMNI and one of the reasons that we've asked for the eight to ten time slot and, again, only looking for a two-year licence term.

225   And this is -- a critical point is we have U.S. strip programming that we are contractually obligated to do for the next two years.


227   MR. PELLEY: And a tune of $30 million.


229   MR. PELLEY: So what we're trying to do is take that U.S. programming, generate as many viewers as we possibly can.

230   But I do see a day where we become even more -- less reliant on U.S. programming on OMNI and it even is possible where it doesn't exist.

231   THE CHAIRPERSON: But over the next two years, especially during playoff season, we could see first run U.S. programming that was on City broadcast on OMNI?

232   MR. PELLEY: Possible. Possible that you could see that over the next couple of years.

233   But in terms of the playoffs, CBC will be our first player, then Sportsnet and then Sportsnet One, you know.

234   But you could. You'd probably be better off -- well, you would have to -- well, you know what? It really depends on how many teams are in the playoffs as far as Canadian teams. This year it doesn't look like many. Next year, I think, is going to be a different year.

235   So theoretically you could over the next two years, yes.

236   THE CHAIRPERSON: Well, Canada's national team is going to be in the playoffs. That's all that counts for this year.

--- Laughter

237   THE CHAIRPERSON: But back to the subject at hand.

238   MR. PELLEY: And next year they'll be seen in 100 percent of Canadian homes.

239   THE CHAIRPERSON: There you go.

240   MR. PELLEY: On conventional.

241   THE CHAIRPERSON: But you're contractually on the hook potentially over the next two years with U.S. programming and with your L.A. spend. And you can't leave that on the shelf?

242   MR. PELLEY: No.

243   THE CHAIRPERSON: You'd have to find an outlet for it.

244   MR. PELLEY: You would.


246   CBC and your deal with the CBC, after we plan -- I know you're just reading your notes. So I'll let you read that if you want.

247   But how do we plan on accounting for the revenue and the expenditure and the CBC deal as a whole? Then we can sort of expand into Sportsnet activity if you wish.

248   MR. PELLEY: Okay.

249   I think I'll have Navaid Mansuri, our accountant, speak to that.

250   But it really is no different than the way that we have accounted for programming in the past that is the industry norm, i.e. and maybe I'll have you elaborate, the Sochi Olympics and OLN and APTN and ATN during the Olympics in 2010 and so forth.

251   MR. MANSURI: Yeah. I can't speak to how CBC is going to account for it on their side but --

252   THE CHAIRPERSON: My question is how you're going to account for it on your side.

253   MR. MANSURI: Right. And the deals are different. Like, TVA is a straight sub-licence deal --


255   MR. MANSURI: -- of French-language rights and that gets accounted one way.

256   What we've done in the past for Vancouver Olympics or London Olympics, for example, or even the most recent Sochi Olympics where we've sub-licenced programming from the CBC, we have accounted for that as a transaction where we acquired the rights to air the programming in exchange for giving up the advertising inventory on Sportsnet to the CBC to sell.

257   And in that case we recorded the value -- the revenue based on the value of the advertising on our financials --


259   MR. MANSURI: -- and equal value of the programming costs.

260   That's the methodology that we've used consistently in the past for these kinds of transactions and what we have assumed for the transactions on City as well as on Sportsnet.

261   THE CHAIRPERSON: Okay. Let's go to an non sort of accounting-related aspect of this whole file.

262   We all understand that we've sort of created a wall between digital and linear and that was the Commission's choice and we're maintaining that position going forward.

263   I would think there must be some concern as to how we allocate revenue and expenditure between the linear world and the digital world. And I would think that the Commission and others would be concerned that we would artificially inflate digital revenue to artificially deflate linear expenditure.

264   And I was wondering if Rogers had any ideas to bring before the Commission to make sure that that wouldn't happen. What kind of safeguards can we put in place?


265   MR. PELLEY: Well, perhaps we can think about that and come back to you with some suggestions on our reply in Thursday.

266   MS WHEELER: Just so I'm clear, the concern is that we would divert revenue from the linear platform to digital to save CPE. Is that what you're --

267   THE CHAIRPERSON: Exactly, yeah.

268   MR. PELLEY: We'll give you a more formal answer on Thursday.

269   THE CHAIRPERSON: What would be the impact for City and Rogers of a CPE 30 percent spend on day one of the next licence, if we were to include Sportsnet 360?

270   MR. PELLEY: Well, if you include Sportsnet 360 then we can match a 30 percent CPE. Without it we would be at at 26 percent CPE.

271   It would be somewhat perplexing to even contemplate the thought of taking Sportsnet 360 out of the group-based licencing policy. That would be contrary to what is -- what the Commission has done with Category As.

272   You're looking at RDS info which is the similar network of Sportsnet 360 just in French that carries live sports. So that's part of the group-based licencing for Bell as are other services like BNN and CPE 24.

273   So I would say that if there was discussion about removing Sportsnet 360 then we would be at a 26 percent CPE. I believe our PNI would be reduced by approximately -- is it $7 million on a per annum basis?


275   MS MINHAS: Our PNI would actually stay the same.

276   THE CHAIRPERSON: Your actual overall revenue spend on PNI would decrease, though. I don't want to divulge.

277   You've done a lot of sort of number -- you put a lot of numbers out there, Mr. Pelley, and I don't want to get caught putting out a number that you haven't already put out.

278   But if we were to include Sportsnet 360 revenue the PNI would increase by $7 million, as you said?

279   MR. PELLEY: That's correct.


281   We talked about how the national footprint should have increased revenues overall for Rogers -- for City. And I think we should talk about how hockey on conventional television would, I would think, considerably increase revenues for City over the next couple of years.

282   Would you agree with me on that?

283   MR. PELLEY: Yes, I would.

284   In fact, what I would say is if, in fact, the revenue -- if the NHL -- if we had not acquired the NHL content, the revenue on City would have declined year over year. There is no reason for us to expect that it wouldn't.

285   So the only reason -- and like I said, the numbers that you have seen in front of you, I'm happy to discuss them in-depth, in camera in our allocations of NHL hockey. For competitive reasons based on our sub-licencing rights that would be something that we would either want to discuss in camera or --

286   THE CHAIRPERSON: We understand that.

287   MR. PELLEY: -- yes.

288   But the answer is "yes". Without NHL hockey our revenues on City would decrease year over year.

289   THE CHAIRPERSON: So the idea being that your L.A. spend would decrease most probably?

290   MR. PELLEY: Yes. Yes.

291   THE CHAIRPERSON: And would you care to put a percentage or a number on that, Mr. Pelley?

292   MR. PELLEY: Yeah, it's --

293   THE CHAIRPERSON: Your thoughts going forward?

294   MR. PELLEY: -- yeah, it's 20 percent is what we're looking to decrease our U.S. programming.


296   And given the increased revenue, CPE would expand?

297   MS WHEELER: Just to clarify, it's a slight increase in revenue but, really, it's offsetting the losses that we had forecast before we had NHL. So the revenue lift in Year 1 isn't as significant as it may be after NHL is on City for a longer period of time.

298   But, certainly, it is our hope that the revenues will increase and with that will be greater expenditures on Canadian programming.

299   THE CHAIRPERSON: I just want to briefly turn to the OMNI stations and the advisory boards and then we're going to sort of hand it over to my colleagues. You know, it's going to be all overlapping as you can tell from your files.

300   MR. PELLEY: Sure.

301   THE CHAIRPERSON: Just briefly on the advisory boards, the decision to dissolve the boards in 2010, would you please help the Commission with the rationale behind that?

302   MR. PELLEY: Sure. And I think I'm going to have Madeline take you through the history of that.

303   MS ZINIAK: Thank you, Keith.

304   Originally, the advisory board was brought together in 1981 when there was still minority investors from CFMT TV during the Iannuzzi era. And that was maintained through a period until when majority ownership from Rogers did kick in.

305   It was a neophyte team that was in place in 1981 and also in 1986 when the Rogers Group took over. It was also just one station, CFMT TV in Toronto.

306   So this advisory board were individuals who -- there was 12 of them later who joined with the board of directors were the minority investors. And this helped guide and lead the neophyte team, if you will, that was was at CFMT TV.


308   MS ZINIAK: And as CFMT TV grew into OMNI 1 and 2 and enhanced it to five stations across Canada, there were different needs certainly, and also that the connections and the connectivity that the Rogers team started to have and also the talent and the production group that was there, were certainly from the communities. So our needs evolved and we were able to then also have Community Liaison Officers.

309   And as we began to go down the road of looking for independent productions clearly -- I myself was the first Community Liaison Officer at CFMT TV and later evolved into production -- independent production and these are two clearly meshed areas.

310   So really, in short, as Rogers became centralized and OMNI became part of a larger team, our connections in the communities were deep and vast and the CLO function along with independent production, really was giving us that kind of information that was necessary in a very cross-cultural configuration.

311   The Advisory Board members were individuals coming from ethno-specific communities as well as some cross-cultural communities and, hence, the need for this information wasn't as substantial for us as we began to grow and have different needs as a larger system.

312   So I, myself, am 35 years in ethnic media. And as far as the management team as well have had many, many years there as well as our talent.

313   So as the communities became more evolved and sophisticated and more dynamic, the resources and information that we needed were very much substantiated by the management team that we had at that point in time.

314   THE CHAIRPERSON: And you no longer saw the need for the Advisory Board.

315   MS ZINIAK: Well, we no longer --

316   THE CHAIRPERSON: In short.

317   MS ZINIAK: -- needed the need for an advisory system where we had no quarterly meetings. We do and continue to have the relationship with some of the previous advisors who have been with us for 30 years. But also, as communities, there was new individuals.

318   But it was really the formal system that we decided to not continue.

319   THE CHAIRPERSON: Is there any cost-cutting that might be behind the motivation for the end of the Advisory Board?

320   MS ZINIAK: The original Board of Directors were on retainer and later, when the Advisory Board members merged, they were as well. But I don't -- it wasn't -- the costs weren't quite high and, really, it was more of the fact that we evolved.

321   And I think we parallel Canada where the advisory committees -- Ontario Advisory Council, Multi-Culturalism Citizenship was dissolved in the early 2000s as well. And other multi-cultural advisory boards as well in Canada, both federal and provincially.

322   So I think there is -- there was an era, also, for us as broadcasters where the need for a formal system was no longer necessary. And I think in that way, we emulated Canadian society, if you will.

323   And that's a large debate, if one wants to get into that, but I don't think we want to get into that.

324   THE CHAIRPERSON: No, we won't get into that.

325   MR. PELLEY: Let me answer that question --


327   MR. PELLEY: -- because I came at it completely different because I had no idea what the Advisory Boards were. So in asking the question, ask somebody who was naïve on it.

328   No, it was never brought up that it was a cost-saving exercise.

329   THE CHAIRPERSON: An issue.

330   MR. PELLEY: Yeah.

331   THE CHAIRPERSON: Given that, what would be the impact if the Commission were to decide to impose a reinstallation of the Advisory Board?

332   MR. PELLEY: Well, I would -- I don't know what the cost would be because I didn't know what the cost was then. I just --

333   THE CHAIRPERSON: No, I'm not asking for the cost. I mean what the impact would be.

334   MR. PELLEY: Madeline, I --

335   MS WHEELER: I think it would depend on the nature and the role that the Commissioner prescribed for the Advisory Board.

336   MR. PELLEY: If it was an Advisory Board that was -- that was made up of people that want to help and drive OMNI and help create more awareness and bring it sponsors and bring in people that want to be engaged in it, bring it on. We're looking for as much help as we possibly can from OMNI.

337   We just don't want to make up any -- any make-work projects or administrative projects that aren't going to actually benefit OMNI. But if there is a real, tangible benefit, we're looking for input and help in OMNI in any possible way.


339   Before I hand it over to my colleague, Commissioner Shoan, I just want to get back to the CPE for a minute.

340   My understanding is that you're prepared to accept a 30 percent CPE day one, September 1 --

341   MR. PELLEY: That's --

342   THE CHAIRPERSON: -- 2014.

343   MR. PELLEY: That's correct.

344   THE CHAIRPERSON: To arrive at that number because, currently, you'd be at 29, you'd have to increase CPE. And the question is, could we increase CPE on City to arrive at that 30?

345   MR. PELLEY: Well, our CPE -- our CPE on City is -- was 23 percent based on the actual formula.

346   THE CHAIRPERSON: That's a stand-alone service. This would -- that reflects in everything that comes with group licensing.

347   MR. PELLEY: Yeah. Based on -- based on the formula right now, our CPE would be 25 percent, and we want to abide by that -- abide by the formula. But I don't think --

348   THE CHAIRPERSON: You'd have to probably increase it to 26. And we -- you know, you do the math down the road, but if you want to get to 30 percent in year one, you'd have to increase CPE on City.

349   MR. PELLEY: I think -- I think we're comfortable getting to the 30 percent CPE out of the gate using the group method and the formula that has been --

350   THE CHAIRPERSON: And the inclusion of Sportsnet 360.

351   MR. PELLEY: That's correct.


353   Mr. Shoan?

354   COMMISSIONER SHOAN: Thank you, Mr. Chair.

355   Good morning. I have a number of questions with respect to the level of ethnic and multi-lingual programming.

356   Before I get into that, I'd like to follow up on Commissioner Pentefountas' line of questioning with respect to CPE and PNI.

357   Given concerns expressed by some intervenors with respect to the potential use of Rogers -- expenditure by Rogers of CPE on sports programming which, in their view, is very profitable, has Rogers considered perhaps offering to bump up its PNI commitment to ensure that their expenditures on Canadian programming would be on programs of national interest and not necessarily weighted towards the sports programming?

358   MR. PELLEY: No, I think we were prepared to offer a 30 percent CPE and a five percent PNI.

359   And I think when you look at sports programming, I don't see it any different than the commitment that CORUS has on children's programming. This is just the area that we focus on.

360   It is an area that now has become a key area for City, and that changed, obviously, dramatically with our purchase of the NHL rights.

361   I believe that, as I said to the Vice-Chair, nothing is more Canadian than NHL hockey, and we're delivering more NHL hockey to more Canadians than ever before and providing more choice.

362   And I believe a 30 percent CPE and a five percent PNI is consistent with the other broadcasters.

363   COMMISSIONER SHOAN: Okay, fine. Thank you.

364   MS WHEELER: I'd just like to add, too, that we are effectively increasing our PNI commitment by agreeing to five percent, and that's because of our ability to have Sportsnet 360 in the group. So in terms of a commitment or stepping up to PNI, we believe we've done that through our five percent commitment.

365   MR. PELLEY: Yeah. I really feel -- I really feel that when we came here and talked about City when we sat down and had these conversations we said, okay, we're, first of all, looking for only a two-year licence, which I think is pretty important for both OMNI and City. We could ask for a five-year or a seven-year on both, but we want to go through the Let's Talk TV and we want to actually try to figure out OMNI together.

366   But we heard you the last time, and so we came in and said it's a 30 percent CPE right off the bat. Sportsnet 360 is a qualifying service, so I don't even think that is a -- that it is a discussion point. And five percent PNI.

367   And I really think that that is -- that's consistent with what the Commission would have wanted us to do.

368   COMMISSIONER SHOAN: Okay. And -- well, to your point when you referenced CORUS earlier, I do note that CORUS has a PNI of nine percent. And in the case of Astral, prior to its acquisition by Bell, its PNI was 12 percent. And that increased after the acquisition as well.

369   So I encourage you to give it some thought. Perhaps if you were interested in bumping up the PNI to alleviate some of the concerns of intervenors. I'll leave it at that. Perhaps it's something you want to address in your reply.

370   Before I turn to ethnic programming and OMNI, I wanted to cover off a question with respect to described video programming.

371   If the Commission imposed a standard DV condition of licence which would require Rogers to provide a minimum of four hours weekly of described video programming, of which two hours would be broadcast for the first time on the service, can you explain why or why not that would be reasonable, what would be the costs involved and, in particular, if you could discuss the Commission's determination in a 2009 decision that approximately 40 percent of OMNI stations' program schedules comprised of English language programming which would be suitable for DV, that would be appreciated.   

372   MS WHEELER: Absolutely.

373   So I can ask, perhaps, Hayden to weigh in on the costs associated with the DV, but it really isn't a cost issue. It's more of a program availability issue that we have.

374   DV programming is most conducive to scripted programming, and the majority of the programming that we offer on OMNI is fact-based or current affairs, magazine-type programming. So that's very difficult to describe.

375   So the four hours that we've committed to without the original is, really, to be able to not have to go out and find programming that -- just for the purposes of being able to offer original described video programming.

376   So it's not really us trying to -- you know, to reduce costs or not incur additional costs. It's really that it's not reflective of the type of programming that OMNI offers on its service.

377   COMMISSIONER SHOAN: Okay. So to that point, Ms Wheeler, in your presentation this morning, you noted that OMNI supports three types of Canadian programming; the in-house local production, which focuses on newscasts and information. I take your point that that doesn't necessarily lend itself to DV.

378   But there was also reference to local independent production and national independent productions.

379   Would any of those be suitable for DV and, typically, how much of those types of productions comprise OMNI's schedule?

380   MS WHEELER: Absolutely.

381   So the independent production is also traditionally fact-based or current affairs-type programming.


383   MS WHEELER: It's not scripted. But the national programming that we do with our benefits money, that is scripted and we have described a number of those documentaries and dramas.

384   And I can ask Paritosh to speak to that.


386   MR. MEHTA: Thank you, Susan.

387   Commissioner Shoan, all the independent productions, when they come from the benefit fund, English programs are -- do have DV.


389   MR. MEHTA: But it comes to there are few independent productions that are in English. For instance, there's an African program that's geared to the African communities in English. That is produced by a local community independent producer. They really don't have the resources to do that in DV.

390   To expect them to deliver a program with DV is going to mandate a great cost on them, and that's really -- they're not going to be able to afford that.

391   So they're -- so for scripted programs, as Susan has just mentioned, or documentaries that come from the benefit fund, great. They do come back -- they do come with DV. But for independent producers for community programs, really -- and there's just a few of them. It would be very, very difficult for them to provide DV.

392   COMMISSIONER SHOAN: Can I ask you what percentage of the independent producers that you contract with that do ethnic programming actually provide described video?

393   MR. MEHTA: Most of the -- most of our programs are language programs, so they don't require DV. There are only three programs that are -- two are in English and one of them is in French, and they don't have DV.

394   So those are the only three programs in total. And I can give you the number of hours. I think it's less than two hours in total.


396   MS WHEELER: We can provide that in a -- as an undertaking if it's of help -- if it's of use to you.

397   COMMISSIONER SHOAN: That would be great. Thank you.


398   COMMISSIONER SHOAN: I was going to ask you to elaborate a bit more on the challenges that OMNI had faced financially, but I see that you had addressed it in your opening remarks, so I'm just going to go through the points that you raised in your opening remarks --

399   MR. PELLEY: Sure.

400   COMMISSIONER SHOAN: -- at pages 8 and 9 one by one. And perhaps you can just give me a bit more detail.

401   You mentioned there were several reasons why OMNI's business model has begun to -- began to struggle.

402   The first point you mentioned was the fact that OMNI has traditionally relied on reruns of U.S. programming, which has comprised a substantial portion of its revenue, and that there had been a 62 percent decline since 2011.

403   MR. PELLEY: M'hmm.

404   COMMISSIONER SHOAN: Okay. Has that always -- did that figure, has that always been the percentage of revenue derived by OMNI of its U.S. programming?

405   MR. PELLEY: I --

406   COMMISSIONER SHOAN: Has that number increased or decreased over the years?

407   MS WHEELER: It used to be 75, and now it's 70, from the U.S. programming. But yes, it's always been the majority -- the vast majority of revenue derived for OMNI.

408   MR. PELLEY: Yes. It's now considerably less.

409   Did you want to --

410   MR. MANSURI: Yeah. It's traditionally been anywhere between two-thirds and three-quarters or almost even 80 percent of OMNI's total revenues.

411   COMMISSIONER SHOAN: Okay. And in that first point, you make reference to multitudes of specialty services and Netflix.

412   Have you seen a decline in tuning to OMNI stations?

413   MR. PELLEY: Well, you know, one of the -- one of the challenges that I mentioned in the opening remarks is the lack of what we call a measurement system that is beneficial to the ethnic broadcasting landscape.

414   So in terms of ratings -- and ratings is nothing more than a form of currency. And the ratings are not what we believe are fairly represented on OMNI, but that is based on the BBM measurement system, which we don't believe gives a fair representation of the ethnic community.

415   So it's tough to look at the ratings and say that they have declined significantly.


417   MR. PELLEY: What we do know is OMNI -- the way OMNI is purchased and if you -- and we certainly, if you want more information, could bring in, in our reply, some of our salespeople to kind of actually take you through the way OMNI has been sold over the years.

418   But it's traditionally sold as a tag-on buy from the agencies, and it was a buy that sometimes was with City. And it is the first one that often agencies are buying just for reach, take out of their buy.

419   And I can tell you the biggest drop that we saw was when CTV2 came into the market and into the Toronto market. And when they were able to leverage CTV and CTV2, it really -- it really saw a decline in the OMNI advertising.

420   That, combined with well -- as well is, you know, it was a great story that I told Susan last night.

421   And I was just walking through the mall yesterday, and I saw Nutrition House. And Nutrition House, I happened to have a dinner the other night and a gentleman was there and he was the founder of Nutrition House.

422   And I said, "So tell me more about Nutrition House". It has 60 locations, and we used to spend a lot of money on Rogers.

423   I said, "Oh, that's" -- I said, "What do you mean, used to?" He said, "Well, this year we've taken our entire buy and put it totally on social digital search optimization".

424   And I said, "How's that working?" "Well, we'll see. We may be back; we may not be".

425   But that gives you the example of how the industry is changing.

426   So there are a lot of reasons why the advertising has declined, but U.S. strip programming being commonplace is the greatest. You can get it so many places.

427   And as I said -- so when you talk about that border station and -- I'm just going to give you -- I'll just read this to you.


429   MR. PELLEY: So "Two and a Half Men" in Calgary airs on OMNI from 5:00 p.m. to 5:30. It airs in Calgary on Shaw, Shaw Direct and TELUS, the following stations, WGN Chicago, which comes into the marketplace, 5:00 p.m. and 5:30, same time zone. WPIX in New York, 5:00 p.m. and 5:30. WSBK in Boston, 4:00 p.m. to 4:30. KWYU in Spokane, 6:00 p.m. to 6:30. KTLA in LA from 8:00 p.m. to 8:30. And WWJ in Detroit at 9:00 p.m.

430   So there's not one reason why the decline. There's a structural change. OMNI has more pressure.

431   You've got border stations. You've got distance signals. Overall, the U.S. programming is dramatically -- advertising is dropping, and OMNI is seeing the biggest drop.

432   COMMISSIONER SHOAN: In the example you just used, presumably OMNI would -- OMNI, as a local station, would be carried by the local BDU in the marketplace, like on basic.

433   MR. PELLEY: Right.

434   COMMISSIONER SHOAN: Are the other American border stations, would they all -- were they also carried on basic in that scenario; do you know? Are they a separate package?

435   MR. PELLEY: I would have to check and get back to you on the actual distribution of those.


437   MS WHEELER: But just to clarify, OMNI isn't carried on the basic package by all of the satellite distributors, so that certainly, given their offering of the signals, that certainly is a disadvantage for OMNI as well.

438   MR. PELLEY: But what would be a good exercise for us to do, Commissioner Shoan, is to actually do the distribution of those -- all those networks in that market as a comparison.

439   COMMISSIONER SHOAN: Okay. Thanks.

440   So you actually had touched upon the second point that you had mentioned with respect to the extension of CTV2 to the Toronto market and the effect that it had on OMNI.

441   You know, I've looked at the numbers, the returns of CTV2, and it doesn't seem to me like it's had a substantial uptake in revenue.

442   What leads you to believe that it's CTV2 that's had the impact on OMNI?

443   MR. PELLEY: Agencies and advertisers, and there are dollars that are coming into that marketplace. The way that they've actually priced themselves.

444   You know, they're obviously airing significantly more English programming than we currently do on OMNI. And all of a sudden, another over-the-air channel comes into the biggest television market. If they're not having any type of impact whatsoever, then they're not -- they're not selling any advertising. That's just not possible so --

445   COMMISSIONER SHOAN: So are you suggesting that CTV is doing a combo sell for -- with its inventory for CTV and CTV2 to the detriment of --

446   MR. PELLEY: I don't know exactly how CTV is selling, but I know that the emergence of CTV2 into the marketplace is something that we hear all the time from agencies and advertisers.

447   And when you bring -- when you bring in, you know, an over-the-air into the -- you know, we knew it was going to hit City, we knew it was going to hit OMNI. We didn't know bad it was going to hit OMNI, and it's hit it significantly.

448   COMMISSIONER SHOAN: Just to go back to the point about the BBM measurement system and how ethnic broadcasters aren't captured by it, this has been actually something that a number of ethnic broadcasters have raised with me and has been a point of frustration, I think, for all ethnic broadcasters.

449   So typically, can you just walk me through if you don't have a measurement system which demonstrates to what extent you're being viewed in a particular marketplace, how do you sell your advertising inventory to national ad agencies, to local retailers?

450   What's the strategy that you employ?

451   MR. PELLEY: Yeah. Well, I will have Madeline just talk a little bit about it in a second.

452   But like I said, there are two ways of selling. There's a media buy and then there's sponsorship.

453   And media buy is, really, just buying, as I said, on ratings, and ratings is the form of currency that will determine your rate card and so forth. That's how you sell.

454   When your ratings are as low or lower than we believe they are, then it's tougher to garner the larger advertising dollars.

455   COMMISSIONER SHOAN: And if they're non-existent?

456   MR. PELLEY: It's almost impossible.

457   So you know, there are -- a lot of the advertising that is sold in the -- by the -- for the ethnic programming is often done from the association of wanting to be involved with that brand and believing that the ratings are larger than they are.

458   But the agencies, they want to buy totally on ratings for OMNI. And when they're buying "Two and a Half Men" or when they're buying "30 Rock", they want to buy totally on ratings.

459   And the ratings just are not at the level that they need to be to garner large advertising dollars.

460   Madeline, did you want to add anything else?

461   MS. ZINIAK: Thank you.

462   So we have sold on our petard in the sense that we are talking about anecdotal stories where, on one hand, we know that Canada's a nation of immigrants, it's growing, language retention is important. And agencies who have the trust in us will do the buy, so that's anecdotal.

463   We've tried to do research where we can with academia, which also has come forward about the impact of multi-lingual broadcasting and the need for that.

464   So we have really been selling on the fact that, you know, the agency does believe that we are important.

465   If we have ever commissioned research in the past, it was suspect because, of course, we're paying for it and we'd have to do it consistently throughout the years.

466   This has been a point of contention. We've been in front of several Chairs in the past of the Commission where both APTN and multi-lingual broadcasters have expressed the point that we do not have accurate reflection in this country. And with a growing market, you know, with the growing demographics that are only going to be going higher and higher, there is a need for some kind of accurate reflection because, in fact, we're living a lie.

467   And I've said this before. It's not the first time that I've said living a lie.

468   But -- so there's a real need for this kind of accuracy because that is the lexicon of agency world.

469   COMMISSIONER SHOAN: So if people have made the argument that any study that you commission is self-serving, have you considered joining forces with other ethnic broadcasters, specialty services or otherwise to independently commission studies that agencies perhaps might find to be of more use?

470   MS ZINIAK: I think that there's been conversations, but I think this is something that most multi-lingual broadcasters have expressed frustration as well as APTN, so that's something that we think we should consider.

471   MR. ZANE: If I may add a couple of points.

472   We've had conversations with other broadcasters through the sales departments, primarily, and the efforts in the past have not been very fruitful because everybody is very conscious of their competitive position.

473   In many cases, you know, Fairchild Television and OMNI are going to the same clients looking for advertising spending. It's a lot of hard work.

474   In addition to what Madeline was saying, the pitch is based on Statistics Canada information and it is based on mining of available data sources. Our national language sales manager, Christine Colmy, does this very effectively. Her own background is research. So we do a lot of our own in-house research.

475   But the specific research that Madeline was referring to is extremely expensive. And the problem with that is that you do it in one year, but you cannot do it every year. And even when you can get some valuable information from it, it does not help you sell if you can't do it every year and it is a cost issue.

476   So the anecdotal response from clients that have seen traffic through their doors has been our track record, as Madeline calls it, our petard.

477   And the other thing is the packaging of consistent language programming on OMNI has proven to be effective because of the reach that OMNI has in Ontario. So when we do special program like, for example, around Chinese New Year, we can put together some attractive packages that include news programming, include special in-house production around that time period as well as movies from Hong Kong.

478   And when we go to agencies, that strikes a cord. And so we have been able to bring on Wal-Mart and bring on other companies like Procter & Gamble and certain buys.

479   And that is true of the large South Asian and Asian events that we cover where the agencies can see it in their communities and they see the impact of that particular type of marketing.

480   MR. PELLEY: I think, Commissioner Shoan, what would be probably prudent for us to do is to bring Jack Tomek, our chief sales officer, even just for a minute or two during our reply, we will bring him and discuss the sales challenges that OMNI and directly give you the impact of CTV 2.

481   COMMISSIONER SHOAN: That would be very helpful. Thank you.

482   THE CHAIRPERSON: Let's do that. I mentioned to staff following your question initially, Commissioner Shoan, I think it is a great idea. If you guys can make arrangements for that to happen, that would be great.

483   MR. PELLEY: Yes, we will make sure --

484   THE CHAIRPERSON: Thank you.

485   MR. PELLEY: -- that that happens.

486   COMMISSIONER SHOAN: Great, fantastic.

487   Can you quantify the financial impact should the Commission decide to maintain the current Canadian content obligations for the OMNI stations?

488   MR. PELLEY: Well, I don't know if we can quantify it right now. But I will tell you the concept behind the Canadian content is, and it really came down to a conversation that we had had regarding Bollywood movies.

489   And some of the research that we had done in the fall of 2013 that basically said that many Canadian immigrants at the ages of 18 to 34 are coming to Canada already understanding English and French, one of the main two languages.

490   And then we started to actually think about the concept of programming more ethnic programming in one of our two official languages. And that is really where the flexibility that we wanted to, is to carry some more Bollywood movies, some Italian movies and such.

491   COMMISSIONER SHOAN: In your application you referred to experimenting with a different model on OMNI 2. Is that the type of programming you are referring to?

492   MR. PELLEY: No. OMNI 2 is now fully ethnic, as you know.


494   MR. PELLEY: But, no, I think it is just -- did you want to add anything, Madeline, to that?

495   MS ZINIAK: Thank you. I think what we are looking for is flexibility and being able to bring a robust genre. Let's say we are in recognition of a specific celebration, you know, for the South Asian community, for the Chinese community, be it New Year or Diwali. We would like to bring forward a robust package so we have that kind of genre, which would be important.

496   So we are really trying to figure out, you know, how can we be most relevant to the changing demographic and have impact in the viewing pattern?

497   And although, you know, we know that there is some language proficiency as far as English goes, but still it is important to have language nuance. You know, we know that language is culture and, you know, we think it is also important to bring these two worlds together, if you will.

498   MR. PELLEY: And the other thing, and this is when I asked one particular show to -- Hayden Mindell, our programmer, I said, do we really need to continue to air this program over and over again?

499   And sometimes we are just airing Canadian content to meet the licence requirements, and it is not necessarily great for consumers. So that is another reason just to get the exhibition requirements up there. And a show to repeat over and over and over again when you could take an English program in an English or French language.

500   COMMISSIONER SHOAN: Right. I will get that point a little bit later with respect some of the proposed changes you have made to your licence.

501   But, Ms Ziniak, can I just follow-up on a statement you just made with respect to the demographic for the viewership of OMNI?

502   If there is no BBM numbers that you have to quantify that, how do you quantify the nature of your demographics or your viewership?

503   MS ZINIAK: Oh, well certainly I think the communities are very vocal with their likes and dislikes. As we have seen, we have close to 500 letters of support, for example, for this very hearing. We have viewer lines in place so we do get audience reaction.

504   We have our proposal process of independent production where communities come forward with their need of having their programming in their language of comfort.

505   So these are just some of the vehicles that we have in place where we are able to, you know, be a barometer as far as what is necessary for an over-the-air broadcaster to reach out to its communities and its audiences.

506   And certainly, when we are in the public eye the many conferences and forums that we are invited to to be guest lecturers or speakers, you know, we see not only in academia, but also in different institutions where, you know, that the need and really the reaction to the kind of programming that we actually broadcast as far as either news goes, you know, the public affairs programming that we have, the kind of reaction that we get to that kind of viewership.

507   So, again, this is all anecdotal, but I would classify that, you know, when you look at multilingual media we are more than just a broadcaster.

508   I would say that we are almost a social movement; where you get the kind of feedback from institutions in Canada that continue to reiterate how important it is in having a voice, a third voice in Canada that is going to connect and speak to the ever growing audiences and to actually contribute to Canadian policy.

509   I mean, look what happened in Quebec the other day, yesterday.

510   COMMISSIONER SHOAN: Okay, thank you.

511   I wanted to give you an opportunity to respond to some statements or some -- well, some information put on the record by the Forum for Research and Policy in Communications. I saw the submission that was filed on April 3.

512   But with respect to its intervention, the FRPC made several statements that I was hoping you could reply to directly.

513   I am going to go back a few years.

"The FRPC notes that in 2009/2010 Rogers actually surpassed its revenue forecast by 1 per cent. But that didn't prevent Rogers from cutting expenditures on news and Canadian programming by 12 and 15 per cent respectively, while increasing the amount spent on non-Canadian programming by 24 per cent." (As read)

514   So in other words, the argument is irrespective of financial performance, there might be a strategic effort on the part of Rogers to increase the amount of non-Canadian programming on the OMNI stations to the detriment of its ethnic viewers.

515   Can you comment?

516   MR. PELLEY: Yes. My comment would be, and I wasn't here in 2009, so my comment would be that is five years ago. So I think the landscape has changed dramatically now. I don't know if that comment is relevant at this point.

517   In 2009 the government was spending $1.1 million in advertising revenue on OMNI. They are now less than $500,000.

518   All I know right now is what we are facing currently, and that is a challenging environment for OMNI in its current conditions of licence. I can't really comments on what transpired in 2009, and I really don't believe it is relevant.

519   COMMISSIONER SHOAN: Okay, thank you.

520   The FRPC also looked at the 13-year period between 2000 and 2013 on OMNI 1 CFMT-DT and noted that local programming had decreased by 54 per cent and news programming had decreased by 44 per cent.

521   Can you speak to those numbers and how those decreases serve the needs and interests of your audience?

522   MR. PELLEY: I would have a similar comment. I can tell you that in 2000 there were five ethnic broadcasters. And I think, you know, with the addition of the extra two yesterday, I think there is 132 now that are available on most BDUs.

523   But again, I'd be more inclined to have the discussion focusing on today's environment as opposed to 2009.


525   You provided the Commission with projections regarding the breakdown of revenues and expenses the OMNI stations attributable to the ethnic programming component of your stations as well as for the non-Canadian strip programming.

526   Can you provide some insight as to how the expenditures were allocated between the two components?

527   MS WHEELER: Could you repeat the question?

528   MR. PELLEY: Could you just repeat that?

529   COMMISSIONER SHOAN: It was the revenue projections for OMNI going forward. There was a breakdown of revenues and expenses for the OMNI stations, and it is broken down by ethnic programming and by non-Canadian strip programming.

530   And I was curious about the expenditures and how they were allocated between the two.

531   MR. PELLEY: Our overall expenditures -- Mona, do you want to walk through it?

532   MS MINHAS: Yes, I think we will commit to an undertaking to get back to exactly the attribution.

533   But the expenses around obviously non-Canadian strip programming are based on our commitments that we have against that programming and in ethnic and third language around news production. But in order to give you a breakdown, I would like to take that as an undertaking.


534   COMMISSIONER SHOAN: That is great. Thank you.

535   MR. PELLEY: Yes, I think we have significantly reduced our OPEX I think from $74 million in 2011 to $47 million in 2014. So if I understand you, you just want to know what the breakdown of the ethnic programming and of the U.S. programming, is that the question?

536   COMMISSIONER SHOAN: There were some numbers provided, projected for what the revenue expenses would be. I just wanted a bit more clarity with respect to how those numbers are reached in terms of the expenses allocated to the --

537   MR. PELLEY: Right. Yes, it is pretty easily --


539   MR. PELLEY: -- we can do that.

540   COMMISSIONER SHOAN: Wonderful.

541   THE CHAIRPERSON: So we have had a good run. We will take a break if that is all right with everyone, and we will be back at 11:00?

542   MR. PELLEY: Sure. And why don't we come back and with that -- we will have that answer and we will start with that answer.

543   COMMISSIONER SHOAN: Thank you.

544   THE CHAIRPERSON: I would also like us to do an in-camera session.

545   MR. PELLEY: Perfect.

546   THE CHAIRPERSON: And we will do that at the end of questioning perhaps.

547   MR. PELLEY: Perfect.

548   THE CHAIRPERSON: We will have to take a break before that as well.

549   MR. PELLEY: Okay.

550   THE CHAIRPERSON: Okay, thanks so much guys. See you in 10 minutes.

--- Upon recessing at 1048

--- Upon resuming at 1107

551   THE CHAIRPERSON: I will ask everybody to take their seats. Thank you.

552   Commissioner Shoan?

553   MR. PELLEY: Commissioner Shoan, could we answer that question that we left as we went on the break?


555   MS MINHAS: Commissioner Shoan, your question was about how we allocate expenses between our ethnic and third-language programming and our non-Canadian strip programming.

556   So to answer your question, on the non-Canadian strip programming, our expenses are based on our planned costs of acquisition for that U.S. programming.

557   In terms of ethnic and third-language, that is comprised of our projections for our news production, our independent production and our language programming.

558   And in terms of costs like overhead, we attribute overhead based on the proportion of revenue that is generated between non-Canadian strip programming and ethnic and third languages.

559   COMMISSIONER SHOAN: Okay, thank you, I appreciate that.

560   I had some questions with respect to the sales staff employed by OMNI. Are those questions you would prefer Mr. Tomek to handle or..?

561   MR. PELLEY: Yes, absolutely.

562   COMMISSIONER SHOAN: Okay, great.

563   MR. PELLEY: We have just located Mr. Tomek, he will -- been on a plane from Calgary I think and be here as soon as possible.

564   COMMISSIONER SHOAN: Okay. Great. There is specific information I would like from him. Can I just toss them out now and perhaps you can pass that along?

565   MR. PELLEY: Yes, absolutely.

566   COMMISSIONER SHOAN: I was hoping to get an idea of the specific size of the sales force. I wanted to know whether the sales force is separately assigned to sell inventory for the ethnic programming as well as the strip non-Canadian programming. I wanted to know whether the sales team is split or shared between City and OMNI.

567   And if you could tell me if there is any, if they are shared in whole or in part, what sort of training is provided to the sales force to assist them in terms of selling ad inventory on an ethnic station vis à vis an English-language station?

568   So those are sort of the kinds of questions that I am interested in getting responses to.

569   MR. PELLEY: Sure. I can answer quite a few of them. But it would be no doubt -- and then it would stimulate dialogue and I would get to the point where then I would say, well why don't we wait for Mr. Tomek?


571   MR. PELLEY: So why don't we just wait for Mr. Tomek?

572   COMMISSIONER SHOAN: Fair enough.

573   I would like to take a step back and just ask some broad questions with respect to the application of the ethnic broadcasting policy.

574   Can you explain how meeting only the core requirements of the ethnic broadcasting policy, which is essentially what Rogers is asking for, is appropriate considering that the OMNI stations benefit from broad distribution as conventional networks?

575   MS WHEELER: Absolutely. And I just would qualify that it is not that we are only adhering to the core requirements of the ethnic broadcasting policy, those are minimum requirements that we are exceeding on a, you know, on a daily basis.

576   But in terms of why that is an appropriate reduction or some of the changes that we have been making to the COLs or that we have requested for the COLs is that, frankly, OMNI is not the station it was 10 years ago or 15 years ago when they were licensed.

577   Conventional television, as we explained in our opening remarks, is undergoing enormous pressure because advertising dollars are shifting to digital platform.

578   So we really need to adjust the expectations of what a multilingual multicultural service like OMNI can actually provide to the community and we really, frankly, believe we have over-indexed on that to date in terms of the quality of service and the interaction and involvement to the community that we have, you know, made a practice at OMNI.

579   And I will ask Madeline to, you know, give you more examples of how we have exceeded those minimum requirements.

580   But, frankly, I know that there are a lot of people, you know, who have come on the public record and said this is what OMNI did in 2000, this is what OMNI used to do in 1985, and it is not 1985 anymore. We really have to adjust, you know, to the new reality.

581   MR. PELLEY: Before Madeline speaks, because what I am taking with OMNI, and you have seen, without mentioning any names, some of the other ethnic broadcasters both that produce premium services that have Canadian content requirements.

582   What strikes me with OMNI is the quality of our production. And Renato I don't think gets enough credit for the actual news and information programming that we produce on a daily basis.

583   It is not easy to produce that many newscasts. It is tough. I know how tough it is to produce City News daily. To produce as many newscasts on a daily basis that Renato and his team are doing at the quality that they are doing, although I don't understand it, it is astounding to me, from a broadcaster who has been in the business for so many years.

584   And, Renato, perhaps if you could just talk a little bit about the difference in terms of the quality of the content that we produce on OMNI.

585   MR. ZANE: Yes. Thank you, Keith.

586   I would say that the easiest way to categorize it is that we see ourselves, as I mentioned in the opening remarks, as a vehicle for new Canadians to understand Canada.

587   And by that, I mean we do a lot of stories of national interest, we do a lot of stories of local interest. We help our viewers understand what is happening with the Temporary Foreign Worker Program, with what is happening with civic engagement in the provinces in which we are active.

588   We reflect communities not only through events, which tends to be the type of coverage that you see on a lot of the other ethnic services, and that's fine, but we really do interpret Canada.

589   We have a full-time bureau in Ottawa, we have a full-time bureau in Victoria, and, of course, we are trying to reflect what Chinese Canadians are doing, South Asian Canadians are doing, Italian Canadians and so on, at all levels of provincial government, municipal government, federal government, and we talk about the stories that impact them and how Canadian stories are impacting them.

590   We have very little reliance on just reflecting foreign feeds and so, you know, Reuters' stories, for example, are reworked by us. We don't just refeed material all the time.

591   COMMISSIONER SHOAN: Okay. Thank you. And I can appreciate the complexity involved with that.

592   I'd like to ask you about the broad service mandate and specifically the rationale for proposing 10 distinct ethnic groups and 10 distinct languages for OMNI.

593   Can you explain how reducing OMNI's broad service mandate would advance the objectives of the Ethnic Policy and what would be the impact should the Commission decide to impose a different requirement of perhaps 12 or 15 ethnic groups?

594   MR. PELLEY: Well, the reduction from 20 to 10 -- and I'll have Madeline and maybe Paritosh speak a little bit about it -- is because this is something after significant dialogue that we had in determining what is the best way for us to try to make OMNI economically viable. And this may seem strange but we don't at this particular time have the financial impact. We need the flexibility.

595   We have no immediate plans to reduce from 20 to 10, but we often find, as I said earlier, getting good, solid content from the independent producers just to actually get to the 20 languages, and then you add the 24 for OMNI 2 --

596   COMMISSIONER SHOAN: So from what I gather in your application -- I think you referred to this earlier, Mr. Pelley -- was that one of the rationales for decreasing from 20 to 10 is to reduce the number of repeats; is that correct?

597   MR. PELLEY: That's one of them, yes.

598   COMMISSIONER SHOAN: Okay. So, how did you come to 10?

599   MR. PELLEY: Well -- and maybe I'll have Madeline and Paritosh speak to it. Like I said, when we're into the OMNI conversations, I do a lot more listening --


601   MR. PELLEY: -- which is new for me, and Madeline and Paritosh and Renato take the lead.


603   MS ZINIAK: Before I throw it to Paritosh, we -- number one, it's flexibility and there isn't definitive immediate plans to cut down to 10. We certainly are broadcasting presently in over 40 languages. It is a shifting demographic with the ebb and flow of different immigration and the immigration needs, the communication needs of different communities.

604   So we choose the broadcasters and the languages as there is a demonstrated need from the communities, the journalistic experience and the business infrastructure, and these are the elements that do change quickly.

605   I know that often people ask: Well, are you just going to be broadcasting to the highest demographic? That would not be the case because certainly we are no doing that presently, we're not just going for the highest demographic. We're really looking at the kind of needs that the communities would have.

606   So it is to have that flexibility on a monthly basis. OMNI 2, since it became 100 percent ethnic, does have a higher repeat factor than we would like.

607   We continue to work with across the country 50 independent producers. Ontario is the breadbasket for ethnic media, in a sense. It does have many. We are trying to continue to nurture and evolve the independent production base in Alberta.

608   For example, we are working with the Canadian Media Association to hold monthly editorial meetings in both Calgary and Edmonton with their CLOs to try to nurture and evolve that community base and to also help producers to see how best they can harness production and quality of production. And the same with B.C.

609   So it is just in order to decrease the repeat factor and to have that flexibility.

610   And certainly, I'd like to throw that now to Paritosh to expand on the independent production arena.

611   COMMISSIONER SHOAN: So, can you explain to me how decreasing from 20 to 10 offers more flexibility? Wouldn't you have more flexibility with 20?

612   MS ZINIAK: Hayden, from a scheduling point of view, do you want to give the detail?

613   MR. MINDELL: Sure.

614   Having fewer languages or being able to focus on the number of languages allows us to provide those language groups with more content. So, whereas currently we can only schedule, you know, one Bollywood movie or two Bollywood movies, we would be able to better serve the communities, certain key language groups or key ethnic groups.

615   MR. MEHTA: May I add to that, Commissioner Shoan?

616   I think the answer to that is very simple. We have stringent COLs in each market that we are in. In Alberta we have to have so many languages on a weekly basis, on a monthly basis. Now, we have been in Alberta since 2008. It's very difficult sometimes -- actually let me backtrack.

617   Before OMNI started over there, Shaw Cable was the only cable company that had local ethnic independent productions. We've been trying to start the independent production base there with good quality programs on a consistent basis. It takes time, it takes effort and it takes a long gestation period for community groups to come forward and then they're ready to produce these programs.

618   The reason why we're asking for this flexibility right now is that we can then -- you know, once these program producers are ready, once these communities are ready, then we will be able to put them on air and then we'll have a program.

619   The flexibility we ask is not we're going to reduce any languages, we're not going to cut down any languages or groups, but we just want the flexibility. We don't want to have that condition of licence that every month we have to have so many language groups on air.

620   For example, what's happening is as we need those 15 or 20 groups, really, they're airing repeats from Ontario over there and that's what we don't want. We are not going to cut down any languages. We are not going to cut down any groups. We just want the flexibility so that we don't want to feel that the viewers don't want to watch those repeats on a weekly and a monthly basis.

621   COMMISSIONER SHOAN: I see. So you're suggesting that if you weren't obligated to serve such a wide variety of groups you could dedicate your schedule to fewer repeat programming and allow more opportunities for original programming from up and coming ethnic producers?

622   MR. MEHTA: Absolutely. Absolutely.

623   To give you another example, one of our CLOs, Soren, who you just saw on the radio a few hours back, he's working with the Somali groups in Edmonton since 2009. It's taken a long process. Finally now, the community is ready, the producer is ready to come forth with a program proposal, and hopefully, in May, we will be able to have a program over there.

624   But in lieu of that, what we have been doing, since the last three years we've been having the Ontario program airing in Alberta in a few repeat time zones over there and I think that's -- you know, that's what we've been doing, that's what we don't want to do, and this flexibility we are asking for will curtail that.

625   COMMISSIONER SHOAN: Okay. So, in the event the Commission were predisposed to decrease the number of groups served from 20 to something along the line of 10, would Rogers be willing to commit to doing a certain amount of original programming reflective of those 10 groups?

626   MR. PELLEY: I think we want the -- the answer would be no. We would -- we've asked here, for a two-year licence term. We've asked for the flexibility. That would be something we might consider if we were looking for a five- or a seven-year deal.

627   But as I said at the beginning, we don't know all the answers right now to OMNI. We know that if you come to the city and you can't afford a premium service and you can't afford an online subscription, OMNI is there and it provides a necessity to people who can't afford those premium services or an online package.

628   So I think that we have thought through these amendments to our conditions of licence very thoroughly and believe that although we do not have -- and I know that it might be tough to comprehend the full financial implications in terms of benefits to OMNI -- the flexibility that we need to try some things is really what we're looking at.

629   COMMISSIONER SHOAN: Okay. Thank you.

630   I'd like to turn now to some of the proposed changes you've suggested to your conditions of licence.

631   MR. PELLEY: Sure.

632   COMMISSIONER SHOAN: Can you explain in general terms the importance of the broadcast period between 8:00 p.m. to 10:00 p.m. in terms of viewing shares and generating revenue?

633   MR. PELLEY: Sure. That's prime time.


635   MR. PELLEY: So, as I mentioned earlier, we have some strip programming that we've committed to right now that is not aired in that particular timeframe. If we were during prime time, it would generate more revenue that hopefully would make OMNI sustainable while we still have those contracts.

636   The Vice-Chair also alluded to the fact that we have some programming conflicts this fall and in the light of the NHL that could propose an opportunity for us during the Playoffs.

637   So overall, it provides us with an opportunity that is driven -- what has driven OMNI over the many years is the U.S. programming. While we have these contracts, while we're going through the transition period, it allows us the flexibility to try to maximize revenues and I don't think it's any more complicated than that.

638   Susan, you want to add something?

639   COMMISSIONER SHOAN: Okay. And just to follow up on that point, Mr. Pelley, Ms Wheeler, essentially what you're saying is we can expect that the ethnic programming would be shifted to earlier in the evening, to 6:00 to 8:00, and that the 8:00 p.m. slot forward would be used to maximize revenues for OMNI?

640   MR. PELLEY: Well, first and foremost, we still have a condition of licence. So the U.S. programming isn't going to be on there every night between 8:00 and 10:00 or we wouldn't be able to make our conditions of licence.

641   So I think that would be -- unless you were going to significantly change our prime time commitment, then I don't think that that would be feasible.

642   MS WHEELER: And in terms of right now, we use that 8:00-to-10:00 block to air a number of our language newscasts. It's unlikely that we would shift that on a regular basis given that's when viewers come to expect to watch those programs.

643   But just to talk about the original rationale for imposing the 75-percent requirement between 8:00 and 10:00, that again goes back to a linear world where that was the biggest time slot in terms of maximizing viewing and making sure that the widest number of Canadians had access to that content.

644   And as you saw from our video earlier, we're now making all of OMNI's multilingual and multicultural programming available online. So that appointment viewing is less relevant than it was back when OMNI was first licensed. So now, ethnic audiences can access OMNI's programming on the device of their choice online whenever they want.

645   So the requirement to put the fences along 8:00 to 10:00 to ensure that it's available to the widest portion of the population, I don't think that that principle still holds true in this day and age.

646   COMMISSIONER SHOAN: Okay. So, two responses to those statements.

647   Firstly, numerous individuals from diverse ethnic communities and organizations representing ethnic communities based in Ontario and B.C. expressed concern with Rogers' request to delete that requirement. So obviously, there is some interest in maintaining it. It is prime time for a reason. That's the time when most people like to watch their programming.

648   So I would ask you to respond to, I guess, that audience demand to keep programming in the 8:00 to 10:00 slot.

649   The other statement I would make is anecdotally I can tell you my parents, who are older, of Indian descent, watch OMNI and they watch OMNI programming during these slots. They would never watch it online. They're in their sixties and seventies. Most of my aunts and uncles are in their sixties and seventies. Irrespective of whether it's online or not, they're not going to go online. They're going to watch it during prime time because, generally speaking, older generations like to watch TV at a certain time and in a certain way.

650   And I recognize -- back to our earlier conversation, Mr. Pelley -- that the lack of BBM measurement with respect to the demographic and the consumption and the viewership of OMNI makes it difficult to really break down viewership in terms of who's watching and when --

651   MR. PELLEY: M'hmm.

652   COMMISSIONER SHOAN: -- but I'm not necessarily convinced that putting it online serves your audience base, particularly if your audience base is representative of an older generation.

653   MR. PELLEY: Based on anecdotal research and based on the fact that we don't have large ratings, again, one of the -- we're going down an area now that would probably be better served with Jack. But the 55-to-64 demo is, I believe, a demo that needs to be measured. It's not currently measured by BBM.


655   MR. PELLEY: It's all 55+. And that is something that Jack and I have discussed for some time because I believe it is a lucrative demo but it is not measured.

656   I think -- I don't dispute the fact that your parents don't watch it online. What we're trying to do is come to some type of an arrangement to make OMNI a little bit more viable and we could make the commitment to revisit the 8:00-to-10:00 slot after the two years, which obviously we would do anyways in a licence renewal.

657   COMMISSIONER SHOAN: What about a bit more flexibility: as opposed to 75 percent, 50 percent or something a bit less?

658   MR. PELLEY: We could look at something.

659   One of the keys is we need to harmonize to -- at least to the fact that we have a national footprint. In OMNI, currently we don't have that flexibility.

660   So, if the Commission felt that the 8:00-to-10:00 slot needed to still have some ethnic programming, we're totally amenable to that. So maybe we could come back and make a recommendation to you.

661   Did you want to make a comment, Navaid?

662   MR. MANSURI: No. I just wanted to reiterate the harmonization in B.C. is definitely a key part of it.

663   COMMISSIONER SHOAN: Okay. Great. And if you have any further ideas on that front, we would be --

664   MR. PELLEY: Yeah. Commissioner Shoan, we can come back with a comment on that. The harmonization in B.C. is critical.

665   Did you --

666   MS WHEELER: M'hmm.

667   Just to clarify, just because we're asking to have that restriction removed doesn't mean that there won't be ethnic programming between 8:00 to 10:00. We're in the business of putting programming at the times when people are going to watch it. So if there is a big demand for our news programming or our ethnic programming between 8:00 to 10:00 you can be sure that we'll put it there.

668   MR. PELLEY: But if you feel more comfortable putting an actual restriction on that, then we're okay coming back with a recommendation on that to give you some comfort that 8:00 to 10:00 won't be strictly U.S. programming.


669   COMMISSIONER SHOAN: Okay. We would appreciate that. To be clear, our minds are open. We haven't certainly --

670   MR. PELLEY: Yeah. And maybe the number is 50 percent, 8:00 to 10:00, which gives us the flexibility to burn off some of our U.S. programming while still keeping the ethnic programming that your parents want to watch. You just need to tell me what days.

--- Laughter

671   COMMISSIONER SHOAN: Okay. Sounds good.

672   Let's turn to the amount of programming that OMNI can offer in one language.

673   The Fraser River Community Crematorium suggested an increase from 16 percent to 25 percent of programming broadcast in any one foreign language during each month. Unifor and its local branches in Toronto and Vancouver suggested an increase to 30 percent.

674   Can you comment on the appropriateness and the financial impact of each of those proposals should the Commission decide to impose an increased limit from 16 percent to either 25 or 30 percent instead of deleting --

675   MR. PELLEY: Well, Unifor is our greatest critic and detractor --


677   MR. PELLEY: -- and so if they've suggested 30 percent, we would agree to 30 percent and we could move on.

678   Do you need a rationale why we want to move from 16 percent to 30 percent or do you want to just leave it at that?

679   COMMISSIONER SHOAN: Well, if you're happy with 30, then I guess the record is clear, but if you would like to give some rationale, we're happy to hear it.

680   MR. PELLEY: We're happy with 30.

681   COMMISSIONER SHOAN: Okay. Great.

682   Can you comment on Fairchild's submission that without a restriction of some kind -- well, actually, you know what, you've already said you're happy with 30, so I don't think I need to ask that question.

683   Let's talk about overlap between OMNI and City.

684   MR. PELLEY: Okay.

685   COMMISSIONER SHOAN: Should the Commission choose to retain an overall requirement that no more than 10 percent of all programming broadcast weekly may be broadcast on both OMNI and City but impose no other overlap limitation, would that be useful?

686   MR. PELLEY: A cap of 10 to 15 percent would be acceptable.

687   You know, the one example which really puzzles me is we have this show on CHIN. They produce Saturday and Sunday mornings for City, and yet -- I wasn't familiar with this condition of licence a couple of years ago and I said: Well, why are we not airing that on OMNI? Why are we not simulcasting maybe to get a better audience? And that's when I learned of the lack thereof of overlap programming, which I don't know whether that was just something that's been in there since 1979 or since we acquired it, but it really --

688   Yeah, we would accept a cap of 10 to 15 percent --


690   MR. PELLEY: -- which would give us a little bit of flexibility.

691   COMMISSIONER SHOAN: Can you give us a bit more information about the financial challenges of the OMNI stations and how they differ from those of other private conventional stations?

692   I ask this question because obviously we read your application with great interest and the financial challenges confronting OMNI. Naturally, we did our due diligence. We certainly looked at some of the challenges and the numbers of other conventional stations. Some networks are doing better, some networks are doing worse. One could argue that the challenges specific to each network differ and that it's difficult to look at it as across the industry challenge.

693   MR. PELLEY: Right.

694   COMMISSIONER SHOAN: So can you give us a bit more --

695   MR. PELLEY: Sure.

696   COMMISSIONER SHOAN: -- put a little meat on that bone in terms of whether it is actually a structural problem with conventional, whether it's a problem specific to OMNI, whether the problems can be remedied with just some simple flexibility or whether in the long term there's a bigger issue there?

697   MR. PELLEY: No, I think it's a challenge with conventional, it's not just OMNI. And I think at the Let's Talk TV hearing, I think you will find similar comments from those of CTV and Canwest.

698   From OMNI's perspective, you know, when it came into the marketplace in 1979 -- well, you know what, I kind of use the example of TSN when it came into the market in 1984 and many people thought that, you know, a 24-hour sports network wasn't going to be able to compete, it was way too niche. And now, you almost get to the point where it's almost not niche enough, as I alluded to the 25 national networks in the U.S. alone.

699   So I think OMNI's just a product of the environment and its competition changing dramatically. I think that if you and I lived abroad or if we lived all of a sudden in Greece and the over-the-air programming was at four o'clock on a Tuesday or at 10 o'clock on a Saturday morning or that was the only place you could get the English programming or you could subscribe to a service that gave you CP24, City News, Sportsnet, FX and all of that, you'd probably go to that route, or then if you could go online and you could get all your programming via Google, YouTube, any of it, to get your local news on Mayor Rob Ford, you'd probably do that as opposed to wait for the two o'clock show on Thursday.

700   So that has been a challenge that the other conventional networks don't have. You know, I have always felt that having 20 languages is difficult. I don't know the answer, but I know that that has been tricky.

701   Other than that, the difference that OMNI has is the lack of measurement that we talked about, the fact that it's not a destination for any type of U.S. programming, so that will continually erode.

702   When I talk about the conventional business, it's just tough, it's a tough time. It is a tough time in the media business as it's changing and it's changing so quickly. You know, when you look at -- there was an advertiser that approached -- or Google approached this advertiser and didn't look for 40, didn't look for 75, looked for 100 percent of the media buy. You know, for next year's media buy we want to go 100 percent. All agencies, all advertisers are going down to the Silicon Valley now.

703   As I look at it, and I have said this to Kevin Krall, I will say this to Paul Robertson, you're not my competitors. Our competitors are the Netflix and the other people that are now -- and you will hear that from Jack -- that are actually playing such a voracious game in the advertising market.

704   So, you know, OMNI is just -- and the challenges, if you are number one or number two, which CTV and Canwest is, it will take -- and again, I would be on record as saying this to CTV and to Global, is that they are facing it and they are going to face it soon, just the people that are number three or number four face it first and OMNI is the one that faced it first in terms of U.S. programming.

705   It's the reason that I feel so good about the fact that we have acquired this NHL content that is such coveted content in Canada and allows us to reduce our reliance on U.S. programming, because I don't believe from a Canadian over-the-air that is where we are going to make our money long term.

706   COMMISSIONER SHOAN: Okay. Thank you very much. Mr. Chairman, I just have one further question.

707   There were some exchanges between Commission Staff and Rogers during the deficiency process asking Rogers to explain the effect of each proposed amendment. I understand that Rogers has made clear that it proposes the amendments as a package, but are there any of the amendments that are more significant than others in terms of helping the OMNI stations to become financially viable again?

708   If you couldn't have them all, which one or two is the most important to you?

709   MR. PELLEY: Yes. We have talked about that and we have had significant debate regarding that. I'm going to let Madeline give your comments on it. I think in the short term, and with some flexibility, the 8:00 to 10:00 is pretty important. I know these are yours, I know what yours are --

--- Laughter

710   MR. PELLEY: -- so you don't need to give me yours. So I think the 8:00 to 10:00 is pretty critical in the short term. I think the language caps are critical, the flexibility there. Similar to the Cancon, I would put as number three. The last one for me is the overlap on City and OMNI programming. I just think that's an easy one, it doesn't really, it's just -- it's a small, little one that we want to be able to put some of the programming on City on OMNI at a small number.

711   So that would be my comments and, like I said, we have had a lot of debate, but I believe Madeline and I are aligned, hence, the reason Susan is not getting to the mic. Madeline...?

712   MS ZINIAK: Yes. So I think really what we are asking for is, you know, give us the tools to do our job, give us the tools so we can marry, you know, the equity that we have externally that we keep hearing how important we are, how necessarily we are at this time in Canada.

713   So I would agree that certainly the language caps would be number one, the 8:00 to 10:00 restrictions, Canadian content, you know, broad service requirement, we could speak about that further. We have that --

714   MR. PELLEY: And the overlap is last.

715   MS ZINIAK: Right. So I think there are areas that we would like your guidance as well where you think you can help us do our jobs, do our jobs the way we should be doing our jobs and we are looking at a landscape that will not be protectionist of other language -- you know, for example, when we are looking at being undercut by language specialties, we know that sometimes spots are being sold for $20 and they are going nationally.

716   So I think there are different areas that we would like to have that opportunity and I think also we know that being an over-the-air accessible broadcaster is very important for those communities that first land in Canada and don't have the kind of money that they would have to go in and buy specialty, et cetera.

717   So if we continue to believe, as Ted Rogers did in the very beginning, that language television is important, over-the-air accessibility to Canadian content, to having positive portrayal, contributing to self-esteem of community.

718   So these are all things that are important and we look to your guidance, how can you help us continue to do the job that we really want to do?

719   I would say that we didn't want the cuts, you know, we don't want the diffusion of ethnic outreach, but we also need to be able to do the job that we want to do for ethnocultural communities across Canada. Does that summarize...?

720   MR. PELLEY: Yes, I think so. I think we had the same list.

721   COMMISSIONER SHOAN: Great. Those are my questions, Mr. Chairman. Thank you.

722   THE CHAIRPERSON: Great. Thank you. What if OMNI gets none of the amendments asked for?

723   MR. PELLEY: Well, OMNI is part of our heritage, we have been involved in it for so long. We will continue to look for other solutions and look at a number of different ways that we can do it. The regulatory relief will just help us, so that's why we brought -- which we didn't think were anything that were detrimental to the core of the service.

724   And when you look at i.e., amending to 50 percent from 8:00 to 10:00 or you look at the overlap, yes, just like I said at the beginning, we want to work together and have that -- and that's why the Advisory Committee, we are open to having any type of discussion. We believe this service is necessary, but we also believe that every part of the business has to make a contribution and it is not making a contribution at this point.

725   THE CHAIRPERSON: How respectful to the core is a service that doesn't offer nightly 8:00 p.m. newscasts?

726   MR. PELLEY: Well, an 8:00 p.m. newscast?

727   THE CHAIRPERSON: Yes. Third language 8:00 p.m. newscast. If I understand your ask is to have greater flexibility between 8:00 and 10:00.

728   MR. PELLEY: That's correct.

729   THE CHAIRPERSON: So some nights at 8:00 will have news, some nights at 8:00 won't have news?

730   MR. PELLEY: We wouldn't schedule news at that particular time.

731   THE CHAIRPERSON: So five nights a week you would have a third language newscast at 8:00 p.m.?

732   MR. PELLEY: Why are you tied to 8:00 p.m.? Eight p.m. is usually not when a newscast occurs, it's usually --

733   THE CHAIRPERSON: Third language newscasts often happen at 8:00 and if you travel the world, most newscasts in Europe and in Southeast Asia are at 8:00 p.m. and that's probably part of the thinking originally as to why your newscasts run at 8:00.

734   MR. PELLEY: Right.

735   THE CHAIRPERSON: Would you agree with me on that?

736   MR. PELLEY: No, I didn't know that.


738   MR. PELLEY: I did not know that.

739   THE CHAIRPERSON: Okay. That being said, you want to build an audience and audiences are built on habitual behaviour, so at 8:00 p.m. you have gotten used to watching the news, just like people got used to watching Peter Mansbridge and Lloyd Robertson at 10:00 or 11:00 --

740   MR. PELLEY: Sure.

741   THE CHAIRPERSON: -- or whatever that time might be.

742   MR. PELLEY: Yes.

743   THE CHAIRPERSON: So how do you build an audience and how are you respectful of an audience by not offering the same programming at the same time every night of the week?

744   MR. PELLEY: Well, with all due respect, apparently that's not working now.

745   THE CHAIRPERSON: How is it going to work any better --

746   MR. PELLEY: You can build --

747   THE CHAIRPERSON: -- by not offering that kind of scheduled repetitive programming?

748   MR. PELLEY: Well, I'm not saying that you wouldn't offer the scheduled repetitive programming, you just might not offer it from 8:00 to 10:00. I'm just saying that the eight o'clock programming that is commonplace around the world is not generating the dollars that we need and is not working and is not generating the ratings.

749   THE CHAIRPERSON: And what is the eight o'clock programming --

750   MR. PELLEY: And even -- pardon me?

751   THE CHAIRPERSON: And what is the eight o'clock programming that is prevalent on OMNI?

752   MR. PELLEY: Going forward, or...?

753   THE CHAIRPERSON: Over the last 30 years?

754   MR. PELLEY: News. And here we are in a problematic time. So we are trying to figure out, as I said -- as I said, you know, that might have worked in 1979, that might have worked 30 years ago; there are so many options for people to get their news.


756   MR. PELLEY: And this is not a case where it's just the challenge for ethnic newscasts, this is everywhere. By the time you get to six o'clock, by the time you get to 11 o'clock, you know, if there is a big news story, you've seen it, you know. The minute last night that the Liberals won, you didn't need to wait to 11 o'clock to actually watch a newscast like you had to do 15 or 20 years ago, you could get it on your mobile phone in the next five minutes.

757   THE CHAIRPERSON: I agree, but Commissioner Shoan spoke to about the fact that the majority of OTA third language news clientele, recipients --

758   MR. PELLEY: Right.

759   THE CHAIRPERSON: -- won't necessarily go online and may not have the means to purchase a specialty service in the third language. So they are the 8:00 p.m., they want to watch the news at 8:00 p.m. I mean, what is the 8:00 to 10:00 plan? You are asking for flexibility.

760   MR. PELLEY: Right.

761   THE CHAIRPERSON: What is that going to look like concretely?

762   MR. PELLEY: I'm going to have Madeline and Hayden talk a little bit about it, but I will say that I know and I respect Commissioner Shoan's parents and so forth, but that's hearsay in terms of actually one particular group.

763   You can't base your entire service on Commissioner Shoan's parents and their actual viewing habits, although I'm happy to have that discussion.

764   THE CHAIRPERSON: I understand that, but what is this flexibility going to look like practically speaking?

765   MR. PELLEY: Okay. I will have Madeline and Hayden talk a little bit about that.

766   MS ZINIAK: Yes. Thank you very much. So we do recognize the fact that much of our schedule is predicated on viewing habits of older generations and, yes, very much so, the eight o'clock corridor.

767   Indeed we have had some challenges in displacing and you are correct in identifying that, displacing sometimes our newscasts and we have tried to rectify that with informing the audiences that we will be -- Mondays and Tuesdays for example -- I think your example was Italian news for example where it was displaced.

768   THE CHAIRPERSON: There are others, but that's one, yes.

769   MS ZINIAK: And others, yes. So we tried the best we could in order to inform audiences that this would be happening.

770   THE CHAIRPERSON: And how would that work for you?

771   MS ZINIAK: We would like to do more. We basically have run crawls --

772   THE CHAIRPERSON: It didn't work that well for you, would you agree with me?

773   MS ZINIAK: Well, displacing audience viewership --


775   MS ZINIAK: -- consistently is always a challenge, yes.


777   MS ZINIAK: And I know you have received letters in that regard.

778   THE CHAIRPERSON: Yes. As have you, I'm sure.

779   MS ZINIAK: Yes. We have actually --

780   THE CHAIRPERSON: So it's not working very well.

781   MR. PELLEY: You know, perhaps we will have Renato make a comment, who runs news, but I will tell you that even CBC National gets revised from time to time significantly. So I think to have discussion about programming that's on the exact same time every Saturday for every Tuesday is becoming less and less important, but I understand the comment regarding the older demographic and I respect that, regarding their digital use, which again will change over time.

782   THE CHAIRPERSON: But you also understand the programming certainty in scheduling is core to any network?

783   MR. PELLEY: It was core. It was score.

784   THE CHAIRPERSON: You don't think it's the case today?

785   MR. PELLEY: It's not as much anymore. No, I don't believe it is core as much.


787   MR. PELLEY: I don't believe so. I believe it is core with the older demographic, with the younger demographic I don't believe it is. I really don't.

788   I believe if you are looking at the way the PVR stats, if you're looking at the way VOD, if you are looking at the online usage and you are looking at all the digital applications, I think looking at core programming at specific times is, with all due respect, archaic thinking outside of the older demographic.

789   MR. ZANE: It's a very complicated situation for us on the programming side because we are front facing to those communities who, as Commissioner Shoan was saying, do expect a show at a certain time.

790   So when we had the displacement on OMNI One with "Bachelor" for example, as Madeleine was saying, we tried in many ways to tell viewers that they could watch at alternative viewing opportunity times. So we increased the number of repeats of Italian news for example and we -- thanks to a significant investment that we made in our website, we made the entire first segment of the newscast available online at about the same time as it was on air. In other words, it was originally scheduled for eight o'clock, we put it online at eight o'clock. But that requires a significant amount of promotion and a significant amount of repetition to tell the viewers to get used to going to find this at another spot.

791   But the fundamental question I think you were asking was about the business, what would happen to the business if we didn't get these conditions of licence that we were requiring.

792   What we did with OMNI Two when we removed all of English was to experiment to see if we could have more people accessing our programs at more times and whether that would help us. Well, as of the end of 2013 we lost $12 million in revenue on OMNI Two, $11 million of that was in English. So our big problem is English revenue.

793   We are trying very hard to sustain the ethnic revenue and keep it at levels that are going to help the business, but as we go through this fundamental shift in television viewing and conventional TV, that is our challenge, is how do we increase our language revenue so that it offsets the losses in English, and it will be very difficult.

794   THE CHAIRPERSON: Could I just ask another question in terms of the business plan? I mean, how do you increase sales by decreasing sales staff; is that a winning formula?

795   MR. PELLEY: Well, the industry is changing in terms of advertising.


797   MR. PELLEY: So the model that we have gone to is what's called a one-call sales model.


799   MR. PELLEY: It's a model that after we created it, it was followed by Bell Media and recently announced by Shaw and it is a concept now that because clients and advertiser -- or agencies and advertisers are getting inundated with so many different people, they want one person to talk to regarding all the assets at the media company. So, like I said, we were the first to do it.

800   So rather than we have 55 radio stations, 37 magazines, rather than every single agency and clients get inundated with people selling OMNI, people selling Maclean's, people selling Chatelaine, CHFI, 680 News, Jack FM, Sportsnet, City and all of that, we all have gone to a one-call sales model to be able to best cope and compete with some of the non-traditional advertisers.

801   So you have streamlined a little bit of your sales and that's how you have been able to do it.

802   THE CHAIRPERSON: Given your numbers, though, that hasn't been very successful. Would you agree with me?

803   MR. PELLEY: I would say that would be accurate, but I don't think that has anything to do with the model.


805   MR. PELLEY: I think that has everything to do with the actual industry and what I just alluded to earlier about the likes of the Google and Facebook being real opportunities for advertisers.

806   Marketing companies now have a plethora of ways to spend their advertising dollars, no longer on traditional businesses. If you look what's happening -- and we run a publishing company, again, but whether it be Transcon or St. Joseph's or ourselves, if we are all up here again, we would be saying the same thing, facing double-digit advertising declines on an annual basis.

807   THE CHAIRPERSON: Any solutions -- and before I get to sort of the whole advertising industry, just briefly, you mentioned your ask on the overlap of 10 to 15 percent, you also spoke about a simulcast.

808   Would you like to sort of create a formula there between simulcast and overlap?

809   MR. PELLEY: Simulcast, you know, we have had internal discussions a couple of times on simulcast. I had some success with simulcasting in the Olympics, but that was the Vancouver Olympics so it might not be comparable. But on something along the lines of City and CHIN, they have two different audiences.

810   Like if I look at -- and we have had discussions over recent weeks with CBC on some of their programming, with the audience that is so different from CBC to City, it doesn't make sense for one of the programs that airs on CBC for us to do on City.

811   On Friday they announced that they were continuing to fund Mr. D which is a comedy show, a 30-minute comedy show on CBC. The only way that they were able to continue that funding is for us to help out, and so we now will take the second window on Mr. D, partnering with CBC.

812   And the reason that we -- when we sat down and had this conversation, which is a completely different conversation than you would have a broadcaster three or four years ago, but when you look at it now and you go, CBC has a completely different audience than City, so if we can broaden the actual scope of Mr. D it can be a more popular show. And we will promote CBC and they will promote us.

813   And similar to City and OMNI, if we can introduce people to the different networks, then it makes a lot of sense.

814   THE CHAIRPERSON: That's a great collaborative effort. I understand your ask on overlap. Is there a specific ask on simulcast?

815   MR. PELLEY: No. No, I would just --

816   THE CHAIRPERSON: Would you like sort of a certain percentage of potential simulcast that you may or may not decide to use? You can think about it for a while and come back to us with an answer.

817   MR. PELLEY: Sure, we could. Yes.

818   THE CHAIRPERSON: I just want to close on sort of getting back to the whole social digital media agency landscape and the strengths and weaknesses of the measurement system we have in play right now. You outlined the problem, have you thought about potential solutions, be it in the ethnic market, third language market or --

819   MR. PELLEY: Sure. Yes.

820   THE CHAIRPERSON: -- the English language market, in terms of how do we better measure to allow us to better compete with a digital world?

821   MR. PELLEY: Well, it's a combination of measurement, but it's also a combination of audience intelligence as well.

822   So, you know, we were the first that worked with all of our Chatelaine Magazine, Shopping Channel, radio. We brought all our viewers, listeners and subscription people together and created an anonymous data platform that is able to compete with the likes of Google and Facebook.

823   We have become very focused digitally and created Next Issue Canada, which is -- we brought the likes of Condé Nast, Hearth, Meredith and Time Inc. together and pooled them with our magazines to create Next Issue, which you are probably familiar with, and that will have an advertising play.

824   THE CHAIRPERSON: Is there regulatory in play?

825   MR. PELLEY: I don't think there is a regulatory play in Next Issue.

826   THE CHAIRPERSON: Nothing to do with Next Issue, is there a regulatory play that can help, be it with OMNI or City?

827   MR. PELLEY: From an advertising perspective?


829   MR. PELLEY: Well, I think the biggest one would be, and I think it's a tough one, is to work again with Health Canada on the pharmaceutical industry. I think that's a really tricky one.

830   When you go to the U.S., if you take out the pharmaceutical industry and you take out the lack of caps that they have on government funding, you know, conventional advertising is declining in the U.S. Those are two pretty big categories that we don't have access to here in Canada.

831   No, other than that, I think it's the work of the broadcaster that needs to be a little bit more creative and the migration to digital has to be something that we have to embrace. Everyone is now looking at TV Anywhere, because people do, as you know, want to watch what they want when they want, how they want on what device they want.

832   You know, unfortunately right now the digital dollars, as far as the -- and we will have Jack talk about this -- don't match the same level as a 30-second commercial spot.

833   The biggest -- and Navaid made reference to it -- and one of the reasons why we are focusing on sports is because I do worry about the PVR and with 30 percent and that growing at a torrid pace, that's a concern for the entire industry, and finding a way to actually...

834   But we will come back to you with Jack on some regulatory help that you could give.

835   THE CHAIRPERSON: Thank you, Mr. Pelley.

836   Commissioner Molnar...?

837   COMMISSIONER MOLNAR: And it is afternoon, so good afternoon. I just have a few miscellaneous questions actually.

838   I want to begin with OMNI, first of all, just giving you an opportunity to maybe set the record straight as it regards what is going on in Calgary and Edmonton. There have been parties who have alleged that you have essentially ceased local production in those communities.

839   Can you tell me, do you in fact have local production within Calgary and Edmonton?

840   MS ZINIAK: Thank you, Commissioner Molnar. Presently we do not. We did begin having both production entities both in Calgary and Edmonton and within three years of that opportunity we went through a series of cuts. These were all basically revenue -- decisions on revenue, and based also that -- the whole environment that from a revenue point of view for all of OMNI that we were experiencing. So presently we have the CLOs in each of the Calgary and Edmonton, but we also are trying to expand the independent production base and have also given significant funding from the Alberta Fund for documentaries and third language and we continue to nurture the independent production base presently there.

841   I don't know if Paritosh would like to add more to that statement.

842   MR. MEHTA: Presently we have three independent producers out of Calgary. Very shortly we will be having another producer out of Edmonton as well, and we are working with a few independent producers and community groups to actually nurture them to come on board at OMNI.

843   Apart from that, we continue to work diligently with the ind-prod, independent production base, vis-à-vis developing documentaries, dramas, as well as programs of that nature from Alberta.

844   COMMISSIONER MOLNAR: So just clarify for me, you are talking about developing independent producers in Alberta and I'm talking about local production within Alberta and reflecting the local communities.

845   I think, using your words, you need to do the job for ethnic cultural communities and it is a local community and you are licensed locally in Edmonton, you are licensed locally in Calgary, so your discussion about developing these independent producers, is that going to result in programs that would be produced and aired nationally across your network, or are we talking about creating programs locally for the communities of interest within those centres in Alberta?

846   MR. MEHTA: They will be created locally. They will be aired locally in the Alberta markets and if the opportunity comes up, we probably may also be able to air them nationally.

847   To give you an example of even trying to -- you know, for years we have been trying to get a German language program, if a producer out of Alberta happens to come up with a great German show, we will air nationally. Originating out of Alberta, it will air in Ontario and in B.C. So certainly they would air in the Alberta markets, but if the opportunity comes up we will take a look at it nationally as well.

848   COMMISSIONER MOLNAR: So help me, because you have spoken and I have listened carefully, OMNI is not available in my community and you spoke about the value that you provide because you are able to give them information about what is going on in their community in their language to help people become comfortable within their communities.

849   So what are you doing in Alberta to help them become comfortable in their communities with the things that are local in the communities of Edmonton and Calgary? Right now you have said nothing, you are doing nothing, so we will accept you are doing nothing today, but we are looking forward to the next licence term.

850   MR. PELLEY: Right.

851   COMMISSIONER MOLNAR: Do you have a plan to put local programming that is relevant to those communities back into those communities?

852   MR. PELLEY: The answer would be no. We do not have a plan to produce news and information programming in Alberta outside of the independent productions that Paritosh is talking about. We have a news operation in Vancouver, we have a news operation in Toronto; the news operation in Vancouver produces two newscasts, as the one does in Toronto, but we do not have a plan to do such in Alberta.

853   MS ZINIAK: May I just for the record correct that we are producing a program called Culture Avenue out of -- we are presently working with a commercial production unit there, but there was never a requirement for local production. OMNI still continues to be seen in Alberta and Calgary, but originally there was no local production requirement for Alberta.

854   We would love to, if we could, but this again was based on financial deliberations.

855   COMMISSIONER MOLNAR: Do you have a plan to continue to solicit local advertising in Alberta?

856   MR. PELLEY: If we can, yes.

857   COMMISSIONER MOLNAR: Without providing any local content?

858   MS WHEELER: Just to clarify, the local independent productions that Paritosh spoke to, that is local programming specifically targeted towards Calgary and we are in the process of developing programming for Edmonton. So that is local production.

859   The other productions that he was speaking about in Alberta, those are national productions, those are the dramas and documentaries that, using the benefits money that we are paying as a result of the new licences in those markets. But the community liaison officers that were spoken about earlier today, they are all focused on developing independent local producers that will produce programming that reflects those local markets.

860   MR. PELLEY: Yes. I want to make the comment, though, we would produce a local newscast out of Alberta, we would produce a local newscast out of Leading Tickles, Newfoundland if we thought that we could actually generate advertising dollars and make a margin on it. You know, that is not the case.

861   So do we have any plans outside of our independent production to produce Alberta newscasts in third languages? The answer is no.

862   COMMISSIONER MOLNAR: Right. And just to be clear, I didn't ask you whether or not you were going to produce a newscast, I asked how you were going to reflect the community. And you mentioned -- you know, this is to clarify issues, so please clarify for me --

863   MR. PELLEY: Right.

864   COMMISSIONER MOLNAR: -- you mentioned that you do have local, you don't today have any local independent programs, but you are creating local programs through independent producers --

865   MR. PELLEY: Through independent productions.

866   COMMISSIONER MOLNAR: -- that will reflect the communities through those communities.

867   MR. PELLEY: That would be correct.

868   COMMISSIONER MOLNAR: Because I got a little confused when you said --

869   MR. PELLEY: No, no.

870   COMMISSIONER MOLNAR: -- but maybe it's good and so we will run it over the network.

871   MR. MEHTA: Just to be clear, presently as per today on-air we do have three programs out of Calgary. They are on-air, they are local programs. One is a Romanian language program, one is a Filipino language program and one is a Spanish language program. All these three programs originate locally out of Calgary.

872   The fourth production that is a Somali language production that will originate from either May or June, depending upon how they are able to get their productions in order. But presently we have three language productions already on-air from Alberta.

873   COMMISSIONER MOLNAR: None in Edmonton, three in Calgary?

874   MR. MEHTA: The Edmonton program is in progress -- I mean, the producer is getting his affairs in order and as soon as he is able to get it ready he will start. But in theory, we have already accepted the program, it is a matter of getting the production in place, getting the "C" number and all those things, processes in place. Once all that is delivered to us, we will put that on air.

875   COMMISSIONER MOLNAR: Okay. So we are --

876   MS WHEELER: Commissioner Molnar --


878   MS WHEELER: -- perhaps I'd just ask Paritosh as well to explain why we have that low level of production in Alberta at this point.

879   As you know, those licences were issued in 2007 and since then we have put a considerable amount of resources and effort into developing the independent production sector in both Calgary and Edmonton, but it simply hasn't resulted in any type of programming that would qualify or would be eligible for us to air. But that is certainly the work that the community liaison officers are doing on a daily basis and that is what Paritosh is referring to in terms of some of the programs that we feel are pretty near development that will actually get on-air in Edmonton and Calgary in the near future.

880   MR. MEHTA: And actually I can elaborate further on that.

881   Since 2008 our CLOs have been trying to develop programs over there. Prior to OMNI coming in the Alberta market, Shaw Cable was the only entity that actually carried these ethnic productions. Developing these ethnic productions is very difficult, it's not as simple, it's not just like putting it on-air. For OMNI we actually want to make sure that these productions have technical standards in place, they have some journalistic standards in place, and so on.

882   COMMISSIONER MOLNAR: Can I ask you something? Thank you for this, and you actually commented on this earlier today already.

883   MR. MEHTA: Right.

884   COMMISSIONER MOLNAR: So for the seven years you have held this licence you have been unable to get a production community to support local programming in these. You are now asking for a two-year licence.

885   Is there any expectation there will be -- I mean, you have sort of commented about one or two programs and Calgary, but is there any expectation that we would see some more significant commitment to those communities over your next licence term? I mean, it has taken you seven years to not get there, so are we thinking we are going to do it in the next two?

886   MS WHEELER: Well, we certainly plan on building on the record we have to date, but to say that we are going to get to the levels that we have in Toronto, that is probably not something that is going to be achievable in two years. Toronto has had 35 years to develop that infrastructure and it has taken a long time.

887   COMMISSIONER MOLNAR: Would you be able to be specific in telling me what your plans are and commitments to local programming for your different OMNI stations for your next licence term?

888   MR. PELLEY: Well, I think --

889   COMMISSIONER MOLNAR: In some way that might be like a number of hours per week or something --

890   MR. PELLEY: Yes.

891   COMMISSIONER MOLNAR: -- versus a program here and there.

892   MR. PELLEY: Yes. I wouldn't want to get into determining and agreeing to what our programming schedule or programming plan would be because it continuously continues to evolve. So I would just say that we would obviously be prepared to be compliant with all the conditions of licence. I don't think that we would get into committing to certain programming and certain networks and certain genres.

893   COMMISSIONER MOLNAR: So given that we are creating now the conditions of licence, you will simply be compliant with whatever we impose?

894   MR. PELLEY: I guess we would be, if you were --

895   COMMISSIONER MOLNAR: Unless you wanted to have a plan that said, here is what our commitment is to these local communities for the two or three years, and we will talk about the licence term in a minute, but your commitment is simply whatever we impose?

896   MR. PELLEY: Well, theoretically it always is, but we have come forward with the conditions of a licence that we believe we can start to try to make some changes to make OMNI viable. If conditions of a licence all of a sudden come with X amount of programming out of Alberta that need to be generated such-and-such and we need to do the same thing in Calgary and that of Vancouver and that of Toronto, we believe the licence currently is onerous enough, but if the Commission decides to put more arduous COLs on us, then we will have to make some tougher decisions from a programming perspective.

897   As you know, there is no current condition of licence for us to produce as many newscasts as we currently do and that is something that we believe in the quality of programming that OMNI has, as I spoke to earlier.

898   In seeing the video and seeing what we produce, we far outweigh the quality of our competitors I believe and even what we're currently doing from an original programming perspective.

899   So I would hope that it wouldn't get to that, but the conditions of licence and the changes that we have put, we have thought through thoroughly and believe that they are fair and a start to actually move OMNI onto a winning track.

900   COMMISSIONER MOLNAR: Fair enough. You know, I did hear you and I read your file and I understand you are looking at a financial situation here, but if I understand you, there would be no commitment to the individual communities under your proposal?

901   MR. PELLEY: That's correct.

902   MS WHEELER: There would be no commitment to exhibition requirements in terms of local programming, but there is certainly a commitment to serving Calgary and Edmonton and our community liaison officers in those markets are working daily to try to foster those relationships so that it does result in programming that we can air on OMNI.

903   But, as Paritosh spoke about earlier, it takes time. So certainly we have identified that as an area to work on in the next licence term, whether it is two years or five years, but in terms of making a tangible commitment to how much we are going to move that needle, we are not in a position to do that at this point, but certainly it is an area that we know we need to work on and we are committed to doing that.

904   MR. PELLEY: Yes. I think I'm a little stronger. I think I'm a little stronger in that the conditions of licence that we currently have right now are not successful and we need to actually look at it as an industry, as both with the Commission and with the broadcaster.

905   I do believe that OMNI is a network that could be sold to an independent producer and, if so, I would guarantee that it would not have the quality of production that we currently produce. I don't think we should hide behind any of what Renato, Madeline, Paritosh currently produce, do in the communities for ethnic broadcasting across the country.

906   And when you look at the 500 interventions that we had, you know exactly how many were -- what was there, 493 that were positive. So do we have a challenge with OMNI? Yes, but I stand behind how our quality of programming is and what we are actually contributing to the ethnic community.

907   MS ZINIAK: If I can add, we were producing local newscasts, as you well know, until September, 2011 and this is where my point comes in where we know that this was a very meaningful and important vehicle for communities, but again, we need that external equity to match the financial equity.

908   And this is where it is particularly hard for me, knowing that we went through three rounds of cuts, we tried -- you know, we had local production out of each Calgary and Edmonton, we then went to a national model for newscasts and then we went to creating both Calgary and Edmonton as bureaus and then we had to make the very difficult decision -- and difficult for both Renato and I, because we saw how the communities reacted and this was something new for both Calgary and Edmonton. So unfortunately, we had to do that based on financial reasons.

909   However, we continue to work with the communities out there and, you know, work with bringing together editorial boards on a monthly basis and trying to work with that. So we were there. The timing perhaps in that period of time was difficult in punitive in the sense that the revenue wasn't coming in as quickly, but this is our dichotomy, this is our OMNI schizophrenia. We know that it's important and we stand by what we said here, but then we need that other piece to come in and we need that other piece to help support this very important -- I mean, there is only one Canada, there is only one OMNI, but we need the tools to do that and really to figure out how we can jumpstart the revenues and get this to be supported.

910   There really isn't any kind of support for funding for ethnic media, for ethnic producers. I mean, we could talk about the different funds that exist, but that's finite. So that's our frustration.

911   MR. PELLEY: Yes. In hindsight, we will come back to you with regulatory and certainly CMF, which didn't come to my mind, will come up at that time as well.

912   I do also want to stress that from a digital perspective our commitment has been strong, and although these are numbers that are old they are somewhat surprising. I have just looked up, because one out of four people have tablets, and I'm one of those four, 55-64 years old in 2005, 59 percent of people in that demographic used the Internet; in 2009, which is the latest that we have from Statistics Canada, was 69 percent. So in another five years, which is now, I don't have those numbers, but I would say that close to 80 percent of people 55-64 years old use the Internet.

913   Obviously that is significantly lower than 34 years and under. And 65 years and older, as of 2009, 65 percent used the Internet. So our commitment to digital and what we have done, I don't -- again, with all due respect, should not be taken lightly.

914   COMMISSIONER MOLNAR: I think we all understand the world is changing.

915   MR. PELLEY: Yes.

916   COMMISSIONER MOLNAR: I am also one of the four, and we understand it has put pressures on your business model. The problem a little bit is that, you know, traditional over-the-air, it's a little bit of a bargain, that if you want to be an over-the-air with mandatory carriage within a community you give something back and reflect that community to them.

917   So you have come forward asking for certain changes to the regulatory to help you be more successful and for the next couple of years I guess the 8:00 to 10:00 timeslot to burn off your City programming and so on, but at some point it seems like the other part of that bargain being, if you are in that community with mandatory carriage and access to local, you should allow that community to see itself.

918   MR. PELLEY: Commissioner Molnar, I understand, I understand where you are coming from, I understand and, you know, the alternative for us is, if we can't match that, would be to shut down on the Alberta, which is not where we want to go because there is still a lot of programming that perhaps doesn't reflect that community in general, but there is a lot of programming that air on OMNI that people in Alberta are interested in and it provides value.

919   Just because the programming is not produced and represent that culture, doesn't mean that it's not valuable programming. And I think I totally understand your comment in terms of it's our obligation, but I think the industry is changing and I think that we need to be able to adapt to the changing environment, and if that means that we are going to try to produce as many programming in Alberta with the independent production community that we can, that's a great strategy.

920   But I'm trying to be realistic here in saying I'm not going to provide these producers with extra funds to put into Alberta if it is not going to produce a margin at this particular time. We still have to run this as a business and that is that challenge. And I don't want to get to the point where we have to shut down Alberta, but that would be an alternative that we would have to look at.

921   COMMISSIONER MOLNAR: Well, it's on the record, so...

922   Just to be clear, you had initially proposed a five-year licence term and you have come today requesting a two-year period.

923   MR. PELLEY: Right.

924   COMMISSIONER MOLNAR: Are you comfortable with anything between those two ranges? Like is there something magic about two years?

925   MR. PELLEY: No. If you wanted to go one year, then we would even look at one year.

926   COMMISSIONER MOLNAR: And if we went three years?

927   MR. PELLEY: Depending upon your conditions of licence. If you adhere to our conditions of licence, we would be comfortable with the three-year.


929   And for the rest of your group, you are requesting a two-year licence term as well?

930   MR. PELLEY: That's correct.

931   COMMISSIONER MOLNAR: And I think your Sportsnet, somehow for that one you want seven?

932   MS WHEELER: Sportsnet --

933   COMMISSIONER MOLNAR: Does it obviously get impacted by all the changes that are going on and everything else there?

934   MS WHEELER: Yeah, and that's precisely the rationale we had for asking for a longer licence term. It's subject to standard conditions of licence for a Category C service. We don't anticipate that changing within the next, you know, seven years. If it does we're certainly happy to come back and revisit the licence.

935   But in terms of just administrative simplicity we'd rather have the longer licence term so that it's not caught when we're -- appear before you in 2016 after our two-year licence term.

936   COMMISSIONER MOLNAR: Something less than seven years wouldn't be the end of the world?

937   MS WHEELER: Absolutely, yeah.

938   COMMISSIONER MOLNAR: So at the risk that you're going to threaten me with closing down your City stations, I want to talk about local programming on City.

939   Your current licence -- you folks know this -- your current licence requires 2 percent of your gross revenue on incremental local programming. You're proposing to change that now to a commitment to PNI?

940   MR. PELLEY: Yes.

941   COMMISSIONER MOLNAR: So how do you see this changing the programming that would be available on City and on your specialties?

942   MR. PELLEY: Are you referring to in the local market or just overall and generally?

943   COMMISSIONER MOLNAR: Well, you are proposing to change regulatory obligations.

944   MR. PELLEY: Right.

945   COMMISSIONER MOLNAR: I mean if you tell me it doesn't change your programming.

946   MR. PELLEY: Right.

947   Now, well, see, so what -- and the last time that we met, you know, our goal was to get it to the point where we were 30 percent CPE and a 5 percent PNI and I think that was the commitment that we made the Commission at that time.

948   We also made a commitment that we would embark on original series and we were going to focus on comedies which is kind of now, with 17 comedies on our schedule, has kind of been a focus for us. And we produced "Seed" out of Halifax and "Package Deal" out of Vancouver which were our first two to foray into really first run comedies. We have both given those a second licence term.

949   So I think the ability to increase the PNI was (a) to meet the condition that we had talked about and to have the same licence condition of that of our competitors despite our viewing share, while at the same time continuing to try to produce PNI programming that can generate an audience.

950   Once we're back, and I promised I wouldn't because it won't happen until 2016, we'll have a collective conversation regarding the terms of trade. That's the only mention I'll make of it.

951   MS WHEELER: But to answer your question regarding the local programming and the impact on that, that incremental spend was used to produce some local specials and some other types of programming like we covered local sports games. We did a Just for Laughs annual festival coverage in Montreal and that type of special programming.

952   So that's probably not going to be produced in lieu of the Programs of National Interest.

953   MR. PELLEY: I think -- I think when you look at local programming in any market and in -- I think all broadcasters are looking at it. They are all looking at their news. They are looking -- right now we are very excited that Calgary BT has seen a 25 percent jump in audience.

954   I would concur that some of those programming would go away, but I think you look at all your programming. We're obviously very proud of BT in Toronto and very proud of CityLine that is now in its 30th year.

955   So I think you evaluate all the programming all the time. And I think that's no different than any other broadcaster. So we just felt 30 percent CPE, 5 percent PNI and an exhibition requirement for the local markets.

956   COMMISSIONER MOLNAR: Fair enough.

957   All I'm trying to do is every time there is a change there is -- you know, there is sort of the pros and cons. There is the consequences and we're just trying to understand what are -- what is the programming that perhaps will not be made? How will this be changing local reflection in those communities?

958   So you're saying to me that it's special programming?

959   MS WHEELER: Yeah, because the 2 percent incremental was based -- was on our baseline and our baseline really consisted of what our local programming, our BTs and all the markets consisted of.

960   So it's that incremental that will probably be shifted towards Programs of National Interest.

961   MR. PELLEY: But definitively, I can't say for the record what that programming will be in the local market.   

962   You know we've looked at -- like I said, Calgary BT is doing very well. Do we produce Chatelaine and extend that brand as a national brand and bring that into an area of Vancouver and use the crews and the production facilities that we have to produce that?

963   You know, Today's Parent which is a brand that continues to do very well, do we do a component of that in Winnipeg?

964   All these are discussions that are continuing and ongoing. So we haven't definitively made a decision and we'll continue to evaluate programming just like you do on every network all the time.


966   Just to be clear for the record, the policy, the regulatory policy requires 14 hours of local programming in urban markets and seven hours in others?

967   MR. PELLEY: That's correct.

968   COMMISSIONER MOLNAR: Are you making a commitment to anything more than that?

969   MR. PELLEY: No, we're not.

970   COMMISSIONER MOLNAR: Are you prepared to commit to anything more than that?

971   MR. PELLEY: No, we're prepared to make that exhibition requirement commitment.

972   COMMISSIONER MOLNAR: That's it for the local markets. Okay. I just want to cover one more issue.

973   Going back to your opening comments you were talking about the VI code and applying that to Rogers. It's quite clear from your statements you're not really for that being applied as a condition of licence.

974   But just tell me, from your perspective what is the risk to you if it is applied as a condition of licence?

975   MS WHEELER: It's not necessarily a risk. It's the fact that those special measures were taken because of unique situations of particular broadcast groups having exceeded thresholds, pre-established thresholds by the Commission in terms of having a concerning level of concentration. And I think that we don't fit that mould. We only have 9 percent viewing share.

976   So to impose the VI code based on the program rights we have acquired is the concern because that can never -- that can never end. I mean maybe next year we'll buy something different and then -- or someone else will buy something and you'll have to impose VI codes on that.

977   I think that that merits more of a policy discussion as to why the VI code should be imposed as a condition of licence rather than just a policy that the industry is expected to adhere to.

978   MR. PELLEY: I feel that we don't just need another administrative burden, that I don't think that we have merited that type of safeguard at this point with 9 percent.

979   COMMISSIONER MOLNAR: Okay. But you accept it already applies to you?

980   MS WHEELER: Absolutely. It's a policy that we are -- we have to adhere to.

981   MR. PELLEY: Yes.

982   MS WHEELER: In terms of the --

983   COMMISSIONER MOLNAR: So there is no additional regulatory burden?

984   MS WHEELER: Well, there is in the sense that there are a number of filing requirements and I believe the COLs that have been imposed on Bell and Corus triggered a dispute resolution before the expiry of an affiliation agreement. We don't believe we've done anything to merit that type of measure.

985   We believe affiliation agreements should be negotiated in good faith and if the parties aren't able to come to a reasonable settlement or agreement then that's when we will seek Commission assistance.

986   But having the COL on our licence actually makes that an automatic requirement that we don't feel our behaviour has merited that type of safeguard.

987   COMMISSIONER MOLNAR: Okay. Fair enough.

988   And you say in here that it was -- you don't believe your past behaviour merits this level of a safeguard. So you have had no disputes or thought to withhold your programming?

989   MS WHEELER: No, we haven't.

990   MR. PELLEY: We have not.

991   COMMISSIONER MOLNAR: No, you haven't?

992   MR. PELLEY: We have not.

993   COMMISSIONER MOLNAR: Okay. I'll let parties come forward and speak to that. I think it may have happened in my region but, fair enough.

994   The other thing is --

995   MR. PELLEY: Well we'd be very interested in hearing that because I don't believe -- I would not be aware of that.


997   MS WHEELER: We didn't -- we have had dispute resolutions but we have not -- those are because we are not able to rate -- our rate card. That isn't about withholding content.

998   COMMISSIONER MOLNAR: It isn't about withholding content?

999   MS WHEELER: I think you're alluding to our dispute resolution with the CCSA on Sportsnet and that was because we were unable to come to an agreement on the rate card. It wasn't about --

1000   COMMISSIONER MOLNAR: And so you withheld the content and now you're --

1001   MS WHEELER: That was before our last licence. That was in our last licence term but, certainly, yeah -- so we did at the -- at that time we were able to do that.

1002   Now, the Commission has rules in place that we are not allowed to withhold our signal and we certainly -- we'll respect that rule.

1003   COMMISSIONER MOLNAR: Okay, thank you. Those are my questions.

1004   THE CHAIRPERSON: Thank you, Madam Molnar.

1005   I'm going to turn it over to staff in a moment. But, just briefly, we appreciate your honesty and your reasonableness, Mr. Pelley.

1006   In your attempt to reach out to the 55-64 demo and your commitment to digital, do you need the linear platform on the OMNI front?

1007   MR. PELLEY: That's a great question and it's one that we've had a lot of debate in.

1008   It's a very good question. We certainly -- we certainly need it for the next two years because of our U.S. programming that we have, but as the world becomes digital does OMNI become fully digital if you catapult ahead another 10 or 15 years? It could very very well be the case.

1009   It's an excellent -- it's an excellent question and I don't have the -- I think in the short term you do.

1010   I do. I do believe you need it in the short term. I don't know if you do in the long term, especially not knowing exactly where the industry is going to go.

1011   THE CHAIRPERSON: Thank you.

1012   Maître Gagnon..?

1013   MR. GAGNON: Thank you, Mr. Chairman.

1014   I'd like to begin with a follow-up question on a point that was made during the opening remarks.

1015   Rogers has stated that the financial projections that were filed were no longer reflecting the current reality. Well, now, those projections, they relate to which services exactly?

1016   MS WHEELER: It's City.

1017   MR. GAGNON: Only City?

1018   MS WHEELER: And OMNI.

1019   MR. PELLEY: Yeah, OMNI.

1020   MR. GAGNON: And Sportsnet 360?

1021   MR. PELLEY: And Sportsnet 360.

1022   MR. GAGNON: Would it be possible for Rogers to file those as an undertaking for those services?

1023   MR. PELLEY: Absolutely.


1024   MR. GAGNON: Now, I have a few other undertakings that I would like to relate. You might want to take these as notes because you won't get the transcript before tomorrow.

1025   So I'll just read them slowly so that you can note them.

1026   MS WHEELER: Thank you.

1027   MR. GAGNON: Can Rogers provide a detailed breakdown of projected NHL-related revenues and expenditures across each of its services within the proposed group?

1028   THE CHAIRPERSON: Maître Gagnon, all this in the attempt to perhaps avoid an in curia session -- in camera session -- excuse my Latin.

1029   So just take notes and we're going to try to avoid an in-camera.

1030   MR. PELLEY: Okay.


1032   MS WHEELER: Sorry. Could you just repeat that last -- the first one again?

1033   MR. GAGNON: Yes.

1034   If Rogers can provide a detailed breakdown of projected NHL-related revenues and expenditures across each of its services.

1035   MS WHEELER: Okay.

1036   THE CHAIRPERSON: In the group.

1037   MR. GAGNON: Within its proposed group.

1038   MS WHEELER: M'hmm.

1039   MR. GAGNON: And outside its proposed group for each of the two next broadcast years.

1040   MS WHEELER: M'hmm.


1041   MR. GAGNON: Additionally, we would like Rogers to provide NHL-related revenues and expenditures that are projected to be recorded on other services.

1042   MS WHEELER: Outside the group?

1043   MR. GAGNON: Such as CBC or TVA and also on non-linear platforms.

1044   MS WHEELER: Revenues and expenditures for licences that we don't control?

1045   MR. GAGNON: Yes.

1046   MS WHEELER: Okay. I'm not sure that we are going to be able to --

1047   MR. GAGNON: Okay. Is it possible that some of this information can be found in contracts with these other groups?

1048   MR. PELLEY: So what are you referring to?

1049   MS WHEELER: So you request that?

1050   MR. PELLEY: Are you referring the CBC revenue or are you referring to or --

1051   MS WHEELER: And TVA.

1052   MR. PELLEY: -- referring to TVA?

1053   MR. GAGNON: I'm referring to both of TVA and CBC.

1054   MR. PELLEY: Yeah, so TVA is a completely different -- we have a contractual deal with TVA that is not similar to that of CBC's. So we don't have access to their actual revenues.

1055   MR. GAGNON: Can those two --

1056   MR. PELLEY: We are not selling -- we are not selling TVA's advertising revenue.

1057   MR. GAGNON: Okay.

1058   And can you -- is it possible to file an agreement, those agreements with TVA, those contracts with TVA and CBC? Can we get those as undertakings?

--- Pause

1059   MS WHEELER: There is some concern because those commercial agreements are competitively-sensitive.

1060   MR. GAGNON: Basically you could avail yourself of the Rules of Procedure with respect to confidentiality.

1061   MS WHEELER: Absolutely. But we have no assurance that the Commission will grant that confidentiality.

1062   So I guess we would reserve the right to withdraw those contracts from the record if they were deemed to be --

1063   THE CHAIRPERSON: Absolutely.

1064   MS WHEELER: -- confidential.

1065   THE CHAIRPERSON: Absolutely.

1066   We may even provide sort of a temporary consultation and remit the entirety of the document immediately. But, go on.

1067   MR. PELLEY: Yeah.

1068   THE CHAIRPERSON: And we're not asking for TVA's revenues, obviously.

1069   MR. PELLEY: I'd still like to seek our legal counsel on how that would --

1070   MR. GAGNON: Maybe we can -- sorry. Maybe we can end this conversation after lunch, if that's okay to you?

1071   MR. PELLEY: Yeah, that's fine.

1072   MR. GAGNON: If whatever the decision is or --

1073   MR. PELLEY: Why don't you ask? We'll listen now and then we'll get back to you after lunch.

1074   MR. GAGNON: Yes.

1075   Now, with respect to timing, I mean, a lot of undertakings we discussed this morning and we'd like to get some of them or most of them before the reply phase. Is that possible?

1076   MS WHEELER: Yes.

1077   THE CHAIRPERSON: It'll have to be possible. It'll have to be nine a.m. tomorrow morning at the latest.

1078   MS WHEELER: Nine a.m.?

1079   THE CHAIRPERSON: Yes, please.

1080   MR. GAGNON: Those are my questions for the moment, Mr. Chairman.

1081   THE CHAIRPERSON: You can speak to counsel, Mr. Pelley, but they'll advise you that the asks are very reasonable and all the necessary safeguards will be put in place.

1082   MR. PELLEY: Yeah.

1083   THE CHAIRPERSON: Okay? And we'll take it from there.

1084   MR. PELLEY: Okay.

1085   THE CHAIRPERSON: All right.

1086   Autre chose, Maître Gagnon? Ça va?

   Mr. Lee? Fine.

1087   Madame Poirier...? Non.

1088   Thank you all so much. It is 12:42. We're going to break for lunch.

1089   We have to advise interveners that we'll be starting with their presentations this afternoon.

1090   Let's do 1:45. I'm being very generous. Thank you so much. See you this afternoon.

1091   Mr. Pelley, is that fine?

1092   MR. PELLEY: That's fine.

1093   THE CHAIRPERSON: Thank you.

--- Upon recessing at 1242

--- Upon resuming at 1351

1094   THE SECRETARY: I believe we are ready to start, Mr. Chairman.

1095   THE CHAIRPERSON: Just a couple of follow-up questions, I don't think there is anything else that would fall under the sensitive materials category, I think that is already been posed before lunch. And you would be in a position to provide us with that before the end of day or, at the very latest, 9:00 a.m. tomorrow?

1096   MS WHEELER: Yes, the undertakings that legal counsel outlined this --


1098   MS WHEELER: Yes. But the additional --

1099   THE CHAIRPERSON: Contracts.

1100   MS WHEELER: -- the additional information about the sales for such -- Commissioner Shoan had asked, is that all required by 9:00 a.m.?

1101   THE CHAIRPERSON: Yes, everything is going to be by 9:00 a.m.

1102   MS WHEELER: Okay.

1103   THE CHAIRPERSON: A couple of cleanup questions. One, if the Commission would deem it appropriate, would you accept the annual reports entailing the allocation of NHL-related revenues and expenditure?

1104   MS WHEELER: Related to Rogers licence services?


1106   MS WHEELER: Yes.

1107   THE CHAIRPERSON: The other question that has been somewhat asked and answered, would you be able to provide an explanation of the accounting and allocation methodology that would be used for NHL-rated revenues and programming expenditures, including the base with which this allocation between services is determined?

1108   MS WHEELER: Yes. And that relates to advertising only in terms of revenue or also subscription revenue for the speciality services?


1109   Does this relate to Sportsnet as well or just the group?

1110   THE CHAIRPERSON: The group.

1111   MS WHEELER: The group.


1113   I'm just going through these, because some of these were asked and answered.

1114   And the other question that is not here that was asked earlier, is what kind of safeguards you can put in place to assure that there isn't any gaming of the system between digital and linear?

1115   MS WHEELER: Yes. Would we be able to respond to that one in reply? Because that isn't something that we have turned our minds to, so it may require a bit more thought on your part.

1116   THE CHAIRPERSON: That is fine.

1117   MS WHEELER: Thank you.

1118   THE CHAIRPERSON: But reply could come sooner than one thinks.

1119   MS WHEELER: Okay. Tomorrow?


1121   MS WHEELER: Yes.

1122   THE CHAIRPERSON: Yes. I think that is all there is to it. And if there are any problems whatsoever, please advise before the end of day. And if you can bring us the documentation today, please do so.

1123   Monsieur Gagnon, d'autre chose?

1124   MR. GAGNON: Yes. There was a question if Sportsnet was to be included. I think we would like that, in the question that the Chairman had asked about the --

1125   MS WHEELER: About the accounting methodologies on NHL?

1126   MR. GAGNON: Yes.

1127   THE CHAIRPERSON: That is fine.

1128   MR. GAGNON: And also there was one previous undertaking on new financial projections. What we'd like to add to that undertaking would be to explain why there are changes -- changes have been made since last December.

1129   THE CHAIRPERSON: Yes. That was mentioned at the top of the day I think. You are in a position to furnish that from what I understand?

1130   MS WHEELER: Yes, we are.

1131   THE CHAIRPERSON: Yes, okay.

1132   Anything else?

1133   Great, thanks so much for sticking around after lunch.

1134   MS WHEELER: Thank you.

1135   THE CHAIRPERSON: Don't leave town.

--- Laughter

1136   Madame la Secrétaire.

1137   THE SECRETARY: Merci, Monsieur le Président.

1138   THE CHAIRPERSON: I say that because we are ahead of schedule.

1139   MS WHEELER: I am sorry?

1140   THE CHAIRPERSON: I say that because we are ahead of schedule.

1141   Okay, thanks so much.

1142   THE SECRETARY: So this concludes Phase 1 of this public hearing, Mr. Chairman.

1143   Just for the record, because we are a little bit ahead of schedule, we had to reorganize a little bit the order of appearance. So I will be announcing what the order is for this afternoon.

1144   So we will start with all interveners in support with Mr. Mohamed Dahir, which is appearing by Skype. And then we will hear the Canadian Interuniversity Sport, Mrs. Pauline, APTN, Canada India Education Society, and Brandy Y Productions.

1145   And those interveners in support will be followed by presentations by PIAC, Bell, and Unifor.

1146   The remainder of the interveners will be appearing as indicated in the order of appearance for tomorrow. All right?

1147   So I would now invite, I believe he is already on the screen, Mr. Dahir. Can you see us and can you hear us well?

1148   MR. DAHIR: Yes, I can see you and I can hear you very well.

1149   THE SECRETARY: Thank you very much. The panel is now ready to hear your presentation. You have five minutes, please go ahead.


1150   MR. DAHIR: Thank you very much.

1151   The Chair and the Members of the Canadian Radio and Television Commission, thank you very much for inviting me today for this presentation.

1152   My name is Mohamed Dahir Hassan, I am the producer of Muuqaalka Soomaalidaa, a Somali-language TV program airing on OMNI television in Ontario and Alberta, as well as the Somalia radio show on CHIN.

1153   In the last 15 years the Somali community in Canada has grown rapidly to become the third-largest Somali community outside of Somali. It is important to note that many have come to Canada in the last 15 years as refugees, fleeing the political and economic hardships in Somalia.

1154   With such high numbers in Canada comes the need for news and information in their own language of comfort. Keeping in mind the negative stereotypes associated with Somalis or Somalia these days the community craves for positive news about their own culture and language.

1155   Parents and children look for positive role models that can provide inspiration to the growing Somali generation in this country.

1156   Since the launch of Muuqaalka Soomaalidaa TV on OMNI 2 in 2002 we have been successful in informing Somali Canadians about the vitality of Somali culture and history. Through the launch of OMNI in Alberta our program continues to impart news and information in the Somali language that in many ways provides an important sense of unity across the community.

1157   Many of you may recall the fallout of the "Operation Traveller" / Mayor Rob Ford incident at the Dixon Road buildings in Toronto. For months the Somali community was the spotlight, much of it in a negative way. As there is a general sense of mistrust between the Somali community and the mainstream media. People always look at Muuqaalika Soomaalidaa TV to tell their side of the story.

1158   To help the community overcome media prejudice, I, along with some key community members, organized a bridge-building exercise with the police. Incidents such as this prove OMNI's credibility in helping large and smaller communities alike.

1159   I have been producing community programming in Toronto since 1993 and I am proud to say that my program was the first such TV production outside of Somalia. Even the BBC only produces radio shows, but not television in the Somalia language.

1160   Since 2006 Muuqaalika Soomaalidaa TV program has also been airing simultaneously on the internet, thereby proving a global audience for the Somalia Canadian production. I request Members of the Commission to long onto Toronto Somali TV on YouTube to watch a sample of the program.

1161   Through the OMNI benefit fund I have also produced two documentaries; Leopards in the Snow, and Amin, Amir that focus on stories within the Somali-Canadian diaspora. This was only possible because of the constant mentorship provided OMNI from proposal writing to creating a budget and story editing.

1162   As a producer, I regularly receive emails and phone calls from members of Somali communities in several parts of Canada and across the globe who appreciate our program and thank OMNI for providing such a platform.

1163   But all this comes at a steep price. As in most community productions, this is a one-person show; I produce, direct, and market my own production. In spite of the census numbers, the retail infrastructure in the Somali community is still weak and it affects advertising.

1164   OMNI has been kind enough to mentor us via technical and production knowledge. But what we need is some institutional support via the CMF. While English, French and Aboriginal programming get CMF envelopes, ethnic programming such as mine gets no funding. Yes, there is the Diverse Language Fund envelope, but that is for documentaries and dramas, and not for community programs.

1165   And yet, there is a sizeable ethnic independent production community who keep on doing weekly programming for their community. Many people ask me and producers like myself, that if we're not making any money, why continue doing such programming?

1166   The answer is plain and simple. For the community, it is programs such as mine that help keep the language and culture alive in Canada. Even though we are not the biggest ethnic community in Canada, it is very important for us to have a voice. OMNI is so important, as it gives important voices to communities that otherwise would be silent and their opportunities to contribute in Canada would be weakened.

1167   The Somali community in Canada continues to develop skills that will help them gain access to the cultural industries in Canada. OMNI Television provides important and viable access via television as we perform our daily work within the community in building a successful TV program.

1168   Therefore, Members of the Commission, Somali TV and Radio fully support the licence renewal for OMNI Television as well as the changes in COLs.

1169   The Somali community across Canada believes in OMNI Television as being a genuine supporter for the community as they continue to put forth great effort and commitment in assuring the success of all multilingual and multicultural programs.

1170   Members of the Commission, I thank you again for giving me the opportunity to present in person.

1171   THE CHAIRPERSON: Thank you, Mr. Dahir Hassan. Thank you very much for your presentation.

1172   You live in Toronto, do you not?

1173   MR. DAHIR: Yes, sir.

1174   THE CHAIRPERSON: I understand in your submission from earlier this year that you, on occasion, go to Alberta?

1175   MR. DAHIR: Yes, Sir.

1176   THE CHAIRPERSON: And you broadcast from the OMNI stations?

1177   MR. DAHIR: Yes, from Alberta, from Ontario, and we have local people there also. So we work together and we put it through together.

1178   THE CHAIRPERSON: And how much time do you spend in Alberta?

1179   MR. DAHIR: It depends. Most of the time the team over there do the job, but I do sometimes go there. And as often the community go in a very difficult situation. I go there every year maybe three times, four times, I go there and spend a month or two weeks or a week there.

1180   THE CHAIRPERSON: But you have collaborators there fulltime?

1181   MR. DAHIR: Yes, sir.

1182   THE CHAIRPERSON: Great. And what would be the population of people of Somali origin in Alberta, would you know?

1183   MR. DAHIR: I can't give it to you exactly the number, but it is growing rapidly everyday or every week. There are thousands or hundreds that are brought to Alberta from Turkey, from Europe, from Africa, by Canadian Government and the refugee -- UNHCR. And people sponsor their loved ones from all over, so the number is very high in Alberta. It is second to Toronto.

1184   THE CHAIRPERSON: And the state of the Somalia community in Toronto, how are things?

1185   MR. DAHIR: Things are always, you know, bad, poverty is very high. It is the highest birth rate community in all Ontario. As they say -- you know, I can quote what former Mayor of Toronto, Mayor, Mel Lastman, said one time, "It is the highest birth rate community in Toronto," he said. So the number is very high, more than 250,000.

1186   Plus there are Ethiopians, Kenyans, Djibouti, all of them they speak Somali. Most of people in Kenya who don't only speak Swahili, they speak Somali.

1187   THE CHAIRPERSON: And are those numbers reflected in the census reports, the Canadian census data?

1188   MR. DAHIR: No, they don't reflect it, because people came to this country as Djibouti. And Djibouti, they are people of Somali, but a different government. In Kenya, Ethiopia they -- but they all watch the program, they even participate with us, they work with us. So the language and ethnicity, they are Somali, but they are under other countries.

1189   THE CHAIRPERSON: Well, thank you, Mr. Dahir Hassan. Thank you very much for your presentation. Very much appreciated.

1190   MR. DAHIR: I wanted to say quickly, if you don't mind?

1191   THE CHAIRPERSON: Yes, please. Please do.

1192   MR. DAHIR: One thing very important is the system and the way that we go now is excellent. But I am asking the Commission not to allow or even authorize broken air time. Because the system that we have now is the best one. At least we need the institutional funding from CMF. Apart from that, what we have now is the best.

1193   So if the system goes broken system, it will destroy forever communities like us to have a program on air.

1194   And many communities will go back or what they call small instruments made in China through IPTV, they will put their TVs and they will download channels from Europe, Middle East and Africa and nobody will see channels from or contents from Canada.

1195   So it is very important. Even now, I know three or four basement studios that they want to produce programs without licence from CRTC or from anywhere else, and they want to produce those kind of programs and put those equipment, IPTV made in China.

1196   So what to stop people not to buy those kind of things is programs like Muuqaalika Soomaalidaa and other producers' programs.

1197   So I am requesting from the Commission not to allow broken air time.

1198   THE CHAIRPERSON: So your support is conditional to their not being brokered programming on the OMNI networks, is that correct?

1199   MR. DAHIR: Definitely.

1200   THE CHAIRPERSON: Okay, thank you very much, sir.

1201   MR. DAHIR: Thank you.

1202   THE CHAIRPERSON: We appreciate your time. Thank you.

1203   MR. DAHIR: Thank you very much for the time.

1204   THE CHAIRPERSON: Madame le Secrétaire?

1205   THE SECRETARY: Merci.

1206   I will now invite Mr. Paul Lafontaine from the Canadian Interuniversity Sport. You can take place, Mr. Lafontaine.


1207   M. LAFONTAINE: Bonjour, merci beaucoup.

1208   Members of the Commission, thank you for inviting me to appear in this hearing, to voice my support and that of my 56-member universities for the application filed by Rogers Media to renew their licence as Sportsnet and Sportsnet 360.

1209   My name is Pierre Lafontaine and I am the CEO of the CIS. The CIS is a national governing body for all university sports in a country.

1210   It covers approximately 11,000 students, about 700 student athletes, about 700 coaches in 56 different universities in four different regions; one called the AUS, which is Atlantic provinces; one is the RSEQ for Quebec; OUA for Ontario; and Canada West for all the western provinces.

1211   My other role previous to talking this role is, was your Olympic swimming coach and I would work with Sportsnet for all these years while I was with Swimming Canada.

1212   On behalf of the CIS I would like to report that our relationship with Rogers Media has helped elevate our university sports at an unprecedented level. I will talk to you about it a little later.

1213   The national coverage provided by Sportsnet and Sportsnet 360 leading up to and including all of our national championships that finished last week has been instrumental to the growth and to the promotion of our strategy for varsity sport in Canada.

1214   Our relationship with Rogers is mainly about sports, they cover sport. But it is also about exposing and building our student athletes as leaders and actually as game changers for Canada.

1215   The work that Rogers does to highlight great personal stories and the work that our student athletes do around the universities and inside of the communities is crucial to promoting and encouraging exciting university experience and developing regional following.

1216   If you ever have a chance to go to see the new strategic plan at University of Calgary, it is called Eyes High, and part of their role at the University of Calgary was really about reaching down to the community and making Calgary a part of the University of Calgary. Very much what we believe we want to do.

1217   And the strength of our student athletes is actually the quality of the individual that these athletes have become because of what they do.

1218   One of the pet peeves I have, and the reason I moved to this role, is out of our 11,000 student athletes staying in Canada there is another 4,000 that actually go to the NCAAs and every Sportsnet and Sportsnet 360 covering our Canadians at home is crucial in building the CIS brand for all the high-schoolers and CEGEP kids are looking for choices going forward, whether they get scholarships in the U.S. or they stay in Canada within our great schools.

1219   This year, for example, the Vanier Cup, which was in November, our football icon property, had close to 1 million spectators watching one of the greatest football games we've had against Vanier and the University of Calgary.

1220   We also had just a couple of weeks ago nine hours live from Women's Hockey that was played at St. Thomas University, hosted by a university which only has basically 2,000 students, and it finished in a double overtime between McGill Redmen and the Université de Montréal, which, as arch rivals, was basically just over the hill.

1221   A couple of other great rivalries that were covered by Sportsnet was University of Carleton played here in Ottawa against University of Ottawa and they were number 1 and 2 at home. It was awesome. What a great competition.

1222   And then just last week in Men's Hockey it was the University of Saskatchewan against the University of Alberta. And, again, probably I couldn't have picked the best rivalry than these two schools. They went at it and it was a great game, sold out at, you know, a 6,000-seat ice arena.

1223   Having Sportsnet on my team and on our team is also important to elevate the presence and awareness of our universities that would not necessarily receive that type of national recognition. You think of St. Thomas University. Very few people would know that it was in Fredericton.

1224   The exposure of Sportsnet this year alone was Men's Basketball was live for semi-finals and finals in Ottawa, Football in Quebec City, Women's Basketball semi-finals and finals in Windsor, Men's Hockey in Saskatoon and Women's Hockey in Fredericton. I can tell you this is certainly something Sportsnet is able to help us with and sell universities across the country.

1225   Many of the students competing in the CIS championships are Canadian icons: Haley Wickenheiser, Olympic triple Gold Medallist; we had Desiree Scott just this past year winning an Olympic Bronze Medal in Soccer, who plays soccer for the University of Manitoba; just a couple of weeks ago, Melodie Daoust won Gold for Canada in Hockey; and I go back through my little world, Mark Tewksbury was Olympic Gold Medallist and swam for the University of Calgary full-time.

1226   Probably half of the football players at CFL are CIS athletes and just this past weekend we had our first Super Bowl winner. The kicker for the Seattle Seahawks won the Super Bowl and probably rebuilt his new contract to much better financial support.

1227   A couple of things I didn't write in my note.

1228   A couple of things that I think we are working on with Sportsnet and Sportsnet 360 is building innovation, building rivalry weekends between some of the best schools around the country in different sports. Next year is our first Super Weekend Championship where we're bringing four major sports in one weekend, over 30 hours of CIS TV on Sportsnet 360.

1229   And the other pathway that is crucial for us is in many of our sports we are the pathway to the Olympics, and so, showing that to all of our high schoolers and CEGEP athletes is crucial.

1230   Finally, building role models for the next generation with the help of Rogers Television, their online platforms and all of their magazines is assisting us in our efforts of building a better country through our athletes and a healthier lifestyle for all Canadians.

1231   With this, I would like to thank the Commission for this work and allowing me to take this opportunity to do a presentation face-to-face. Merci beaucoup.

1232   THE CHAIRPERSON: Thank you, sir.

1233   Madam Molnar.

1234   COMMISSIONER MOLNAR: Thank you, Mr. Lafontaine.

1235   I just had one question. You have laid out well all of the benefits that you've received and the benefits that Rogers Sportsnet has provided to the universities and the athletes. Have you had any discussions or any conversations as to future commitments on their part?

1236   MR. LAFONTAINE: Yes. So basically, this year is our first year of a six-year plan and contract, which is really exciting. I don't know if you've noticed but it's the first time we've had Women's Sports on TV as extensively as we have now, with three games of Women's Basketball and three games of Women's Hockey.

1237   The plan is to add a sport per year for the next six years and hopefully add innovation such as, for example, the Rivalry Weekend, such as -- you know, we talked about Retro Basketball, so they wear the old Basketball games and so on.

1238   And so, it's been -- the six-year contract is about adding new sports and looking at other opportunities to highlight CIS athletes and highlight CIS.

1239   They've also done -- and that's part of the work we've done with them. They've also done 30-minute shows on certain athletes to promote the quality of the student athlete.

1240   COMMISSIONER MOLNAR: Thank you. Those are all my questions.

1241   THE CHAIRPERSON: Commissioner Shoan?

1242   COMMISSIONER SHOAN: Thank you for being here today.

1243   It's very interesting. A number of interveners wrote in for this licence renewal and they expressed some concern that Rogers would allocate Canadian programming expenditures to professional sports programming, NHL Hockey, which is typically programming which is revenue-generating and doesn't necessarily need it, but you're introducing a whole new type of sports programming which we typically didn't get a lot of information about. So it's refreshing to hear that Rogers is engaged in a six-year strategy for amateur sports in Canada.

1244   I'd like to get a bit more information about this strategy. Is it strictly with Sportsnet or is it with Sportsnet 360? Does it involve any of their conventional properties, Citytv or what have you?

1245   MR. LAFONTAINE: So, basically it's all other platforms. For example, if you look at next year, the Super Weekend --


1247   MR. LAFONTAINE: -- with 30 hours there's no way we could have it just on Sportsnet One, for example, so we'll be using the Sportsnet 360 as also another property.

1248   And if there's an overlap, we're going to be looking at other -- it might be regional properties if it's in Saskatoon or if it's in Vancouver covering some of the events there also.

1249   COMMISSIONER SHOAN: Do you have a target number of hours you'd like to hit on an annual basis?

1250   MR. LAFONTAINE: Well, I think some of the work we've done with them is -- if we could get to the 30 hours just on the Sportsnet long weekend, Super Weekend, I think it would be really exciting for --

1251   Just this year alone, with what we've seen, we've had so much good feedback from Canadians or from parents and so on, and so, for us, as we build our relationship with them and as we build our -- and I keep saying and I read it earlier, our team, I do believe that media and Sportsnet are the eyes for the next generation of kids.


1253   MR. LAFONTAINE: You know, I'm not trying to sell you anything but I can tell you that sports for boys, it's crucial to keep them in school for so many of these boys. Being on TV for them, on any platform whatsoever, is crucial.

1254   I have two boys. I'm struggling just for them to stay on the pathway to university. So to me, I think our relationship is good and it's only going to get better with time.

1255   COMMISSIONER SHOAN: That's terrific. Thank you very much for being here today.

1256   MR. LAFONTAINE: Thank you.

1257   THE CHAIRPERSON: Thank you, Monsieur Lafontaine.

1258   Just briefly, you mentioned a pet peeve of yours. If you had a magic wand and you could have sort of any ask within reason of Sportsnet and Rogers, what would it be?

1259   MR. LAFONTAINE: Probably they even expand more, you know, the ability to go down to the local games. Right now we're covering all the championships. We're covering the semi-finals in some of the championships and if we could go down a little further, it would be even greater. I think we have to build the stories from week to week into --

1260   THE CHAIRPERSON: So you'd like to get some regular season games in?

1261   MR. LAFONTAINE: Well, they already have a relationship with the OUA and they've covered some of the football games going into the Yates Bowl and so on and it's been really helpful. And so, I think for us it's just to keep building those relationships so that we allow that.

1262   THE CHAIRPERSON: And you also mentioned sort of building the profile of the athletes and expanding more on who they are and where they come from and how they got to where they got to, right, sort of almost documentary type --

1263   MR. LAFONTAINE: Yeah. Yeah.

1264   THE CHAIRPERSON: -- profiles of the athletes.

1265   MR. LAFONTAINE: I'll give you a little story on this. We've just added -- I just started with the CIS a year ago and we've just added, in relationship with the Governor General, a new award called The Governor General Academic All Canadians.

1266   THE CHAIRPERSON: M'hmm.

1267   MR. LAFONTAINE: So these are student athletes, they have above 80 percent, the top two per region. And we had the top eight kids that got received by the Governor General. It was November 12th this year. Every one of them was top of the class in terms of students and some of the best students in the country.

1268   We even have one boy now that -- from McGill, a boy that was playing football full-time, a medical school student and is just about to get drafted for the NFL.

1269   And so they've done some of the stories on these platforms and I think for us -- my job is sport, my medium is people, and I want to build the greatness of our people and hopefully we can inspire, through what we do, a healthier lifestyle and get kids in school, you know.

1270   THE CHAIRPERSON: Very interesting. Very. Thank you very much.

1271   MR. LAFONTAINE: Thank you.

1272   THE CHAIRPERSON: That red maple leaf, is that built into the shirt or is that a stick-on?

1273   MR. LAFONTAINE: Actually, I wore it for you guys but also that was our Olympic -- I was the Olympic Coach till 2012 and that was our Olympic coaching staff clothing that we gave all of our coaches for the pool deck.

1274   THE CHAIRPERSON: Okay. You answered my question.

1275   MR. LAFONTAINE: So there we go.

1276   THE CHAIRPERSON: Thanks. Nice touch. Thank you so much, Monsieur Lafontaine.

1277   MR. LAFONTAINE: No problem.

1278   LE PRÉSIDENT : Alors, Madame la Secrétaire.

1279   LA SECRÉTAIRE : Oui.

1280   Our next presenter will be by videoconference and it is Brandy Y Productions.

1281   Good afternoon. Can you see us and can you hear us well?

1282   MS YANCHYK: Yes, I can. Can you see me?

1283   THE SECRETARY: We can see you.

1284   MS YANCHYK: Hello?

1285   THE SECRETARY: Yes, we can see you and we can hear you well.

1286   The panel is now ready to hear your presentation. You have five minutes. Please go ahead.


1287   MS YANCHYK: Okay. First, I would like to thank the Chair and members of the Canadian Radio-television Commission for inviting me today to do this presentation.

1288   Now, I am a Canadian documentary filmmaker who lives in Edmonton, Alberta, and although I am based in Edmonton my documentaries are playing on an international stage. I have made five documentaries about immigration from around the world and these films have aired on BBC World TV, PBS, OMNI Television, CBC's Documentary Channel and CTS.

1289   Now, I used to live in London, England, where I worked as a Broadcast Journalist at BBC World TV and the BBC World Service. I was also a reporter for the Canadian Broadcasting Corporation from the London Bureau and after five years of living in England I decided I wanted to return to Canada so that I could live in the country that I grew up in and tell stories about my people, Canadians.

1290   Now, OMNI Television gave me the opportunity to do this. I've now been living in Alberta for five years and I have made a number of documentaries with OMNI in Mandarin, Tagalog, Ukrainian and Korean.

1291   OMNI TV's language documentaries give filmmakers the opportunity to tell stories from people the audience wouldn't usually hear from because of the language barrier. My films include heart-wrenching details from new immigrants in Canada who would never have the opportunity to tell their stories if OMNI didn't provide language programming.

1292   Now, the films I have made for OMNI have been picked up by PBS, CBC's Documentary Channel, CTS, and have won awards and been shown at film festivals in Finland, Indonesia, China, all across the United States and Canada.

1293   A major highlight for me was showing the two films I made for OMNI, called "Nature's Invitation" and "Brooks - The City of 100 Hellos," in Mandarin at the Guangzhou International Documentary Film Festival in China. It was so amazing to see how the local stories about Alberta were truly global stories and how much they resonate with an international audience.

1294   The world is a global stage now and people want to know what other people's lives are like even if English isn't their first language. With OMNI TV's language programming we actually get to hear in their own voices what is in their heart and soul.

1295   I really want to make it clear that if it wasn't for OMNI TV's Independent Producers Program I would not be a filmmaker today. Creating these films inspired me to seek out stories about Alberta and the many newcomers who are moving to this thriving province because of the economic security with the oil and gas industry. OMNI television's language programming also helped these newcomers here in Alberta to feel welcomed into Canada. Language, culture and feeling secure in a new country go hand in hand and OMNI TV facilitates this process.

1296   Working with the Director of Independent Productions of OMNI Television, Paritosh Mehta, also helped me to grow as a filmmaker. He worked with me on my strongest talents and instilled a lot of confidence in me, which I believe is the base of my success in this difficult and turbulent television industry. Every artist needs support and a voice telling them they can do it, their vision is important and we'll help pay for it.

1297   I cannot stress enough if it was not for OMNI TV I would not be able to work as a filmmaker in the Province of Alberta. There is not enough work there or broadcasters willing to pay for these types of stories. I would have to move to Toronto or another major city in Canada which is already saturated with lots of documentary filmmakers, and these unique stories about Albertans would not be told.

1298   It is imperative to my career and to many other Canadian documentary filmmakers that OMNI TV's licence is renewed. Personally, I would like to see a commitment made by OMNI to once again create multilanguage films via a new documentary fund and not spend all their money and efforts in sports programming.

1299   I just want to end on one final idea. I truly believe that our television lets society know who appears on it are the ones who are accepted by our citizens. When we watch commercials the race and ethnicity of the people in the commercials tell us who lives in Canada and, more importantly, who matters. OMNI TV with its language programming shows all Canadians that their stories are important. They belong and are welcome as part of this country with its fabric of multiculturalism that we love to brag about as Canadians.

1300   So let's celebrate the work that OMNI TV has done by being a leader when it comes to reflecting who truly lives in this country of ours, despite what their mother tongue is. Let's see more stories being told about real Canadians, new Canadians, and let's continue to learn about each other.

1301   Thank you very much.

1302   THE CHAIRPERSON: Thank you, Madam Yanchyk.

1303   Commissioner Shoan.

1304   COMMISSIONER SHOAN: Good afternoon. Hello. Thank you for being here.

1305   MS YANCHYK: Hello.

1306   COMMISSIONER SHOAN: Thank you for your presentation as well.

1307   I had a couple of questions following up on your written submission.

1308   You mentioned that Rogers OMNI Television Documentary Fund had been very helpful to you in your career as a documentary filmmaker and you noted it was extremely difficult to find funding and be commissioned by Canadian broadcasters to make one-off documentaries.

1309   Can you give me a bit of background about some of the challenges you faces in terms of getting funding for your documentary programming?

1310   MS YANCHYK: It's extremely, extremely difficult, and in fact, OMNI gave you $100,000. That was what they gave before and that money, you can't see that anywhere. You would have to go get it from five different broadcasters to make it work.

1311   And also, it's just very challenging for other broadcasters to actually put one-off documentaries on because now they want series and they want reality programming. They want three one-hour docs, this kind of thing.

1312   So that world of making one-hour docs that Canada has become so famous for is basically disappearing. It's extremely difficult.

1313   And to tell stories about new immigrants, to tell stories about people who don't speak English as a first language, no one is interested in those films other than OMNI. But look at all the success that I've had, you know, selling them to PBS, to BBC, CBC, CTS, all those film festivals. There is a global market for this work.

1314   COMMISSIONER SHOAN: Okay. Thank you.

1315   May I ask, have you had a chance to read Rogers' renewal application for this proceeding for OMNI and for its other applications -- other licences, its other services?

1316   MS YANCHYK: I have looked through it, yes.

1317   COMMISSIONER SHOAN: Okay. I'm curious because you clearly have a great deal of passion for the subject matter and for OMNI's role in terms of providing that bridge, providing that window into the lives of new Canadians, but OMNI obviously has been asking for some rather contentious to its conditions of licence, a reduction in Canadian content programming, a removal to do a certain amount of ethnic programming between 8:00 p.m. and 10:00 p.m.

1318   Do you have any comments on those proposed or suggested amendments to their conditions of licence?

1319   MS YANCHYK: The most important thing for me is that OMNI survives, and whatever OMNI has to do to make itself viable, I think it has to do what it has to do, because at this point, if this channel disappears, then all these voices are going to disappear.

1320   So, you know, if I'm being selfish by saying that, I apologize, but I'm very worried that all these opportunities are going to disappear. I'm not the one who's making those decisions about all those other factors but it's just, for me, I just want to support them and show that really I just want to make sure that this broadcaster survives.

1321   COMMISSIONER SHOAN: Okay. Thank you.

1322   Are you a viewer of OMNI, a regular viewer of OMNI?

1323   MS YANCHYK: Absolutely.

1324   COMMISSIONER SHOAN: Have you or do you regularly watch OMNI programming online, on digital platforms or do you watch it solely --

1325   MS YANCHYK: Mainly at the moment, I watch it on television.

1326   COMMISSIONER SHOAN: You watch it on television. Okay. Great. Those are my questions. Thank you very much.

1327   MS YANCHYK: I watch it on television.

1328   COMMISSIONER SHOAN: Great. Thank you.

1329   MS YANCHYK: Thank you.

1330   THE CHAIRPERSON: Thank you, Commissioner Shoan.

1331   Thank you, Madam Yanchyk. Thank you very much.

1332   Madame la Secrétaire.

1333   LA SECRÉTAIRE : Merci.

1334   Our next presenter will be appearing by Skype and it is the Yee Hong Community Wellness Foundation, Mrs. Pauline Tong. We can see her. There you go.

1335   Good afternoon.

1336   THE SECRETARY: Can you hear us well, Ms Tong?

1337   MS TONG: I can hear you very well. Can you see me and hear me?

1338   THE SECRETARY: We can, yes, very well.

1339   The panel is now ready to hear your presentation. You have five minutes. Please go ahead.


1340   MS TONG: Good afternoon.

1341   I cannot get a better follow-up with what the previous presenter was talking about from her perspective as a documentary television producer. I'm talking about it from the community's perspective.

1342   So, good afternoon, Commissioners and CRTC staff. My name is Pauline Tong and I am the Special Advisor to the Chair of the Yee Hong Community Wellness Foundation.

1343   What is unique about OMNI? There are many, but I would like to talk about how it positively impacts Canada as a country, a country that is proud of its diversity, a quality that strengthens the country as a whole.

1344   OMNI is the only broadcaster that outreaches to so many ethnic and cultural groups, both in English and in their own languages. It welcomes the immigrants to Canada and tells them the Canadian way of life. Through its airwaves, various communities share their history, culture and perspectives. More importantly, it gives them a platform to tell their Canadian stories, their dreams and aspirations, their setbacks as well as their achievements.

1345   Unlike the specialty channels that focus on one language or one ethnic group, the voices of the various ethnic communities are not just heard within their own but also being heard by other cultural and the mainstream communities.

1346   In many ways, the success stories of the immigrant groups are Canadian success stories, and OMNI has been a solid supporting partner all along.

1347   This can be best illustrated by the Yee Hong story. In 1990, when I was a volunteer working for Dragon Ball, a Chinese New Year gala raising funds to build a culturally and linguistically appropriate geriatric care centre, I remember fighting and begging for promotion and coverage of the gala. No broadcaster was interested. They had discounted Dragon Ball as too insignificant or too ethnic to merit their attention or time.

1348   OMNI has been our sponsor from the very beginning. This past January, Dragon Ball 2014 celebrated our 25th Anniversary. This major Yee Hong fundraising gala brought in excess of $20 million in 25 years to fund the critical services in support of tens of thousands of seniors and their families in the Greater Toronto Area.

1349   Channel 47 and later OMNI shared our aspiration to do well, to contribute to our adopted country, and helped us to inspire other communities.

1350   In 2000, "Courage and Compassion" was a documentary produced in English, Cantonese and Mandarin, funded by Rogers, which illustrated how Dr. Joseph Wong led a group of volunteers to get involved with numerous initiatives to help and support the city and the country they called home. In particular, it related how a whole community rallied behind the dream of building a well run and proper facility to serve seniors.

1351   Now, Yee Hong is the biggest non-profit geriatric care centre in Canada, renowned for our model, which is being sought after all over the world.

1352   As recent as last year, OMNI funded the documentary "Our Parents Our Future," broadcast in English, Mandarin and Hindi, which talked about the commonalities of how the South Asian and Chinese communities in Canada take care of their seniors. Through these documentaries we share positive cultural values and the ways we adapt to the Canadian environment to seek solutions to deal with the ever-increasing aging population.

1353   OMNI has played a significant role in the development of the Chinese Canadian community. I applaud the Commission for granting OMNI the licence and its renewal in the past. If anything, OMNI should be supported by funding like that of the CBC. Instead, it is being left to fight in the commercial world, with less and less support from Rogers, and being restricted by some of the rules set up by the Commission.

1354   Please don't allow OMNI to wither away with a thousand cuts. I sincerely appeal to you to grant the conditions for OMNI to succeed. OMNI is the one broadcaster that actually pays attention to the various communities that help to build a strong country. It pays attention to organizations like Yee Hong that sets examples for the world. Please make sure that OMNI can continue to support the various communities to achieve the excellent outcomes so envied by the world.

1355   Thank you.

1356   THE CHAIRPERSON: Thank you, Madam Tong.

1357   Madam Tong, what Commission restrictive rules are you referring to?

1358   MS TONG: Well, I think there are a number of rules, but in particular I guess just the way of how it's not providing a fair playing field as compared to the specialty channels.

1359   So there are some restrictions, I think OMNI can probably answer that much better than I do, I don't want to give you the wrong impression that I know exactly what's going on, but certainly in the way of how just hours being cut or how it is restricted in not reaching the national market or the local market, I think it plays a big part in raising the funds and advertising dollars.

1360   I think I have seen other presentations talking about why in the world would they cut a South Asian news program which has such a big following, as well as a growing population.

1361   THE CHAIRPERSON: That's a good question. When you talk about OMNI's death by a thousand cuts, who was cutting them, according to -- what's your impression? What cuts are you referring to?

1362   MS TONG: Well, I think that, you know, in the way when I was -- I have been involved with OMNI, for example the television producer was talking about, I don't think they have that anymore, I don't think they have independent production anymore.

1363   I don't think we would ever able to produce a story about Dr. Joseph Wong if it weren't for that kind of funding. The same with "Our Parents", they totally have ran out and bought -- I don't think there are additional funds to provide support for documentaries as important as what the previous producers were talking about, as well as how the stories were being shared.

1364   And I guess, you know, in the way of courage and compassion, it airs many times, people have seen it, and sometimes I have feedback from really well respected, I guess you can say, white Caucasian establishments to say, listen, I see this story, it's so inspiring, you know, or the Chinese community to come up with such kind of a model and to be shared. I think it is very important that we should keep having these kinds of documentaries to be shared by all.

1365   I don't think CBC would support a documentary such as that.

1366   THE CHAIRPERSON: Yes. With the exception of "Our Parents, Our Future" and "Courage and Compassion", can you think of any other documentaries that have been produced by OMNI over the last 20 or 30 years even?

1367   MS TONG: Well, in a way I think recently -- I mean, from time to time I would catch one. I think there was this one documentary about two twin sisters who were adopted by parents. One is I think in a West European country and the other one in China -- no, another one in Canada and how they compared, it was really enlightening to know how the world is becoming such a small place actually, but that they really can live with each other's culture, but it takes really a lot of understanding to share these kind of stories.

1368   THE CHAIRPERSON: Well, thank you very much, Madam Tong, we appreciate your contribution today.

1369   Commissioner Shoan has a question for you.

1370   COMMISSIONER SHOAN: Good afternoon, Ms Tong. A couple of quick questions. Are you a regular viewer of OMNI?

1371   MS TONG: Yes, pretty much.

1372   COMMISSIONER SHOAN: Do you watch predominately on television or do you watch online?

1373   MS TONG: I watch mostly on television. I am the older generation.

1374   COMMISSIONER SHOAN: Understood, thank you. I'm not sure if you have had an opportunity to read OMNI's Licence Renewal Application in full, but they have made some proposals for reductions in Canadian content or changes with respect to primetime programming for ethnic programming that a lot of people have commented on.

1375   Do you have any perspective on those proposals?

1376   MS TONG: Well, actually I take exception to how they are making the position. I guess if Rogers -- I believe Rogers is making the position about a financial situation, but I think they are doing the wrong thing. They really should encourage, for example, having the South Asian program, news program, not to have the American programs on the primetime. I believe that they can make money.

1377   They haven't really provided the support of promotion, marketing as necessary so that it can reach out to the mainstream, for example, bankers, that they really want to focus their attention and focus marketing, but if they are cutting that, I mean, you know, I guess a famous example that somebody -- actually Dr. Wong was talking about, is how OMNI is being cut in the way of how you look at, for example, a mainstream newspaper and they are shrinking and the Chinese newspapers, they are increasing. So why are they increasing? Because it is focused marketing.

1378   And in the way of how OMNI is switching out to ethnic broadcasters within a news hour for the Chinese community or the South Asian community, they talk about the Canadian news, they talk about the home news, they also talk about encouraging people to be part of the Canadian way of life. I mean, I don't think any other broadcaster has done that.

1379   So I think it is a very unique service and, you know, we really need that kind of outreach to the community so that they feel that they are part of the whole country.

1380   COMMISSIONER SHOAN: That's great.

1381   MS TONG: And look at how Hee Haw is successful. I mean, only in Canada that we can have geriatric centres serving -- we are talking about daily 16,000 seniors and their families, and how it can be emulated and how people are looking at our models and saying, oh, jeez, this is great. This is what we should do. This is a great service to the country.

1382   COMMISSIONER SHOAN: That's terrific. Thank you very much for your time.

1383   MS TONG: Thank you.

1384   THE CHAIRPERSON: Thank you, Madam Tong, we very much appreciate your time this afternoon.

1385   MS TONG: Thank you.

1386   THE CHAIRPERSON: Enjoy the rest of the day.

1387   MS TONG: Yes.

1388   LE PRÉSIDENT : Madame la Secrétaire.

1389   THE SECRETARY: Thank you.

1390   Our next presenter will be Monsieur Jean LaRose from the Aboriginal Peoples Television Network.

1391   Good afternoon, Mr. LaRose. Can you see us well and hear us well?

1392   M. LaROSE : Oui. Je vous vois bien. Est-ce que vous m'entendez?

1393   LA SECRÉTAIRE : Oui, parfaitement.

1394   Alors, allez-y, Monsieur LaRose. Vous avez cinq minutes.


1395   M. LaROSE : Merci beaucoup.

1396   Bon après-midi, Monsieur le Vice-Président, Commissaire Molnar et Commissaire Shoan. Mon nom est Jean LaRose. Je suis le président/directeur général du Réseau de télévision des peuples autochtones. Je vous remercie beaucoup d'avoir rendu possible cette conférence vidéo aujourd'hui.

1397   APTN supports the renewal of Rogers television service licences that are before the Commission in this hearing. As was the case in our written intervention, we wish to focus on the very positive role that Rogers has played in supporting independent Aboriginal production, especially through the OMNI One and OMNI Two services.

1398   Let me first give you a little background to our submission. I think that the Commission is aware that APTN has always thought that entering into production, training and other partnerships with more mainstream Canadian broadcasters is an important part of APTN's role in the broadcasting system. These types of partnerships are important to APTN and to Aboriginal peoples for a number of reasons.

1399   First, they often permit APTN to commission the type of high-quality television productions that would otherwise be beyond our reach. By sharing production costs and broadcast windows, APTN and our audience get to benefit from new original Canadian productions.

1400   Second, APTN's participation in these partnerships results in greater Aboriginal participation and productions than would otherwise be the case and these productions are often broadcast on different commercial and non-commercial broadcasters and seen by a wider audience. This is contributing to make Aboriginal peoples less invisible on Canadian screens.

1401   Third, greater Aboriginal participation leads to skills training for Aboriginal independent producers talent and behind-the-camera professionals. It is our hope and experience that after the production is complete Aboriginal talent is getting noticed and finding a way to work on other projects in this exciting industry, whether or not APTN is involved.

1402   We have found that Rogers has consistently been open -- and I would say more than open, even enthusiastic, to pursue these types of partnerships with APTN. This has been the case even in the more recent past when, as we have explained before, larger broadcast groups have increasingly felt pressure to develop and produce projects on their own without the type of partnerships APTN has had in the past.

1403   The OMNI services have not succumbed to this pressure. Most recently we have worked together to commission Mohawk Girls, a scripted drama which is currently in production for its second season of six episodes. The series is directed by Tracey Deer, a leading filmmaker in Canada and a Mohawk from Kahnawake. The project originated with Tracey's award-winning documentary of the same name from 2005 which she subsequently turned into a pilot drama first broadcast on APTN in 2010.

1404   Maybe I can give you a sense of what Mohawk Girls is about with a quote from an interview with Tracey which you can find on the Cinema Politica website. As she said:

"You know, stereotypes suck and lack of expectations suck. We are just as capable and complex as any other culture and somehow people don't see that. So I wanted to show people who we are in each story that I tell." (As read)

1405   And maybe this ambition has made Mohawk Girls a natural fit with the OMNI services. These services reach out to an incredible range of communities throughout Canada. Through their programming and connecting Canadians of all backgrounds together, they help break down stereotypes and help to show that all people and cultures are complex and fascinating.

1406   For example, one of the amazing things that OMNI has done with Mohawk Girls is to broadcast it in a Mandarin version, something that I feel has inspired, and I hope we can do more of in the future. This is the type of programming that can break down cultural barriers in our society and bring greater understanding.

1407   Mohawk Girls was not the first series that we worked on with OMNI. OMNI also helped to green light, "First Talk With Tamara Bull", a long-running original talk show focused on issues and subjects of interest to Aboriginal peoples in the Greater Vancouver area.

1408   I want to personally recognize the leading role that OMNI and its management played in the formation and leadership of SABAR, the Strategic Alliance of Broadcasters for Aboriginal Reflection. SABAR was established in 2003 shortly after the broadcasting industry, through a CRTC mandated study, came to the realization that with the exception of APTN, the lives and interests of Aboriginal peoples in Canada were not reflected at all on Canadian television. Through its scholarship program and other activities, SABAR is playing an important role in raising the profile of Aboriginal peoples in the industry and getting Aboriginal peoples on screen. OMNI and Rogers have been members of SABAR from the beginning and OMNI's executives have been leaders in making SABAR an effective organization.

1409   Finally, looking forward, APTN is excited about the possibility of working with Rogers in its new rule as the rights holder for NHL broadcasts in Canada. We have had initial discussions with Rogers about developing broadcasts for an Aboriginal audience.

1410   APTN was part of the consortium of broadcasters that covered the Vancouver 2010 Olympics and we have already had initial talks with Rogers on how we can take that experience and use it to our mutual advantage. I hope that we will have a positive story to tell the Commission about that in the future.

1411   APTN supports Rogers licence renewals. We have direct experience in working with Rogers and we can attest to their commitment to working with Aboriginal peoples in the interests of all Canadians.

1412   Thank you for the opportunity to speak today.

1413   LE PRÉSIDENT : Merci, Monsieur LaRose.

1414   Alors, je vais céder la parole à Monsieur Shoan.

1415   COMMISSIONER SHOAN: Good afternoon, Mr. LaRose. Thank you for being here. A couple of questions following up from your oral remarks and then I will turn to your written submission.

1416   Challenges associated with measuring third language audiences, this was something we discussed at length with Rogers this morning and how difficult it is to sell your ad inventory to the national ad agencies and other media buy opportunities when you can't actually measure your audience or provide any sort of meaningful information with respect to that demographic that is viewing your service.

1417   How has APTN attempted to overcome that difficulty?

1418   MR. LaROSE: Well, I think we are all in the same boat pretty well. One of the things that I think is impacting APTN as much as it is impacting OMNI is the fact that our audiences measure. In our conversations in the past with the BBM, they told us that there are no Aboriginal individuals in their sample, which obviously from the get-go probably indicates that whatever extrapolation they make of the numbers is not reflective of our audience. Some programming shows no audience numbers at all when, in fact, we get a lot of reaction from our community members, from individual peoples across the country. So obviously someone is watching, but the BBM does not reflect that.

1419   And I think OMNI is in the very same boat. And that impact, as much as we try to go around it by creating opportunities with online, some of our online streaming, some of our website presentation, streaming of live audio, all of these numbers add up a bit, but not to the point of allowing us, or probably OMNI to generate a fair market value for their program.

1420   COMMISSIONER SHOAN: Mr. LaRose, how do we generate better information, better measurement tools, both in the traditional realm and in the online world? Do you have any views on that?

1421   MR. LaROSE: Well, yes I do in fact. I think one of the things we probably should consider is to look at a measurement system that actually is based on the population breakdown in the country.

1422   I would argue, and I think that an experiment in Vancouver in the early 2000s demonstrated it. When you break the audience by group, you know, whether it is the Aboriginal audience, it's the East Indian, Asian or other groups, we find that people don't necessarily watch television as a uniform entity and that's the weakness of BBM, it generates numbers based on a standardized approach and we don't think the audience is in fact that standardized.

1423   What we need is a system that truly reflects either the breakdown of the communities or something that looks to whether it's the -- all of the set top boxes being installed on televisions now, whether it is from cable or satellite, those provide data to the cable companies, they provide data to the satellite companies. That data would be invaluable to demonstrate that we do have an audience and that audience is probably much larger than anything that BBM claims we have.

1424   COMMISSIONER SHOAN: Okay, great. Thank you. I would like to turn now to discuss your possible working with Rogers as its role as the rights holder for NHL broadcast in Canada.

1425   Can you give me a bit more information on that? Would that be a situation where APTN is considering buying sublicensing or Rogers would sublicense the rights to certain games to APTN to broadcast? Is it a skills training program where Rogers would impart broadcast skills to employees of APTN? Exactly what would that look like?

1426   MR. LaROSE: It might look a bit like everything you have mentioned, but it could also be something closer to the experience we had with the Olympics in Vancouver. In Vancouver Rogers and, at the time, CTV recognized they began as a full partner into the consortium. We had various games, various events during the games that were unique to APTN, others were in Aboriginal languages. We had the -- we broadcast 14 hours a day of the Olympics in 10 languages, eight Aboriginal languages, plus English and French. We had a very, very unique presentation to both the pre- and post-event programming.

1427   APTN was lauded by the IOC at the end of the games for the high quality of the programming it offered and the fact that for the first time it actually was an Aboriginal broadcaster presenting the Aboriginal community events in their language and with people who were trained by APTN in a very short timeframe.

1428   So if there were to be an agreement with Rogers -- and, as I say, we have only had one meeting, it has been very preliminary, they have shown interest in maintaining a conversation, so time will tell where that goes -- but if we had something similar to what we had in Vancouver, if we could have the type of opportunity to both train some of our people -- I mean we have coaches and whether it's Ted Nolan, we have players, Aboriginal players across the country playing in the NHL, some of these people would make terrific commentators, terrific online commentators, they could provide the backdrop, the background, some of the post- and pregame commentary analysis. I think we could bring a lot to it and it would bring it from a different perspective even to Canadians.

1429   Canadians know a lot of these players. They probably don't know that a lot of them are First Nations or Métis or even Inuit and that could give a whole different perspective to how Canadians view us when it comes to their national game, their passion, this sport that they take huge pride in claiming around the world is their sport, I think it would give them a whole new perspective.

1430   COMMISSIONER SHOAN: Well, it sounds like an exciting opportunity. I certainly hope it comes to fruition. Just a couple of more questions, Mr. LaRose.

1431   Mohawk Girls, I think it's great that it was translated into several third languages. In your working with Rogers, was Mohawk Girls closed captioned and described in video -- provided with descriptive video as well, do you recall?

1432   MR. LaROSE: I believe it was probably closed captioned. Described video, it may be one that we are doing described video on to meet our new conditions of licence. I can't say what OMNI did with its production, but I do know for sure ours was closed captioned and I suspect was or is being described video.

1433   COMMISSIONER SHOAN: Okay, thank you. Lastly, the request to have Canadian content on OMNI reduced to 40 percent, do you have a perspective on that?

1434   MR. LaROSE: Well, I think the reality for OMNI, as it is for Rogers, is that they have a service that probably they need to find -- because they can clearly demonstrate what their audience is, they probably are having challenges on the revenue side with advertisers, they are probably needing to minimize a bit their Canadian content, until we can improve the position and certainly demonstrate more clearly to various advertisers that we have viewers, that there are a source of revenue for them.

1435   So I mean, it's always unfortunate when someone has to ask that the Canadian content be dropped, but I'm not going to second-guess why they are doing it, I'm sure those are business driven and I am confident that they are doing it with the hope of providing, you know, a better environment for those networks in at least maintaining them as opposed to them being put in a difficult situation of having to shut down one service because they can't justify the financial existence.

1436   COMMISSIONER SHOAN: Okay. Those are my questions. Thank you very much

1437   LE PRÉSIDENT : Merci beaucoup, Monsieur LaRose.

1438   Malheureusement, monsieur Nolan...

1439   M. LaROSE : Merci beaucoup, Monsieur le Vice-Président.

1440   LE PRÉSIDENT : sera pas en position de commenter grand-chose, compte tenu du fait qu'il a été renouvelé pour trois ans, il y a 10 jours. C'est des bonnes nouvelles.

1441   M. LaROSE : Oui. Mais on en a d'autres aussi.

--- Laughter

1442   LE PRÉSIDENT : Sans doute. Sans doute.

1443   M. LaROSE : On va se reprendre avec plusieurs autres.

1444   LE PRÉSIDENT : Mais, en tout cas, c'est des bonne nouvelles pour Coach Nolan quand même.

1445   Merci beaucoup. À la prochaine.

1446   M. LaROSE : Merci. Bonne journée.

1447   LE PRÉSIDENT : Madame la Secrétaire.

1448   THE SECRETARY: We actually have one more intervener in support. We will have to get back to them a little bit later, we have some technical issues, the Canada India Education Society, but for right now I would invite PIAC, which is appearing with the Canadian Ethnocultural Council, Council of Senior Citizens Organizations of British Columbia, National Pensioners Federation and Public Interest Advocacy Centre.

--- Pause

1449   THE SECRETARY: Are we ready, Mr. Chairman?

1450   THE CHAIRPERSON: We are always ready when you are ready, Madame Roy.

1451   THE SECRETARY: All right. Go ahead, please.


1452   MS LAU: Thank you, Madam Secretary. Good afternoon, Mr. Vice Chair, Commissioners. My name is Alysia Lau, I am legal counsel with the Public Interest Advocacy Centre or PIAC.

1453   To my left is Geoffrey White, counsel for PIAC, as well as the Council of Senior Citizens Organizations of British Columbia, the National Pensioners Federation and the Canadian Ethnocultural Council. On my right is Anna Chiappa, Executive Director of the Canadian Ethnocultural Council or CEC. A description of each of these groups is appended to the written version of these remarks.

1454   In this proceeding the Commission is examining applications for the renewal of broadcasting licences for 17 television services owned and operated by Rogers, as well as a large number of proposed changes to existing licence conditions and a departure from the Commission's group-based licensing policy.

1455   The focus of our remarks is on the proposed changes to the OMNI services, Rogers compliance with the nature of service definitions for OLN, Rogers inclusion of Sportsnet 360 and its licensing group and Rogers role more broadly, speaking in the Canadian broadcasting system.

1456   Rogers has asked for a series of changes to the conditions of licence attached to its OMNI ethnic television stations. In the view of the groups represented on this panel, Rogers has fallen short of showing how its proposals to allow it to reduce ethnic programming, particularly during the popular primetime hours, would result in ethnocultural communities being better served by the OMNI stations.

1457   We believe ethnic programming is important to Canadians and access to ethnic programming supports a number of policy objectives under the Broadcasting Act, a point which Anna will elaborate. Therefore, we strongly oppose Rogers proposed changes, and particularly those related to the exhibition of ethnic programming and programs in third languages, the minimum number of ethnic groups that OMNI stations must serve and overlap between Rogers OMNI and City stations.

1458   We also believe that the Commission should add primetime ethnic programming exhibition requirements to Rogers OMNI Alberta stations and order Rogers to reinstitute the OMNI advisory boards.

1459   Anna...?

1460   MS CHIAPPA: Thank you very much.

1461   The organization I represent, the Canadian Ethnocultural Council, is a non-profit, non-partisan coalition of national ethnocultural umbrella organizations which in turn represent a cross-section of ethnocultural groups across Canada. I would also like to add, personally I am a viewer of OMNI, I watch the Italian shows and documentaries.

1462   We initially filed a letter supporting the Rogers renewal of the OMNI licences and this is because we support OMNI in principle, like many of the previous witnesses. We in fact support OMNI, we have supported it since the very beginning, since it was CFM-TV. We filed a letter of support for the renewal of OMNI's licence because we are concerned about the possibility of its service disappearing gradually. However, we did not say that we supported the proposed amendments. In fact, most of our members to not support the amendments and are concerned about these as well.

1463   The reality, we understand in speaking with our members, is that we each have a direct link with the respective communities is that there are concerns about how OMNI has been managed and operated by Rogers over the past few years. There is also concern that Rogers has been more focused on promoting and supporting City services and sports services, rather than on connecting with the communities that OMNI services and the ones that it has built relationships with over the past years.

1464   The very reason some Canadians purchase Rogers cable service, in our view, is because they want OMNI and over the years Omni has built a dedicated audience and cultural communities in particular have placed significant public trust in OMNI and its long-standing reflection of a broader vision of Canada.

1465   OMNI serves an important role in reflecting a broad picture of the Canadian identity and values. It has in a way become a symbol of our diversity, but that has come into question in recent years in light of the more recent management changes and cuts to ethnic programs and the current proposed amendments.

1466   OMNI was built on a community approach, a two-way dialogue, that is why cultural communities historically supported these stations. So now from eliminating the advisory boards where ethnic community representatives used to have a direct interface with management, to relying on international content rather than Canadian local content reflecting on Canada's diversity of cultures, to the reduction of primetime ethnic content, it concerns us that there is a weakening commitment to Canadian ethnic content and a breach of public trust.

1467   MS LAU: Regarding Rogers compliance with the nature of service definitions, the nature of service definition for Outdoor Life Network, or OLN, requires it to be of service, "devoted exclusively to programs that deal with outdoor recreation, conservation, wilderness and adventure".

1468   The majority of programs currently on OLN however are, in our view, inconsistent with that narrative description. Rather, OLN is currently better described as it is in the first line of the Google search result for OLN, "reality TV, adventure travel, outrageous characters".

1469   We fail to see how shows dealing with chasing criminals, searching haunted houses, bidding on lost luggage, repossessing cars, boats and planes, and eating challenges fit within OLN's nature of service definition. Most of the shows have little to do with outdoor recreation, conservation or wilderness. This is a major deviation from the nature of service description and the Commission should issue a mandatory order under section 12(2) of the Broadcasting Act requiring OLN to comply at all times with its nature of service definition. If a format protected "reality TV, adventure, travel and outrageous characters" services is to be provided, then let other potential operators come forward with their best applications.

1470   Similarly, if Rogers is unwilling to deliver on its nature of service obligations, then let other potential operators come forward.

1471   This is not the first time that Rogers has tried to change the nature of service for OLN, but it may be the first time Rogers has made the change without seeking Commission approval.

1472   MR. WHITE: Turning now to corporate and group issues, in arguing for a number of the proposed changes, Rogers has repeatedly highlighted its small relative size compared to Bell and the Shaw/Corus group and focused its remarks this morning on the conditions of licence not being successful or the industry being challenging, but there was little in the way of a plan or a commitment to Canadian communities. However, Rogers remains one of the largest communications providers in Canada and a colossus in the broadcasting system. In Roger's own words, it's Canada's largest wireless provider, the leading Canadian cable provider and the owner of a "powerful combination of communications and media assets", generating just in operating profits of $5.0 billion.

1473   It is also well known that Rogers has also recently attempted to become the sole Canadian source of NHL hockey, something described as the religion in Canada, and that Rogers committed almost $3.3 billion on 700 MHz of wireless spectrum and what was recently admitted to be part of a broader corporate strategy linking NHL hockey and wireless spectrum.

1474   An example of Rogers role in the Canadian broadcasting system is provided by the example given by Ms Chiappa about how some Canadians subscribe to Rogers cable on the basis of their interest in OMNI and as a consequence of them subscribing to Rogers cable, then also end up with Rogers home phone and Rogers wireless, and so on. You see quite quickly with that example not just how Rogers may be profiting indirectly off of OMNI, but also about how big Rogers can be in any given Canadian's life.

1475   Thus, given Rogers scope and scale, we do not believe Rogers has provided any sufficient reasoning to receive greater regulatory flexibility or leeway and should not be granted any.

1476   That means not approving the proposed changes to the OMNI licences or to letting Rogers continue to ignore the nature of service definition for OLN. It also includes not deviating from the group-based licensing policy. In the Commission's group-based licensing policy, the Commission specifically excluded Category C services from the designated group because sports programming was already profitable.

1477   If Rogers proposal to deviate from the group-based policy by allowing Sportsnet 360 into the Rogers group is accepted, then Rogers could, if it so chooses, devote 100 percent of the CPE requirements imposed on its other specialty services to Sportsnet 360, which may be in turn used to defray the cost of the 5.2 billion in NHL rights or be spent on already profitable sports services or on lower-cost sports filler content, not community-based shows or shows that reflect OLN's nature of service, for example.

1478   In our view, the Commission should only permit the inclusion of the Sportsnet 360 service into the Rogers group where Sportsnet 360 would not be an eligible recipient of any of the CPE requirements imposed on the other services in the group. This prohibition should be made a condition of licence.

1479   We maintain, however, that even then it's not entirely clear why Rogers, and any other party for that matter, should be granted this deviation and we echo calls for Rogers to produce more details about how the revenue and expenses associated with NHL exclusivity -- and we are pleased to see that this is being sought by way of an undertaking from Commission Staff.

1480   Finally, in light of Rogers size and role in the Canadian broadcasting system, and in light of the concerns expressed on the record, we do believe it is appropriate that the Commission impose upon Rogers licences the same vertical integration safeguards as imposed on Bell and the Shaw/Corus group.

1481   We noted several instances in our intervention of Rogers engaging in anti-competitive conduct and we believe other interveners may come forward with examples that give rise to a similar request to impose the VI Code.

1482   The reason given by the Rogers Panel earlier today as to why the VI Code should not be imposed was because Rogers does not fit the mould for the VI Code and a form of argument about how to impose the VI Code on Rogers would somehow be to bend it beyond the circumstances in which the Code was originally conceived.

1483   At the same time, Rogers seems willing to be flexible when it suits Rogers purposes, such as OLN's unsanctioned rebranding or in continuing to argue for more flexibility elsewhere.

1484   To conclude, all users of public radio frequencies have obligations to strengthen the ability of the Canadian broadcasting system to serve all Canadian communities. Rogers is a major vertically integrated company whose success has shown that it has widely benefited from Canadians and its broadcasting licences. Any proposed change or request must show how that change would be in the public interest and would allow Rogers to serve Canadian communities beyond the ways it is serving them today.

1485   In our view, it has fallen short of demonstrating this. Therefore, if the Commission chooses to renew the Rogers licences, then it must ensure that Rogers services will further promote and advance the policy objectives outlined in the Broadcasting Act. We are not convinced from what we heard this morning that Rogers has any concrete plans to commit to serving Canadian communities with local content in a way that reflects their culture. We are pleased to provide these oral remarks and are available to answer any questions.

1486   THE CHAIRPERSON: Thank you very much. Commissioner Shoan has some questions for you.

1487   COMMISSIONER SHOAN: Good afternoon. Thank you for being here. Just a couple of quick questions following your oral presentation and then I will turn to your written submission.

1488   With respect to paragraph 29 of your oral remarks, you mentioned the prohibition against including Category C services and/or devoting CPE to otherwise profitable programming to the detriment of other community-based shows or shows that reflect -- or shows that would possibly not be made without the assistance of CPE expenditures or of the like.

1489   I'm wondering if there is a middle ground there in terms of, for example, earlier we had an intervener come up from the University, Canadian University scene indicating that they had worked out an arrangement with Rogers for broadcasting Canadian University sports programming. Would you have any problem with CPE going to supporting that type of sports programming? Would you have similar concerns with respect to CPE going to professional sports programming if it was limited in some way? Would you have less concern if PNI was increased? Do you have any -- is there a middle ground there that would give you some more comfort, Mr. White?

1490   MR. WHITE: I don't know about a middle ground, but I do know that there are distinctions between local University sports and $5.2 billion on NHL sports. I mean, I think that is the heart of the concern here is what's -- how could this flexibility that Rogers is seeking, how could this be used in light of the NHL deal?

1491   And in terms of PNI, I think the fundamental concern is that Rogers is before you saying we can't make this work, we can't make this work, we can't make this work, it's the model, it's the conditions of licence, it's the industry, it just doesn't work. Like what we need to see is a proposal for how this would work from Rogers and I think the details are lacking there.

1492   So in concept perhaps there is a middle ground, but I think the details about the NHL revenues and expenses need to be seen by the Commission first.

1493   COMMISSIONER SHOAN: Okay. Thank you. At paragraph 31 of your oral remarks you made reference to certain instances of anti-competitive conduct and you referenced your written submission. I took a look at those instances of anti-competitive conduct and really those are instances involving the BDU arm of Rogers.

1494   You also made reference earlier in your oral presentation to the size and scope of Rogers, including of course its wireless arm and its Internet arm as well. But the Rogers broadcasting arm is significantly smaller than all three of those arms.

1495   Rogers made the argument this morning that it only has nine percent market share, viewer share. I think that was the number, it might be slightly higher.

1496   So my question to you, is it fair to put the VI Code via condition of licence on the broadcasting arm of Rogers Media when its viewing share is significantly smaller than that of Corus or Bell?

1497   MR. WHITE: Yes. I don't think you could ignore the context that Rogers Media exists in and its recent dealings and its recent media reports of its overall strategy. I mean, Rogers has an impressive share of the average Canadian's wallet and they are part of three vertically integrated companies that control I think it's 76 percent of commercial revenues right now. Fairness is a question of fair to whom, fair to Rogers, I'm not so sure, but we are really here to talk about the Canadians and the services they receive from whom and how much they pay and what their choice is and whether or not their services reflect the community that they are part of. That's the fairness here.

1498   Rogers hasn't really given a reason why the VI Code shouldn't be put on them. Rogers as a whole, and its affiliates and on the BDU side and the wireless side and all that, because a lot of the rights that Rogers Media produces are rights that Rogers, the BDU and Rogers the wireless company are going to naturally be seeking to profit off of. So that's why you would need to think carefully about imposing that Code.

1499   I will just speak to the examples we included of anti-competitive conduct. I mean, I note some other interveners as well have had the direct dealings with Rogers where it has been a problem, so I would suggest you can't ignore Rogers context.

1500   COMMISSIONER SHOAN: Okay, thank you. In your written submission you made the argument that Rogers should not be relieved of any of the regulatory commitments from which it is claiming relief.

1501   Taking a step back and without getting -- just to get into the specific requests for revisions to their conditions of licence, Rogers is quite clear this morning that the conventional broadcasting industry is going through a difficult time, Mr. Pelley felt that this is actually symptomatic of a structural problem in the industry and may not necessarily be cyclical and that the world has changed and the world is changing dramatically, and given the various options, viewing options available to Canadians on a variety of platforms, increased flexibility is necessary to make OMNI more competitive to give it the ability to program in a more cost-effective way in order to allow it to continue to be relevant.

1502   Can you speak to that generally, I suppose your perspective on the feasibility or the economic model, the business model for conventional television first and foremost, and then for OMNI's business model specifically? And this is open to any of the panel members.

1503   MS LAU: I think we can clarify our position. First of all, I think it's important to say that we see holding a broadcasting licence as a privilege because it does give you access to millions of Canadians and in order to gain that privilege you have a responsibility to the Canadian broadcasting system and to the Canadian communities that you serve.

1504   I think our view generally is that if a licensee is asking for an amendment or a change to regulatory policy or to the conditions of licence, they must show how that change is in the public interest and would benefit the Canadian viewers and the Canadian communities that they serve.

1505   So that I think would be our general position. And having reviewed Rogers application, we were not convinced that their proposals, particularly related to OMNI, showed that they would be able to better serve the ethnocultural communities of the individual OMNI television markets.

1506   COMMISSIONER SHOAN: Does anyone else have anything to add?

1507   MR. WHITE: I think, Commissioner Shoan, you need to look at the consequence of the flexibility being sought here, and with a proposed gutting of the ethnic character of the Omni licences you are going to end up -- and others have made this allegation, you have -- Omni is becoming a conventional broadcaster and its primetime schedule doesn't look very ethnic to me with back-to-back episodes of Two and a Half Men. And OMNI seems to have become, just based on comments I heard this morning, OMNI seems to have become a vehicle for burning off U.S. strip content in the evening and not a vehicle for Rogers to live up to the condition of licence.

1508   The Commission gives Rogers this licence, it expects a product and Rogers is blaming the conditions of licence and the Commission to a certain extent and the industry in Rogers inability to function in this industry.

1509   This is, as Alysia had mentioned, this is a public licence and Rogers has implicitly put the threat forth that, well, we'll see, but let others come forward with their best applications for how they can take advantage of what Statistics Canada has pointed out is a hugely growing segment of the Canadian population. I think 2006 it's about 20 percent, 22 percent, and by 2013 it's going to be 28 percent. I may have the figures a bit off, but it's a hugely growing segment of the population, and surely there is a business model there to serve those people.

1510   MS LAU: And just to add to what Geoff said, I think the fact that Rogers is before you applying for renewal of these licences means that they are prepared to hold onto them.

1511   MS CHIAPPA: If I could just add to Geoff's comment, in particular, as the community organization I don't think we have seen any special efforts by Rogers to market OMNI in a different way, to reach out to younger generations in a different way.

1512   And I guess the example I personally use is that I didn't know that I could actually watch OMNI on a tablet until I went on it myself, because no one marketed it. I had seen absolutely no marketing.

1513   So perhaps, yes, it's a difficult time, but has it really looked at ways of building the audience in reaching out to a new audience, I'm not convinced that that has been done.

1514   COMMISSIONER SHOAN: Okay, thank you. Mr. White, to your earlier point about opportunities, about a growing demographic, I think everyone would agree that certainly for this country the numbers are clear, the ethnic community, the ethnic population, the percentage of is growing quite quickly in this country, but we have heard numerous interveners today speak to the difficulty in terms of identifying viewership of third language services, ethnic services in this country, and without that ability to provide granular information with respect to viewership to national ad agencies or perhaps even local retailers, it's hard to acquire a substantial base of revenue by which to grow the business.

1515   So do you have any thoughts with respect to how that aspect of the business could be improved?

1516   MR. WHITE: The thought on that is please don't let that be the basis for accepting that Rogers can't run this business profitably in light of this huge demographic shift and in light of the huge size of Rogers and all the assets it has to bear on sort of the quad play/quid play, whatever it has become.

1517   Just on the issue of granular audience identification and the representative of APTN had a good point and we recognize that and I think that's important, better tracking, better data is something that PIAC, et al have been asking for and more data on the public record in terms of who is watching what and the revenues associated with it. So that's a broader point.

1518   But there is also a serious primary aspect to what we heard this morning. I believe Rogers has said they are developing a Google or Facebook-like platform. I'm just going to say that again, a Google or Facebook-like platform.

1519   That needs to be carefully understood because we all know Facebook and Google are involved in a lot of personal data tracking and personal data, you know, behavioural marking and so on. So I just caution the Commission. So two points:

1520   Don't let the lack of granular data about the ethnic communities be the justification for letting Rogers off the hook for these conditions of licence that it's been well aware of for many years.

1521   And also don't let the need for better data lead to this unprecedented invasion of personal privacy based on set-top box technology.

1522   COMMISSIONER SHOAN: Okay, that's fair. Thank you.

1523   A question for the entire panel. The request has been made to decrease the number of groups served for OMNI from approximately 20 groups to 10 groups.

1524   This morning there was a discussion with Rogers. Their perspective was that a reduction in the groups served would permit them to reduce the amount of repeat programming that was broadcast on the service and provide more opportunities for new fresh original programming from production communities to be broadcast on the service.

1525   I did ask them whether they would be willing to commit to some measure of original programming in exchange for a reduced number of groups to be served. They said "no".

1526   So a two-part question. Do you -- what are your perspectives on reducing the amount of community served or groups served from 20 to 10 or 20 to another reduced number?

1527   And is there any mechanism that could be in place that would alleviate those concerns either in terms of an assurance of original programming or something else?

1528   MS CHIAPPA: Well, just generally speaking from our perspective, I think our communities would be very upset to see that decrease. There was some discussion around that earlier in 2013 and people were quite upset about it.

1529   I guess OMNI, as an institution that has partnered with us, it should be growing. It should be increasing the community somehow, not diminishing them.

1530   And I don't have the formula or the answer but, surely, today with technology and innovation there must be ways to maintain the status quo and to increase it actually.

1531   And there is an issue of, I guess, in some ways that the trust that's developed, communities almost see OMNI as their ethno-cultural community. They see it as their station, I mean, you know.

1532   Correct me if I'm wrong, but it was through CMFT and OMNI that Rogers was able to get into the broadcasting world. As such, there is almost a kind of, I don't know, ownership in the sense of making sure that it not only sustains the way it is, but it grows.

1533   MS LAU: I think with regards to some kind of compromise or middle ground, I think at this point we're not willing to be -- kind of lean in favour of Rogers' proposal until at least there are greater details about their commitment to original programming and their intentions, as well as at least some kind of format of a plan in development or something.


1535   My final question: I think your position is very clear and your written submission was very strong and very clear as well.

1536   For the record, you have all been quite clear that you are not satisfied with the explanations provided by Rogers with respect to the relief they are seeking. If Rogers should decide it can't make a go of it under these conditions and they decide to return the licensee's -- return the licences -- your view is that's acceptable as another party will step forward to provide an ethnic service according to the broadcasting policy in place?

1537   MR. WHITE: I think that the question there is what's the Commission's comfort level with issuing a call for applications?

1538   I don't think a threat, as Commissioner Molnar has described it, is an appropriate regulatory advocacy strategy and that's what you're facing.

1539   I say have a beauty contest. Have other operators come forward. Use your licensing condition power to hold Rogers to account.

1540   Again, in light of the importance of these communities, in light of the policy objectives, in light of the size of this demographic and in light of the assets Rogers has to bring to bear on serving Canadians, I think you may think about seriously calling that bluff.

1541   MS LAU: Yeah. In our view OMNI is an ethnic television station.

1542   So if you're an ethnic television station you need to air ethnic programming. You can make sure that ethnic programming is accessible to your viewers during primetime, for instance, when the majority of working Canadians are actually able to access television programming.

1543   And so that is our position. If these OMNI services become something that is -- no longer reflects that mandate then, yeah, in our view it's not an ethnic television station anymore.

1544   COMMISSIONER SHOAN: Great. Your position is very clear. Thank you for being here today.

1545   Those are my questions, Mr. Chair.

1546   THE CHAIRPERSON: Thank you for the clarification. We really appreciate it.

1547   I think that's it. Thank you so much.

1548   I think, Madame le Secrétaire, we have a videoconference and then we'll take a break?

1549   THE SECRETARY: Sorry. We have one last intervener who is in support --


1551   THE SECRETARY: -- appearing from the original office in Vancouver. It's the Canada India Education Society.

1552   Hello, there. Can you see us and can you hear as well?

1553   MR. DHAHAN: We hear you well.

1554   THE SECRETARY: We don't hear you quite well, though. Can you turn up the volume a little bit, please?

--- Pause

1555   MR. DHAHAN: Hello, I am Barj Dhahan. Can you hear me now?

1556   THE SECRETARY: Yes, we can. You can now go ahead. The Panel is ready to hear your presentation, sir.


1557   MR. DHAHAN: Well, thank you very much and good afternoon to everyone.

1558   I am here on behalf of three organizations in which I have played a founding role and an important role; Canada India Education Society, Canada India Foundation and the Dhahan International Punjabi Literature Prize.

1559   We have a very keen interest in the Commission renewing the licence for Rogers OMNI, especially as it pertains to the OMNI Punjabi news hour program which runs Monday to Friday in British Columbia from nine to ten p.m.

1560   My connection and the connection of these organizations and their supporters to Rogers is largely through the OMNI Punjabi new program. This program has played an important role in creating awareness of not only these three organizations that I am speaking on behalf of, but also other community-based organizations that work in the cultural, educational and community arena.

1561   One thing that I did not write or include in my written submission is that we've seen not only ethnic communities from the South-Asian populations have a keen interest that these licences be renewed, but also we're seeing in the last number of years all of the major universities in British Columbia, they have launched Punjabi language programs.

1562   So let me give a couple of examples.

1563   The University of The Fraser Valley has a Punjabi language program and they are doing this partly in response to the very sizeable ethnic Punjabi-speaking community. So they recognize the importance of promoting Punjabi through the university.

1564   Similarly, last year, Simon Fraser University which is based out of Burnaby and has campuses in downtown Vancouver and Surrey, they also launched a new Punjabi language program. Literally within a couple of weeks of announcing the program all the classes were filled.

1565   What I'm trying to say is that not only are the ethnic community groups interested in the licence being renewed but also universities because they see the importance of the Punjabi language to a large portion of the population in the province.

1566   There is also a growing concern, you know, in the community and some people have said in fact there is also a United Nations report out there which seems to say that within 50 years Punjabi language is at risk of being extinct.

1567   The community would like to undertake initiatives to make sure that the Punjabi language thrives. It is a Canadian language. It has been spoken here for 115 years. Therefore, that was one of the rationales for us establishing the largest prize in Punjabi literature based out of Vancouver in partnership with the University of British Columbia.

1568   Now, OMNI Punjabi news program plays a really big role in promoting Punjabi language and also attracting the younger audience. I can speak from experience about my family and friendship circles where not only our grandparents are watching the nine to ten p.m. program but also their grandchildren are watching the program.

1569   So it is -- so that's the main reason or one of the reasons why we are supporting and requesting the Commission to renew the licence for OMNI Rogers.

1570   Thank you very much, and I'm open to taking some questions.

1571   THE CHAIRPERSON: Madam Molnar...?

1572   COMMISSIONER MOLNAR: Thank you for your presentation and I just have a couple of questions.

1573   You are, you mentioned, supporting Rogers' application. In their application they are requesting a number of changes that could impact their programming on the OMNI stations.

1574   I'm sure you're aware of that. You're aware of the changes that they are requesting?

1575   MR. DHAHAN: Yes, I am aware of a couple of them.

1576   COMMISSIONER MOLNAR: Okay. Well, one of them --

1577   MR. DHAHAN: Yes.

1578   COMMISSIONER MOLNAR: -- I noted your reference to the Punjabi News. And we've had other folks from your community write us in actually in opposition to the changes because of its impact on the Punjabi News. So I thought it was interesting.

1579   Rogers is proposing to modify its licence to enable it to provide non-ethnic programming between the eight and 10 p.m. time slot, which is the time I understand that the Punjabi News is showing in Vancouver.

1580   Are you aware of that change?

1581   MR. DHAHAN: I have not been aware of that specific change, but I was aware that they were looking for more flexibility in terms of scheduling. My understanding has been that the one-hour new Punjabi News program would still be kept.

1582   COMMISSIONER MOLNAR: And can I ask where you gained that understanding? Was it by --

1583   MR. DHAHAN: I think I gained that understanding from speaking with some of the people with Rogers that are involved.

1584   And in terms of the -- you know, just from my family's perspective and friendship perspective, if the program was shifted to different hours, as long as it's in the evening I think that that would be fine with most -- a large portion of the audience.

1585   COMMISSIONER MOLNAR: You do think it would fine with a large portion of the audience?

1586   I think what we've heard today --

1587   MR. DHAHAN: Yes, as long as --

1588   COMMISSIONER MOLNAR: -- is that the audience becomes very loyal to a time slot. So you don't see that as an issue if that news program gets moved?

1589   MR. DHAHAN: Well, I think -- my personal view on this is if the program is still in the evening hours, then obviously during the change there will be some adjustments.

1590   But my hunch would be that the audience would still be there.


1592   I'll just go over quickly some of the other changes that they are proposing, not all of them but some of them.

1593   They want to reduce the number of languages they are required to broadcast from 20 to 10. Are you comfortable with that modification?

1594   MR. DHAHAN: Well, you know, earlier some of the comments made I listened to them, and I share the view that in fact what is happening in our country, the ethnic population is growing so we're seeing more and more language groups growing. And there will be greater demand as we go forward for perhaps even additional ethnic language programs, so a reduction from the 20-plus down to 10 that I think would be problematic.

1595   COMMISSIONER MOLNAR: Okay. Thank you.

1596   Those are my questions. Thanks very much.

1597   THE CHAIRPERSON: Commissioner Shoan has a question.

1598   MR. DHAHAN: Thank you.

1599   COMMISSIONER SHOAN: Good afternoon. Just one question.

1600   Rogers, when it was here this morning, noted that one of the rationales for increased flexibility between the eight p.m. and ten p.m. slot was the fact that a lot of their programming is available online either through a desktop or laptop computer or a tablet and given that all their programming is available online, having a specific slot is less important.

1601   Do you or any of your family members watch OMNI programming on your tablet or online or do you rely primarily on the television?

1602   MR. DHAHAN: Well, in my family and my extended family and friendship circles, most of the people watch the program on television. It's the younger generation that have tablets, but I haven't seen anyone yet watching it on tablet or on their computers.

1603   COMMISSIONER SHOAN: Terrific.

1604   MR. DHAHAN: Most of the watching is still happening in front of the television.

1605   COMMISSIONER SHOAN: Right. Okay, that's great.

1606   Thank you very much.

1607   THE CHAIRPERSON: Thank you, Commissioner.

1608   MR. DHAHAN: You're welcome.

1609   THE CHAIRPERSON: Well, thank you, sir. Thank you for your contribution. We appreciate it and we thank you.

1610   MR. DHAHAN: Thank you.

1611   LE PRÉSIDENT : On prend une pause, Madame la Secrétaire.

1612   So we'll take a break. We'll be back -- are we starting up with Bell, Madame la Secrétaire? Are we starting up with Bell after the break?

1613   THE SECRETARY: Yes, we are.

1614   THE CHAIRPERSON: Great.

1615   So let's do a 4:00 p.m. hard start. Thank you all so much. We'll see you at four.

--- Upon recessing at 1540

--- Upon resuming at 1600

1616   THE SECRETARY: Order, please. We are now ready to hear Bell Media Inc. presentation.

1617   Please introduce yourselves for the record. You have 10 minutes.


1618   MR. GOLDSTEIN: Thank you, Madam Secretary, and good afternoon, Mr. Vice-Chairman and Commissioners.

1619   I'm Kevin Goldstein, Vice-President, Regulatory Affairs at Bell Media. With me today is Alain Straiti, Assistant General Counsel at Bell Media.

1620   We appreciate the opportunity to appear before you today to discuss with you some important issues raised by Rogers' application. While we do not oppose the renewal of the licences for Rogers' services, we believe certain changes to its proposal are required to maintain the integrity of the Commission's licensing framework and to ensure Rogers makes a contribution to the broadcasting system that is both consistent and commensurate with its programming strategies going forward.

1621   Our concerns fall into two categories; Rogers' ongoing demands for special treatment for its services compared to those of its competitors, and Rogers' failure to recognize the significant impact that its $5.2 billion NHL hockey deal will have on its services and the broadcasting system.

1622   Like me, many of the people in this room were here three years ago when Rogers argued that its Citytv stations required a special exemption from the CPE and PNI requirements of the new group-based licensing framework. At that time, Rogers argued its asset mix was different from the other large multi-station groups even though its stations purchased and produced similar types of programs and sold time to the same advertisers.

1623   While the Commission granted Rogers' request, it only issued a short-term licence, with the clear intention of revisiting it in this proceeding.

1624   While Rogers was the same as everyone else three years ago but demanded special treatment, for purposes of CPE and PNI it now has significant advantages over all of its competitors but demands to be treated the same.

1625   NHL hockey is a unique and valuable programming asset, and this change to Rogers' asset mix must be addressed in the Commission's assessment of Rogers' group application.

1626   Rogers is also requesting new special treatment for its OMNI conventional stations. In particular, Rogers is asking the Commission, (1) to remove the prime time scheduling restrictions that are imposed on OMNI as an ethnic conventional broadcaster, and (2) to reduce OMNI's Canadian content obligations to 40 percent, well below those imposed on any other conventional broadcaster.

1627   In effect, Rogers wants the benefits of mainstream conventional television licences, but not the obligations. If Rogers wants to program OMNI like a mainstream conventional service, buying and airing prime-time U.S. programming and generating the related advertising revenues, it should accept similar regulatory obligations to other conventional services like CTV and Global.

1628   In its application, Rogers does not acknowledge the radical impact that the 12 year, $5.2 billion acquisition of all national NHL broadcast rights will have on services within its proposed group.

1629   While this morning Rogers acknowledged the obviously dramatic impact the NHL hockey rights will have on its group, it didn't propose any changes to the application to reflect that impact.

1630   When the Commission excluded Category C sports services from the group-based licensing policy in 2010, it did so because sports programming is both profitable and expensive, and including it could allow spending to be diverted to high-priced sports rights at the expense of independent production, Canadian dramas and documentaries and other programming that requires regulatory support.

1631   The Commission was also concerned about creating inequity among groups.

1632   The group-based licensing policy determined that a base spending level for each group of 30 percent was appropriate, but that was based on the common realities of each group and could be adjusted as necessary, as Rogers argued, successfully, should be done for Citytv.

1633   For example, the Commission has increased the CPE requirement for the former Astral French-language services now owned by Bell Media to 32 percent. The ultimate objective of the policy is to examine the groups themselves, their expenditures, individual asset mix, plans and potential contribution.

1634   None of the private groups at that time had an overwhelmingly powerful asset like NHL hockey airing on services in the group.

1635   Rogers' application should reflect the financial impact of its NHL deal on the services in its proposed group.

1636   Beginning next year, services in the proposed Rogers group will broadcast a number of NHL games on at least three nights a week, including a new Sunday showcase on Citytv. It's obvious that this will dramatically strengthen the group as a whole.

1637   In the context of Rogers' application, we think there are three questions that need to be asked about the NHL deal in order to ensure the letter and spirit of the group-based licensing policy is maintained.

1638   First, where are the revenues?

1639   Rogers paid $5.2 billion for the rights over 12 years. That's about $433 million per year. After factoring in the sub-licences, Rogers' annual cost is about $313 million for the rights fees, and then it will have significant production costs as well.

1640   Among services in the group, Rogers has announced that Citytv will air NHL games every Saturday night and a new exclusive NHL game every Sunday night. Sportsnet 360 will air NHL games on Saturday and an exclusive night on Thursday. There could be more but, at a minimum, this would be more than 100 NHL hockey games added to the programming schedules of stations in the group.

1641   Despite the impact of NHL hockey, in its application Rogers projects that advertising revenues for the services in its group will fall slightly from 2012 levels, the last year in which data is available, as the NHL deal is implemented.

1642   For Sportsnet 360, advertising revenues are expected to be $8 million lower in 2015 than they were in 2012 despite being added to the Rogers family and gaining NHL hockey. For Citytv, Rogers estimates that advertising revenues will increase by just $16 million from 2014 to 2015 despite adding a new exclusive showcase night for NHL hockey.

1643   Rogers also projects that subscriber revenues for services in the group will increase by about $8 million between 2012 and 2015.

1644   At most, this is a $24 million revenue increase for services in the group, 16 million in advertising for Citytv and 8 million in subscriber revenues. It's difficult to see how that squares with the fact that these services will carry a significant portion of more than $300 million worth of new programming.

1645   That leads to our second question, what is the arrangement with the CBC?

1646   Alain.

1647   MR. STRATI: We know from public reports that Rogers will produce, exercise editorial and creative control, sell advertising on, and retain the revenues from NHL programming that will air Saturday nights on CBC and throughout the playoffs. In recent years, CBC has reportedly earned more than $100 million annually from its NHL hockey advertising sales.

1648   This suggests that Rogers is treating its agreement with the CBC as a brokered time arrangement where it earns revenue as a "producer" and does not treat the revenue as subject to CPE obligations, even though it is earned from broadcasts shown on the CBC.

1649   Does that mean more than $100 million simply disappears from the system?

1650   This morning, in response to the Vice-Chairman's question, Rogers described how they accounted for the Sochi Olympics for CPE purposes, indicating that the same situation would apply with the respect to the CBC-NHL arrangement.

1651   While this is technically accurate, what he described was how CBC would account for the arrangement. What wasn't discussed was where the revenue Rogers earns from selling advertising on CBC would be accounted for and whether it would be subject to CPE.

1652   It appears from their projections that it would not. The implications of this for the broadcasting system are significant.

1653   Number 3, how are revenues and expenses allocated?

1654   With NHL hockey airing on almost all its channels, CPE for the group could be diverted to rights and program production costs for NHL hockey content, replacing current expenditures for local or news programming and Canadian independent productions.

1655   This morning, Rogers downplayed this concern by noting that sports services have CPE requirements as well. Of course this is true, but the requirements for sports services are twice what Rogers is proposing for its Citytv stations.

1656   CPE can be used for a wide variety of programming, but the level is set consistent with the types of programming intended to be aired.

1657   There is a simple step the Commission can take to address this concern. For the same reason mainstream sports services are excluded from designated groups, the Commission should also exclude the revenues and expenses from all live Canadian professional sports events from its calculations for all groups.

1658   That will eliminate the incentive for group licensees to allocate CPE away from under-served programming and contribute to the fundamental goal of assisting broadcasters by providing them with greater flexibility to produce quality Canadian content. This is a step that the Commission has the ability to take in this proceeding and that should not be deferred until Rogers' next renewal.

1659   If the Commission decides not to exclude live Canadian professional sports events from the group-based licensing calculations at this time, it should set the CPE and PNI obligations for the Rogers group to reflect its uniquely advantageous asset mix.

1660   Kevin.

1661   MR. GOLDSTEIN: Thanks, Alain.

1662   The Commission's group-based licensing framework is a progressive approach that assists broadcasters in delivering on the objectives of the Broadcasting Act.

1663   We do not oppose Rogers' application to be treated as a group and to benefit from this Commission policy. If it wants to do so, however, it must accept commensurate obligations and the Commission must take reasonable steps to maintain the purpose and integrity of the policy and to ensure that all broadcasters make an equitable contribution to our system.

1664   In particular, the Commission must, (1) exclude revenues and expenses associated with mainstream live Canadian professional sports events from the CPE and PNI calculations for the group. (2) Alternatively, set CPE and PNI obligations that reflect the unique advantages of the NHL deal. And (3) deny Rogers' requests to (a) remove the prime time scheduling obligations OMNI has as an ethnic broadcaster and (b) reduce OMNI's CPE obligations to 40 percent.

1665   By taking these steps, the Commission can make sure that both Rogers and the broadcasting system benefit from the application of the group-based licensing policy to Rogers over its next licence term.

1666   Those conclude our remarks. We'd be pleased to answer any questions.

1667   THE CHAIRPERSON: Thank you very much.

1668   I'd like to get to your conclusions as we move along, and we'll address some of your concerns. But let's start from the top and, specifically, demands for special treatment.

1669   Help me understand. Three years ago, Rogers was sufficiently balanced in their asset mix so that they should have been included under group licensing and, three years later, when we add Sportsnet 360, they're just too big, too powerful and would create massive imbalances within the system and they should not be treated like every other group licensed broadcaster in Canada.

1670   MR. GOLDSTEIN: I don't think it's really the group licensing that we necessarily have a concern with. It's that it would seem, when you read the Rogers application, that everything is destined to try to say, okay, you know, three years ago, we were here and we said, you know, we need something different. It doesn't work for us.

1671   And now, we've done a whole bunch of things and we can get to 30 percent if you do this, this, this and this. And you know, I don't even know that 30 percent is necessarily what the objective is.

1672   You know, to me, the group-based licensing framework is that, you know, you have a CPE and you share the expenditures amongst the different assets.

1673   In this instance, though, you've got everyone else who competes with Rogers, so that's us, that's Shaw, CORUS. You've got the former Astral Group, who we also own. And you know, we all air various different types of programming and we all have various mix of different assets.

1674   And you know, we produce dramas, documentaries, news, a whole bunch of different things.

1675   The problem is, that what we essentially see here is, is Rogers saying, "We're just like them. We should have all the same obligations as them" except that they have this one asset that no one else has, which is fine. They went and purchased it, the NHL. That's great. You know, good for them. I hope they do well with it.

1676   But the amount they've spent on it and the fact that it all counts as Canadian expenditures mean that they effectively will have to do nothing else. And that puts them at a competitive advantage over the rest of us in terms of the way the policy is structured.

1677   I don't know, Alain, if you want to add anything.

1678   THE CHAIRPERSON: Yeah. No, I was here three years ago, just as you were, and I remember Bell's arguments pretty clearly. And I've heard Bell's arguments ever since then.

1679   And the argument always is, treat everyone the same. Treat us like you treat everybody else.

1680   And you come before us today to say, you know what, don't treat us like you treat everybody else because, given changes in the system over the last few years, namely, the acquisition of NHL sports rights by Rogers, they're going to be too big and too powerful and they shouldn't be treated like everyone else.

1681   And Bell's ask has traditionally been conformity. Give us the same treatment as everybody else. Ignore the fact that we might have market share, far more infrastructure than anyone else. Ignore the fact that we may have revenue share, even more interesting than market share, than anyone else. And treat everyone the same.

1682   And now Bell comes before us this afternoon to say no, don't treat everyone the same because there may be some kind of advantage that may fall upon Rogers that we don't necessarily have, so now we want special treatment or we should give them special treatment.

1683   Does that come together for you? Because it doesn't come together for me.

1684   MR. GOLDSTEIN: I guess I have a couple of comments on that.


1686   MR. GOLDSTEIN: You know, I think -- and I think it's true to say that, you know, Bell has consistently maintained that you should treat like entities alike.

1687   We're not dealing with like entities.

1688   THE ADJUDICATOR: Rogers has somehow become an "unlike entity".

1689   MR. GOLDSTEIN: Well, they are because essentially -- and you heard it from Mr. Pelley this morning in terms of, you know, we're going to meet all our PNI requirements by doing hockey documentaries and we're going to meet all our Canada -- you know, spend all our Canadian content on hockey. Maybe not next year because we've commissioned a couple of shows, but that's where all the money's going.

1690   And that's --

1691   THE CHAIRPERSON: Well, we can get to that and there can be safeguards put in place.

1692   MR. GOLDSTEIN: You know, and that's what we've chosen to do. But I think it's definitely a differentiating factor between, you know, what others offer.

1693   Shaw, if you look at Global and the Shaw mix of services, there's no professional sports there other than some U.S. golf, which doesn't count to your CPE, but the revenue contributes to it.

1694   If you look at what the CTV group has -- put TSN aside. It's not part of our group. You know, there's not really anything there in terms of sports.

1695   There's NFL football, but again, that's the same as golf. So it doesn't -- there's no CPE on that --


1697   MR. GOLDSTEIN: -- and it contributes to the revenue that then goes back and invest it into the system.

1698   So I think, you know, to the first point, you know, I think you've got different -- you have different type of assets, so you're not necessarily going to -- shouldn't apply the same type of obligations.

1699   The other thing, too, is that in terms of Bell's comment, it's true, we have argued that there should be symmetry, but there seems to be a willingness on behalf of the Commission over the last number of series of, you know, decisions over the last few years to actually not adopt that approach.

1700   You know, it didn't adopt that approach in 2011 with Rogers. It didn't adopt that approach with respect to Astral in terms of, you know, the revised group. We ended up with 32 percent.

1701   And so you know, it's - you know, to say, you know, it's -- I understand where Rogers is coming from. I think they would very much like 30 and five.

1702   Thirty (30) and five was on offer in 2011 when the Commission sort of set it initially for everyone and everyone kind of looked the same. They chose that that wasn't in their interest at that time for a variety of reasons.

1703   Now they've come back and they've got a different mix.

1704   THE CHAIRPERSON: Traditionally, we've looked at the aggregate CPE and PNI for the last three years.

1705   We did that in probably 2011. We did that under French licensing, if I'm not mistaken.

1706   We did that following the acquisition of Astral by Bell.

1707   Why wouldn't we look at Rogers' three-year aggregate spend on CPE and PNI and base their next licence term on those numbers?

1708   MR. GOLDSTEIN: And this is a bit of a challenge in using a historical representation of their spending because they got a special deal for the last three years.

1709   When we actually looked at the historical spend of all the other licensees that you referenced, their spend wasn't necessarily regulated in the same way so the spend was more reflective of what their true spend in the marketplace might be.

1710   You know, essentially, if we have -- and I think we noted this in our written comments. If you look at the historical spend of Rogers over the last three years and you say that sounds good, that's what we should do, then you're essentially codifying the regulatory advantage they got three years ago.

1711   THE CHAIRPERSON: Nothing prohibits Bell from broadcasting NHL hockey that they own on the CTV network.

1712   MR. GOLDSTEIN: You mean in terms of the rights we've acquired for TSN?

1713   THE CHAIRPERSON: In terms of the rights --

1714   MR. GOLDSTEIN: If we wanted to move programming over to be on our conventional network?


1716   MR. GOLDSTEIN: I'd have to actually -- I'll be honest, I'd have to actually look at our licensing.

1717   THE CHAIRPERSON: Is there a regulatory --

1718   MR. GOLDSTEIN: Not necessarily a -- there wouldn't be a regulatory restriction on us doing that presuming we met the necessary Canadian content exhibition requirements and things like that. But you know, when you do go and license rights to programming, it's generally you license it for different windows and different mediums.

1719   Sometimes in terms of the way Rogers licensed the national rights, they licensed it for everything and they have the flexibility to do what they want?

1720   We don't necessarily license things, but I don't have the agreements in front of me, so I couldn't comment.

1721   THE CHAIRPERSON: Your Cat Cs are not part of group licensing?

1722   MR. GOLDSTEIN: No.

1723   THE CHAIRPERSON: The Rogers Cat Cs would not be part of group licensing, either.

1724   MR. GOLDSTEIN: That's correct.

1725   THE CHAIRPERSON: Right.

1726   AVS Sport is part of group licensing.

1727   MR. GOLDSTEIN: It is.

1728   THE CHAIRPERSON: And how would that be different from Sportsnet 360?

1729   MR. GOLDSTEIN: RDS Info doesn't really air live sports in the same way.

1730   You know, Sportsnet 360, as we highlighted in our opening statement today, and Rogers has been fairly transparent in terms of its plans relating to NHL hockey, that service airs a lot of live sporting events and it will air premium live sporting events in terms of NHL hockey, including designating a specific night of the week that will be exclusive to them.

1731   THE CHAIRPERSON: Is there a regulatory restriction that would not allow you to broadcast live premium NHL rights on AVS Sport?

1732   MR. GOLDSTEIN: Sorry, on RDS Info?


1734   MR. GOLDSTEIN: Is there a regulatory requirement? There's a limitation --

1735   THE CHAIRPERSON: Is there a regulatory restriction that would not allow you to broadcast live premium NHL hockey?

1736   MR. GOLDSTEIN: There isn't a regulatory restriction, but there's a practical restriction, which is that the content doesn't exist. The content doesn't exist because there's only a limited amount of content that is appropriate to the French market, and essentially we have RDS and RDS2, which are Cat Cs, which are outside the group.

1737   THE CHAIRPERSON: I understand that. But the regulatory conditions under which RDS Info has to broadcast are the same as those under Sportsnet 360.

1738   In other words, you also have a 15 percent live sports restriction, the same as Sportsnet 360, does it not?

1739   MR. GOLDSTEIN: It does, but the services haven't operated in a similar way since their development. They may have similar conditions of licence, but they --

1740   THE CHAIRPERSON: That's a business choice. That's a --

1741   MR. GOLDSTEIN: That's correct.

1742   THE CHAIRPERSON: -- programming choice.

1743   MR. GOLDSTEIN: That's correct.

1744   THE CHAIRPERSON: Right. Okay.

1745   But the RDS Info is part of group licensing for the Bell properties.

1746   MR. GOLDSTEIN: It is. I think the other thing, too, that one needs to keep in mind in terms of RDS Info -- and you know, I understand where you're going in terms of the -- you know, whether or not Sportsnet 360 should be part of the group or not.

1747   And you know, I know our intervention was fairly, you know, firm on that point, but I think, you know, as we've kind of honed our comments today, you know, our issue is in terms of that the obligations are properly reflective of the position they -- you know, the position they have.

1748   You know, they -- you know, essentially, what we heard from Rogers was is that we can get to this number, but you just got to let us do this and let us do that.

1749   The interesting thing is, is that, you know, it's also a matter of degree. You know, I looked at the amount of CPE that RDS Info contributions to our group, so we spend somewhere in around $400 million on CPE every year --


1751   MR. GOLDSTEIN: -- in terms of the -- that's the Bell Media regulated group. We spend more on Canadian programming when you include all the assets, especially TSN and RDS.

1752   The RDS Info is, I think, 10 million of that, so it's about two and a half percent.

1753   You know, the Sportsnet 360 element will be much larger as part of that, but that isn't really our concern. You know, I think our concern is setting the number at the right number or excluding the life sporting events to sort of level the playing field.

1754   THE CHAIRPERSON: Right. We can get on to the exclusion of live sporting events later on.

1755   Just to be clear, Bell's position today is that Sportsnet 360 should be excluded and that Rogers group licensing should be at 30 percent with -- 30 percent CPE with a five percent PNI.

1756   Is that Bell's position today?

1757   MR. GOLDSTEIN: I think our position is that live sporting events should be excluded, and if that is the case, then the obligation should be 30 and five. And I think we're indifferent on -- in that scenario whether Sportsnet 360 is in or out.

1758   THE CHAIRPERSON: Or out. Okay. Great.

1759   You talked about hockey documentaries, and I spoke about the hockey documentaries this morning as well. And you heard Mr. Pelley say that, you know, hockey docs are hockey docs and they're as PNI as anything else.

1760   Reaction?

1761   MR. GOLDSTEIN: I think sports documentaries along with, you know, various other types of documentaries can be great. You know, we haven't advocated that hockey documentaries shouldn't qualify as PNI for Rogers or anything.

1762   You know, our concern lies more in the bigger budget kind of rights issue that is attached to kind of the overall live event NHL package. It's not really relating to the PNI side.

1763   I think we have some concerns about, you know -- and I'm sure we'll get there in terms of the CBC and where their revenue is going because that obviously influences in terms of absolute dollars what you spend on PNI.

1764   But in terms of going to an independent producer and say we'd like to do a documentary on, you know, some element of hockey, I think we think that's great. I think, you know, obviously, it's not -- we didn't air it on CTV, but "Engraved by the Nation", the -- you know, the TSN documentary series that we did around the 100th anniversary of the Grey Cup, huge success.

1765   If that would have aired on conventional or as part of our group, that would have been PNI. I think everyone --


1767   MR. GOLDSTEIN: You know, it was widely critically acclaimed, so we don't have an issue with that.

1768   THE CHAIRPERSON: You talked about the cost of acquiring the NHL rights, the global cost. You broke it down on a yearly basis. You subtracted what is estimated to be contribution and you arrived at a number of $313 million. And you also add a production cost to that.

1769   Now, could you put a production cost -- I mean, there are varying kinds of productions, depending on the game and depending on how much production you want to put into the game. And you can have one camera or you can have 20 cameras and, you know, 20 on-air personalities working a game.

1770   Your best guesstimate above and beyond the $313 million in fees, I mean production costs above and beyond that, would you double that number on a yearly basis?

1771   MR. GOLDSTEIN: No, I don't think it is that much.

1772   THE CHAIRPERSON: Where would you put that?

1773   MR. GOLDSTEIN: I am trying to remember what...

1774   THE CHAIRPERSON: You have a lot of experience with hockey productions on TSN and elsewhere?

1775   MR. GOLDSTEIN: You know, and I am sure the Rogers people will be able to give you more accurate numbers on this. I think it is somewhere in the range of about $100,000 to $150,000 a game.

1776   THE CHAIRPERSON: A game. So if you got --

1777   MR. GOLDSTEIN: Now, that depends -- that is if you do it in terms of as a Canadian game, that you are going to have talent and whatever, as opposed to picking up a U.S. feed, that you are going to just rebroadcast, whereas the cost would be --

1778   THE CHAIRPERSON: So if you are adding 100 NHL games for the season, as is put forward here under paragraph 14, you have $150,000 x 100?

1779   MR. GOLDSTEIN: So, yes, $10 million to $15 million on --

1780   THE CHAIRPERSON: Exactly. So you are adding another 15 million to those costs.

1781   We talk about numbers and we talk about, you know, what CBC may have contended they were receiving in revenues as a consequence of having hockey on their network.

1782   And you talked about an obvious discrepancy in the projections that Rogers put forward in terms of their numbers. And you threw out $100 million that may be missing, may be more, may be less, I don't know.

1783   But I mean all sports revenue basically or most sports revenue for Bell is derived from TSN, TSN properties. And would you not suspect that most of the revenues would come from subs and advertising on Sportsnet network, the Cat C that is not included in the group licensing? Wouldn't that come in and pickup the lion's share of those missing monies?

1784   MR. GOLDSTEIN: Not at all. I think the intention and I think Rogers spoke to it this morning, and has been evident in their plans, is CBC is going to air the 7:00 prime time Toronto Maple Leaf's game, the most profitable and highest revenue generating game in the country, and that is going to continue.

1785   So I think the revenue will be split up. I think, you know, it seems to me, you know, Sportsnet has had lots of hockey historically and I think -- trying to think what is new for Sportsnet in this. I think they are going to get Wednesday, which was I think traditionally the TSN game, national game. They might get some Saturday night.

1786   But what is really going to benefit out of this a lot is City and Sportsnet 360 which historically has not had it. So I really don't think there would be a huge amount of that revenue that, you know, is going to go to Sportsnet. I think there will be a large amount of revenue still derived from what is sold on CBC.

1787   THE CHAIRPERSON: So City will have a Sunday night game?

1788   MR. GOLDSTEIN: That is our understanding.

1789   THE CHAIRPERSON: Obviously your understanding, and we have asked some questions on that and we are going to get some answers on a lot of these concerns that you put forward today shortly.

1790   But the Saturday night game will be broadcast on the CBC, that is your understanding?

1791   MR. GOLDSTEIN: Our understanding is that there is, and I think we heard it this morning as well, so there is going to be multiple different stations airing NHL hockey on Saturday nights.

1792   So if I remember what I heard this morning, in a typical Saturday night, if I am sitting in Toronto, CBC is going to have the Toronto Leafs game, City might have the Habs game, and 360 might have the Jets game or --

1793   THE CHAIRPERSON: A western game?

1794   MR. GOLDSTEIN: But there is going to be multiple different stations airing it.

1795   To be honest, it is not dramatically -- I know I heard this morning, you know, that we are going to be bringing all this content to conventional television and that is so great for the viewer. And it is, you know, there will be lots of places where you can watch hockey.

1796   There are lots of places you can watch hockey now, you know, and it is nonconventional too. You know, we all have distant signals, you know, they are not the greatest thing in the world, I think we have been pretty... You know, Mr. Pelley spoke to it this morning, I think we have been pretty consistent on it, it causes challenges from a rights perspective.

1797   But anyone who has a BDU subscription essentially can get, you know, all of those games. They can get the --

1798   THE CHAIRPERSON: At a cost.

1799   MR. GOLDSTEIN: Sometimes yes, sometimes no, as part of my basic package.

1800   THE CHAIRPERSON: As opposed to an OTA?

1801   MR. GOLDSTEIN: Yes, it is part of my basic package. So, you know, I don't think there is a lot of OTA tuning. I think that people watch over-the-air television -- there is about 8 per cent of the population that watch over-the-air television.

1802   You know, a lot of --

1803   THE CHAIRPERSON: But distant signals are part of your basic package?

1804   MR. GOLDSTEIN: I think so, yes. Like, I am a digital subscriber, so...

1805   THE CHAIRPERSON: And they are part of your basic package at no extra charge?

1806   MR. GOLDSTEIN: I haven't looked. It is definitely generally part of your DTH subscriber, distant signals are part of your basic package.


1808   MR. GOLDSTEIN: Why? that is a problem?

1809   THE CHAIRPERSON: I don't know, not sure. Okay.

1810   MR. GOLDSTEIN: They always have been.

1811   THE CHAIRPERSON: I guess it depends on where you are at.

1812   MR. GOLDSTEIN: At least on the Bell ExpressVu package they always have been.

1813   THE CHAIRPERSON: Good plug.

--- Laughter

1814   So you were saying that the fact that it is going to be on conventional television, not a big deal? Just to get back to your point.

1815   MR. GOLDSTEIN: Yes.

1816   THE CHAIRPERSON: If you were to include the hockey rights I guess you would exclude the live game, but you would include the pre-game and the post-game --

1817   MR. GOLDSTEIN: Yes, that is fine.

1818   THE CHAIRPERSON: -- from your model potentially?

1819   MR. GOLDSTEIN: Yes, that is fine.

1820   THE CHAIRPERSON: That would be fine?

1821   MR. GOLDSTEIN: Yes.

1822   THE CHAIRPERSON: And that can be counted as CPE spend, the pre and post-game?

1823   MR. GOLDSTEIN: Absolutely.

1824   THE CHAIRPERSON: Okay. And if you were to allow CPE to be counted, the hockey rights per se, I mean is there a number that you would like to float out there in terms of what would have been an appropriate CPE/PNI?

1825   MR. GOLDSTEIN: There isn't. You know, honestly I think the Commission needs to look at it and assess. You know, and we said in your opening statement, you know, Ms Wheeler commented this morning on how the sports services have CPE requirements. They do. TSN has a 50 per cent CPE requirement.


1827   MR. GOLDSTEIN: If you are going to use all your Canadian programming expend on hockey, that is not the number we are throwing out, but --

1828   THE CHAIRPERSON: Right.

1829   MR. GOLDSTEIN: -- but, you know, I think the Commission has to make -- you know, get themselves comfortable with what they feel is a commensurate commitment given the advantage they are going to have.

1830   THE CHAIRPERSON: If you have $120 million per game production cost --

1831   MR. GOLDSTEIN: $120,000.

1832   THE CHAIRPERSON: -- $120,000, sorry, that would give you a pretty good idea as to how you might be able to adjust that number?

1833   MR. GOLDSTEIN: Well, not really because the productions costs, you know, is really dwarfed by the rights cost. You know, because all of the rights go into CPE. So it is not -- you know, there is $313 million, roughly, that is going to get floated in, you know, as CPE somewhere between Sportsnet, City, Sportsnet 360 and the like.

1834   THE CHAIRPERSON: Right.

1835   MR. GOLDSTEIN: So, you know, there is going to be additional costs relating to production that get added on top of that.

1836   THE CHAIRPERSON: We talked about the possibility that revenue be attributed to production for the broadcast on CBC and some of the implications that might have on CPE. I mentioned this morning and you mentioned it as well, that if it is counted -- if that revenue has produced a revenue, then there is no CPE implication.

1837   And if I was to understand your contention, is that that would be -- you would certainly be offside on the intent and the purpose of CPE spend?

1838   MR. GOLDSTEIN: Yes, I think that is exactly right. You know, you are not offside from the letter of it. Your broker time arrangements, you know, have existed for sometime. The way Mr. Mansuri described it this morning is exactly how it would generally work.

1839   If you are the broadcaster -- he described it from the perspective of the broadcaster on which the program is going to air. You know, so what wasn't described was the fact that in the scenario we are talking about, that is CBC, that is not Rogers.

1840   THE CHAIRPERSON: Right.

1841   MR. GOLDSTEIN: So if Rogers goes and sells $125 million of advertising time on CBC --

1842   THE CHAIRPERSON: He is a producer, he is not a broadcaster.

1843   MR. GOLDSTEIN: He is a producer --

1844   THE CHAIRPERSON: There is no CPE on that $125 million.

1845   MR. GOLDSTEIN: -- he is not a broadcaster. So I guess our point is, you know, that you have to take that into consideration in determining what is a commensurate amount that you would have to contribute in CPE.

1846   THE CHAIRPERSON: We talked about the Olympics. Any other examples you can think of where we have done brokering on that scale?

1847   MR. GOLDSTEIN: No, nothing has ever been done on that scale. Like, for example, TSN does brokering. The fishing show is brokered, okay. But you are talking in the thousands of dollars, like less than $10,000. And it is not really done in that way.

1848   THE CHAIRPERSON: I have got to make some appointment television to catch that fishing show.

1849   MR. GOLDSTEIN: I am sure I can get you a DVD.

1850   THE CHAIRPERSON: Just briefly on OMNI -- I don't even have a DVD -- but briefly on OMNI -- player that is -- briefly on OMNI you want to maybe sort of speak -- I understand your concern for third-language programming and the servicing of that community.

1851   But there is also the impact that it may have on your services.

1852   Do you want to speak to us on that issue and what the impact is of the changes that are proposed on the OMNI side of the ledger?

1853   MR. GOLDSTEIN: I think our concern relating to what is being proposed vis à vis OMNI is very very simple. We have an ethnic broadcasting policy. There are ethnic stations that have a set of obligations set and they gain certain rights associated with that.

1854   On the other side, you have the traditional English and French-language conventional television stations, mainstream, and they have a set of obligations and rights and privileges that come with those licences.

1855   What we are seeing in terms of what Rogers is proposing is they really like their rights and privileges, but they don't really like the obligations from one side, and same on the other.

1856   So what they would like to do is try to minimize the obligations on the ethnic side and take all the good things that exist. You know, and as you reduce and reduce and reduce you become a lot less like an ethnic station and a lot more like a mainstream station, but you are not making local programming commitments, you are not making PNI commitments, you know, so we have that concern.

1857   You know, it is not in terms of how it would impact our stations. You know, anytime you, you know, have a competitor or the marketplace that has more flexibility and they can go buy, you know, more programming and, you know, there is going to be an impact, I don't know if I would call it a dramatic impact.

1858   THE CHAIRPERSON: Are you in any way, shape or form troubled with the possibility that the OMNI stations can become a depository for excess content and have the content transferred from City onto OMNI?

1859   MR. GOLDSTEIN: Sorry, I am not sure if I understand.

1860   MR. STRATI: I think you are saying -- so, for example, a primetime U.S. show that is on City TV currently right now, any kind of conflict for whatever reason, then finds its way on OMNI.

1861   That has happened already with a few programming properties. So there is, frankly, a little bit of flexibility there because we have talked about restrictions. It is not 100 per cent in some cases, it can be 75 per cent or different based on various stations.

1862   But the reality is that the bargain for OMNI was sort of there is a restriction in terms of your ability to generate revenue in primetime and there are less requirements for you in terms of what your Canadian content was. It happens to be ethnic programming, but it is Canadian programming.

1863   And the mainstream, if you will, for conventional television has been that you have greater ability to generate revenue in terms of you don't have restrictions in primetime, but you also have specific obligations. They have changed over the course of various changes for policy issues, et cetera, but that consistency has been there.

1864   So the bargains are a little bit different, if you will.

1865   THE CHAIRPERSON: How do you respond to the challenges that were put forth by Rogers this morning that the same content broadcast on City sees a significant drop in revenue? And you take the same, because of the different, the smaller reach, as opposed to a CTV or a Global and that that should somehow be taken into consideration in deciding group licensing conditions?

1866   MR. GOLDSTEIN: I had thought --

1867   THE CHAIRPERSON: I mean, we mentioned Glee, we mentioned -- what was the other show that was mentioned this morning? Person of Interest, yes.

1868   MR. GOLDSTEIN: Maybe I will start maybe on -- I think the reference that they said was OMNI has an issue in terms of its reach --

1869   THE CHAIRPERSON: No, City.

1870   MR. GOLDSTEIN: Was it City?

1871   THE CHAIRPERSON: City, yes.

1872   MR. GOLDSTEIN: City? I am not an advertising expert. City has widespread care, you know, essentially distribution is available across Ontario and throughout. They have an issue in terms of I think the province of Quebec a bit and they lack Atlantic Canada.

1873   We have significant operations in Atlantic Canada and we actually are -- Atlantic newscast is the third-most watched newscast in Canada, and we invest significant dollars in those stations. So, you know, they may not have the reach we have, they also don't have the obligations and don't make the spend we spend.

1874   THE CHAIRPERSON: I did see reference on the VI code. And my understanding that Bell's position is that the VI code should be imposed as a condition of licence on Rogers?

1875   MR. GOLDSTEIN: We haven't commented specifically in this process, but I think that is the position we have maintained from the beginning, is that to the extent those requirements are put in place, you know, I think we believe they should apply to all the VI players.

1876   And especially given Roger's acquisition of the NHL rights that is, you know, the most must have content. I think, you know, imposing the VI obligations in this circumstance would make sense.

1877   THE CHAIRPERSON: Commissioner Shoan.

1878   COMMISSIONER SHOAN: Good afternoon.

1879   A couple of quick questions. This morning Rogers alluded to the impact of CTV 2 on their OMNI station in the Toronto market. Do you want to respond to that?

1880   I guess the implication was that increased competition was affecting OMNI in the marketplace and, as part of that competition, CTV 2's presence was affecting OMNI as well. Opportunity to reply if you have anything to add.

1881   MR. GOLDSTEIN: I checked with our sales guys and, you know, I think we have invested significantly in the CTV 2 schedule, but I don't think we have seen any kind of massive revenue increase that would say that, you know, that all of a sudden it is all coming from OMNI. So, you know, I think that is more anecdotal than anything else.

1882   MR. STRATI: Yes. And I think it was mentioned this morning in terms of different competition in terms of that, you know, that timeslot or those timeslots, whether it be super stations. And you quite rightly noted that sometimes penetration or the availability of those aren't there.

1883   But there is still Peachtree from Atlanta, there is still Fox affiliates from Buffalo and from Spokane and Bellingham on the west coast. City itself carries, you know, its premier sort of strip programming, Modern Family, on City. So you essentially have a marketplace which is more crowded.

1884   And I would argue, you know, that programming per se was more valuable. You know, if you know OMNI you know Full House and Frasier and Friends, which were specific properties that just, you know, were something that were different than properties today.

1885   And frankly, if you mention CTV 2, you know, there are shows that CTV has acquired rights for that happens to be that number one show if you will, that is the number one show period.

1886   So I think there is fewer shows that have that cache as well. But it is a very crowded marketplace.

1887   COMMISSIONER SHOAN: Sure, okay. Final question. I had an exchange with Rogers this morning about potentially upping its PNI to alleviate concerns with respect how their CPE would be spent.

1888   You have made that recommendation here in the alternative in the event that we should not exclude revenues and expenses associated with mainstream live Canadian professional sports.

1889   I know my colleague Vice-Chairman Penefountas asked you already, and you declined to answer him. And I give you one more time, is there a figure there that you could throw out for consideration in terms of PNI?

1890   MR. GOLDSTEIN: We don't specifically have a figure, but what I do want to provide maybe a bit more context on is that our view on PNI and our view on CPE are different.

1891   And the PNI side, and I think I alluded to it a minute ago, is drive more by our concern about the revenue that might be vanishing in the CBC arrangement.

1892   Because, you know, essentially if all the revenue is included, then the PNI is going to apply against that. And whether it goes to hockey documentaries or other things, that is fine, you can't use a live sport even to count as PNI.

1893   Whereas on the CPE side we have concerns with the fact that you have program rights that are essentially going to eat it all up.

1894   So we don't have, you know, a number specifically that we think. But I think it would be something that would have to be designed to deal with that issue that we raised in terms of their arrangement with the CBC.

1895   COMMISSIONER SHOAN: Okay. I am just going to push you a little bit further on that course. Is it 9 per cent? Astral, as you know, is a little bit higher given the recent acquisition by Bell.

1896   Do you think it should be more than Astral, less than Astral, more that Corus, less that Corus?

1897   MR. GOLDSTEIN: I will be brutally honest, I am not familiar enough with what Rogers had historically spent on PNI, what their plans are in that regard, what the kind of things that fit their schedule are, you know, so I can't really comment on it.

1898   To us, 5 per cent for the -- you know, for the conventional service, you know, the conventional services including CTV and Shaw and Global and Rogers makes sense, as long as it is applying against, you know, the revenue base that is the true revenue base for what you are earning for those services.

1899   COMMISSIONER SHOAN: Okay. Those are my questions.

1900   Thank you, Mr. Chair.

1901   THE CHAIRPERSON: Commissioner Molnar.

1902   COMMISSIONER MOLNAR: Thank you.

1903   I have been sitting here kind of pondering your proposal that all mainstream sport services be excluded from the designated groups.

1904   And I am wondering, would you see that that would have any impacts on programming itself? Like, would that change the incentive to put it onto the conventional stations versus your specialty or anything like that?

1905   MR. GOLDSTEIN: Probably not. I think our proposal is sort to exclude not the services, but -- because the mainstream services are already outside the group. Just the events, the events, yes.

1906   COMMISSIONER MOLNAR: No, I am sorry, the mainstream sporting events.

1907   MR. GOLDSTEIN: Yes, the sporting events. I don't think so.

1908   COMMISSIONER MOLNAR: So you would exclude the Olympics, as an example?

1909   MR. GOLDSTEIN: No, we said professional sport events, it is professional.


1911   MR. GOLDSTEIN: It is just professional sporting events.

1912   COMMISSIONER MOLNAR: Okay, but take that away. Thanks for -- let me go back to my question.

1913   MR. GOLDSTEIN: It wouldn't affect the Olympics.

1914   COMMISSIONER MOLNAR: So you wouldn't see that affecting the incentive as to which of the platforms or stations you would put the program on?

1915   MR. GOLDSTEIN: No, because I think you would still, as a broadcaster, program your service -- because you are just talking about really what revenue and expenses become eligible for sort of regulatory accounting, you know, in terms of what counts and what doesn't.

1916   But you would still, as a broadcaster, want to program your channels in a way where the programming had the best chance of earning the most revenue. And I think that conventional still, in terms of advertising specifically, still has the broadest reach. And so I don't know that it would really change things dramatically.

1917   COMMISSIONER MOLNAR: So it wouldn't change where you would program the mainstream sports. So what would it change?

1918   MR. GOLDSTEIN: What it would do is, is it would ensure a level playing field such that you couldn't essentially use this one unique property to essentially eliminate any requirement to spend on local news, any other types of Canadian programming.

1919   Because, effectively, if you look at the projections Rogers has and you look at the rights fees and costs associated with the NHL package, other than PNI, and I am not sure how they are going to account for or do the documentaries. They would have to do it with independent producers or at least 75 per cent of it to meet the rules. There is really no reason to spend anything else.

1920   COMMISSIONER MOLNAR: They will have the local programming requirements?

1921   MR. GOLDSTEIN: They will, but hockey is also local programming.


1923   MR. GOLDSTEIN: Hockey is also local programming.

1924   COMMISSIONER MOLNAR: It is local programming?

1925   MR. GOLDSTEIN: Yes, it is. Something is produced in Toronto and airs in Toronto, that counts as local programming. As does if you want to do the local Jets show in Winnipeg, that is local programming.

1926   Local programming does not necessarily mean local news.

1927   CTV has historically used their local programming in a way to do local news, as has Global traditionally. Others, you know, City does that in Toronto, they do a different approach in some other markets.

1928   COMMISSIONER MOLNAR: So what if we were to place a condition that said your local programming requirements cannot be met with mainstream sports? That would still require some commitment to the local communities and --

1929   MR. GOLDSTEIN: It would, but it wouldn't necessarily ensure that you spend at a level, for example, to do a local newscast. There is many ways in which you can meet local programming obligations without investing the kind of dollars necessary.

1930   Now, I am coming at it from the broadcaster's -- I know Unifor's up after us and I think they are probably in a better position to comment on kind of those kind of, you know, expenditure requirements, as I think it more directly affects their members.

1931   But our concern was driven more by wanting to ensure that all the licensees, when they are looking in terms of how they meet their Canadian programming expenditure requirements, are on somewhat of a level playing field, and the way in which -- what's being put forward by Rogers will ensure that one player is in a very different situation than everyone else. And it's not just CTV. You know, Global will be in the same boat, and others.

1932   COMMISSIONER MOLNAR: Okay. So, your concern was not with what might be made available to an audience or what might be spent on Canadian programming, it was regulatory parity?

1933   MR. GOLDSTEIN: To an extent, yes.


1935   One question related to your issue on PNI. If the revenue associated with the CBC deal was attributed to the group, would that address your PNI issue?

1936   MR. GOLDSTEIN: Yes.

1937   COMMISSIONER MOLNAR: Yes. Okay, thank you. Those are my questions.

1938   THE CHAIRPERSON: Thank you, Commissioner Molnar.

1939   I just want to get back just briefly. Your understanding on the Sportsnet front is that there's going to be one game a week broadcast on Sportsnet?

1940   MR. GOLDSTEIN: No. There's lots of games on Sportsnet. Sportsnet has all kinds of regional rights packages relating to Flames, Canucks, Oilers -- I'm not sure --

1941   THE CHAIRPERSON: But under this $5.2 billion deal.

1942   MR. GOLDSTEIN: Yeah, I think that Sportsnet will get some of the Saturday night games -- they have multiple feeds -- and I think they're going to get Wednesday night. But they also have a bunch of hockey other nights that are the regional games because they still do a lot of things on a regional basis.

1943   THE CHAIRPERSON: So your understanding is that the bulk of these revenues are going to be acquired by Rogers through CBC and City?

1944   MR. GOLDSTEIN: And 360, yes.

1945   THE CHAIRPERSON: And 360?

1946   MR. GOLDSTEIN: Yes. But I think City and CBC, yes.

1947   THE CHAIRPERSON: And having more programming available on Sportsnet, wouldn't that entice more subscribers and more subscribers to pay a higher fee, and isn't that the future of revenues, that dual stream, specifically subscription revenues?

1948   MR. GOLDSTEIN: I can't really comment on what their motivation is as to why they would air things on one or the other.

1949   THE CHAIRPERSON: But just logically speaking, I mean TSN's value and TSN's rate is based on the programming that they have secured, right. Now, Sportsnet has secured all this NHL hockey. Wouldn't you want to be broadcasting those games on Sportsnet to profit from an equivalent rate and an equivalent number of subs that would be interested in Sportsnet?

1950   MR. STRATI: Again, they can speak to -- we can only see what sort of they've presented and discussed in their press release and other elements, but I believe that --

1951   THE CHAIRPERSON: Well, you've spoken to some of the logic that may come into play given the cost.

1952   MR. STRATI: Absolutely. I'd argue there's two values.

1953   I'd argue there's value currently in Sportsnet for a lot of regional programming. And is there an opportunity to increase that value with the Wednesday National Hockey Game, which will include Canadian teams and maybe some games on Saturday and other elements? Certainly.

1954   But I think if you've looked at the way it's been discussed, there's another opportunity to create very significant value, and that value is (a) with CBC and (b) with Citytv on Saturdays for second-tier or other interest games from Canadian teams and Sunday night.

1955   You know, Citytv was an NFL rights holder and so is Sportsnet, and we've seen that Sunday Night Football, which is a brand-new night of football, what it did, and that's obviously the model that they're looking for in terms of an opportunity.

1956   So I don't think -- I think you're right in that there is an opportunity to increase value for Sportsnet, but I think, you know, a really, really strong value is that over-the-air value and the programming that can be available on Citytv and others as well.

1957   THE CHAIRPERSON: Yeah. Do you know what else is interesting? I understand your concern about the vanishing of, you know, perhaps $100 million worth of rights, if not more, given the broadcasts on the CBC and how we'd calculate that loss of revenue to the system, but I haven't heard you speak about potential loss to the system of revenues that may be derived from the linear broadcasts and expensed to the digital broadcast world. That doesn't concern you?

1958   MR. GOLDSTEIN: I don't know enough about what their digital plans are in terms of -- you know, I would think that the vast majority of the revenue that they plan on generating from this arrangement is going to come from broadcasts on either CBC, City, Sportsnet or whatever, traditional licensed regulated players. I don't know, maybe in the future that could happen but that isn't kind of as I've seen it how they've structured the offering.

1959   THE CHAIRPERSON: You don't see that being a concern over the next few years or the --

1960   MR. GOLDSTEIN: Not based on what Rogers has announced as to their plans.

1961   THE CHAIRPERSON: Okay. Do you want to add something?

1962   MR. STRATI: I was going to just talk about in terms of -- you know, much like you talked about in terms of being viewer and I think, although tablets and phones and other elements are screens, and I think hockey has been discussed today and discussed every day in terms of its importance and significance and interest and I think a lot of people watch it on a really big screen and watch it in a, you know -- I don't want to call it a more traditional way, but they really enjoy it that way. Having it in a digital area is certainly an enticement, an improvement to service, but I would have expected that, you know, you still see that significant percentage, an element that relates to, again, a traditional regulated environment.

1963   THE CHAIRPERSON: Great. I think we're done. Thank you all so much. Thanks, again.

1964   Madame la Secrétaire.

1965   MR. GOLDSTEIN: Thank you.

1966   THE SECRETARY: We still have one presenter left --

1967   THE CHAIRPERSON: Yeah. Yeah.

1968   THE SECRETARY: -- Unifor. I would ask you to please take place.

--- Pause

1969   THE CHAIRPERSON: We're ready when you are.


1970   MR. LAW: Thank you.

1971   I'm Howard Law and I'm the Director of the Media Sector at Unifor. And to my left are Joseph Nieforth from Toronto and Steve Hawkins from Vancouver, and then to my right, Randy Kitt, the Chair of the Media Sector, and Angelo Contarin from the OMNI station in Toronto.

1972   Thanks for the opportunity to address the panel. I'd like to think that Unifor is not the harshest critic of Rogers or that we don't necessarily have to define it that way.

1973   COMMISSIONER SHOAN: Excuse me, would you just give me a moment? I'm just trying to locate your oral remarks so I can follow along.

1974   MR. LAW: Sure.

--- Pause

1975   COMMISSIONER SHOAN: I'm sorry to interrupt.

1976   MR. LAW: Yeah, no problem.

1977   THE CHAIRPERSON: Go ahead.

1978   MR. LAW: So we're trying not to define ourselves as that. I think, given the opportunity to define ourselves, I would say that we are a vigorous proponent of local programming in the system and it's in that vein that we make these comments.

1979   So, thank you for the opportunity to address the Commission on the topic of the Rogers application to renew its licences for the OMNI stations.

1980   As you know, we represent employees at the Vancouver and the Toronto stations. Our members are the canaries in the ethnic broadcasting coal mine and that's why we sounded the alarm regarding the deep cuts to staffing and programming in our complaint last year.

1981   Let me get right to the point. We do not believe that Canadians should accept the pitch that Rogers has made in their filings, which, if I may take the liberty of paraphrasing it: We are losing money, we don't know how to fix it, and yet, we would like free reign and five broadcasting licences for five years and we will see what happens.

1982   Now, Rogers is saying two years, which is better than five.

1983   We know that the community loves ethnic programming and OMNI is the only game in town for free OTA content, ethnic broadcasting content, and that sentiment was expressed in hundreds of interventions in the CEP complaint last year, as it was again this year in this file. Everyone is grateful to Rogers for their historical commitment to ethnic broadcasting but that does not, in our submission, bootstrap them into justifying their COL relief in this proceeding. They have to offer meritorious arguments and persuade the panel in that regard.

1984   Our response starts with the point that Rogers can and should be massively more transparent, both about the current state of their financial ledgers in OMNI and their future programming plans.

1985   On the finances, as we indicated in our brief, we have asked you to engage in what I would candidly admit is an extraordinary financial show cause process but the extraordinary nature of that process is directly proportional to the extraordinary nature of their COL relief.

1986   Once the staff and the panel have satisfied themselves on that account, if they can and do, then measured relief that's proportional to the financial picture could be entertained.

1987   Now, on the programming side, in terms of transparency, Rogers would like you to accept at face value that they don't know what they're going to do to refresh their business model, although we did hear something this morning about Bollywood and Italian movies but there wasn't any marketing research filed on that point.

1988   Ultimately, their pitch is, you know, despite this lack of transparency, that if they don't get the revenue that they feel they have to have, then they will be forced to re-evaluate whether they're in this game.

1989   Candid. Quite a card to play. That's why we have suggested a short term.

1990   And I note with interest that Mr. Pelley said this morning right off the top that they would be prepared to look at a two-year term.

1991   Now, I want to turn to Rogers' main policy argument in their brief as it pertains to the Ethnic Broadcasting Policy.

1992   Their claim is that they will be complying with the spirit of the Ethnic Broadcasting Policy even with all this COL relief that they've asked for and we simply do not agree with that.

1993   According to their brief, the core of the policy is limited to basically four things:

1994   - the ethnic broadcasting percentage;

   - the third-language minimum;

1995   - the minimum levels of Canadian content; and

1996   - the broad service mandate, i.e. the number of community groups serviced.

1997   So given that that's the core, they propose to reduce a large part of the core by reducing the Canadian content minimums and the minimums pertaining to the number of ethnic groups serviced.

1998   The next thing, on so-called non-core items, they ask you to accept the argument that prime time viewing hours, on-the-ground news reporting in Alberta, the overlap limits, the restrictions on single ethnic group programming time, the advisory boards, are all not core and should not be conditions of licence.

1999   And their bottom line on the policy argument is that we should trust them to be the guardians of ethnic broadcasting in this country even with all that COL relief.

2000   So to look a little bit more closely at a couple of these "trust us."

2001   In their filings Rogers says that if they get permission to eliminate prime time ethnic programming or eliminate the regulation around that, that won't actually result in a reduction of ethnic broadcasting. That's what they said in their filings.

2002   I detected perhaps a slightly more candid approach earlier this morning. I wasn't quite sure if we were going to see -- if what was being communicated was that there would be NHL Hockey in a third language, which would qualify for ethnic broadcasting, but I think Mr. Pelley was absolutely candid that they intend to and need to, in his view, burn off their existing inventory of the American strip programming in this 8-to-10 spot.

2003   If the Commission is persuaded by that argument -- that's a big "if" -- and if -- because I heard the number thrown out of 50 percent and I saw Mr. Pelley grab that number very quickly -- then anything along those lines should expire on the last day of the licence.

2004   If this is a transitory or transitional issue based on burning off an inventory, then in that case, if the Commission went this way, what we would advocate for is that the regulatory return to 75 percent on the last day of the licence so that when Rogers is here two years from now asking for another licence that the starting point is the appropriate 75 percent limit.

2005   And if I could just say one last word on this. It is a big "if" to grant them this relief because essentially, the way I understand it -- and perhaps I don't have the business background that they have at their fingertips -- is they made a decision to buy certain programming several years ago and they had an upside risk and a downside risk and perhaps they're seeing too much of the downside risk.

2006   Coming and asking for regulatory relief is not unlike asking for a bailout and that's why we advocate you take a very careful approach to this issue.

2007   A word about reducing the monthly number of ethnic broadcasting groups from 20 to 10.

2008   First of all, I understand that they asked for this five years ago and I understand it's also perhaps not their top two or three on their list.

2009   First of all, it would appear that flexibility is not really the issue. They can rotate the 20 every month.

2010   But if I read their filings correctly, they concede in their filings that the lowest 10 groups by revenue are in fact profitable. They're just not profitable enough. So I think that's something that the Commission ought to take into account. This is not necessarily -- it's a nice to have for them perhaps but not a need to have.

2011   Unifor also would like to comment on the intriguing question posed by the Commission to Rogers in the questions that were sent to them by the staff and raised again in this hearing, which is: Could and would OMNI agree to a licence condition normally required of conventional OTA stations, namely a minimum of local programming, let's say 14 hours a week?

2012   I think it's fair to say that Rogers has given a flat "No" to this idea -- it was expressed this morning -- and in their filings they indicated this would put a further $2 million per year of red ink onto the OMNI financial ledger.

2013   But at this point, our view is it's important to decide which books are the issue here: the OMNI books, the RBL books, the RML books, the RCI books.

2014   As one of the other interveners, the Forum on Policy and Research in Communications, has submitted, $2 million is really what amounts to a rounding error in the overall Rogers system. As Bell has submitted as well in their filings, and Rogers essentially conceded in their response that they filed, the OMNI stations are operating as a hybrid conventional/ethnic station, neither fish nor fowl as Rogers indicated in their March response.

2015   If Rogers wants to tip the OMNI stations further to the conventional side of the fulcrum, perhaps they should be expected to play by the same rules as the conventional stations when it comes to local programming requirements.

2016   Which brings us directly to the issue of Mr. Pelley's position that he is not willing to lose money on producing local news in Alberta. As he said, he wouldn't do it unless he could have a margin on it.

2017   Unifor's position is if that is Mr. Pelley's line in the sand, then our position is that somebody else is entitled to try. We don't savour taking that position but if that really is his line in the sand, then the Alberta licences should be opened up for new entrants.

2018   Alternatively, there should be a condition of licence requiring local news be produced and broadcast in Alberta in the manner and scope prior to the closures, that is with reporters on the ground reporting on local stories that get produced and broadcast in Alberta.

2019   And, frankly, just to be safe -- I go back to the canary in the coal mine issue -- the same condition of licence should apply to all five stations because, frankly, we're concerned that Vancouver is next.

2020   On the final note of the advisory boards, we are quite pleased to hear that Rogers is receptive to re-establishing the boards. We would say that that would have to be a condition of licence. They did promise to have advisory boards. They promised verbally at the 2007 licence hearings to have that. It was an expectation, not a condition, in Toronto in the last licence and then they removed the advisory boards.

2021   But I take at face value what Mr. Pelley says, that they can add value to OMNI's strategic planning to succeed in ethnic broadcasting.

2022   And independent of that, we also see an enhanced role for the boards and, frankly, that's -- in the event that there is condition of licence relief, we believe that the boards can play an important role in terms of having experienced and independent members of advisory boards to keep track of whether the COL relief is leading to an improvement in the quality of ethnic broadcasting as we understand it.

2023   That is why we advocate to re-establish the advisory boards as a condition of licence; that they meet regularly; that they have reasonable meeting expenses; that they are given information that they need, subject to non-disclosure where appropriate, by Rogers; that they report to the CRTC on this; and we would make a pitch for including in these advisory boards, because of their hands-on experience, members of the staff of these stations and where the stations are unionized that those staff members be appointed by their union locals.

2024   Those are our comments on OMNI.

2025   On the City stations and the group licence, when it comes to the group licence, of course, the elephant in the room is the hockey deal, the $5.2 billion hockey deal, with all its expenses and revenues.

2026   It was obvious before Mr. Pelley made his comments that we are going to see a lot of hockey on Rogers and all their properties, and as Mr. Pelley said loud and proud, it's Canadian content, and indeed it is. He might also have added: It qualifies as local programming.

2027   We are going to see Citytv hockey on Saturday and Sunday nights, as we understand it, and that fills the bucket right off with about six hours of CPE and local programming right there. And these are stations that have licences for 14 hours per week of local programming.

2028   Based on Rogers' application, they would be free to allocate hockey programming expenditures as CPE, which is set at 23 percent in the City stations, and local programming hours, which depending whether you're talking about Winnipeg or Toronto or Vancouver, you're talking 7 to 14 hours, and that will completely crowd out, or potentially completely crowd out, existing local programming.

2029   So, in our view, this potential calamity would also occur in addition to another one, which is the proposal to trade off an increase in PNI spending against incremental local programming dollars, which, by our calculations and we're somewhat at a disadvantage here in terms of our accuracy but we believe that would take another $5 million annually out of local programming. If you put that in perspective, in 2013, our estimate is that the City stations spent $33 million in news and $54 million in in-house production overall. So you're talking about taking $5 million out of that.

2030   As Mr. Pelley said just before the break at lunch, he said he cannot say definitively what local programming will be, and he didn't endorse Ms Wheeler's comments that she made just before he made that comment, that the loss of incremental local programming dollars would necessarily match up to the special or extra programming that it was recently spent on. In other words, it can be pulled out of news, it can be pulled out of Breakfast Television.

2031   Diverting dollars to hockey and/or cutting $5 million from local programming to move it over to the PNI side of the ledger would be a disaster for local programming, especially outside of Toronto, where most of the programming is not local news but they are local programs that have lower audience ratings than local news.

2032   Unifor is asking that you not accept any gentle reassurances, any expectations from Rogers on these vitally important issues. A COL is binding and reassurances are not.

2033   In fact, we know from very recent history with Lunch TV and City News ... the List, that Rogers is not averse to touting commitments to broadcasting local programming when they appear here in front of you and then, if circumstances change, in their view, after they have the licence, drop those very same programs, and that's what happened and it could happen again.

2034   So there are a number of different options for dealing with this and we offer these as alternatives. You probably have your own, that's why frankly we defer to your expertise, but here are some suggestions.

2035   One is a condition of licence that existing local programming will continue to be budgeted and broadcast at its current level and, in particular, that it can't be spent on sports programming and sports-related shows, and there are going to be a lot of spinoff sports-related shows with the Hockey Docs, but it's going to be hockey magazine shows, think of Canucks Now or Leaf Nation, or so on.

2036   Another option that has been mooted would be to exclude sports programming from the group to follow the general policy on doing so.

2037   Another one would be to include it, but then deal with the CPE ramifications and to increase the CPE sufficiently that the CPE for current local programming cannot, for all practical purposes, end up getting diverted to sports.

2038   Or fourthly, another option would be to redefine sports and sports-related programming as non-local, because right now it's local. That's our understanding. We would be pleased to be disabused of that notion.

2039   So in conclusion, we would like to leave you with this thought. We feel that local programming is becoming an endangered species and that sounds dramatic, but I think it's accurate. As you know, Unifor and CEP before it have been banging the drum on this issue for a very long time and quite recently as well we raised this issue in the tangible benefits file, we raised this issue when the LPIF was discontinued.

2040   Local programming, particularly local news, is absolutely vital to our civic and democratic life in this country and because of that, we make these submissions today imploring you to protect local programming.

2041   Those are our submissions and we would be happy to respond to questions.

2042   THE CHAIRPERSON: Thank you very much. I will tell you something about your submissions in your brief earlier in the year and in today's document, it's very thorough.

2043   MR. LAW: I hope that doesn't mean it was too long and boring.

2044   THE CHAIRPERSON: No, no, it's just it was thorough and it was very clear and it leaves very little room for ambiguity.

2045   That being said, just a couple of things I want to touch upon. One, the notion came up this morning in terms of an overlap or simulcast between City programming and OMNI programming and you made reference to it here. Why is that particularly troublesome for Unifor? I have some idea, but I want to give you a chance to expand on that.

2046   MR. LAW: It is not one of our top priority concerns at this point.

2047   THE CHAIRPERSON: The secondary issue obviously is the fact that, the fear being that OMNI will be used to burn off existing inventory. I think that was clearly set out today.

2048   And your position is quite clear, that's not what the OMNI services are there to provide within the Canadian broadcasting system. Is that correct?

2049   MR. LAW: Yes. I think our thoughts are this, that if it really is just a temporary problem, then it doesn't need a solution, frankly, and that the concern is that they are simply getting relief for a bad price point decision that was made.

2050   On the other hand, you know, we don't want to be too cruel in the sense that, you know, they are having a revenue problem, our members work for these people having a revenue problem, we are very sensitive to that, but it is hard -- not that I'm going to proclaim too much regulatory expertise here, but it is hard to justify from a regulatory policy point of view to give them that relief for that reason.

2051   THE CHAIRPERSON: Right. You know, you touched upon something that I want to touch upon earlier and the fact that you are employed by them and you are employed by others as well, and you touched upon it as well in your document today and even earlier, the fact that there is this threat that we are not profitable, we don't want to be losing any more money on OMNI, we will just close the door and hand the keys back to the Commission, the system or whoever it is, we hand the keys back and we won't put the lock in the door.

2052   Would it be correct to say that you are not that concerned with the possibility that that might happen and, if it were to happen, someone else would come forward and run the stations, be they in Alberta, Ontario or elsewhere?

2053   MR. KITT: I think we are concerned. To say we're not concerned, it's a big threat, you know, that the station would close their doors, but if in Alberta they did that, there are no members working there. So if that's the threat, you know, will they close their doors in Vancouver and Winnipeg? So if there is no boots on the ground, then should there be a station there?

2054   MR. LAW: I think we are also trying to balance between being, frankly, affected by that threat on one hand and not wanting to come here and say the only thing that matters to us is whether, you know, our members -- one member, you know, is working or not working, that at some point there has to be some principle in the policy.

2055   And, you know, whether or not there is somebody -- how well financed a potential successor to Rogers might be is something that's beyond, certainly beyond our knowledge and it may be beyond the knowledge or experience of the Panel. But there has to be a red line somewhere, you will decide where, but it is somewhat breathtaking the extent of the regulatory relief that Rogers Communications Limited is asking for.

2056   THE CHAIRPERSON: You are not sold on the fact they are asking for that relief because the losses are real and they are there and if the relief is not offered, well, there may not be an OMNI network to work for?

2057   MR. LAW: Well, I trust that no one is going to hang the worst case scenario on us, but if it ever came to that, I would like to point out that our position is for you to look -- to go through this financial show cause process that we have asked you to do to make sure -- to look at how bad is it.

2058   Because, you know, frankly, it's a little too easy for any company in any regulatory proceeding to plead poverty, especially where the financial information is shielded. And Rogers did, on the basis of a non-disclosed, sent us some of the figures that they sent you and that were not disclosed. I will only say that I don't think that those figures are enough for you to make a decision on.

2059   So is it bad, how bad is it and what is the measured proportional regulatory relief?

2060   THE CHAIRPERSON: What figures above and beyond those figures would you think would be appropriate?

2061   MR. LAW: Whatever figures would be provided to an internal auditor. You know, every company has to have -- they hire a chartered accountant to do their books, why can't they go through the same process with you and I think a -- I won't be dramatic by calling it forensic, because I don't know if that's the right term, but a very strategic inquiry to how are they allocating expenditure costs.

2062   Because in these complicated broadcasting and media companies, there are lots of accounting decisions that can be made legitimate, accounting decisions from an accounting point of view, but perhaps not legitimate from a regulatory point of view.

2063   THE CHAIRPERSON: On the advisory boards it's quite clear your position, and Rogers questioned that this morning.

2064   On the whole local programming front -- and we heard from Bell earlier that the actual sports -- professional sports games should be excluded. If I understand your presentation today, the pre and post and every other show that relates to hockey should also be excluded.

2065   MR. LAW: That's correct.

2066   THE CHAIRPERSON: You mentioned Canucks Now, Jets Hour, Leaf Nation and all the other shows that we may see before and after and in between hockey games always.

2067   MR. LAW: Can I just say, we don't have any skin on the game in this, other than local programming. So whatever is the right decision, whether to move them on the inside or outside the group, you know, certain things flow from that as Mr. Goldstein suggested in his submissions in terms of CPE and PNI, but our concern is a little bit different.

2068   THE CHAIRPERSON: But you want Canucks Now, Jets Hour and Leaf Nation to not be part of local programming basically?

2069   MR. LAW: Exactly, because dollar-for-dollar that could mean that there is no Breakfast Television or no news.

2070   THE CHAIRPERSON: Right. Your members, do they work on these shows? Your members work on these shows as well, do they not?

2071   MR. LAW: I don't know.

2072   UNIDENTIFIED SPEAKER: These shows don't exist yet.

2073   MR. LAW: They might.

2074   THE CHAIRPERSON: They may, yes, sure.

2075   MR. LAW: Yes.

2076   THE CHAIRMAN: Okay. If that's your position, that's your position.

2077   MR. LAW: I would like to point out, you know, I don't know what's being left there, but yes, our members might be working on there and I'm not trying to do a quick calculation on whether we are further ahead or behind.

2078   The shows matter to the public as well and something like local news is vital. Breakfast Television is important to the communities it has served historically and to get sideswiped by a massive hockey deal is unnecessary and tragic, in our view.

2079   THE CHAIRPERSON: So the hockey shows will we made, they don't need a regulatory push to be made, ergo they should be excluded?

2080   MR. LAW: Yes.

2081   THE CHAIRPERSON: Okay. You also mentioned that the CPE should reflect -- if the hockey broadcasts -- the sports broadcasts are going to be part of the group, then that should be reflected in a different CPE?

2082   MR. LAW: Correct.

2083   THE CHAIRPERSON: You didn't put a rate. My colleagues asked the question, I have asked the question; if you don't have a rate, that's fine.

2084   MR. LAW: I'm way out of my expertise on that. If Mr. Goldstein is not prepared to venture a rate, I sure am not.

--- Laughter

2085   THE CHAIRPERSON: He is in the room, there you go. I think Commissioner Shoan might have some questions for you.

2086   COMMISSIONER SHOAN: Good afternoon. Just on that last line of questioning from Vice Chair Pentefountas, I just want to understand if I understand your proposal.

2087   You have offered a number of different options for dealing with the challenge of the sports programming and CPE. Number four is redefine sports and sports-related programming as non-local. I want to ensure that I understand it completely.

2088   Is that all sports programming, amateur or professional? We had CIS come here earlier today. If Ryerson was playing U of T football and it was broadcast on City, should that not be local?

2089   MR. LAW: I think that's an excellent point you make. They are helpful and they want distinctions to be made between amateur and professional sports.

2090   COMMISSIONER SHOAN: Okay. What about if Rogers should use the expertise that CBC has developed over the last few years, for example, to broadcast Hockey Night in Canada in the Punjabi language in Vancouver to serve the South Asian community, is that local ethnic programming for that South Asian community?

2091   MR. LAW: Well, I think it is. Did you want to comment on it?

2092   MR. HAWKINS: As long as it's not to the exclusion of the current very popular news programming. Okay. I'm just trying to understand the concept, I'm not suggesting that -- and we don't really know the structure of this programming, if it's going to, you know, involve eight months a year, 10 months a year, how long are these programs going to be. You know, these are all unknown.

2093   And you know, the fear is if it adds up and all of a sudden there is less of a motivator to have the local news programming.

2094   COMMISSIONER SHOAN: Okay. Great.

2095   MR. LAW: Our concern is this hockey beast is just completely new, it has the potential to sideswipe all sorts of things and we are just urging the Panel to think through to the last degree what will happen to local programming depending on what counts for CPE local programming, and so on.

2096   COMMISSIONER SHOAN: Okay. That's great. Those are my questions. Thank you.

2097   THE CHAIRPERSON: Commissioner Molnar has a question. Thank you.

2098   COMMISSIONER MOLNAR: Just one question. As you said, it's a new beast, we don't know much about it. And just as an aside, I mean to me hockey is a beast, I don't even understand why this is such a popular issue, but anyway.

2099   But we are talking here about a two-year licence term and so there is actually -- you know, we can throw in place a lot of restrictions and we don't see how that beast evolves, or we can provide some flexibility to Rogers to see what's working, you know, how they would move that thing forward and in two years we are looking at it again.

2100   MR. LAW: Mr. Kitt just spoke into my ear just exactly the response I was going to have. If the collateral damage are the news programs and the jobs, but particularly the news programs, they are not coming back and that's our concern. We are not familiar with seeing a phenomenon where regulatory relief translates into reduced programming and then the regulatory relief is reduced and the programming comes right back the way it was before.

2101   You know, we are not talking about, in our view, peripheral programming. I suppose everybody will have their opinion about what that is, we are talking about local programming and we are talking about local news for the most part. It's kind of a Humpty Dumpty thing.

2102   COMMISSIONER MOLNAR: Right. And I do understand what you are saying. So with the exception of the commitment to the local programming or at least some commitment that is not hockey related, would you see some ability to kind of not put in place a lot of restrictions that are looking at "what if" scenarios and possible consequences, knowing that we are two years away from looking at this again?

2103   MR. LAW: I think if you want to get experimental about it and you revise the current local programming requirements to become original local programming requirements, because right now you have 14 hours, it doesn't all have to be original, and if some of the local programming is going to become hockey, that might crowd out a repeat, but if it crowds out original local programming, that is where we sustain a loss that is unlikely to be remedied at a later date.

2104   COMMISSIONER MOLNAR: Thank you.

2105   THE CHAIRPERSON: Thank you very much. Thanks again.

2106   MR. LAW: Thank you for the opportunity to address the Panel.

2107   THE CHAIRPERSON: No, we appreciate it. Thanks so much. Madame la secrétaire...?

2108   THE SECRETARY: Would you like me -- we are done for the day. We will resume tomorrow at 9:00 a.m. Would you like me to read out the order of appearances for tomorrow, just to be clear with everyone, or at least the two or three first interveners?

2109   THE CHAIRPERSON: You can do that.

2110   THE SECRETARY: We will start with Ryerson University and then Metro Toronto Chinese & Southeast Asian Legal Clinic, they are by videoconference from Toronto, and then it will be followed by CMPA and CCSA.

2111   And the rest will follow the order of appearances.

2112   THE CHAIRPERSON: Excellent. Merci beaucoup. Thank you all so much.

2113   LA SECRÉTAIRE : Merci.

2114   THE CHAIRPERSON: Thank you. Tomorrow, 9:00 a.m.

--- Whereupon the hearing adjourned at 1729, to resume on Wednesday, April 9, 2014 at 0900

Kristin Johansson
Beverley Dillabough
Monique Mahoney
Jean Desaulniers
Karen Paré

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