Transcript, Hearing November 26, 2018
Location: Gatineau, Quebec
Date: November 26, 2018
© Copyright Reserved
Providing Content in Canada's Official Languages
Please note that the Official Languages Act requires that government publications be available in both official languages.
In order to meet some of the requirements under this Act, the Commission's transcripts will therefore be bilingual as to their covers, the listing of CRTC members and staff attending the hearings, and the table of contents.
However, the aforementioned publication is the recorded verbatim transcript and, as such, is transcribed in either of the official languages, depending on the language spoken by the participant at the hearing.
Attendees and Location
140 Promenade du Portage
- Chairperson: Ian Scott
- Vice-Chairperson Broadcasting: Caroline J. Simard
- Vice-Chairperson Telecommunications: Christianne Laizner
- Legal Advisors: Eric Bowles, Valerie Dionne
- Secretary: Lynda Roy
- Hearing Managers: Tracy Speigel, Tina-Louise Latourelle
--- Upon commencing on Monday, November 26th, 2018 at 9:02 a.m.
1 LE PRÉSIDENT: Merci, Madame la secrétaire.
2 Bonjour. Good morning, everyone. Bonjour et bienvenue à cette audience publique.
3 Avant de commencer, je tiens à souligner que nous sommes rassemblés sur le territoire traditionnel des peuples autochtones. Je tiens aussi à remercier le peuple Algonquin et rendre hommage à ses aînés.
4 Durant cette audience, nous examinerons huit demandes pour un service national de télévision multilingue à caractère multiethnique. Les demandeurs cherchent aussi à obtenir la distribution obligatoire de leur service proposé au service numérique de base dans l’ensemble du Canada. Nous examinerons si ces propositions répondent aux critères pour un service qui offrira aux Canadiens de la programmation, y compris des émissions de nouvelles et d’informations dans plusieurs longues et d’un point de vue canadien.
5 Any service, if licensed, must ensure that the multicultural nature of Canadian society is reflected in its programming, as well as provide access to affordable third-language programming in the Canadian broadcasting system. Such programming assists Canadians in civic engagement and can help promote cross-cultural understanding.
6 Mandatory distribution is a privilege reserved for television services that provide an exceptional contribution to the broadcasting system and to achieving the policy objectives of the Broadcasting Act. Any such service would be included on the digital basic service, and all television subscribers would pay for it. Accordingly, we take the granting of such a privilege very seriously.
7 Over the next four days, we’ll examine whether the proposed services would contribute to the achievement of these goals. In particular, we’ll want to know if their inclusion on the basic service would support the objective of the Broadcasting Act.
8 To that end, the applicants are required to demonstrate how their proposed services would meet the criteria for mandatory distribution set out in Broadcasting Regulatory Policy 2010-629.
9 Furthermore, each applicant will have to clearly demonstrate how its proposed service would fulfil other criteria, including how it would operate under a diverse governance structure, how it would serve a broadly representative set of minority, linguistic and cultural communities, including newcomers to Canada, how it would be relevant to all Canadians across the country, and how it will present news and information programming in multiple languages from a Canadian perspective, including local, regional and national news and information.
10 Applicants were also asked to provide any other evidence and arguments to support the issuance of an order for mandatory distribution on the digital basic service.
11 Based on this information and the evaluation of the applications in the context of these criteria, the Commission will then decide whether any of the proposed services should receive a licence and have the privilege of receiving mandatory distribution.
12 We are seeking an exceptional service that will contribute to the diversity of Canada and best serve Canadians.
13 Avant de commencer, permettez-moi de faire quelques présentations. Le Comité de cette audience est composé des personnes suivantes : Mme Caroline Simard, vice-présidente, Radiodiffusion; Mme Christianne Laizner, vice-présidente, Télécommunications, et bien sûr, moi-même, Ian Scott, président du CRTC.
14 L’équipe du Conseil qui nous prête assistance comprend les personnes suivantes : Tracy Spiegel et Tina-Louise Latourelle, gestionnaire de l’audience, Erik Bowles et Valérie Dionne, conseillers juridiques et Linda Roy, notre secrétaire de l’audience.
15 J’invite maintenant Mme Roy à expliquer la procédure que nous suivrons.
16 Madame la secrétaire?
17 LA SECRÉTAIRE: Merci, Monsieur le président.
18 Good morning, everyone. I would like to go over a few housekeeping matters to ensure the proper conduct of the hearing. When you are sitting at the presentation table, we would ask that you please turn off your smartphones as they cause interference on the internal communications systems used by our translators.
19 You can examine all documents on the public record of this proceeding in the examination room, which is located in the Papineau Room.
20 Interpretation services are available throughout the duration of the hearing. English interpretation is available on Channel 1 and French on Channel 2.
21 I would like to remind participants that during their oral presentations, they should provide for a reasonable delay for the interpretation, while respecting their allocated presentation time.
22 Le service d’interprétation simultané est disponible durant cette audience. Vous pouvez vous procurer un récepteur auprès du commissionnaire à l’entrée.
23 There is a verbatim transcript of this hearing being taken by the court reporter sitting at the table to my right. Please note that the transcript of each day will be posted on the Commission website the following business day.
24 Just a reminder 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, you must ask permission of the panel before you do so.
25 Please note that the Commission will also be tweeting the documents during the hearing @crtchearings, using the #crtc.
26 Finally, please note that if parties undertake to file information with the Commission in response to questioning by the panel, these undertakings can be confirmed on the record through the transcript of the hearing and, if necessary, parties may speak with Commission legal counsel at break following their presentation to confirm the undertakings.
27 And now, Mr. Chairman, we will proceed with Item 1 on the agenda, which is an application by Rogers Media Inc. for a broadcasting licence to operate the national multiethnic multicultural discretionary service known as OMNI Regional and composed of four regional feeds.
28 Please introduce yourselves first for the record, and you have 20 minutes to make your presentation.
29 Mme WILSON: Merci.
30 Good morning Chair, Vice-Chairs and Commission staff. My name is Colette Watson. I am Senior Vice-President, Television and Broadcast Operations at Rogers Media. With me today are, starting from my left, Susan Wheeler, Vice-President, Regulatory, Media; Sam Norouzi, Vice-President, General Manager, ICI Television; Jake Dheer, OMNI Local Independent Production and Community Relations; and Christine Comi, OMNI Sales. To my right are Vic Maghakian, Director, TV Finance; Manuel Fonseca, General Manager, OMNI; and Nathen Sekhon, OMNI News BC.
31 In the back row, starting from my right, are Nataline Rodrigues, Director, Independent Production; Charmaine Wong, Supervising Producer, Chinese Programming; Lenny Lombardi, President, CHIN Radio and Television; and Zahera Mohamed, Manager, TV Compliance.
32 We are pleased to be here today to discuss how we will continue to build on the success of OMNI Regional, our national, multilingual, multi-ethnic service, currently operating pursuant to a 9(1)(h) order. OMNI Regional launched in September 2017 and became the foundation of OMNI Television. It is now a key part of OMNI's ongoing effort to serve ethnic and third-language Canadians, which we have been proudly doing for more than three decades.
33 To give you more insight into OMNI's rich and committed history in ethnic broadcasting, we have put together a short video that reflects who we are and what we do.
34 (VIDEO PRESENTATION/PRÉSENTATION VIDÉO)
35 Ms. WATSON: The launch of OMNI Regional has been an enormous success. It has reinvigorated the OMNI brand by providing the critical financial support needed to invest in high-quality programming. The subscription revenue we receive has enabled us to re-invest in national third-language newscasts, maintain our local news and information programming, and grow our investment in third-language Programs of National Interest. OMNI Regional's national reach has also given us the opportunity to expand our audiences and foster local production in more areas across the country.
36 With our new application, our goal remains the same. We want to continue to provide Canadians with an array of Canadian ethnic and third-language programming that reflects a variety of interests and is a trusted source of professional and editorially diverse news and information.
37 Mme DIONNE: Nous croyons que le service OMNI Regional décrit dans notre demande est exceptionnel.
38 Ce service nous permettra de conserver tous les éléments essentiels de notre service actuel, y compris ses quatre signaux régionaux; notre partenariat avec ICI Television au Québec et notre engagement à exploiter OMNI Regional selon le principe du « seuil de rentabilité ». Autrement dit, nous maintenons notre engagement à réinvestir dans notre programmation les profits que ce service pourrait générer.
39 Nous proposons également un certain nombre d'améliorations, y compris des engagements importants envers une programmation de nouvelles originale et exclusive; des investissements accrus envers notre production nationale indépendante et une programmation locale, ainsi qu'un nouveau produit numérique qui offrira à la fois des émissions en direct et sur demande.
40 Nous investirons aussi dans l'avenir du journalisme ethnique en offrant des bourses d'études d'une valeur de 100 000 $ pendant la période de licence afin de développer et de former la prochaine génération de journalistes allophones et ethniques.
41 Rogers est le seul requérant qui possède l'expérience et une fiche éprouvée de succès en matière d'offre d'un service de télévision national, multilingue et multiethnique. Nous offrons déjà aux Canadiens des émissions de nouvelles locales et nationales dans plusieurs langues. Nos journalistes et nos installations de production sont sur le terrain dans les communautés partout au Canada aujourd'hui. Aucun autre requérant ne peut en dire autant.
42 Ms. WATSON: In licensing OMNI Regional in 2017, the Commission recognized that there is an exceptional need in Canada for a multilingual, multi-ethnic television service that offers significant amounts of news and information programming.
43 We heard your concerns regarding our original concept for OMNI Regional and respectfully submit that our new proposal exceeds all of the 9(1)(h) criteria.
44 First, we will continue to offer four regional feeds: OMNI BC, Prairies, East, and Quebec. This allows us to change and customize the programming we provide to reflect the demographic realities of each region. Each feed will tailor programming to reflect our commitment to serve a minimum of 20 different ethnic groups (18 in Quebec) and 20 different language communities (15 in Quebec).
45 Second, we are making exceptional commitments to original, first-run Canadian programming. We define this to mean programs commissioned, licensed or produced in-house, and aired for the first time simultaneously on OMNI Regional and an OMNI/ICI local station. This definition does not include repeat programming or programming that has aired on another broadcast channel or platform.
46 OMNI Regional will broadcast six daily national 30-minute newscasts seven days a week in six different languages, which includes the launch of newscasts in Arabic, Spanish, and Tagalog. That, along with our commitments to locally-reflective news, will provide Canadians with 42.5 hours of original first-run local and national news programming each week.
47 OMNI Regional will also offer 50 original, first-run hours of local, independently produced programming each month - a minimum of 12 hours per feed. This includes a commitment to source at least 2 of these original, first-run hours from independent producers in Manitoba and Saskatchewan and 2 from Atlantic Canada. In Quebec, we will offer 14 hours each month of original first-run local, independently-produced programming.
48 OMNI Regional will also invest a minimum of 50% of our annual gross revenues in original, first-run Canadian programming and we will double our investment in PNI to 5% of these revenues. This investment is in addition to our Canadian program expenditures on OMNI's local OTA stations.
49 Third, we are committing to devote 55% of our program schedule to Canadian programming each day and 50% during prime time; and to devote a minimum of 50% of our program schedule to third-language programming. OMNI Regional regularly exceeds these levels but we have proposed conditions that align with those of our OTA stations, which mirror each regional feed.
50 Fourth, we are proposing a reasonable wholesale rate that will start at 19 cents in 2020 and rise to 21 cents in the last year of the licence term. At these rates, we will be able to address the projected declines in revenues and still support the cost of the programming commitments we've made. The survey evidence we submitted with our application demonstrates that our proposed rate is strongly supported by Canadians, particularly those who speak a third language. Our proposed fee also compares favourably to wholesale rates approved for other 9(1)(h) services and to those proposed by other applicants in this proceeding.
51 M. NOROUZI: Enfin, le maintien de la licence d'OMNI Regional permettra d'assurer l’exploitation continue des stations ethniques, locales, en direct à Vancouver , Edmonton, Calgary, Toronto et Montréal, et les avantages que cela apporte au système. Mentionnons notamment que des investissements distincts dans des émissions de nouvelles canadiennes à saveur locale et le soutien aux communautés et aux entreprises locales.
52 Cela signifie que les Canadiens et Canadiennes vivant dans les centres urbains, en particulier les nouveaux arrivants, auront accès gratuitement à une programmation d'émissions de nouvelles et d'information essentielles. Nous sommes d'avis que cet aspect de notre requête nous distingue des autres qui vous ont été présentées.
53 OMNI Regional poursuivra plusieurs objectifs énoncés au paragraphe 3(1) de la Loi sur la radiodiffusion, y compris répondre aux besoins des communautés linguistiques et culturelles minoritaires du Canada et offrir un vaste accès à la programmation locale d'importance publique.
54 Mr. FONSECA: As you saw in our opening video, OMNI offers a diverse range of programming that meets the various interests of our audiences. Our investments in PNI and sports programming have created new opportunities for Canadian talent and resulted in a number of Canadian firsts. For example, Blood and Water, was the first Cantonese, Mandarin, and English-language drama to be produced in Canada. Not only was it nominated for a Canadian Screen Award for Best Dramatic Series in 2017, it was also recently launched on Amazon Prime where it will showcase the diversity and depth of Canadian talent to international audiences. Our Blue Jays Baseball: Pinoy Edition was also a Canadian first. It was the first Canadian produced major-league baseball game broadcast in Tagalog. As one viewer told us:
55 "Wow...It has finally happened! Two cultures #unitedbysport. First time on Canadian TV that a sports broadcast is being produced in the Filipino language. I am proud."
56 While we are extremely proud of these accomplishments and will continue to build on these types of investments, the core of OMNI's brand is our news and local programming.
57 By approving our application and granting OMNI Regional a new license, we will be able to expand our news commitments by offering national newscasts in three new languages and by launching a new regional Italian newscast in Montreal. No other applicant in this proceeding has any experience producing local and national news specific for ethnic and third-language audiences.
58 MR. SEKHON: OMNI is a well-known and trusted source of local and national news programming because we offer an editorial perspective that is different from that offered by mainstream news outlets. We approach our news stories with a different lens, one that reflects the interests and concerns of ethnic and third-language viewers and provides a voice for these communities. Each newscast in each language is produced for the specific ethnic community it serves.
59 Our first priority is to cover the news for the local language community; however, the common thread is always culture, identity, and the Canadian experience. This means that relevant stories must go beyond language to focus on the issues and the individuals.
60 Next, we provide a community perspective on what would be considered the regular and local news of the day. This may include taking a deeper look at how the event impacts a community, or by focusing on a voice from a member of that community. Most importantly, our editorial approach recognizes that ethnic communities are faced with many of the same issues and challenges that all Canadians face, and it's our job at OMNI to make sure these stories are heard.
61 MR. DHEER: Our application also satisfies the six additional criteria the Commission indicated it would use to assess proposals for a national, multi-lingual, multi-ethnic service.
62 The first is to operate under a diverse governance structure. We do that now. OMNI has been operating under Regional Advisory Councils for the past 4 years, and we report to the Commission on this engagement. These councils are comprised of community leaders and business professionals who provide OMNI with valuable regional insight and expertise. We've already expanded these councils to include representatives from Manitoba, Saskatchewan, and Atlantic Canada.
63 The second criterion is to serve a broadly representative set of minority, linguistic, and cultural Canadian populations, including newcomers to Canada. Our local independent productions are designed to inform and integrate new Canadians into the communities where they live. For example, the new -- series, New Canadians, portrays stories of recent immigrants making Canada their home. The magazine-style presentation showcase settlement, education, employment, and entrepreneurial opportunities available to newcomers to ease their integration into Canadian society.
64 The third criterion is to be relevant to all regions of Canada. OMNI Regional has made specific commitments to source local independent production from all of the regions it serves. In fact, we've already been successful in developing new, independent productions in Saskatchewan, Manitoba, Alberta, and Atlantic Canada in Tagalog, Korean, Swahili, and Cantonese.
65 The fourth and fifth criteria relate to Canadian news and information programming in multiple languages and Canadian content. OMNI Regional's commitments exceed the obligations established for every other ethnic service operating in Canada today. Our newscasts and independent productions will occupy the majority of OMNI Regional's programming schedule.
66 The last criterion is adaptability. Our four regional feeds and digital TVE product will ensure OMNI Regional continues to adapt its service to reflect the unique linguistic and cultural makeup of each region and will appeal to digital consumers and audiences of all ages.
67 MS. COMI: Before we conclude our presentation, we wish to address the issue of advertising. As the public record reflects, advertising revenues for OMNI Regional continue to decline even faster than we expected, and much faster than the broader industry.
68 National advertising continues to be a challenge for a service of this nature. That is the case despite our sales efforts at the local and national levels, and our new investments in custom content that leverage our relationships with advertising clients who have been more traditionally focused on mainstream media.
69 The following is a short video highlighting the creative spots we've developed for OMNI Regional with new and existing advertisers.
70 (VIDEO PRESENTATION / PRÉSENTATION VIDÉO)
71 MS. COMI: Despite our creativity and efforts to attract more advertising revenues, ethnic and third-language programming, both domestic and foreign acquired, remains a challenge to monetize. This is due to both the small size of each language and ethnic group and the absence of standard audience measurement tools that can be used by advertisers. This, coupled with systemic changes in the broader television advertising industry, have made ethnic and third-language news programming impossible to support without a stable subscription revenue stream.
72 Mme WATSON: OMNI et les auditoires qu'elle dessert ont une signification très particulière pour Rogers. Pour nous, OMNI est plus qu'une simple entreprise commerciale, comme en témoignent les pertes financières que nous avons absorbées pendant de nombreuses années. Nous sommes d'ardents défenseurs de la radiodiffusion à caractère ethnique depuis plus de 30 ans parce que nous y croyons. Nous sommes très conscients que l'ordonnance de distribution obligatoire au service numérique de base constitue un recours exceptionnel. Et je vous promets que nous ne prenons pas cette responsabilité à la légère.
73 OMNI Regional isn't just a promise on paper. It is a proven service with broad and passionate support from Canadian ethnic communities across the country. We are extremely humbled by and grateful for their support in this licensing proceeding. Licensing OMNI Regional will ensure they continue to receive a high quality, multi-lingual and multi-ethnic service that they know and trust.
74 Thank you for listening to us today. We welcome your questions.
75 THE CHAIRPERSON: Thank you. Thank you for your presentation. Merci pour votre présentation. I have a few questions for you.
76 So I was going to begin by asking you something of a obvious question in terms of why you believe your current application addresses the concerns that the Commission raised 3 years ago, but you have by and large answered that in your opening remarks. Thank you. But if you have anything to add on that front, we can start there.
77 MS. WATSON: We just want to reiterate that it is an exceptional service by combining local -- no other service combines no -- local, regional, and national news and information the way this service and this proposed service do. It is without a doubt meeting more than the exceptionality standards by providing over 40 hours a week of local news and information.
78 Our record on civic engagement -- I noticed in your opening remarks, Mr. Chair, you mentioned civic engagement. Our performance in the last few provincial elections demonstrates how strongly we feel about that as well. We had simultaneous interpretation of consortium debates, we simultaneously interpreted a debate -- an English language debate that was done by City News. We created panels. As we all know, perspective, depending on the community, varies, and so we created panel discussions on this and created additional programming to allow citizens of many ethnicities to participate in the electoral province -- into the electoral process regardless of the province they live in.
79 And so we believe OMNI is exceptional today and it will be even more exceptional in this -- with this new proposal.
80 THE CHAIRPERSON: Thank you.
81 So that’s a good place to start in terms of exceptional programming or exceptionality. So in your current application you indicate you’ll maintain on the regionals content levels of 55 percent during the broadcast day and 50 percent of the evening broadcast, and you note that it exceeds all of the other discretionary services and conventional television station, but the levels are nevertheless less than or inferior to the commitments made by other applicants in the proceeding and generally less than those offered by licenced services that have 91h status.
82 So given that most other applicants have proposed higher thresholds, can you tell me again why it’s exceptional?
83 MS. WHEELER: So the levels that we proposed in our application were done to mirror those of our OTA stations, and that was primarily for administrative compliance purposes. In reality, OMNI currently and in a new licence term will exceed all of those levels.
84 For example, right now our Canadian content levels are around 65 percent throughout the day and 63 percent in the prime time period. We’re 100 percent ethnic schedule and our third language programming is at 95 percent.
85 In the new licence term our program schedule that we did file with our application reflects generally those levels. It does reflect a bit less third language programming because we have heard from our advisory councils that they believe that ethnic and third language audiences want more programming in English and French that’s culturally relevant but that helps with integration and cross-generational viewing. So we do intend to invest more in English and French language programming of an ethnic nature in order to serve that need, and that’s also supported by the research that we conducted and filed with our application as well.
86 THE CHAIRPERSON: So I have kind of an obvious follow-up. But before I go there maybe I’ll just jump to the ethnic and third language programming. It’s really the same question and I assume it’s probably going to be the same answer.
87 Because again you’ve proposed to maintain the current levels in your application, but again -- and you noted that the Commission didn’t express explicit concerns at the time of licensing of OMNI Regional, but again a number of participants have proposed exhibition that exceeds the 50 percent proposal.
88 So again why is it exceptional compared to the others?
89 MS. WATSON: Because those are floors. Our performance -- as Ms. Wheeler just indicated, these are floors. Our performances we exceed those amounts, and we are at 95 -- we are 100 percent ethnic today, and I don’t see that changing, and so we believe it is exceptional.
90 And, in fact, our -- based on our performance, based on what we believe are perhaps some of our competitors don’t know what they don’t know, these are reasonable, practical, achievable, and exactly what the research shows.
91 We have balanced this proposal based on three things. One, commercially reasonable rates so that there’s no undue burden on BDUs, and two, research that demonstrates the levels that we proposed are exactly what the desired mix was when we surveyed Canadians of ethnic backgrounds, and three, it is what we think an excellent mix of local, regional, and national programming.
92 THE CHAIRPERSON: Thanks.
93 I guess that leads me to the obvious question then. If you are so confident about exceeding that as a baseline, are you prepared to commit to higher thresholds?
94 MS. WATSON: Yes.
95 THE CHAIRPERSON: Thank you.
96 Turning to the governance issue -- again you raised it or addressed it in part in your opening remarks -- can you tell me how -- elaborate please on how OMNI Regional will operate under a diverse governance structure.
97 MR. FONSECA: I’ll start by explaining our advisory councils and how they are set up. We have four advisory councils that represent four regions across the country. We meet with them each twice per year, so in total eight meetings, where Ms. Wheeler, Ms. Watson, and myself have attended. But we interact with them throughout the year. Our community liaison staff and myself are in constant contact with each of the council members. And their mandate is really to help us enhance our engagement and reflection of the ethno-cultural communities that we represent.
98 The make-up of those advisory councils are -- we try to balance it based on gender, based on ethnic representation, based on geographic representation, as well as skill set. So we’re looking for community leaders with specific skill sets to help us grow the service.
99 Their advice, quite honestly, has been invaluable. They are our ambassadors in the community. They help us find new community producers for our independent productions, and they often offer us thoughts and advice on our programming strategies.
100 When it comes to selecting our advisory council members, I’ll throw over to our Senior Manager of Community Liaison Mr. Dheer and he can explain that as well.
101 MR. DHEER: Yes. So we will -- when we’re looking for advisory members we look to the community. We look at existing advisory boards. We also look at the regions and we look at what are some of the ethno-cultural demographics of that community, the immigration trends. And so when we look at that then we make sure that we get that sort of representation on our advisory boards.
102 For example, in the Prairies region we know that there’s a large -- especially in Saskatchewan, Alberta there’s a new immigration trend from the Middle Eastern and Arabic communities, and so we reached out to the University of Calgary and their Middle Eastern and Arabic continuing studies program and we were able to get Mr. Mushegh Asatryan, who is the assistant professor of the Middle Eastern/Arabic studies.
103 Similarly, when we were looking for -- again in the Pacific Mr. Sung Van -- we know that there’s a growing Korean community in the Pacific, and so we reached out to Mr. Sung Van, who is the president of the Canada Korean Business Council, and so we’re fortunate to have him on board.
104 And on the Atlantic side, sharing our cultures as an organization that’s been around for 20 years -- they’re celebrating their 20th year this year -- and Rogers TV has a great relationship with them and their executive director Dr. Lloydetta Quaicoe. And so Rogers TV suggested that, you know, you might want to engage with her. We did. And she believed in the values that OMNI has and she’s come on board as well. In fact, in a few days during our intervenors you’ll hear from her.
105 So it’s educational institutions, it’s community groups, it’s our stakeholders, it’s existing advisory members, it’s our Rogers partners, our -- you know, so it’s a whole gamut.
106 MR. FONSECA: And just to summarize, Mr. Dheer said if you can -- we take the feedback that they give us very seriously, and we act upon it, and we file reports from our meetings with the Commission every year as well, and their advice has been acted upon many times, both in programming and our strategies.
107 THE CHAIRPERSON: That speaks strongly to engagement, but governance I guess can be seen to be a little bit more, at the end of the day, having consulted or engaged with the various communities, there still is -- the decisions are ultimately up to Rogers as to what gets on the air, how you act. I guess I'd just like to push you a little but further on how does that really relate to governance?
108 MS. WATSON: Fair enough. Thank you.
109 We -- this is a 9(1)(h) service and we take that responsibility very, very carefully. So, for us, the stewardship of the money we receive from subscribers to deliver this service is of utmost importance, which is why we are an obedient, compliant group with respect to our COLs, with respect to making sure we reach our audiences.
110 The advisory councils are advisory councils. They are not boards of directors. And so they help us, in fact, exactly as you mentioned, with engagement, pulse, making sure that we're relevant and continue to be relevant.
111 Some -- our newest member in Alberta has joined and she is very active in the commerce sector and is now ready to help connect us and network us with respect to sales. They are all -- they don't have fiduciary obligation, but they are all passionate and supportive of the program -- of the channel.
112 But you're quite right, we -- this is our license and our stewardship of a 9(1)(h) license. So in terms of governance, it is managed by a general manager who reports to me. News and operations are separate and distinct from our mainstream English language news. And overall, it is structured as one of our licensed services at Rogers Media where we -- where I hold responsibility for it and Suzanne Wheeler, as well as the Vice-President of Regulatory helps us ensure on that.
113 THE CHAIRMAN: You don't have to repeat yourself.
115 THE CHAIRMAN: The -- fair enough. I'll just push you a little bit further, if I may, just -- but have you given thought to how if it's possible or how you might have those advisory groups play a greater role and have more involvement in the stewardship?
116 MS. WATSON: In fact, we have asked our advisory council should we be fortunate enough to secure this license, to manage and oversee the distribution of the scholarship money we have proposed. I'm happy to enshrine that in a condition. And we will also -- we have also asked them to be more involved with us on securing new local independent producers in the areas where we feel we are lacking in terms of language or communities where we haven't reached -- we haven't been able to get them on the channel.
117 MS. WHEELER: The only thing I would add is that while they are advisory councils in a sense that they don't have final decision-making power over the programming, because that resides with us as the license service, we are accountable to them. We meet them regularly, as Manuel indicated. And they are formal meetings with agendas that are sent two weeks in advance. They have the opportunity to feed into the agenda and determine what the order of business is for that meeting. We also take minutes and file annual reports with the CRTC to demonstrate the types of discussions that we've had, the council feedback that we've received. And if we haven't actioned the items that we discuss at a previous meeting by the next meeting, we are held to account on that and required to explain our actions and why we would -- we have or have not adopted one of their suggestions.
118 MS. WATSON: And if I can just add on that, there are four separate advisory councils per feed. And when we were about to launch the OMNI Regional service, there was a particular -- a very large issue that we were grappling with. We met with the group in B.C. who had an opinion and then the group in Ontario had a completely opposite opinion. And so we bow on the two and made a decision at the end of the day. And so having four regional ones, this will happen. Just putting it there for you to consider that they are autonomous in their regions, but not on a national level.
119 THE CHAIRMAN: Thank you. I just want to confirm that you did say that you were prepared to set the condition of license with respect to the fund or the scholarships rather.
120 MS. WATSON: Yes, absolutely.
121 THE CHAIRMAN: Thank you. Maybe change gears a little bit and go to local advertising. So in the standard conditions of license for discretionary service, a COL18 specifies license shall not broadcast any paid advertising material, other than paid national advertising. So currently license and exempt discretionary services that broadcast at least 90 per cent of their programming in a language other than English or French are permitted to broadcast up to six minutes of local advertising. Are you seeking an exception to the standard condition of license in order to be permitted to broadcast local ads?
122 MS. WHEELER: Yes, we are. The original concept for OMNI Regional was always to have the local OTA station mirror each regional feed. And the local OTA station obviously sells local advertising, so the idea was to have that advertising viewed both on the OTA and the OMNI Regional service at the same time. So we wouldn't see this as an additional encroachment on the local advertising market in any of our regions because we're already operating and soliciting local advertising at the OMNI OTA level.
123 THE CHAIRMAN: Even though you're proposing less than 90 per cent third language programming?
124 MS. WHEELER: This is advertising, local advertising?
125 THE CHAIRMAN: Yeah.
126 MS. WHEELER: Yes.
127 THE CHAIRMAN: Okay. So, again, in your opening remarks you touched on the issue of OMNI's OTA stations, so you're well aware a number of parties have raised concerns in that area. You've indicated that you intend to maintain the operation of the OMNI OTA stations during the respective term if it's awarded the license. So how do you respond to the argument of some interveners that it's not appropriate? It's not appropriate to -- or fair for Rogers to support OMNI OTA through the operation of a 9(1)(h)?
128 MS. WHEELER: Well, that first responsibility is to our audiences, communities we serve, so we're less concerned with the criticism of our competitors and more concerned with providing free over the air access to communities that we're currently serving. And when we originally conceived of OMNI Regional, the whole intent was the need to be able to stabilise and reinvest in OMNI as an enterprise. So that always meant OMNI Regional and the OMNI OTA stations.
129 And we see this as a unique and a benefit that is unmatched by those other applications before you in the sense that it provides -- it allows us to invest in news and information programming, both at the local and national level, and also provides Canadians with free over the air access in urban markets to this programming. Many new Canadians coming to the country can't immediately afford a cable or internet subscription to be able to access this programming. And we see this as a critical element of our service in terms of engaging and ensuring that they have the information they need to integrate into Canadian society.
130 THE CHAIRMAN: And if the Commission were to decide that it wasn't appropriate to subsidise the OTA service with a 9(1)(h) service, would Rogers maintain its proposed commitments for OMNI Region?
131 MS. WATSON: We wouldn't be able to, Mr. Chair. These are -- this is an integrated aggregated service. We were up front in 2016 that in order to continue offering the OTA stations we needed the partnership and support and sustainability of two revenue streams. And so having OTA and Regional is what we believe delivers that specialness, the exceptionality of having local, regional and national programming, especially when it comes to civic engagement.
132 And so, you know, while we could offer a lot of the programming, we wouldn’t be able to deliver the locally reflective news; we would have to abandon those commitments.
133 So we would be able to offer a national service that we think would be a lesser service than it is -- than what we offer today, and that’s always a shame to take away from these communities.
134 THE CHAIRPERSON: And what guarantees does the commit have that the OMNI OTA stations will remain open even if we do grant Man (1)(8) status?
135 MS. WHEELER: If we’re granted the 9(1)(h) licence for OMNI Regional, we will commit -- we will accept a condition of licence to maintain our over-the-air operations.
136 THE CHAIRPERSON: Thank you.
137 And the last one on this area you probably want to do it via undertaking, but can you provide projections then of the incremental revenues, operating expenses and capital expenditures associated with operating OMNI OTA in the prospective licence term?
138 MS. WHEELER: Yes, we will.
140 MS. WATSON: Is there a deadline date?
141 THE CHAIRPERSON: We’ll summarize that at the end. There will be -- I just don’t have it in front of me so we’ll give you a couple of hours.
142 MS. ROY: Mr. Chairman, the deadline would be December 6 for all undertakings.
143 THE CHAIRPERSON: They’re more generous than me.
144 Switching gears a little bit, or a little bit more maybe I should say, advertising revenues. So you noted again in your Opening Remarks that advertising revenues have declined at a fairly -- at a significantly higher rate for ethnic advertising over the past few years.
145 Can you explain what’s led to that decline; can you cast some light on it for us?
146 MS. WATSON: The trend over the last five to seven years, with OMNI in particular, has been the fact that American strip programming on OMNI for decades was what subsidized the ethnic side of the programming ledger.
147 And as we’ve appeared before the Commission many times over the last seven years, that advertising revenue has virtually evaporated. We took off -- the last U.S. program off the channel this year, earlier this year or late 2017, late 2017, because it’s no longer funding -- it’s costing more to air that programming than we are generating revenues.
148 So we need to rely on local language revenue as well as national language revenue and those are -- they’re more difficult to go out and get. Doesn’t mean we don’t try. We are, as you saw in our video, we created a culturally nuanced team in our Rogers Elevate sales group that allows us to speak to national advertisers and tap into their diversity budgets or their language budgets, and we are seeing some success, but understanding that those revenues are small and the fact that we don’t have national measurement tools to show to a large national marketing agency is also a big hindrance for us. We’re not able to demonstrate ratings. We operate for small, niche groups and there are advertisers who want to reach them, but there aren’t as many and the dollars aren’t as large.
149 THE CHAIRPERSON: So how do you allocate advertising -- how the allocation -- how does it work in terms of the -- for Rogers’ services and situations where an advertiser purchases advertising time on multiple Rogers’ properties?
150 MS. WATSON: So with respect to OMNI, it is an additional buy. So, for example, the Canada Dry one was a national hockey buy and then they were able to secure -- I can give you the amount in confidence if you would -- I’d rather not give amounts here. So we are able to secure an additional top-up with respect to the Canada Dry campaign we saw in the video, and there are three or four examples like that.
151 THE CHAIRPERSON: Okay. We’d be happy to accept the information in confidence as an undertaking.
152 So in September, you submitted updated financial projections which revised down advertising revenues from the original application and, again, you were talking about the recent trends in the ethnic advertising market.
153 You’ve mentioned some of them, but what further trends -- what are -- there anything else with respect to recent trends that drove you to further reducing your -- or downgrading your estimates?
154 MS. WATSON: I’d like our Director of Finance, Vic, to take you through and then Christine can add to that after.
155 THE CHAIRPERSON: Yeah, just -- I mean it was only nine months in between the two, so I’m wondering what changed?
156 MR. MAGHAKIAN: Well, in our original projections we had included U.S. English programming which Colette indicated that we removed.
157 As well, we had made an assumption on the extended reach of OMNI Regional and assumed that there would be a lift in advertising revenue. That did not materialize. In fact, we saw a decline and that’s why we corrected that once we had launched the service.
158 THE CHAIRPERSON: Can you provide the amounts in revised advertising specifically related to the expected decline in ethnic advertising market?
159 MR. MAGHAKIAN: The amount as in what we had assumed ---
160 THE CHAIRPERSON: M'hm, yeah, the amounts in -- in terms of the difference between your assumption, initial assumption ---
161 MR. MAGHAKIAN: Yeah, so in terms of the English programming was a million dollars, and in terms of what we expected as a lift it was three million dollars which has not materialized; we saw a 10 percent decline year over year and that was two million dollars.
162 MS. WATSON: Just to add, Mr. Chair. With respect to the English programming, while it impacted the advertising revenue line it benefitted the PBIT line because we were spending more and selling less. If you take the expensive program on while you have lower revenues, you also have much lower costs, and so the PBIT benefitted from that.
163 THE CHAIRPERSON: Okay. And, I guess, so what are your plans and what steps will you take to better compete with the other digital services in terms of advertising?
164 MS. WATSON: So as I mentioned, we -- Elevate, this Elevate language group and commercial production group is maybe four or five months.
165 And as you mention, it’s been nine months so we’re having a reality check. We realized what -- where we are, and our sales team is quite confident. Christine can take you through the numbers of sales reps we have in our sales structure, but we’re very confident and optimistic that we will build. It’s taken us nine months, but we’ll build on the momentum with respect to that.
166 MS. COMI: Currently, Rogers Media has over 60 reps across the country who are selling the Rogers’ properties. So each of these reps is expected to sell OMNI Television. Each of these reps has an OMNI target and each of these reps is incented to sell OMNI.
167 As of year-to-date 2018, two-thirds of these reps have booked business on OMNI, so that means that there are more people, more sales reps, talking to their advertising clients about OMNI Regional today than ever before in the past.
168 It’s still -- the reality is that advertising revenues for OMNI are declining and this is in line with the declines experienced by the other language specialty services; so about a 50 percent decline over the past 6 years.
169 To counter this, we -- not only do we have the 60 reps across the country but we’ve also invested in a specialized sales team called Elevate and you saw a couple of examples of what they’ve done in the sales video. They work at a very strategic, high-level, relationship with large national agencies and large national -- large direct clients.
170 The vetting program that are to engage new Canadians and the immigrant communities in culturally sensitive and nuanced manners. And so we’re seeing some success with that. The Scotia Bank program is a great example, and Canada Dry’s, another good example leveraging our assets to reach new Canadians.
171 THE CHAIRPERSON: Thank you. You mentioned earlier the level of US reprogramming.
172 Can you provide a specific date when Rogers discontinued US acquired programming from its OMNI OTA stations programming schedules?
173 MS CHRISTINE COMI: Yes, we’ll add it to the undertakings. I can come back in a couple of hours as well.
175 THE CHAIRPERSON: Why they didn’t include it in the initial forecast, if you’re going to remove it?
176 MS COLETTE WATSON: You know, we were operating on known quantities, which were if we still had... I’ll give you the example.
177 The year before we got the 918 licence, “The Bachelor” aired on OMNI, and it brought in a significant amount of revenue. And then, when we got the licence, we realized that, we made the decision to focus on the national newscasts, and would not preamp those national newscasts in order to deliver things like “The Bachelor”. And so, “The Bachelor” was removed, the revenues went with it.
178 We still had, we thought, “We’ll keep our timeslot in case there’s something else we can put on OMNI to help generate more revenues and help subsidises the programming.”
179 And realized that we’re not able to continue with our cadence with respect to how we’re meeting—to be honest, I much preferred doing the Quebec election in Arabic than a stunt show.
180 And so, we made that decision, it became something we learnt as a result afterwards. And so, that’s why we submitted the revised projections.
181 THE CHAIRPERSON: Okay. Can I add to your homework for the next few hours in terms of your undertakings response, maybe you can also provide the amounts in your projected advertising revenues specifically related to the discontinued US reprogramming?
182 MS COLETTE WATSON: Yes.
183 THE CHAIRPERSON: Thank you.
184 Moving on, I guess, still on advertising sales strategies. Can you talk about sales strategy for OMNI regional, particularly as it relates to soliciting local advertising sales from businesses in the local communities with programming target?
185 MS COLETTE WATSON: So, I’ll start and then Christine can follow up.
186 There are two types of local advertising on OMNI. The first is what Christine was just mentioning; in addition to those national reps, we have what we call “language reps”, we have four in Toronto and two in the west. And they are out building relationships with large third-language communities, where we think there could be commercial arrangements.
187 And the other one is with our boarded independent production programs, where in an independent producer will share the six-minutes of advertising. We have three and they have three, and they are out in the markets, at the local level, selling this. And I’ll have Jake and Christine take you through how that works.
188 MS CHRISTINE COMI: There are six language specialists reps, specializing in language. They speak a range of languages from Cantonese to Urdu, and are deeply imbedded in the communities, so that’s their focus.
189 But Rogers is also invested in a lot of cross training and cross-- creating hybrids sales roles, so that every rep has the, as I said, every rep has a target, and every rep is expected to sell OMNI.
190 MR JAKE DHEER: So with respect to independent productions, there is really two ways that independent—first of all, there’s three actually.
191 There’s the national independent producers, which is shows like “Blood in Water”, “Second Gen”, and that’s the direct access licence fee, we paid a licence fee access to CMF and stuff.
192 In terms of the local community independent producers, there’s two ways, I guess, they can get the content on. One is the broker way, which is a community producer would pay or buy airtime to get exhibition of their show on the channel.
193 The other way, and this is the way that OMNI does it, is the boarder approach, where they will produce the show, they will get the-- so if it’s a half-hour show, they will get three minutes, up to three minutes of... advertising opportune, which they can solicit to sell advertising.
194 THE CHAIRPERSON: So what would be your position on the possibility that the Commission would impose a condition of licence limiting local advertising sales to six (6) minutes per clock hour, obviously?
195 MS SUSAN WHEELER: And just to be clear, we’re currently only soliciting advertising in the markets where we have an over-the-air broadcast, so in regions where we don’t have an over-the-air broadcast facility, like Saskatchewan or Manitoba, we would not solicit local advertising from that market.
196 The independent producers who are working within those areas, we will help them to look for advertisers of more regional and national level. And so that is something that we would be able to commit to.
197 However, any kind of limit on local advertising would have a negative impact on the independent production model that we currently have in place, as Jake just explained, where we split the advertising inventory with the independent producer.
198 So we may be able to commit to limiting our own sale as Rogers of local advertising, but we wouldn’t want to encumber the independent producers ability to solicit local advertising.
199 THE CHAIRPERSON: But what, would a condition of licence of that type impact your proposed commitments from the regional? I take it that’s a yes, given what you just said?
200 MS COLETTE WATSON: The projections we’ve provided the Commission are on a break-even basis, and so any advertising revenue decline is absorbed by Rogers with respect to the financial picture of the service.
201 The reason the rate is low is because we’ve combined ad revenues and subscriber revenues, projected those declines, and so it’s a delicate balance.
202 And while... I get the dilemma with respect to local advertising, and I would be prepared to commit to six minutes, and if we had to give up our portion of the three for an independent producer, we would. It wouldn’t materially impact the finances, but all finances are-- all the proposals here, are based on a break-even basis.
203 THE CHAIRPERSON: Which will answer my next question, which is: if we’re to prohibited the broadcast of local advertising, would it impact your commitments? I take it, again, the answer is obviously “yes”.
204 Maybe I can continue to your homework assignment and ask if you could, for both of those situations, a limitation of six minutes per clock hour or a prohibition, could you provide revised financial projections under those scenarios?
205 MS COLETTE WATSON: Yes.
206 MS SUSAN WHEELER: Just one point of clarification; that would be a six-minute per hour limitation per feed?
207 THE CHAIRPERSON: Yes.
208 MS SUSAN WHEELER: Okay.
209 THE CHAIRPERSON: So I have a few more, if you thought those were detailed questions, I have so more nitty gritty questions. I think a number of these may also have to be responded through undertakings, so you’re obviously gonna be busy.
210 But before I get there, just to return to some forecast issues. Rogers and Bell, obviously, the two largest medias in Canada, you have very different subscriber forecasts than do Bell, as filed in example location. And you opted to base yours on the conversions report.
211 So, can you tell me what specific assumptions and methodological elements in the conversions forecasts led you to select it as the basis for your forecasts?
212 MR VIC MAGHAKIAN: We did use that report to forecast for the out-balance years. We felt that coupled with our internal performance was the best and the realistic approach to take going forward for the next licence period.
213 MR. SCOTT: So is there anything unique about the assumptions or methodological approach in the Convergence report that drove you to using it as the base?
214 MR. MAGHAKIAN: It aligned with our internal thoughts and predictions as well.
215 MR. SCOTT: Okay. And then turn it the other way, what specific assumptions used in Bell’s forecast do you take issue with?
216 MS. WHEELER: We haven’t looked at Bell’s particular forecast. But I’d just say that ours were based on both the Convergence report, but then they were substantiated by the Commission’s recent correction to the subscriber levels announced in a procedural letter this May, where it does indicate a 3 percent decline in subscriber levels. So that aligns with what our estimates of decline are for the license term as well.
217 MR. SCOTT: Okay
218 MS. WHEELER: The only thing I would add too is that, if we do end up being wrong and the declines are not as significant as we anticipated, that revenue will be reinvested in our programming in keeping with our commitment to operate the station on a break-even basis.
219 MR. SCOTT: Okay. Thank you.
220 Now, the hits just keep on coming. So you project significantly higher technical expenses, relative to other proposals. Can you explain -- can you explain why?
221 MR. MAGHAKIAN: It’s because of the four feeds that we have. We have uplink fees that we have to pay, and it’s -- the cost is significant and so that’s why relative to our other costs, it is a significant portion.
222 MR. SCOTT: And is there anything -- are there changes you can contemplate that would reduce those technical expenses?
223 MS. WATSON: Not if we want to maintain the specialness and exceptionality of being -- of having four different feeds and offering regional and local programming.
224 MR. SCOTT: Okay. Thank you.
225 MS. WHEELER: The only thing that I would add is that we already are receiving the transmission costs at a very reasonable rate, because we were able to leverage the agreements that we have in place for our other services. As you know, we operate a regional support service as well and other discretionary services. So we were able to leverage those relationships to get the -- you know, an excellent price for the transmission of those feeds.
226 MR. SCOTT: Okay. Thank you. Then I’ll move to capital depreciation. We’re going to see if we can get all of the panel involved.
227 So you have projected higher amounts in yearly capital depreciation than the majority of other applicants. Can you provide a detailed breakdown of the projected capital expenditures for Omni, for the OTs and Omni Regional.
228 MS. WATSON: Yes, we can. And again, the depreciation would be higher, because we have all of these facilities across the country with respect to offering programing for Omni.
229 MR. SCOTT: And total sales and promotion expenses over the prospective term are projected to be significantly lower than other -- than in other proposals. Do you have any explanation or advice on how you plan to keep sales and promotion expenses significantly lower than all of the other applicants?
230 MR. MAGHAKIAN: We did find some operational efficiencies as -- in our recent submission. It’s -- we had efficiencies in our sales management platform, as well as our combined resources allowed us to keep our costs down, and as a percentage of our advertising revenue it’s the lowest. It’s at 15 percent.
231 MS. WATSON: Which we think, Mr. Chair, is a good thing, right? We are being -- we are being efficient. Some of our competitors have percentages of ---
232 MR. MAGHAKIAN: Over 30 percent. So there’s only two applicants under 30 percent, the rest are all over 30 percent of advertising revenue.
233 MS. WATSON: But some in that 30 percent have -- show zero revenue in the first couple of years. And so, we believe that given that we are -- we are on the ground, we know what we’re doing. We’ve got a national team going out and doing this. Having a 15 percent cost of sales is an industry benchmark.
234 MR. SCOTT: And you’ve listed new programming initiatives that you plan to take in the prospective term. You, I don’t believe have broken down the costs of those initiatives. Again, I assume this would be via undertaking.
235 MS. WATSON: Yes, we can do that.
236 MR. SCOTT: Please. Give me a second, please.
237 I guess again, finally in that undertaking perhaps you can discuss the impact on those programming initiatives for a scenario if Omni Regional is renewed with mandatory distribution, but at a lower wholesale rate. Let’s say, describe the potential changes required for every one cent reduction from your proposed rate increase -- yes, rate increase, sorry. And a detailed listing of those changes if you can, with dollar amounts.
238 MS. WHEELER: So just to be clear, one cent from 12 cents to the 19, and then as it escalates to 21 over the licence term?
239 MR. SCOTT: Yes.
240 MS. WHEELER: Perfect, thank you.
241 MR. SCOTT: That will be fine, thank you. I’m going to keep counsel busy adding up all the undertakings.
242 UNDERTAKING / ENGAGEMENT
243 MR. SCOTT: A couple of last items on my part. Actually, why don’t I ask my colleagues, do either of my colleagues have any questions? And if you do, while I gather up my last couple of questions, do you have -- Commissioner Laizner?
244 COMMISSIONER LAIZNER: I just had a couple of questions on the advisory councils. So excuse me, how long do the members serve on an advisory counsel?
245 MS. WATSON: We’ve asked our Chairs to commit to a two-year term, but most of them there are no term limits on the council at this point in time. Some have resigned and so that has caused us to get new members. But for most part, no term now, apologies.
246 COMMISSIONER LAIZNER: And I think you’ve provided us with a governance document. Is that the complete set of terms of reference for them?
247 MS. WHEELER: It is.
248 COMMISSIONER LAIZNER: Okay. How exactly are the agendas created for their meetings?
249 MS. WATSON: So typical Board structure. Agenda’s, previous minutes, approval of agenda and then the Board’s themselves asked if we could talk about -- in a previous meeting they would have said, next time we’d like to talk more on marketing, or research, or how the application went at your hearing, so that will be in.
250 But there is always a standard set of, we report on programming, on regulatory updates, and community outreach. And then whatever the Board would -- the councils want to see.
251 COMMISSIONER LAIZNER: So the councils themselves set their agendas, other than what’s standard on each meeting?
252 MS. WHEELER: We have standard elements in each of our agendas to deal with programming, community relations, the minutes of the previous meeting, and any action items. Those are sent out two weeks in advance to council members soliciting feedback on any additional agenda items they might want to add, or any omissions that might have, you know, be in the action items that we would have identified in the agenda. Then it’s finalized and then used as the basis for the meeting.
253 COMMISSIONER LAIZNER: And do you adopt the recommendations?
254 MS. WHEELER: Often we do, and we have a number of examples of recommendations that they’ve made that we have actioned.
255 COMMISSIONER LAIZNER: So can you give me an example of that, as it may impact the concerns we have about governance, balanced against vertically integrated entities, balanced against the exceptional nature of programming that we’re looking for in a 91H.
256 MS. WATSON: Could I just confer with Ms. Wheeler for just one second?
257 I will give you an example. When we got the 91H licence in May of 2017, we met immediately with the advisory groups to talk about how we were going to set this up. We had some partnership proposals presented to us by Fairchild and other entities, and so we thought the Fairchild partnership was of interest to us, and we took it to each community group, each advisory board.
258 The advisory board in Vancouver was very, very supportive. They thought we should proceed with it. The advisory board in the Prairies didn’t have an opinion. They thought “Whatever you decide is fine”, and then the one in Ontario and east, the Ontario one thought, “You know, there are concerns we have with it, but if you go, we need to do x, y and z.” And just not to discuss a commercial contract with you here, we can tell you what the x, y and z was with respect to having a balance, what our advisory council in B.C. advised us to do and the one in Ontario advised the opposite on what we think was a fairly substantial operating issue.
259 COMMISSIONER LAIZNER: So is that something you can supply us with by way of undertaking, respecting confidentiality issues, just to give us a better feel for what they’re grappling with and what they do and how you address it?
260 MS. WHEELER: With respect to that particular example?
261 COMMISSIONER LAIZNER: Yes.
262 MS. WHEELER: Yes. So we have filed our agreement with Fairchild. It’s already on the record, and that will reflect a number of the conditions that the OMNI Advisory Council had suggested -- had recommended we incorporate into our agreement. So we can certainly highlight those particular provisions in that agreement that were informed by the OMNI Advisory Council.
263 COMMISSIONER LAIZNER: And what’s the time commitment for a member of the Advisory Council?
264 MS. WATSON: If the formal meetings last two, two and a half hours and then -- but Manuel and Jake communicate with them on a regular basis. I won’t be able to quantify it. I’ll let them do that.
265 MR. FONSECA: It varies depending on the council member, but we communicate with each one at least once a month for me. Mr. Dheer can describe how much he interacts with them, but we do definitely reach out to them on a regular basis via email, via phone calls. How many hours does that add up to a month? It varies, but not a lot of time aside from the formal meetings.
267 MR. DHEER: Yes. So usually it’s an outreach. If we’re looking, again, for some guidance on that specific region, and especially when looking for independent producers, so for example, in the Pacific, when we were looking at the Korean community and it was Mr. Sungvan who said that, you know, that with the growing population of new Korean immigrants, it would be nice to do a Korean show. So he engaged in that process, invited Manuel and I to sit with one of the leaders of that community and talk about how that could be possible.
268 Similarly, Rhonda Rosenberg, when I was looking for -- when we were looking for content in Saskatchewan, again, for independent producers, third language, she is the Executive Director of the Multicultural Council of Saskatchewan and she sits on our Board, and she was able to connect us with a few potential independent producers, and we were able to secure a show.
269 And then I go out to the east, where we have, again, sharing our culture, Lloydetta Quaicoe, again, we were looking for engaging that community for a show, and she suggested Cantonese because Cantonese, it’s an established community there, but they have really contributed quite a bit. And so from St. John’s, Newfoundland, she engaged with a young person who’s part of our Board who is going to be helping host and co-produce a show in the Cantonese language.
270 COMMISSIONER LAIZNER: So is it fair to say that these advisory councils are set up to assist you in achieving your programming objectives? Is that what they’re doing? They’re helping you find creators? They’re helping you in that sense, that you’re using them for the creative process, basically, as a resource?
271 MS. WATSON: Creative and community outreach as well.
272 COMMISSIONER LAIZNER: Okay. And community outreach to find those independent producers or community outreach for other purposes?
273 MS. WATSON: For other purposes, engaging that community to watch OMNI, to become viewers of OMNI, to become marketers on OMNI, all of those areas.
274 COMMISSIONER LAIZNER: Are they remunerated?
275 MS. WATSON: They are. They get $500 per meeting.
276 COMMISSIONER LAIZNER: Okay. And can you remind me again what the frequency of their meetings are?
277 MS. WATSON: Susan meets with them twice a year formally and then Jake and Manuel meet with them informally once a month.
278 COMMISSIONER LAIZNER: And who develops the reports from the meetings? Is that a Rogers rep who attends the meetings?
279 MS. WHEELER: The minutes of the meeting?
280 COMMISSIONER LAIZNER: Right.
281 MS. WHEELER: Yes, they’re taken by Rogers staff.
282 COMMISSIONER LAIZNER: Okay. All right. Thank you.
283 THE CHAIRPERSON: Go ahead.
284 COMMISSIONER SIMARD: Thank you. Thank you for your presentation. Thank you for your submission. I have one specific question and two general questions.
285 So I start with the specific one. In your presentation, page 3, you describe your regional feeds and you kind of indicate that there would be fewer ethnic groups that would be served in Quebec, like compared to the other regions in Canada. This information is also included in your submission.
286 As a point of clarification, could you just tell me why is that? Is it because the immigration trends are different in Quebec compared to the other regions?
287 MS. WATSON: I will let my colleague and partner Sam take it on. It is mostly about -- Sam is a small independent ethnic broadcaster in Quebec, and so it’s about what we feel that condition of licence can be met.
288 MR. NOROUZI: So that essentially reflects our condition of licence for our OTA that’s present in Quebec. And that, it went back -- when we applied for our OTA in Quebec, we based ourselves on the previous licences and previous thresholds that were established for our OTA, also because we have a background in production. I personally have been involved in ethnic production since the age of 14. I mean, I grew up in this. It’s engrained in my DNA. I was volunteered by my father at the age of 14 to become a cameraman for a local public access cultural program that he was doing to serve the Persian language community in Montreal at the time, and I went on to do this for -- as a volunteer, for 25 years.
289 So when we were applying for our OTA licence in Montreal, we based ourselves on the network of producers that we knew when we were all independent producers producing programming, and we reached out to all of our friends and colleagues and said, “Well, will you be able to do this?” and “Will you be able to do that?” And again, that’s really that benchmark or that COL that’s there. It’s really a starting point for us.
290 I mean, ethnic production is of vital importance to us. I mean, we started in Quebec, and when we appeared in front of the Commission, at the time, the Chairman Blais asked me if I was out of my mind, wanting to become a broadcaster in the market with the market conditions involved, and I just told him, “This is just the right thing to do. The service is lacking right now and these communities need to be heard.” Whether I’m nuts or not, it’s up for debate, but we wanted to go forward with it, and we think that it was just simply the right thing to do.
291 Now, we’re always open to additional producers. I understand also that a lot of these independent ethnic producers, this is a side job or a part-time job that they do. They have full-time jobs, and because, like me, they have this need and they see this need for offering the service to their communities, so when they finish their 9:00 to 5:00 jobs, then they have an additional job of producing a program to meet those needs.
292 We also believe that -- and again, I’m talking about the Quebec perspective. Again, I’m a big proponent of language programming. I think it serves an amazing need and want for the communities, but I started to see a trend also where we can do more. I’ve started to see reactions from the communities that we serve, and also the host community. The Francophone host community often writes to us, “Oh, I love your program. I’d love to be able to understand it.” So we propose a gamut of ethnic programming but in French. And I think it’s very important going forward, specifically in the environment that we see, again, from the Quebec perspective, where we have this instances of -- I think it's due to misunderstanding and, like, the whole -- certain elements of the host community not understanding ethnic -- the ethnic communities. One example is the horrible thing that happened at the Quebec City mosque. And I think what we need is really a conversation and understanding of intercultural understanding for us.
293 So I also think it's of a vital importance to have and to demonstrate the richness and beauties of all these different cultures in French language programming so that the whole society can also see the benefits. And perhaps even if it's small step we take forward in creating an environment of tolerance and understanding, I think we've done our job.
294 So, again, I'm a big proponent of language programming, but I also believe that having certain ethnic programming, whether it be a person that calls in -- and I've had this -- and writes to say to me, "Oh, I love that song. What is the name of that song? Where can I hear it again?" Or if it's a simple thing as a cooking show and people try that recipe and they write to us, "That was -- can you tell me what the recipe for that specific dish was because I'd like to try it at home."
295 So we -- and particularly I think it's of vital importance, ever since we started our partnership at Rogers, that we have a vaster distribution across the entire province. And I think more people from the whole society get to see programming like this that's not available on any other medium. I think it can lead to a society where tolerance and understanding is -- moves forward.
296 COMMISSIONER SIMARD: Thank you.
297 MS. WATSON: Sorry, if I -- so just to summarise, the OTA in Quebec has a lower condition of license. And then in addition to ethnic and third language programming, we will look to -- we are looking to in this proposal create more English and French language, based on what Sam just described, in order to bridge those cultural divides. And so when you add all of that up that's why those numbers are lower.
298 COMMISSIONER SIMARD: Good. Thank you very much.
299 You kind of set the table for my next two questions like regarding programming. I would be interested in knowing, based on your experience, what is your -- what is one of the best success stories you can share with us, again, based on your experience?
300 MS. WATSON: So I'm going to give mine for OMNI and then I would invite Sam to do one on his end.
301 For me, personally, Blood and Water was a watershed moment for OMNI. We took the last bit of tangible benefits money from a previous purchase and applied it to the P&I model. And so we met with this -- this breakthrough entertainment had been shopping this story around for years and no one was going to make a Cantonese, Mandarin and English crime drama shot in Canada, visibly set in Vancouver. And so we took a flyer and we did it.
302 And three years later, we're getting top talent from Hollywood wanting to be on that show. It has been sold around the world. It is a huge hit on social media in China. And it is, I think, the way of the future for P&I type programming. This -- think about it, this program, this drama, scripted drama, is in three languages. I watch it. And I read the subtitles, and it is bridging divides. It is telling stories and it is just groundbreaking. So for me, I am so proud of that particular product.
303 MR. NOROUZI: From my perspective, you know, growing up on the production side of ethnic broadcasting, before we broadcast, I was always envious of other channels or other productions that had the resources to be able to provide at least visually a high quality. You know, we did what we could. I mean, but we definitely didn't have the resources to be able to compete visually and programming-wise with other mainstream broadcasters. And I would say, "Oh, if we had this piece of equipment we could do this. And if we have" -- well, I'm not envious of anybody today. And I'm so proud of that that our visuals, when you switch from another channel to our channel, the visuals are at least equal or even I would say sometimes better. We think that's of the utmost importance.
304 And to that point, we -- when we launched our OTA, we used, as the Commission knows, we used some of the tangible benefits money that was provided by Rogers through their purchase of CG&T. There was a portion of tangible benefits that came to receive to help us launch our station, which was a tremendous help. And we used proportions of that money to subsidise the production of our ethnic -- independent ethnic producers so they would have access to a state of the art production facilities at a cost that they could afford. And that was of the utmost important to us.
305 We did not want to have that image of ethnic broadcasting saying, oh, these -- it's ethnic broadcasting. It won't be as sharp or the image won't be as nice. So we invested in that, in the quality of our product. And I'm so proud of our producers for the programming that they provide.
306 And also, I think, ever since our partnership with Rogers and the launch of OMNI Regional, I'm just -- it's incredible the amount of -- I think the level, the prestige of ethnic broadcasting, at least from my perspective, in Quebec has gone up, particularly with programming.
307 When we had the Blue Jays baseball in Tagalog air, it was just -- I would sit -- and I can't speak Tagalog. And I would sit and watch this and it was amazing to me that we could -- and we would never be able to do this by ourselves.
308 So I think we kind of have the best of both worlds of us as a small independent broadcaster in partnership with a large corporation of Rogers that we can do certain things and just -- my goal has always been to elevate the level of ethnic broadcasting when I was involved. And I think over the years that we've achieved that and we're attaining, like, levels and things that we can do right now that we could never have done in the past.
309 COMMISSIONER SIMARD: Thank you. And my last question is could you share with us one of the lessons that you have learned, again, based off your extensive experience?
310 MS. WATSON: Happy to. I'm blown away every day by what our news teams put together. They are -- and so we've learned that storytelling at OMNI is about being by and in that community. It's not about translating or taking a packaged product and just putting it in a body of languages.
311 And if I can invite Nathan to talk a bit about how he addressed the story about organ donation, in particular, that was a real lesson for us.
312 MR. SEKHON: Yes, when we approach news from the OMNI perspective, it's -- there are so many more levels that go into as far as community and engaging directly. And the most recent example we have is the case of a young gentleman who needed a kidney donation. Now, as sad as it is, this is not an uncommon thing and it's not a theme that you would find any conventional news room doing a full story on. It -- with all the things going on, if you'd pick one, you'd have to do every one. There's so many reasons where it wouldn't make it even midway through the news agenda unless it was a really low, slow news day.
313 But from our perspective, this was a gentleman who was in the community, very young, and we have continually done stories talking about organ donation and certain types of genetic treatments that because ethnic communities are genetically, you know, not as able to receive donations, people on those lists are far less likely to find a donor. And that's -- you know, science has come up and told us that and we're continually doing that story.
314 So, from this perspective, from a community standpoint, that story absolutely needs to be told because the likelihood of him getting is far less. And it shows in our viewer engagement. That story aired last week and within 24 hours we had dozens of phone calls, hundreds of posts on Facebook. People from all over the world saying, "I'll fly to Canada right now and test if you can give me part of -- my kidney to this gentleman. I'd love to do it." The family contacted us the very next day to say they were inundated with phone calls.
315 Again, you wouldn't necessarily see that on regular news, but because OMNI, again, is more community oriented, these stories matter so much more and the depth and longevity of that story talking about these concerns is something we stay committed to.
316 COMMISSIONER SIMARD: Thank you.
317 THE CHAIRMAN: Thank you. I have one more and then I think Commission counsel has a couple of last questions. You mentioned earlier, when we were discussing local advertising, you referenced the barter system you have with independent producers. I wasn't familiar with that. So how does that affect the license fee for producers, or does it?
318 MS. WATSON: So there are two types of independent producers. There are producers like Breakthrough Entertainment who are your typical PNI‑type producers. They -- so they belong with CMPA, if I can generalize it that way. And then there are local independent producers who run a restaurant but decide they want to have a talk show about Turkey -- the country.
320 MS. WATSON: I realize that was a bad ---
321 THE CHAIRPERSON: We're getting to close to ---
322 MS. WATSON: Yeah.
323 THE CHAIRPERSON: --- we're not close enough to lunch to make me hungry.
324 MS. WATSON: I apologize. That's the one I visualized right away, and I realized it was a bad example.
325 And so, that independent producer in -- I'm not sure, Jake can tell me where he shoots this show -- but in a studio, they do it themselves, they finance, they create -- and it's a talk show about things that are important to that community.
326 And the inventory of 6‑minutes per hour, we don't charge them airtime but we'll say we'll take 3‑minutes and you sell 3‑minutes of that advertising, and that is how that program -- how that community producer is remunerated for that program.
327 THE CHAIRPERSON: And is that 3‑minutes -- the 3‑of sales that the producers are responsible for, is that included in your local advertising projections?
328 MS. WATSON: No. It's included in the contra line.
329 THE CHAIRPERSON: Okay. Thank you.
330 With that, I'll turn to Commission counsel. I believe they have a couple of questions as well.
331 MR. BOWLES: Thank you very much, Mr. Chair.
332 I only have a few questions. The first question I have relates to a discussion about a potential discrepancy as between your oral comments this morning and your written submissions, and specifically has to do with independent productions.
333 In your oral remarks this -- today, you stated that in Québec you would be offering 14‑hours each month of original first run local independently produced programming. So you're stating a monthly commitment. However, in your proposed COLs, it's drafted as being a weekly commitment. Can you speak to this discrepancy?
334 MS. WHEELER: Yeah. In the COL, there's an original 14‑hours. It's not first run. So with respect to the specific first run -- again, we were defining first run to mean not repeats. So while it is original programming that it's airing for the first time in that year, it's -- it is repeated. And so our original first run commitment is going to be made on a monthly basis, but we're going to maintain 14‑hours of original programming each week in the Québec feed.
335 MR. BOWLES: Okay. Thank you. Can you comment on the possibility of having this original first run commitment reflected as a Condition of License?
336 MS. WHEELER: On a monthly basis?
337 MR. BOWLES: Yes.
338 MS. WHEELER: Yes. We would expect that.
339 MR. BOWLES: You would be willing to have it?
340 Another question I have relates to your proposed COLs 4(a) and 4(b), which relate to broadcasts on the Quebéc feed. And I'll just pull it up here. In your 4(a), you state that:
341 "The licensee shall ensure that the Québec feed includes 3‑hours of original, local ethnic programming in French each week." (As read)
342 In (b), you state that:
343 "1.5‑hours of original French language programming and 30‑minutes of original English language programming." (As read)
344 But dealing specifically with the French language programming, what does proposed COL 4(b) add to 4(a)?
345 MS. WHEELER: So 4(a) is 3‑hours of original local ethnic programming in French each week.
346 MR. BOWLES: M'hm.
347 MS. WHEELER: And (b) is 1.5‑hours of local original French language programming and 30‑minutes of local original English language programming each week.
348 So one is ethnic, so the 3‑hours of ethnic, and the other is non‑ethnic.
349 MR. BOWLES: But it seems to me, unless I'm missing something, that if you comply with 3(a), you're automatically -- at least with regards to French language programming -- you're automatically complying with 4(b).
350 MS. WHEELER: We certainly can, yes. But there is the option of doing a non -- if we wanted to do non -- the idea there is that we would do French language programming that may not be ethnic, it would just be French language programming of a local nature. But ---
351 MR. BOWLES: But because you would have to do the 3‑hours of ethnic, wouldn't you automatically ---
352 MS. WHEELER: We ---
353 MR. BOWLES: --- reach the target of 3 -- sorry -- of 4(b) as it relates to French language programming?
354 MS. WHEELER: And that is what we do in practice right now.
355 MR. BOWLES: All right. My last line of questions has to -- picks up on a conversation you had about local advertising.
356 If I understood correctly, you were mentioning that the local advertising that is solicited is restricted to those markets for which you operate an OTA undertaking. Would you be willing to have that restriction reflected in your COLs?
357 MS. WHEELER: Yes. With the caveat that the independent producers that we're now working with in regions outside of our local OTA contour, because of the barter model that we use, will still need the ability to solicit local advertising. So if the Condition of License does not encumber them, then we would be able to accept that. But to the extent that we would want them to be allowed to continue to solicit local advertising, we would hope that it wouldn't apply to their model.
358 MR. BOWLES: Okay. And picking up on the topic of independent producers, I believe you mentioned a willingness, if I can put it that way, to -- for the Rogers' share of local ad revenues, and just restricted to those revenues for which the independent producers would be the beneficiaries. If I understood that correctly -- and if not, please clarify -- can you speak ---?
359 MS. WHEELER: I think by committing to a 6‑hour -- 6‑minutes per hour, that would be the outcome is that we would have to forgo -- Rogers would be foregoing a certain portion of its local advertising revenue if that were a limitation imposed on our license per fee.
360 MR. BOWLES: Okay. But when you were discussing the bartered system, wasn't it -- did I misunderstand -- wasn't it 3‑minutes goes to the independent producer and 3‑minutes of those 6‑minutes would go to Rogers?
361 MS. WHEELER: Correct. But on a conventional television there are no advertising limits. So we're not operating within the 12‑minute timeframe on local advertising. So -- but that's accurate. The barter program, we split the 3 and 3 for a half an hour program.
362 MR. BOWLES: Okay.
363 MS. WHEELER: For an hour program, we would split it 6 and 6.
364 MR. BOWLES: So just to close the loop on this, if I understand correctly, you are not amenable to a condition of license which would ensure that the sole beneficiaries of those local ad sales would be the independent producers?
365 MS. WHEELER: No, not within the -- not within each feed. But we would be amenable to the 6‑minute per hour ad limit with the exception of the Québec feed. And Sam has -- would like to weigh in that one.
366 MR. NOROUZI: Oh. As I mentioned in my presentation, we do have -- most of our producers do this on a part-time basis, but we do have a few that this is their full time job. And if there was any limitations -- again, this -- the ad revenues are sales that are made by EC television that we get from agencies sometimes, which is really -- adds from the government, messages from the government which is either provincial or federal. I wouldn't want to hinder their ability to be able to sell advertising and maximize.
367 We don't have a specific cap for our producers that you can only sell this amount or this much. If they sell more, we just take it off anything that we have as a national or a regional ad for our specific station. So we don't really have a specific split. We will encourage them to sell as much as they can. So any Conditions of License, I would appreciate it if that could reflect the fact that -- not to hinder their ability to be able to make sales.
368 MS. WATSON: And if -- just a point of clarification. You are asking about the local independent producer shows; right? Not our locally reflective news and our ability to sell those locally?
369 MR. BOWLES: My question actually sought to capture all of the programming.
370 MS. WATSON: Yeah. We're already hindered with trying to sell local advertising. Being prevented or limited on local active news in local markets is a source of revenue for us.
371 MR. BOWLES: During your discussion with the Chair on local advertising, I believe you agreed to an undertaking to provide revised financials under the scenario where you would be limited to the 6‑minutes and under the scenario where you would be -- there would be the provisions set out -- currently set out in Standard Conditional License 18(d). Could I get you to also add to that undertaking the impact which both those scenarios would have on your proposed commitments and proposed wholesale rate?
372 MS. WHEELER: Yes.
373 MR. BOWLES: Thank you. I believe my co-counsel has a question or two.
374 MS. DIONNE: Hi. So with regard to your local advertising revenues, your updated financial projections went from about 12 million over 5 years, down to 3 million. A decline of 9 million with what you’ve updated, so in a matter of 6 months.
375 I had a question with respect to your U.S. programming. Did the original financial projections that you’ve submitted assume the inclusion of U.S. programming in your schedule?
376 MR. MAGHAKIAN: Yes.
377 MS. DIONNE: Okay. So that’s what would explain the difference?
378 MR. MAGHAKIAN: Part of the difference, yes.
379 MS. DIONNE: Okay. You’ve –- you answered being prepared to commit to how your thresholds for Canadian programming, ethnic and third language programming, when you were discussing with the Chair at the start of your questioning. What would those thresholds be? Do you have an idea of -- and would you, of course, adhere by condition of lengths?
380 MS. WHEELER: Yes, so our commitments -- yeah, our commitment for the B.C., Prairies and East feeds, would be 70 percent in day part, 70 percent prime time, 80 percent -- or 100 percent ethnic and 80 percent third language. For the Quebec feed it would be a -- it would be the same Canadian content levels; 70 percent throughout the daytime, 70 percent in prime time, 90 percent ethnic and 60 percent third language.
381 MS. DIONNE: Oui, je l’ai vu. So by COL it’s fine? Okay.
382 MS. WHEELER: Yes.
383 MS. DIONNE: Okay.
384 Madame secretary, I think we’re done with our questions.
385 MR. SCOTT: Madame la secrétaire, we’ll break. We’ll take a 15 minutes break resuming at 10 after.
386 THE CHAIRPERSON: Ten (10) after.
387 MR. SCOTT: Eleven (11) 10, please.
388 THE CHAIRPERSON: Yeah.
389 MR. SCOTT: Thank you very much.
390 THE CHAIRPERSON: Thank you.
--- Upon recessing at 10:52 a.m.
--- Upon resuming at 11:10 a.m.
391 THE SECRETARY: À l’ordre, s’il vous plait. Order, please. Ms. Chairman?
392 We will now proceed with item 2 on the agenda which is an application by 2627147 Ontario Inc., operating as “Multicultural Described Video Guide” for broadcasting license to operate a national multiethnic, multicultural discretionary pay audio service to be known as “Multicultural Described Video Guide”.
393 Please introduce yourselves for the record. You have 20 minutes.
PRESENTATION / PRÉSENTATION
394 MR. WYNN-KOZINER: My name is Evan Koziner and I am the proprietor of Multicultural Described Video Guide. How are you this morning?
395 MR. SCOTT: Welcome.
396 MR. WYNN-KOSINER: A couple things, first off, I’d like to send greetings to the Algonquin people and their Elders. I think that’s appropriate.
397 And I just also would like to state that this is a combination of my personal opinions and that of 2627147 Ontario Inc., carrying on business as Multicultural Described Video Guide.
398 I think you already know from some hostile correspondence between the Commission and myself that I am fairly frustrated and disappointed in the way certain things are going in the television space in particular here in Canada and I appreciate your consideration with this.
399 I do have to note, based on my counsel’s recommendation, that I am under protest and duress, because I do think that this will be going elsewhere for civil proceedings.
400 I think that given the fact we have a pending lawsuit against the Commission there’s a conflict of interest which has been noted, which you guys have done nothing about, I think that some of your actions, including the fact that -- given the fact that I have a disability and provided government issued documentation of that to the Commission and it took that much effort to get a microphone so I can stand during this hearing, is just sort of an example of where you must stand, given your actions, on the disabled people in this country.
401 But I’m not here for me. I’m here for a number of Canadians who have a disability. I’m going into this thinking that I have a zero percent chance, based on the Commission’s actions, of getting this application, but I’m still here.
402 I’ve enjoyed sitting on my couch. I’ve enjoyed -- I’d enjoy more not even having to deal with this, but I feel that if no one is going to stand up for it someone has to, because I’ve been very fortunate in my life and not everyone’s able to stand up for their rights as Canadian citizens and that’s why this is so important.
403 I’ve appeared a couple times before here at the Commission and there’s been a number of different times. The first, I guess, was in 2013 for a somewhat similar application, some would say, for an English described video guide.
404 And my biggest concern from that, and I’ll quote in your decision, as noted by Rogers and other interveners:
405 “The Applicant did not demonstrate the direct attachment of its equipment or software so BBU’s existing infrastructure would not induce an unacceptable risk to the security and reliability of the BDU service.” (As read)
406 Which I find quite puzzling given that this and that was a pay audio service no different than the radio channels you get on your TV set top box, no different than any other pay audio service. There’s no firmware updates that would cause a security breach to any BDU, which makes me question the competence of this very Commission.
407 If throughout an entire hearing like this, one could ghost through it with a pay audio service and then after that’s the technicality that you guys are -- you’re saying that’s -- I don’t even understand it. Frankly, no one really understood it, to this day.
408 Which to me is absolutely outrageous and frankly disgusting that those who are paying the exact same amount as you and I for cable in Canada are at a disadvantage when they’re sitting at home because of your actions.
409 I’ve received the Governor General’s Caring Canadian Award. I’m wearing the Sovereign’s medal for volunteers. I’ve received the House of Commons Award.
410 I’ve co-founded probably Canada’s largest hockey charity with the likes of FedEx. The City of Toronto just donated 200,000 bucks to it. Chevrolet.
411 I’m on tour with Febreze and Proctor & Gamble and Connor McDavid’s mom is our spokesperson. It’s been incredibly successful. And across Canada multiple times doing NHL tours. Collecting skates all across Canada in front of those stadiums.
412 There were two kids who are visually impaired that wanted to race and we sent them out with volunteers and they went racing around the rink. And the first one came back and said did I win. I said, “Yeah, you won”. He said, “Well, I think I’m better than the Toronto Maple Leafs right now”. I said, “I think you’re right”.
413 Just because you have a disability doesn’t mean that you don’t count. I think that’s very important today.
414 There’s a number of applications that are selfish. Perhaps – I’d lean towards the vertically integrated companies are quite selfish. It serves their shareholders.
415 There’s a number of independent applications that are more generous. This application -- you guys asked me an interesting question. You said, “How much Canadian content do you have”. I looked at it we’ve got 20 channels, 100 percent Canadian content. That’s 2,000 percent Canadian content. No one else is doing 2,000 percent Canadian content. It’s coming in a four-cents a month.
416 There’s precedent. You know, AMI audio exists. It provides certain information. This is different information and news as per your request.
417 If there’s a will around the CRTC, there seems to be a way. You know, when Conrad was here and he was sort of, “Let’s get those alerts out there”, look at the -- you have The Weather Network and The Weather Channel going on there. It’s not exactly right in a traditional broadcast television space, but that became 91H territory. What this is is 20 channels of audio -- there's no security breaches happening here because that's what you guys seemed to assume last time -- with 23 different languages being covered. For two purposes: one is for information and news, with clips going on, being used throughout the day; and the other key component is a visually impaired guide. It's very special because accessibility is different than your traditional broadcast license.
418 When you have to deal with people who have some sort of disadvantage, which I'll talk about momentarily -- and I apologise. I'm just getting over a cold as well so. With a described video guide you're actually able to figure out where things are on your television. We're not in 1992. You aren't getting AOL Cds dropped off at your door. Ten (10), 15 years ago I would say AMI totally relevant, it looks great on you. You guys got awards. Congratulations. In practicality I have problems with it, which I'm happy to share, but I'd like to focus on the application at hand first.
419 The news information on this license is happening for 20 plus languages on 20 different channels all the time, 24/7. My grandfather was Polish. If you go on some of these other applications, you have to wait until, like, 5:30 in the morning on a Sunday for information. Even if you PVR it, I like to call it the -- you guys want the news. That's the "olds". You got the news, current information, and all that information is a week late. It's not great. If you want something that serves Canadians you want it all the time.
420 I believe there's two applications, just given all the languages, mine and another one in multiple languages, that actually provide that. It's different. Is it the easiest thing to say let's go license that? Maybe, maybe not.
421 Part of my concerns about this Commission, being independent, being 30 years old, is that you don't have necessarily the same resources as a vertically integrated company.
422 So when one of them lies on public record about what you're out to do, especially when you're doing it not for yourself, it's not a money maker for me. We can crunch the numbers if you want, but it's not. You're doing it to benefit Canadians. I find that just disgusting. I really think as a Commission you guys need to look at what happens when there's defamation on public record. Because twice this year when I brought that up, you've not only done nothing, you've made it harder for me. It's disgraceful.
423 So I've got one of the interventions in front of me that says that it's technologically impossible to do what we're doing. I would beg to differ. I would say that their engineers are lazy and about to get their pensions and they're just not really motivated to. If that was their argument, to be very honest, but that's not their argument, their argument's technologically impossible, so I'm going to deal with that.
424 First and foremost, we're talking about vertically integrated companies that can deliver a gigabit of internet service to your door. Like, let that sink in for a second here, a gigabit. Again, you're not getting 56 kilobits per second to your door. If they can't figure out how to add 20 audio channels, that's absolutely nuts.
425 That same intervening company, I took -- I said, let's look at their programming lineup. They've got 84 audio channels already, pay audio channels. Audio channels take up the least amount of bandwidth. I don't really want to boggle you and blow your minds on what MUXs and transport streams are and how many kilobits per second, but the equivalent of what I'm asking is of the total pipe of cable going down there, about half of one standard definition channel. Standard definition.
426 So I then looked at it and, you know, you might want to be thinking about this for the following applicant as well who will be presenting before you, but here it says -- this just boggles my mind. I need to read this out to you just so you can get it.
427 In high definition -- high definition. Not standard definition, not a 20th -- what I'm saying is a 20th of 1 high definition channel. They've got NBA League Pass HD01, NBA League Pass HD02, NBA League Pass HD03. That's three HD channels. NBA League Pass HD04, NBA League Pass HD05, NBA League Pass HD06. Then there's ones that are kind of interesting. I don't know if you're big Michigan fans, but Big Ten HD Overflow 1, HD Overflow 2, HD Overflow 3. Well, they managed to get six NBA channels on air no problem, plus another three Big Ten. They don't have to do any of this. They just don't care that you're mandating stuff. It's pure laziness.
428 Let's continue. NHL Centre Ice stats, NHL Centre Ice HD01, HD02, HD03, HD04, HD05, HD06, HD07, HD08, HD09, HD10, 11, 12, 13, 14, 15. They even got your NFL Red Zone HD. Let's go down that one. NFL Sunday Ticket 01, 02, 03, 04, 05, 06, 07, 08, 09, 10, 11, 12, 13 and 14. They've got -- I don't have a full count here. We got 15 NFL channels, 16 NHL Centre Ice, 6 League Pass and 3 Overflows, all in HD. You're telling me you can't figure out how to put 20 audio channels on your service when you've already got 84? That's a blatant lie. There's no getting around that.
429 Same intervener. There's no exceptional need for a national, multilingual, multiethnic service justifying mandatory basic carriage. They're happy to take all these immigrant's money for their cell phone service, but when it comes to giving back a little, being a little philanthropic, they're doing nothing.
430 Let's go over to Rogers for a second, who I -- that wasn't Rogers. And as much as I have my differences at times with Rogers, they have these HD mixed channels for free. They've got three of those. We've got 12 audio channels. You got a left and a right, which each count as one. We're talking through a microphone. Microphone's one channel. It's mono. Doesn't take up as much bandwidth. They're doing 12 channels right there with one video channel times 3 for free.
431 Like, I really don't know what to say. And that's why it's disgusting when they lie blatantly on public record. Because then what ends up happening is they lie, that's part one, part two is then you guys listen to them and you talk about security risks, like what happened last time. I thought you guys were smarter than that. It's problematic to say the least.
432 I'm clearly passionate about this; okay? And, again, I still assume there's a zero per cent probability of you doing this, but you should, because I'll tell you a couple quick stories here. We're up at -- I see five minutes left.
433 I just finished at Queen's. I did my masters in business and engineering, did a degree at Harvard Business School in negotiation. I just did a certificate in social impact as well this past year. And we -- there's a number of Indigenous people, hence why I said that at the beginning of this, that I've become close with. And they've got satellite television. But when their elder or grandmother wants to watch TV, they have no clue what's on whatsoever. And you say, "Okay, well, we got this AMI telephone number." Have you ever tried calling it? I picked it up -- picked up the phone and called it a number of times this week.
434 This is what happens. You get put on hold for about a minute. Someone comes on the line who's never done anything before or so it sounds. Sounds like a generic call centre. Said, "Well, when's Game of Thrones on?" No clue. I said, "Well, maybe I like a cooking show. Is there cooking or a home show?" Said, "Well, there's this show, oh, it's called Blackish. It's not a" -- I was spending seven minutes in a half hour every time I wanted to pick up the -- I'm supposed to pick up the phone for 7 to 10 minutes to have a conversation. The show's already coming on.
435 There's a very big difference between what you see in public, you know, your mother, your grandmother, your sibling, God forbid, something happened to them and they lost their vision. Had two friends die of cancer this past year. All they can do is sit around and watch TV. You're in the hospital. You're visually impaired. And we have an aging population here. We have a population that's growing old and this service is what's needed. You shouldn't have to call.
436 If you think you should have to call, why don’t we just stop all the closed captioning? Everyone would be very happy with it. Just cancel closed captioned. And if you want closed captioning, you call it in and they’ll fax it to you. That sounds like a great idea, because that’s basically what you’re saying right now. You should pick up a different medium because your television isn’t capable enough.
437 I’ve got my issues, obviously, with AMI as well through the years. I don’t think it’s necessarily totally fair that I go after them, given they’re not part of this hearing. But I really do question the need for a service like AMI Audio, where you could potentially sunset this and put this in place.
438 It also saves you a tonne when it comes to human rights concerns. You’re literally discriminating against people who are visually impaired, or might be, like your mother. It might even be you. You might be golfing in a number of years. You might forget about this hearing completely, and you’re sitting at home, and you’re like, “Damn, I wish I would have listened to that kid. I would have licensed that service.”
439 So if you need more information when it comes to MUX SYS, I would be happy to explain the technical aspects to you. I think I rest my case with just their programming lineup alone.
440 When it comes to numbers, it’s the least expensive service. My favourite thing in that same intervention I was talking about, notwithstanding the strong opposition, the intervenor submits that if an applicant is approved, at a minimum, it’s critical that the wholesale rate is not more than 12 cents a month. Well, that’s convenient. They own a company called Corus or closely affiliated, and that company is tied in, I believe, with a TVA application, which happens to be 12 cents a month.
441 So you’ve got a lot of applications. They kind of forget about mine, which is 4 cents a month. It gives you a great option, is the most conventional, maybe not. Is it? Definitely. You can’t expect someone in the Northwest Territories -- I brought this as a prop -- this is a satellite phone. This is actually the newest satellite phone. It looks like it’s from 1996. If you’re out there and you expect them to call AMI, they have to go stand outside in -40 degree weather when they are perfectly comfortable next to the fireplace, watching on their Bell ExpressVu, Bell TV ---
442 THE SECRETARY: I’m sorry to interrupt; you have two minutes remaining.
443 MR. WYNN KOSINER: I don’t think I need them. I appreciate that.
444 I think that’s all I have to say at this point in time.
445 THE CHAIRPERSON: Thank you very much.
446 And we do indeed appreciate your passion for the issue.
447 Commissioner Laizner has some questions for you.
448 COMMISSIONER LAIZNER: Good morning. First of all, I want to commend you on your works in the community on behalf of Canadians and persons with special needs of accessibility, and I want to congratulate you on the commendations you’ve received. So thank you for telling us about that.
449 I do have some questions about your application. These questions are so that we have a better understanding of how the Multicultural Described Video Guide would work, and to clarify certain other elements as they relate to the Notice of Consultation that we issued for consideration of the 9(1)(h) service.
450 So let’s just talk a little bit about how the Multicultural Described Video Guide would work. You’ve said that they’ll be a voiceover for the TV Guide that’s on screen, correct?
451 MR. WYNN KOSINER: Correct.
452 COMMISSIONER LAIZNER: Are you going to broadcast any images or video along with the audio content?
453 MR. WYNN KOSINER: So, in short, not necessarily. There’s a couple of ways of going about it. The simplest way, so that every BDU is able to pick it up, is by just having it as an audio service. That’s probably what they would like the most.
454 There’s a distinction here. One is that the way that we send the signal is different than the way it ends up on your cable box at home. Your cable box at home is like a -- they’ve got virtual channels. So any number that you end up clicking is a virtual channel number. The way that gets sent to a BDU head end, where all that stuff comes together is through something called a MUX. You’ve got transport streams. Are you aware of this? Again, you’ve got engineers. I don’t expect you to be, but it’s almost -- now, just stop me if I’m repeating stuff you already know, how’s that?
455 Picture a banker’s box. It’s the best analogy I have. That’s a MUX. Inside of it, you’ve got files. You obviously are very familiar with files, and inside of that, you’ve got different sheets of paper. Some sheets of paper might be yellow. Those could be your audio channels, and it could only be like a notepad size paper, right? Then you’ve got your standard definition paper, and then here’s your high definition. That can all go in a folder. When then shoot that whole -- put all the folders together.
456 Do you guys remember a number of years ago, there was an incident where some porn television ended up, unfortunately, in the Hamilton region, across there? It’s because when they send it down a MUX, you kind of get different numbers. You get -1 and -11. The guy at the head end, supposedly, from what I’ve heard, ended up putting in 11, which happened to be the porn channel, where the -1 was the traditional broadcasting over the air and everyone was shocked and there was media reports about it. That’s what ends up happening.
457 So you end up getting this MUX going straight down, and they basically get that banker’s box. What they do with that, being the cable company, once they have it, it can be any sort of thing. So they can actually just send you the audio signals out. Some of them, for different pay audio services like to put a still up. There’s different ways of putting that still up. Even though you’re seeing video, 30 frames a second typically, there’s actually ways in the mpeg to codex, that you can actually send almost like a slideshow and it takes up way less bandwidth. You can send one pixel. So even though you’re seeing an HD channel, you send six of those and you end up getting that per minute, let’s say, end up doing different ways of that so it’s less bandwidth.
458 So to answer your question, the easiest way is just doing pay audio. If you guys said to me, “Hey, Evan, I’d like to have some video attached to that,” if that makes a real difference to you one way or another, it could be standard definition video; it can be 1 pixel ID that just does it and it takes up way less bandwidth for everyone, or full HD channels to compete with the NFL, we could do that.
459 COMMISSIONER LAIZNER: Okay.
460 MR. WYNN KOSINER: I would say the audio is what’s being presented and it’s a pay audio service that’s before you.
461 COMMISSIONER LAIZNER: So then the news component that you suggested, that would be audio as well?
462 MR. WYNN KOSINER: The news component is also audio. So there’s a two to three-minute audio clip, which you’ve seen there, that runs throughout the hour. So basically what it would sound like is you’ve got, in whatever language -- and I just would also note that AMI audio is only in English. So one could say you’re discriminating against people who speak French potentially, let alone all these other languages, for news and information.
463 So it doesn’t take that long to tell you what’s on TV in described video. There’s only like so many shows in a given hour. So you’ve got, for instance, Blackish on City, right? That’s what AMI said when I called them. You’ve got a whole bunch of different shows that are on, and then you go into a two to three-minute news clip, and this is all in the language that’s being proposed. So there’s 23 languages. One of those channels is dedicated because there’s a couple of different sort of dialects and different languages encompassing those, and that’s how we get to 20 channels in total.
464 COMMISSIONER LAIZNER: So if I’m Italian, how do I access it in Italian?
465 MR. WYNN KOSINER: So what we propose is that we send the MUX of all the channels to head ends, to the BDUs, and from there they create virtual channel numbers. So if you’re visually impaired, you kind of have a sense of your remote. Even right now, you could probably click whatever it is to get to that channel. You would know that Channel 979 is where I get all the Italian information for some news highlights and clips that are updated throughout the day, and I get all of my described video information for individuals who want to do that. We end up slotting it on different windows every 10 or 15 minutes, essentially. So you would get your news four times an hour and you get your DV updates in between.
466 COMMISSIONER LAIZNER: And have you seen this kind of system in operation in other countries or are you pioneering this?
467 MR. WYNN KOSINER: The short answer is we’re pioneering it, which is great for you because it’s something that’s different and very Canadian. The Canadian Hockey Charity -- this is more Canadian than the Canadian Hockey Charity. It’s making sure that everyone has accessibility, and would actually -- it would start the standard.
468 I give you a lot of credit, or this Commission a lot of credit for starting AMI when you did. There’s just a lot of -- there’s a lot of DV content now available where there wasn’t 10 or 15 years ago. It’s a whole different ballgame. And to voice the information of where things are, you actually get that guide and the EPG information visually a couple of weeks in advance. They actually record all this stuff, slot it in for the loops, and then you just insert new news updates that continue to update throughout the day.
469 COMMISSIONER LAIZNER: And tell me a little bit more about the newsfeed and how you actually create that?
470 MR. WYNN-KOSINER: As an entrepreneur, you always look for different ways of doing things that are a little bit not necessarily the most ordinary. If we have to, and the way I would intend to on a number of the channels is actually hiring different individuals who update and do recordings throughout the day.
471 It's a nice -- much nicer job than what you and I have here today. They get to probably stay at home throughout the day, find out different information, go out into their communities. Some the language groups are particular to different communities. And they're able to then record and voice that update throughout the day, bring it back. They upload it to the servers it goes on.
472 Some of the ---
473 COMMISSIONER LAIZNER: So it's original news created by the people that you hire to go into the community and source the news?
474 MR. WYNN-KOSINER: Correct.
475 COMMISSIONER LAIZNER: That's a little bit different from what I think I understood from the written application.
476 MR. WYNN-KOSINER: Okay. What did you understand from the written application?
477 COMMISSIONER LAIZNER: I thought from the written application that you were going to be taking existing news programming and creating audio in the different languages from the existing news programming.
478 MR. WYNN-KOSINER: So there's no existing -- everything's created from scratch. It's ---
479 COMMISSIONER LAIZNER: In your ---
480 MR. WYNN-KOSINER: Proposal application.
481 COMMISSIONER LAIZNER: Okay.
482 MR. WYNN-KOSINER: If -- you got to crunch the numbers. You end up -- I base it on 9 million subscribers. You've obviously had talks with 10 million subscribers. I personally think some of the bigger BDUs are going down faster than they -- we otherwise know, so I think 9 million is a nice place to start. Which ends up, I think, at a $4.2 million in revenue, if I'm not mistaken, and $215,000 per channel of operating.
483 So it allows you to hire a couple of different people, and/or -- some of the stuff you can deal with voiceover artists, some people actually speak multiple languages. So that can sometimes help where one person can voice multiple channels with the EPG data and then you just have to crunch numbers on the different people who are hired to deal with the full time news cycle.
484 You know, I -- it's not the most glamourous news operation, so it's ---
485 COMMISSIONER LAIZNER: So you'd actually have reporters that you hire?
486 MR. WYNN-KOSINER: Correct.
487 COMMISSIONER LAIZNER: For all the different communities ---
488 MR. WYNN-KOSINER: Correct.
489 COMMISSIONER LAIZNER: --- that you're going to service?
490 MR. WYNN-KOSINER: Create a lot of different jobs, and those ---
491 COMMISSIONER LAIZNER: Have you provided us with financial projections for that?
492 MR. WYNN-KOSINER: Yes. Correct.
493 COMMISSIONER LAIZNER: Okay.
494 MR. WYNN-KOSINER: You should have it before you, and I sort of just crunched it for you right now.
495 In terms of, you know, salaries of having a couple of different people and then to offset some of those channels. Sometimes what actually serves the community most is getting customized content from perhaps a local radio station. So it not only promotes the local radio station almost like a local adivil (phonetic) for that community, but it actually lets you piggyback off of their operation where if things were going down the line it would start to open up some different talks.
496 Similar to -- I'll give you ---
497 COMMISSIONER LAIZNER: Okay.
498 MR. WYNN-KOSINER: --- Sirius XM hired the Canadian Press and they charge a fee and you get their information and it would go that way. Again ---
499 COMMISSIONER LAIZNER: So just so I completely understand you. So you have people go to local radio stations and purchase their news content?
500 MR. WYNN-KOSINER: In some instances where it serves the community best.
501 COMMISSIONER LAIZNER: Okay.
502 MR. WYNN-KOSINER: In other instances, it makes more sense to hire a couple of people to provide and really get in that and engage. But that's how I'm confident that with this budget, and given the fact that again, just top of my class for a master's degree, we did a lot of financial calculations, and I'm very confident that we can pull that off and it'll be something you'll be impressed with.
503 COMMISSIONER LAIZNER: So can you give me an idea of percentages here of originally produced news as opposed to the news that you might purchase from say a radio station?
504 MR. WYNN-KOSINER: So the news that would be purchased from radio stations wouldn't not be original. They would do a custom segment just for us. So more to the way you see on the Weather Network, on CBC, or there's a lot of traffic reports on current radio that come through -- I'm forgetting the name of the company but they own a couple of radio stations through -- they applications and they have a few radio stations themselves, but they actually produce that for, I think it's like 30 or 40 radio stations on an ad barter basis.
505 Again, given the fact that I'd like to keep this ad free, besides promoting their radio station in that demographic and now having a new outlet for that, doing a 2‑minute segment throughout the day, giving them some consideration for that out of our budget for it, sometimes that serves the community best and it frees up additional resources for other ones as well.
506 COMMISSIONER LAIZNER: When you say giving them some consideration for that, you mean promoting them on the audio as a promotional ---
507 MR. WYNN-KOSINER: I mean potentially ---
508 COMMISSIONER LAIZNER: --- or paying them?
509 MR. WYNN-KOSINER: I mean paying them.
510 COMMISSIONER LAIZNER: Okay.
511 MR. WYNN-KOSINER: But it might not be in all instances. So I might be able to score a deal with a particular Italian broadcaster. Say, "Hey, we're going to pay you 25,000 a year. You already have a news department. We need a 2‑minute clip. You can kind of promote your own station as part of that, or 3‑minutes you're required there." And if there was any sort of problems, we would be able to pull them and/or redirect that either to a different news operator or hire our own staff internally.
512 COMMISSIONER LAIZNER: Is that a Canadian/Italian broadcaster in your example ---
513 MR. WYNN-KOSINER: It would ---
514 COMMISSIONER LAIZNER: --- or a foreign broadcaster?
515 MR. WYNN-KOSINER: Only Canadian.
516 COMMISSIONER LAIZNER: Okay. Because you did say in your application that you would possibly source news programming from foreign services. So is that also part of it?
517 MR. WYNN-KOSINER: Yeah, I don't think that best serves Canadians. So if it says that, I apologize, and you should take this as being the ---
518 COMMISSIONER LAIZNER: Okay. So it wouldn't be from foreign sources, it would all be from Canadian sources?
519 MR. WYNN-KOSINER: Correct.
520 COMMISSIONER LAIZNER: Okay. That answers the question that I had. Just give me a minute here.
521 Have you done any kind of surveys to determine the percentage of Canadians that would require this service who are visually impaired of different ethnicities? Have you canvassed that in any way?
522 MR. WYNN-KOSINER: To be totally honest, no. With that said, there were a number of different prior commissioned reports back in 2013 as part of that hearing just for the English market. The idea seemed to be one of the most popular amongst Canadians.
523 To put it in the words of -- not that my hairstylist means anything, or she does a particularly good job, but nevertheless, she said, "I'm surprised that this doesn't exist already. What do you mean you're going to Gatineau to talk to people about putting this on? How come it's not there?" And that's -- you know, that's not an official study by any means ---
524 COMMISSIONER LAIZNER: But you're not quite sure what the demand is for the service amongst the different ---
525 MR. WYNN-KOSINER: No.
526 COMMISSIONER LAIZNER: --- ethnic groups that you intend to serve?
527 MR. WYNN-KOSINER: I know it's not always ---
528 COMMISSIONER LAIZNER: Okay.
529 MR. WYNN-KOSINER: --- the bureaucratic way of doing things, you like to have your studies, but for me it's something that's plain and obvious. And I think for most Canadians it would be plain and obvious that a service of this nature, not only now but in the future, as -- I hate to say it, but I assume that you might be a couple of years older than me, so -- or getting closer to it.
530 COMMISSIONER LAIZNER: That's a safe assumption.
531 MR. WYNN-KOSINER: So given that that's the case, that you know -- hopefully, you know, no time soon, but my uncle passed away of cancer this year in Ottawa. He was a Parliament lawyer here, and you know, when you're not able to see, even when something like that comes, and 6‑months later you're gone, and all you're doing is sitting at home watching TV, why is he paying 110 bucks a month when I'm paying the same 110 bucks a month for my cable and I'm able to use it and he's not. He's expected to call people and speak to them when he's just not capable of it. Sometimes all you can do is switch that remote control and it makes a real difference. So I think there's a compelling case for that.
532 COMMISSIONER LAIZNER: Okay. This is a little bit more of a housekeeping question, but it is important since this 9 1(h) proceeding relates to a television service. And -- so we want to clearly understand whether you would accept conditions of licence that relate to discretionary television services. I think your application, you talked about conditions of licence that deal with radio undertaking, like AMI audio, but because it's a television service there is a different set of conditions of licence that apply.
533 MR. WYNN-KOSINER: So to answer that, based on these numbers it's meant to be audio-based. That also serves those who are visually impaired. They're not going to be watching television. I do understand where you're coming from, I do get there's a number of applicants before you. This is coming out of left field. You've got to make a real choice on hey, are we going to do this or not.
534 When it comes to the conditions of a television service, it's not set up for that. If you would like a visual of some sort ---
535 COMMISSIONER LAIZNER: Have you had a chance to look at them? I know, but the Standard conditions of licence, have you had a chance to look at them?
536 MR. WYNN-KOSINER: I have, yes.
537 COMMISSIONER LAIZNER: Okay. So I just wanted to clarify that.
538 MR. WYNN-KOSINER: It's not -- there's ways that it ---
539 COMMISSIONER LAIZNER: It's audio.
540 MR. WYNN-KOSINER: --- could be stretched that way, but it's a stretch. And given the communities you're serving, it's not particularly of value in the sense of the accessibility side of things. If you would like for the reporter to film something, or for the news report to be -- have a video component, it runs a risk of being -- the visual component potentially being a barker channel. I don't know if you're familiar with it, but like ---
541 COMMISSIONER LAIZNER: Right, right.
542 MR. WYNN-KOSINER: --- so if it's going that route it’s slippery waters. If that’s the difference between you saying yes or no, come back to me at it, but, you know, if it needs visuals ---
543 COMMISSIONER LAIZNER: Well, this is the hearing where you have to actually tell us what you’re prepared to do. So I’m asking the question now.
544 MR. WYNN KOZINER: If there needs to be a visual component there could be, but given that the application before you is for a pay audio service -- that’s what’s been presented and has been passed through -- it’s a little hard to ask for a television service when you have a pay audio service before you.
545 COMMISSIONER LAIZNER: Okay. So your answer, to be clear, would be that the conditions of licence that you would accept would be the ones that deal with radio ---
546 MR. WYNN KOZINER: Correct.
547 COMMISSIONER LAIZNER: --- and not the ones that deal with discretionary TV services ---
548 MR. WYNN KOZINER: I think ---
549 COMMISSIONER LAIZNER: --- for the reasons you’ve given?
550 MR. WYNN KOZINER: Yeah, for given the ---
551 COMMISSIONER LAIZNER: So that’s your answer?
552 MR. WYNN KOZINER: It’s a pay audio service. It’s hard to put television conditions on a pay audio service.
553 COMMISSIONER LAIZNER: Okay.
554 MR. WYNN KOZINER: With that said as well I think that the news and information when you’re doing this anyways it’s actually a good use of that bandwidth resources when you have a number of BDUs complaining to you. Again, in my position, being somewhat lazy engineers in that sense, but it’s a good use just having an audio service for that.
555 COMMISSIONER LAIZNER: And on the news front, is it local news, local and regional news, local regional and national news? What news are you going to be focusing on?
556 MR. WYNN KOZINER: All three, because that’s what the requirement is, if I’m not mistaken.
557 COMMISSIONER LAIZNER: Okay.
558 MR. WYNN KOZINER: Yeah, and when you’re dealing with 23 different ethnicities some have different communities and are placed differently in Canada than others. So where there’s some that are more broadly situated across Canada others are more isolated in particular cities. So it’s a combination of doing all three and taking local components in those cities and also doing regional and national as well.
559 COMMISSIONER LAIZNER: And so the local news will be, for example -- and this is just an example -- would be targeted to the local ethnic community ---
560 MR. WYNN KOZINER: Correct.
561 COMMISSIONER LAIZNER: --- or will it be the same local news that is distributed in all 23 languages?
562 MR. WYNN KOZINER: It’s only logical, in my opinion, that it needs to target that ethnicity. There’s -- you’ve got all different sorts of Canadians, but I think what matters, and the reason this hearing’s going on, if I’m not mistaken, is for them to have news that matters to them.
563 Sometimes there’s crossover. A hundred percent there’s crossover at times.
564 COMMISSIONER LAIZNER: Right. Have you reached out to create a cadre of employees or business relationships to obtain that?
565 I mean, that’s 23 different languages ---
566 MR. WYNN KOZINER: Yes.
567 COMMISSIONER LAIZNER: --- local news in each of those stretching across Canada. That seems like quite a huge undertaking.
568 MR. WYNN KOZINER: I beg to differ ---
569 COMMISSIONER LAIZNER: Okay.
570 MR. WYNN KOZINER: --- on a number of different grounds. One, not that it’s great for every single channel, but often times you have very talented reporters -- there’s one I won’t name, just given if there’s publications, but, you know, when Rob Ford was in Toronto there was a young reporter that when I was at Ryerson she was there as the editor of the school newspaper a couple years out. So I think the first distinction is the age of the reporter, given you’ve got vice, given that as a Commission I would think you’d like to stay relevant, so sometimes younger reporters are more gung-ho to go out there.
571 So when it comes to a great job out of school where you’re coming from a different ethnicity and you might not be -- you’d hope that broadcasters wouldn’t discriminate, and some of them definitely don’t, but it might be more difficult for you to find a job and prove yourself. You know, as a young individual who likes to prove himself, it actually provides a great platform. Not saying that every reporter would be 20 years old, because that wouldn’t be the -- what I’d want either. I think it’s a great -- especially as an immigrant to Canada, it would be ---
572 COMMISSIONER LAIZNER: So is what you’re telling me that you think it would be less expensive to procure the younger reporters’ services and that’s how you’re going to be able to manage this financially?
573 MR. WYNN KOZINER: I think that if you have an opportunity to sort of work on your own with some people, creating things that are relevant for your community, to almost be a star in your community, you’re straight out of university and you’re making $40,000, $50,000 a year off the top, you’ve got another partner or two in crime to help produce that with you and take shifts, I think that’s a pretty good job offer. Tell me that I’m wrong.
574 COMMISSIONER LAIZNER: So essentially you’re answering yes to my question?
575 MR. WYNN KOZINER: Correct.
576 COMMISSIONER LAIZNER: Okay. Thanks.
577 Now, you’re the only applicant here before us who in your application on behalf of the Multicultural Described Video Guide has indicated that the service would rely solely on subscriber revenues. And I guess I want to unpack how you think you can handle this given declining viewership and, you’ve indicated that as well, that you project a decline in revenues, I think about 10 percent per year. So we’re just a little, you know, curious to know how you’re going to manage that without advertising revenues.
578 MR. WYNN KOZINER: Each channel has a bit of buffer room, as far as I’m concerned. So some of the savings -- cost savings that you’d receive in the earlier years you could actually use in later years.
579 And then -- you know, I don’t want to get before myself here, but the application is only for so many years as is and I ---
580 COMMISSIONER LAIZNER: I think you said three years, right?
581 MR. WYNN KOZINER: --- get to see my face all over again. So with that said if it’s a whole different time so be it.
582 I apologize for if you heard laughter outside earlier. I thought it was ironic having Rogers, who couldn’t run OMNI off the top, couldn’t run it at 12 cents, now it’s coming back for 19, 20, 21, and by 2040 it looks like it will be -- you know, who knows how much money they’ll need for that. Giving a lecture to other applicants on how to spend money I thought that was kind of ironic.
583 When it comes to funding this, the best way I can describe this to you -- and I don’t know if it provides any sort of security. I’m an entrepreneur. I’ve done well. I don’t need to be doing this. And I’m confident that with the budget proposed that there’s enough room for cost savings upfront. And as an entrepreneur you make things work. You’re used to bureaucracy. And I don’t -- there’s nothing wrong with that, you’re just used to that way. That’s the difference between the bureaucracies of vertically integrated companies and some of the independents that are more entrepreneurial.
584 And, you know, if I -- I haven’t broken my word. There’s a reason why FedEx came on board with my charity day one, which is unheard of for a multinational top Fortune 500 company to take a chance on -- I guess 2012 I would have been -- going back a couple years here, but, you know, if I was in my mid-20s and they’ve stuck with me all through. There hasn’t been a budget that I’ve blown on that charity. If I tell you I’m going to do it it’s going to happen.
585 COMMISSIONER LAIZNER: So you’ve also said that you project that your expenses will decline every year. Why is that, and what are the underlying assumptions that lead you to your expenses are going to decrease?
586 MR. WYNN KOZINER: Essentially, to actually get the play out operational cap ex expenses -- capital expenditures -- it becomes less and less over time.
587 And also building relationships, once you’ve been established after a couple of years there is that potential that more radio stations, for instance, would want to be associated with this because you’re who everyone listens to, and for them to be able to promote that, tied in with your news offering, and using those resources, and building that familiarity, and also co-promoting other radio stations across Canada tied in as a news partner ---
588 COMMISSIONER LAIZNER: But this is a television service, right.
589 MR. WYNN KOZINER: No, this is a pay audio service.
590 COMMISSIONER LAIZNER: So you’re not proposing to do the audio voiceover for the TV guide that people watch?
591 MR. WYNN KOZINER: Yes.
592 COMMISSIONER LAIZNER: Okay.
593 MR. WYNN KOZINER: Yeah. On the same page, yeah.
594 COMMISSIONER LAIZNER: All right.
595 MR. WYNN KOZINER: So it’s a pay -- it’s audio. You’re listening. It’s like a radio station.
596 COMMISSIONER LAIZNER: But it’s on -- you’re listening to what’s on the TV.
597 MR. WYNN KOZINER: On your television.
598 COMMISSIONER LAIZNER: Right. Okay.
599 MR. WYNN KOZINER: So more to the way you’d listen to a traditional radio station ---
600 COMMISSIONER LAIZNER: Right. Got it.
601 MR. WYNN KOZINER: -- or any other pay audio, or AM Audio.
602 COMMISSIONER LAIZNER: I still don’t quite understand how your expenses are going to decline. Can you give me an example of a particular expense that you think would decline year over year?
603 MR. WYNN KOZINER: So I don’t know if you’ve ever had to buy a play out server, but that costs money in year one. That play out server and your back up one depreciate over time but it’s an initial expense. So if you spread that out that’s a declining expense. Having potentially more radio station and less staff on a handful of channels means that the partnerships grow stronger, you’ve been around, you have those relationships, you now have a track record a couple of years in, you no longer have to hire those people, there’s cost savings because you’re paying the radio station at a lesser rate.
604 COMMISSIONER LAIZNER: Okay. But you didn’t ---
605 MR. WYNN KOZINER: So that’s another declining expense. So those are two examples.
606 COMMISSIONER LAIZNER: That brings me to another question. There were no amounts provided in the capital depreciation line for your financial projections. So is that something you can provide us with through an undertaking?
607 MR. WYNN KOSINER: I’d be happy to. By December 6th, is that still the date that we’re going for?
608 COMMISSIONER LAIZNER: Yeah.
609 MR. WYNN KOSINER: Okay. I’ll make a note of that right now.
610 UNDERTAKING / ENGAGEMENT
611 COMMISSIONER LAIZNER: You’ve also -- you’ve talked a little bit about certain expenses. But we would like you to give us a detailed breakdown of your technical expenses. So the technical costs associated with the proposed 23 language fees -- feeds, because we don’t -- like, are those costs reflected in your technical projections?
612 MR. WYNN KOSINER: I believe so. If you’d like more ---
613 COMMISSIONER LAIZNER: We would like a detailed breakdown.
614 MR. WYNN KOSINER: --- a more detailed breakdown.
615 COMMISSIONER LAIZNER: And that can be an undertaking. You don’t have to ---
616 MR. WYNN KOSINER: No problem. I’m happy to.
617 UNDERTAKING / ENGAGEMENT
618 COMMISSIONER LAIZNER: Okay. The other thing, what we would be looking for, is a detailed breakdown of your projected capital expenditures over the prospective term that you’ve asked for.
619 UNDERTAKING / ENGAGEMENT
620 MR. WYNN KOSINER: Okay.
621 COMMISSIONER LAIZNER: So dealing still on the financial side, what are you going to do if your revenue projections do not materialize? Like, how are you going to handle losses?
622 MR. WYNN KOSINER: Again, it might help -- is there a bit more direction to what you think the worst-case scenario would be? To say, we decline by 20 percent, 50 per -- you think everyone is going to shut off cable and is worst like, it’s doomsday? What sort of ---
623 COMMISSIONER LAIZNER: Well, have you got financing that would take into account potential losses?
624 MR. WYNN KOSINER: Yes, although I think that you’re -- it’s slightly counterintuitive given that the most subscribers would be upfront. So with the revenues you have up front and the -- there’s a bit more excess there. There’s a bit of room on each channel already of approximately 70,000 and it ends up being about a 1.4, 1.5 million in year one that would otherwise be profit.
625 That’s -- going on to year two, say not everyone had shut off cable in year two, cable’s not irrelevant as of yet, I now have $3 million in savings. So then you’re at almost 4.5 by year three. If it starts to curve and goes down quickly, I have that amount saved to still be able to pass off. I’m hoping at the end of that, that might be profit, but it easily might not.
626 There’s a lot of, you know, there’s different costs on radio. Some of these pay audio channels might cost more than expected and that’s why there’s room. There needs to be enough room, but it’s still less than everyone else.
627 COMMISSIONER LAIZNER: So do you have any financing in the form of bank loans, or share capital, or any of that sort of stuff?
628 MR. WYNN KOSINER: I didn’t believe it would be needed. Based on these projections, that should be fine.
629 COMMISSIONER LAIZNER: So that’s ---
630 MR. WYNN KOSINER: I don’t think -- I hope that ---
631 COMMISSIONER LAIZNER: --- purely subscriber revenues?
632 MR. WYNN KOSINER: Strictly on subscriber revenues, yes.
633 COMMISSIONER LAIZNER: Okay.
634 MR. WYNN KOSINER: I think any of us, if they were answering the same question, what would happen if you’re -- everything went quickly? You’d have problems. But the best thing that I have is that the reputation starts to go up, that’s an upward curve, and because of the reputation, you can then make use of more relationships in those communities. I’ll give you ap perfect example.
635 COMMISSIONER LAIZNER: I -- but I guess the -- I guess the question is that you’re making assumptions, but there’s no surveys that you have that would give you demand for the service.
636 MR. WYNN KOSINER: Okay.
637 COMMISSIONER LAIZNER: And you yourself have indicated that you expect that subscriber revenues will decline.
638 MR. WYNN KOSINER: For sure.
639 COMMISSIONER LAIZNER: And you’re going to have costs, you know, on the news front for sure. You’re going to have to hire people to do the audio in the 23 different languages. So ---
640 MR. WYNN KOSINER: Can I counter?
641 COMMISSIONER KOSINER: Sure. Absolutely, that’s -- I just wanted to frame for you where the question’s coming from.
642 MR. WYNN KOSINER: Yes. I get that. First of all, to start off I’d say, my subscriber numbers projected are the lowest I believe of anyone, at 9 million, if I’m not mistaken. I think everyone else is like 10. So it would mean there’s more money to be had that would come in upfront as is.
643 I’d say worst case scenario, which if I’m not mistaken, and again, please don’t quote me as this on -- I know it’s being transcribed. But given I don’t have this directly in front of me, it did say from what I recall, on AMI’s website, we have over 600 volunteers reading newspaper services. Okay?
644 Now, if you’re actually doing something for the visually impaired, again, I’m not a lawyer, I don’t plan on becoming a lawyer, I don’t want to be a lawyer. But in the Copywright Act, if you’re repurposing something for people who are visually impaired, I don’t believe that’s a copywrite infraction.
645 So if you got 600 volunteers reading free newspaper services, as far as I’m concerned, repurposing it for the visually impaired, what this service is for, your doomsday scenario, I just point at AMI. AMI has done it, why can’t I?
646 COMMISSIONER LAIZNER: So that means that you’re looking to staff this service with volunteers to actually provide ---
647 MR. WYNN KOSINER: No.
648 COMMISSIONER LAIZNER: Okay.
649 MR. WYNN KOSINER: What I’m saying though is, you asked for what happens if all of the -- nobody watches cable anymore. And frankly, if no one is watching cable, they probably don’t need this service. But in the off chance that they do and there’s still license terms to be had, if you are concerned that there’s no savings from the front end, which that’s why you have savings, for the back end, right? Which can be turned into profit later on after the license has expired, if that’s what the case may be. Worst case scenario, it’s already been done using volunteers.
650 So if it has to happen that way -- it’s not the way I’m proposing. But if you said, “Evan, we’re not willing to give you anymore money. You’ve spent -- you’ve blown through all of these millions of dollars in savings even though it doesn’t cost that much to produce this whole thing.” Okay. Let’s call the volunteers.
651 COMMISSIONER LAIZNER: So you’ll leverage your connections in the community to get volunteers to help ---
652 MR. WYNN KOSINER: Correct.
653 COMMISSIONER LAIZNER: --- you if your projections are incorrect ---
654 MR. WYNN KOSINER: Yes.
655 COMMISSIONER LAIZNER: --- on the financial side?
656 MR. WYNN KOSINER: And there’s precedent for that already. You’re paying them four cents a month just for English.
657 COMMISSIONER LAIZNER: Okay.
658 MR. WYNN KOSINER: I would also ask, if you’ve got 600 volunteers and if the Copyright Act is the way that I believe the Copyright Act is, why are -- where are those millions of dollars going? Just a question.
659 COMMISSIONER LAIZNER: Just give me a moment to see if I have any other questions for you.
660 For conditions of licence that relate to Canadian programming expenditures, I mean, what I think I’ve heard from you is that in your view the service is completely Canadian staffed, and Canadian produced and all that.
661 MR. WYNN KOSINER: Two thousand (2000) percent Canadian content.
662 COMMISSIONER LAIZNER: So if we were going to impose a Condition of licence related to Canadian programming expenditures, you would accept that?
663 MR. WYNN KOSINER: Correct.
664 COMMISSIONER LAIZNER: Okay. I think those are all my questions. Thanks very much.
665 MR. WYNN KOSINER: I would just ask one final thing. It would actually really help as an applicant if the Commission said, “Hey, this is our best case and our worst-case scenario.” or go to Stats Can and get someone to do that. Because you literally have everyone guessing how many subscribers and in cases there’s no -- my guess is no better or worse if I hire a bunch of people to also guess.
666 Like, it just -- as much as you have different organizations who are facilitating different stats, as far as you’re concerned, they’re spinning it to their favour anyway. Like, you guys have to be able to read through that. So if the Commission could actually say here’s a best case scenario and a worst case scenario of where we think subscriber numbers are at. If you think that the -- that no one’s going to be watching television in a year or two and we’ve got to just write the whole thing off, so be it.
667 But it would be great to actually hear that from you so that we can give you that best case and worst-case scenario, as opposed to everyone guessing and spinning it their own way.
668 THE CHAIRMAN: Thank you. Thank you for the suggestion. I have maybe just one small follow up. Just -- I’m trying to make sure I understand. When Commissioner Laizner was asking you about distinct original local programming, versus programming you might obtain from, for example radio stations, you emphasized that it would mostly be original local. And then, but later when we were talking about the financial issues, you were saying as more and more radio stations come on.
669 So I’m just sensing a bit of a disconnect there. Wouldn’t that by definition mean that there’ll be less and less original programming?
670 MR. WYNN KOSINER: The way that I look at it, I see it as commissioned original programming. Are you talking about in house productions, or are you talking ---
671 THE CHAIRMAN: Well, just you were talking about hiring people and they would ---
672 MR. WYNN KOSINER: So if I hire a radio station and it’s never aired prior, it’s first run for us by that station producing it on our direction, it’s considered first run original programming. Like, it’s never been aired before. It’s not in house, if you want more in house production that’s a different conversation.
673 THE CHAIRMAN: Okay. So you’re talking about original ---
674 MR. WYNN KOSINER: Correct.
675 THE CHAIRPERSON: --- radio programming -- original programming being obtained from radio ---
676 MR. WYNN KOSINER: And the best part, again, is that it’s on 24 hours a day, seven days a week.
677 THE CHAIRPERSON: Okay.
678 MR. WYNN KOSINER: Because you don’t have to wait, if you’re Polish, until 5:30 in the morning on Sunday ---
679 THE CHAIRPERSON: I understand.
680 MR. WYNN KOSINER: --- when it’s old.
681 THE CHAIRPERSON: I understand. Thank you.
682 MR. WYNN KOSINER: Thank you.
683 THE CHAIRPERSON: Those are all of my questions.
684 Commission counsel, do you have any questions?
685 MS. DIONNE: Yes. Thank you, Mr. Chair.
686 I want to understand what we’re talking about here in terms of technology. I’m not an engineer. I might need baby steps here.
687 So your application talked about audio and video. Now you’re talking just audio. So we would have audio channels, having the news and the guide of what’s on television, but we would also, on screen, see a described guide that people can read?
688 MR. WYNN KOSINER: That wasn’t the intention.
689 MS. DIONNE: Okay.
690 MR. WYNN KOSINER: But it could be -- that’s more of a barker component, which is not a traditional programming component. The application is a pay audio program, but it’s a different option than -- it’s coming from left field.
691 MS. DIONNE: So what we could -- how do you synchronise the audio feeds with the barker -- what we read on screen? So that would only be alphanumeric text, right?
692 MR. WYNN KOSINER: It’s a great question.
693 MS. DIONNE: It wouldn’t be video?
694 MR. WYNN KOSINER: It can be provided so it comes down as a TV channel, or it could just be audio only, traditional form of a pay audio service. The way you sync it is sending it as a television signal, but as the Commissioners may decide, it may be something that it’s too much bandwidth for some of these BDUs. So it could just be audio.
695 MS. DIONNE: So that was my next question. If there’s -- it would be so many television channels ---
696 MR. WYNN KOSINER: Correct.
697 MS. DIONNE: --- with the audio?
698 MR. WYNN KOSINER: Now, there’s weird ways around it. So if you want to go a little bit technical, there’s video on demand. You’ve got something -- it’s -- traditional cable is called CUALM and there’s three different types of CUALM. You’ve got your video on demand, your switch digital, and you’ve got your traditional cable. So your traditional cable is your traditional broadcast that comes down that everyone watches, probably your most preferred channels. There switch digital that most carriers have, but what it does is it’s kind of like an internet feed, and it takes X amount of bandwidth in your region and sends it down to people in your neighbourhood. There’s also video on demand and there’s actually something called Live on Demand. Live on Demand isn’t really used, but it’s sitting there waiting to, and a lot of engineers just don’t know it. Hence why I think they’re lazy.
699 If a broadcaster said “Hey, we don’t want a television signal in standard definition or HD,” which I may note some of the existing pay audio service that everyone is familiar with, on a channel like Rogers, Rogers takes a video feed where it tells you what song is playing and promotes their stuff. So that’s just traditional, and it might be a switch digital feed. I’m not quite sure on how they do that. But there’s different ways of doing it.
700 I think at a very basic, most minimal service, we could do that as an extra outside of the pay audio. I’m happy to send video along with it. But it should be licensed as a pay audio service so it’s easy for the BDUs. It’s an audio channel like the 84 other audio channels that one of the intervenors who I was not so thrilled with thought about.
701 MS. DIONNE: Okay. Thank you.
702 MR. WYNN KOSINER: Thank you.
703 MS. DIONNE: Any other questions?
704 MR. BOWLES: I have a few questions, if I may be permitted?
705 You were talking earlier in your conversation about newscast per channel or per language feed, that would be four times an hour. Are you willing to commit to any requirements with respect to duration and frequency of news programming?
706 MR. WYNN KOSINER: Yes. The only thing I would ask you to consider is that if the -- if you’re of an ethnicity and the accessibility component is actually what’s part of the reason why this would be going through, that the news doesn’t come in too often that you can’t get through the described video listings for a half hour. So I think every 10 to 15 minutes is quite reasonable. So you’re going from six to -- four to six times an hour for two to three minutes. And the way that the wheel will line up, we can make it -- I actually did this for a SiriusXM when I was 19 until I was 22 years old. I created an exact four-minute loop for their Canada 360 channel. So we shot out thousands of those. So to make that happen, I’m not concerned about. I already have experience with that.
707 MR. BOWLES: So every 10 to 15 minutes, two to three minutes per newscast.
708 Am I right to understand that some of that would be repetition?
709 MR. WYNN KOSINER: Correct.
710 MR. BOWLES: Are you willing to commit to any original first-run programming requirement?
711 MR. WYNN KOSINER: In terms of how often -- well, here’s what you’ve got to consider. If you have a half hour or hour show, the multicultural described information updates and tells me about the next half hour and the current hour. So everything would be first run. So how would you actually go about that? That’s the problem.
712 MR. BOWLES: How about dealing specifically with newscasts?
713 MR. WYNN KOSINER: Yes, that’s okay. I have no objection to that.
714 MR. BOWLES: Can you flesh out what kind of requirement you would be willing to abide by?
715 MR. WYNN KOSINER: I was thinking probably -- I would say four to six times per day. So every couple of hours, if you check in, you’ve got an updated newscast. I think just based on the dollar value, the time it takes to collect the information and produce a two to three-minute segment.
716 The other option, if you wanted to, though, is that as a condition of licence, it could be different segments in that ethnicity. So you kind of have a business segment at the 30s. You could have news at the 15s. You could do sports, and that could fluctuate and change totally differently as well.
717 You know, we’re in unchartered waters right now, so seeing what you would like, I’m happy to entertain, you know, based on the general licence application that’s there. If there’s a direction that you would like to be in, there’s no objection on my end to any of that.
718 MR. BOWLES: I’m interested to hear what you have to propose.
719 MR. WYNN KOSINER: Again, I think that having different segments throughout the day for different topics, and you could run them more often than not. I don’t know if it becomes a problem. I don’t know if all of a sudden you guys are upset that there’s not two business reports every half -- like, we can play with that, but to me, when you have a team who’s dedicated to making sure that it comes out in that sense, it’s great.
720 The only issue that one needs to consider is some of the indigenous languages that we’re putting together so that they have a dedicated channel as well. So if you have different languages on that channel, the rotation of how many would actually override the descriptive video guides because of that. So that might take a bit of consideration as to how you go to program that or separate those languages so they’re on a 1:1 ratio for -- you know, 17 all have their own channel and the other three have double ups, so they’ve got that language and Italian, let’s say, have a secondary one.
721 MR. BOWLES: Okay. One last question I have has to do with -- if I understood correctly the conversation you had with Vice-Chair Laizner, you were mentioning that your financing for this service would be restricted to subscriber fees that would ---
722 MR. WYNN KOSINER: Correct, yes.
723 MR. BOWLES: Can you explain how you would finance all the start-up costs that would need to be incurred before the service actually gets launched?
724 MR. WYNN KOSINER: There are two options. One, if I need to finance them personally, I have the ability to do so as a shareholder loan to the corporation.
725 Alternatively, I’ve got a number of conversations that I’ve had with some technical related companies that can assist and have experience in this already in terms of playout and sending these signals to head ends, and there’s flexible payment terms. I don’t know if it’s like this around the Commission, but oftentimes applicants -- it’s not my favourite way of admitting to this, but people do look at 9(1)(h) licences as a bit of an ATM machine. So given the fact that they have -- that banks are able to do their own calculations, they are able to further finance that, knowing that there should be x amount of years of revenue going on -- and based on subscriber counts and what their projections would be.
726 So between -- if it’s a million dollars that needs to be put forth for initial first-year playout and spread it out over other years, that could happen as a shareholder loan directly. You have that on record. I’m happy to provide that kind of financing. I believe that based on the conversations I’ve had, I’m able to finance that through some of the technical arms and be able to spread those costs, to some extent, over a more reasonable fiscal period to make sure that it adheres to the licence and the conditions and the financials that are coming in.
727 MR. BOWLES: That is all. Thanks.
728 THE CHAIRPERSON: That completes this part of the proceeding. Thank you very much for your presentation.
729 MR. WYNN KOSINER: Thank you.
730 THE CHAIRPERSON: And we will adjourn until 1:20.
--- Upon recessing at 12:17 p.m.
--- Upon resuming at 1:30 p.m.
731 THE CHAIRMAN: Madame la secrétaire?
732 THE SECRETARY: Thank you, Mr. Chairman. Proceed with Item 3 on the agenda, which is an application by Ethnic Channels Group Limited on behalf of a corporation to be incorporated for a broadcasting license to operate a national multiethnic, multicultural discretionary service to be known as “Voices”.
733 Please introduce yourselves first for the record. You have 20 minutes.
PRESENTATION / PRÉSENTATION
734 MR. LEVIN: Good afternoon. Good afternoon, Mr. Chairperson and Vice-Chairpersons. My name is Slava Levin. I’m the Chief Executive Officer of Ethnic Channels Group or ECG, as we’re known in the industry. Let me introduce the members of my team here today.
735 To my right is Sharon Mejia, Vice President of Programming, Affiliate Sales. To her right is Betty Ann Tutching, vice -– sorry, Voices TV News Director. To my left is Sasha Zivanovic, CTO of ECG. Beside him is Hari Srinivas, President of Ethnic Channels Group. Beside him is Oleg Masliy, our Chief Financial Officer.
736 In the back row, from my right to left, is Filbert Wong, Channel Producer for Filipino Television; Tagrid Jajour, Host and Producer of Arabic Community Television; Joel Fortune, our Legal Counsel; Wally Saikali, Technical Consultant; Jennifer Zang, President of Canadian Chinese International Television and rounding our panel is Howard Lichtman, Co-Founder of Ethnicities Multicultural Marketing and Advertising, who assisted us with the marketing research for our application.
737 ECG is proud to bring this application for Voices to the Commission. A mandatory basic multi-ethnic service should provide meaningful daily service to as many communities as possible and to all Canadians in English and in French.
738 Content should be available at a convenient time when people want to watch it, regardless of the size of the ethnic community. After all, as a basic service all BDU subscribers will be paying for it regardless of the language they speak.
739 This is a distinguishing feature of Voices. We’ll offer substantial daily news and information programming in many different languages simultaneously. We’ll provide more content in more languages than has ever been offered in any ethnic service.
740 Voices is inspired by the untapped potential existing digital technology and what it means for ethnic and multi-lingual content in Canada.
741 ECG launched our first ethnic and third language services in Canada in 2004. Today ECG distributes -- sorry, ECG broadcasts and distributes over 80 different services in Canada and other countries. We produce programming in 16 different languages. We serve as many different Canadians from diverse backgrounds and interests as possible.
742 From Arabic to Vietnamese, from sports to movies and everything in between. Let me give you a quick sense of some of our programming.
743 (VIDEO PRESENTATION / PRÉSENTATION VIDÉO)
744 MR. LEVIN: We are proud of our programming and we are leaders in digital technology. Our sister company, NexTV, launched in 2006 as the first internet BDU offering legal third-language content in Canada.
745 Our other company Nextologies offers IP-based transmission and digital master control services to customers in more than 100 new countries at a fraction of the traditional price. We do this from our own state-of-the-art broadcast facility in Toronto.
746 ECG is based on innovation, digital technology and know-how we created ourselves. We have applied this way of thinking and expertise to Voices.
747 Until now, ethnic and multi-ethnic services have always concentrated on providing the most content to a handful of the largest ethnic groups in Canada.
748 A large ethnic group could see hours of programming daily in their language, but a smaller ethnic group could be lucky to find an hour a week. Voices will end this discrimination.
749 MR. SRINIVAS: As business people we always ask ourselves one question before we embark on any new venture. What is the problem we’re trying to solve.
750 In this case, it is to deliver programming, especially time sensitive Canadian news and information programming to a wide range of language groups in their own language, whether the group is large or small, using a single affordable service.
751 As Nelson Mandela, one of the world’s greatest unifiers, famously said:
752 “If you talk to a man in a language he understands, that goes to his head. If you talk to him in his language, that goes to his heart.”
753 And we’re full of heart, by the way.
754 Ideally, every TV viewer should be able to access television content in their own language. This programming approach and technology is already well upon us in the global television environment. Canada needs to keep pace.
755 MS. MEJIA: We will offer programming, daily newscasts and other information content seven days a week, simultaneously in different languages.
756 Starting in the first year of operation, we will offer all of our core news and information programming in at least 10 different languages at the same time in three separate regional feeds across the country. This will increase to 15 languages in the second year, 20 in the third and 25 by the fourth year of the license term.
757 Let me take you through -- let me quickly take you through our schedule. We have attached a copy to this presentation.
758 We will offer two daily newscasts, including local, regional, national and international news in the morning and in the early afternoon.
759 In the morning we will also offer a one-hour current affairs and cultural magazine program and then one-hour of lifestyle content. In the afternoon we will offer premier foreign content such as telenovelas, series’ and dramas.
760 Between 4:00 and 5:00 p.m., we will offer third-language children’s programming. This is just after school when parents may wish to encourage their kids to develop their skills in their mother tongue. Animated shows are ideal for multiple language tracks.
761 After our children’s block, we return to specialized news and information content with entertainment and business news segments. In the evening we will cater to specific communities in each of the regions we serve. These half hour editions of the desk will be produced in third-languages and offered with English and French audio tracks.
762 Overall, we have created a news and information centric programming service that will also provide access to different types of entertaining third language content for a wide audience, including families with children.
763 All of our core news content will be produced with multiple language feeds, as will other key programming, like “Her Voice”, focused on issues of current concern to women from multi-cultural communities; “Welcome to Canada”, information programming targeted to newcomers; “Rising Star” and “Center Stage” featuring multi-cultural talent and events from around the country; “The Drum”, an indigenous production connecting ethnic Canadians to First Peoples and “Discovering World Music”, opening our eyes to the diversity of musical expression in Canada.
764 This core news and other multi-lingual content amounts to approximately 55 hours a week and is shaded dark blue in the programming grid.
765 MS. TUTCHING: I’d like to share with you how our multi-language programming will work on a practical level.
766 Voices will have a team of editors and journalists in our Broadcast Centre in Toronto, as well as in each of the regions we will serve.
767 The news process starts the evening before, with the preparation of newscasts for each region, plus national and international news.
768 Just like other broadcasters, we will rely on a variety of news sources to gather content, including sources such as AP, CP, Reuters and others. As well, our own journalists, in Toronto and each of the regions’ bureaus will contribute.
769 The script for each segment will be prepared in a single language - usually in English - and delivered to our voice-over translators for the preparation of different language versions. After translation, each of the different language files will be returned by a file transfer to our production centre for insertion into our newscasts.
770 If there's a breaking story overnight, the news will be quickly updated before the early morning broadcast. Digital edit suites already enable this type of flexibility. Rapid production turnaround is well established for news programming.
771 For our afternoon newscasts, we will update the morning stories and edit and replace the content as needed.
772 In addition to this core news content, our other leading daily information programs including our business and entertainment news will be produced using a similar production model.
773 Some of our multi-language programs, such as Her Voiceand the programs Sharon just described, will be pre-produced.
774 From the viewer's perspective, the process will be seamless. Content available in their language will be delivered in their language. Other programs will be seen in its original language with English subtitles, or in an English or French version when available.
775 MR. ZIVANOVIC: Voices will make full use of existing digital technologies.
776 The Voices source feed for each BDU will consist of a single video channel and multiple audio channels.
777 Existing digital distribution technology is based on "mapping" by which video and audio channels are associated with each other for delivery to subscribers. This is standard for all digital television programming services.
778 The only difference with our approach is that instead of offering one, two or three separate audio feeds, which is now typical channel architecture, we
779 will offer more audio feeds, starting with 10 and increasing to 25 by year 4.
780 The technology, the signal delivery process, and all other aspects of delivery of signals to BDUs are the same as what is used now to deliver all other digital television programming services. Our proposal is fully compatible with all digital television systems.
781 We have carefully reviewed different BDU environments and every BDU can support 1 video and 25 audios as an input into their system. However, BDUs use different approaches to deliver the video and audio streams to subscribers.
782 All legacy BDUs currently support at least three audio channels per video channel. Many BDUs now support five or more audio channels. Some IPTV BDUs already support 25 separate audio channels. BDUs are migrating quickly to IPTV delivery, which will eliminate any capacity constraints.
783 Our technical delivery approach will take into account the different technologies used by each BDU down to the lowest common denominator.
784 ECG has designed the source feed for delivery to BDUs to allow them to carry Voices in a way that best meets their systems' requirements. The source feed will allow the BDU to choose from any of the following options for delivery to subscribers: 1 video feed and 25 audios; 1 video feed and 5 audios; 1 video feed and 3 audios; and last, one video and 1 audio.
785 The source feed will also offer three digital video formats for selection by the BDU: MPEG2 SD, MPEG4 SD, and MPEG4 HD.
786 Using the lowest common denominator, if a BDU is able to deliver at least three audio channels per video, which all BDUs can, then the BDU will be able to deliver the entire 25 language Voices service using under 16 megabits, if it elects to distribute the service using MPEG4 SD as an example.
787 This is similar to the capacity currently used for a single HD channel now in MPEG2.
788 We have attached some charts to this presentation that might help to assist in visualizing how this will work in case there are any questionss
789 MR. SRINIVAS: We have developed the Voices business plan keeping the viewer as the
790 centrepiece of our strategy. The viewer will be and continue to be the focus of Voices.
791 The service we are offering would not be possible without wide distribution as a basic level service. We have proposed a monthly wholesale fee of 23 cents per subscriber. This fee will generate sufficient revenue to support a high quality and multilingual and multiethnic service.
792 At this wholesale fee, the service is affordable. We specifically surveyed Canadians on the cost of our service. A high proportion, 92 per cent, thought it was affordable as a part of the basic service package at a fee of even 30 cents per month.
793 While we have projected a one person decline every year in future subscription revenues, we believe with the active support of the cable and satellite industry this could be reduced further.
794 BDUs are at the forefront of innovation and are already bundling popular over-the-top, internet and other services with their broadcast channels. Voices is a natural extension of these practices and undoubtedly represents the future of programming content.
795 We will also develop and rely on advertising revenue, although to a far lesser degree than subscription revenue. Voices has been developed for the viewer and not the advertiser.
796 For the first two years of operation we have projected no revenue from advertising, while audiences and advertisers become familiar with the service. By the end of the license term, we are anticipating revenue from advertising of approximately $2 million annually.
797 We have taken a conscious decision to focus on multiple communities during prime time, and not just on the top five to six communities, many of who are courted by the advertiser, for the advertiser's benefit, with minimal regard to the viewer experience.
798 If we are taking the viewer's money, we should give them the content they want to watch at a convenient time, regardless of whether they are part of a relatively large or small ethnic community.
799 In developing our business plan, and in all of our planning, we have relied upon our experience as a third-language broadcaster.
800 Our infrastructure, technology and administrative costs are all based on our experience and success and our proven ability to innovate and grow. We are fully confident in the feasibility of our business plan and its ability to deliver a high-quality programming service and to support the commitments we have made in our application.
801 Seventy-five (75) per cent of the broadcast day and and 85 per cent of the evening broadcast period will be devoted to Canadian content.
802 Eighty (80) per cent of our programming will be news and information programming, including a daily newscast and 40 hours per week of regional and local news programming on each feed.
803 Ninety (90) per cent of all programming will be ethnic content.
804 We will offer content in at least 25 different languages each month, from year 1.
805 Our multiple language content will increase from 10 different languages in the first year to 25 by year 4.
806 We meet a Canadian programming expenditure level or CPE of at least 60 per cent.
807 PNI spending will be at least 3 per cent of revenue, and 80 per cent of this will be for independent production.
808 And most of our programming will be original Canadian content consisting of more than 65 per cent of the schedule on each feed.
809 MR. LEVIN: ECG is leading the world in broadcast technologies and ethnic content. Our Voices application is no different. It is based on the capabilities of digital TV today. It uses existing technologies in an innovative way. It is meant to be a service for this century, not the last.
810 The traditional, scheduled, one-language-at-a-time, linear ethnic service from the 1980s and '90s is an old model and that model is broken.
811 I have no doubt that most of you have tried Netflix and have seen the range of foreign, third-language content available to audiences.
812 Most of that content comes in multiple language soundtracks and all of it is available, simultaneously, at a push of a button. This is what consumers want and, increasingly, this is what they expect.
813 This is exactly what Voices will do for our Canadian news content directed to multiple audiences. This is what the technology will support and this is what Canada needs today.
814 We have another short video for you to watch about Voices.
815 (VIDEO PRESENTATION/PRÉSENTATION VIDÉO)
816 MR. LEVIN: Thank you. We would be pleased to answer any of your questions.
817 THE CHAIRPERSON: Thank you. Thank you for your presentation.
818 Vice-Chair Simard will begin with questions.
819 COMMISSIONER SIMARD: Thank you, Mr. Chairman.
820 Thank you for your presentation. Thank you for your submission.
821 You have already answered many questions that had been prepared before this Hearing, so I guess we have no choice but to, you know, ensure that all the answers are on the record.
822 So we will start with your schedule. So I have some questions about your schedule. You’ve propose a condition of licence indicating you would produce and broadcast daily national, regional and local newscast seven days a week.
823 So I would need some clarification. The first one is about the difference between your proposed regional and local content.
824 MS. MEJIA: Thank you for your question.
825 Our regional and local content will cater to each of the three different feeds that we serve across the country, and it will differ from any of our other newscasts which national news and the international news.
826 The national news will have a broad overview of what is happening in Canada today as it relates to every person and then every individual in the country. International news will be news from outside of Canada, from other countries, of course with a Canadian focus on how it affects us as Canadians here today.
827 COMMISSIONER SIMARD: Could you be a bit more specific? Like in your grid, where is the local content?
828 MS. MEJIA: Sure. We have actually 12 hours of local and regional programming on our grid. You will see it at 6:00 a.m. Monday to Friday and again at 11:00 a.m., and then also that accounts for 16 hours. There’s also 3 hours on Saturday and 3 hours on Sunday. This will be produced specific to each region, so this content would differ from region to region that we serve.
829 Additionally ---
830 COMMISSIONER SIMARD: Excuse me because in your grid, if I have a look at the 6:00 a.m., it refers to Regional News feed.
831 MS. MEJIA: Yes. Was the question not ---
832 COMMISSIONER SIMARD: Local.
833 MS. MEJIA: So the local would be part of our regional content.
834 COMMISSIONER SIMARD: I see.
835 MS. MEJIA: Our regional newscast, and it would be also be local stories philosophy featured in our third language news and information programming titled “The Desk” which airs Monday to Friday in prime time from six to midnight and four hours on Saturday and four hours on Sunday.
836 COMMISSIONER SIMARD: That was actually my next question. I had a question about “The Desk”, so it is my understanding that you refer to thirty-eight hours a week, so is it combined or it’s common to all the feeds?
837 MS. MEJIA: So you are correct. There will be 38 hours broadcast a week, 24 hours of The Desk will actually be different from region to region ensuring that we are meeting the needs of the populations that are in each region as they can differ from province to province and, obviously, from east to west.
838 So the content, there will be similarities, but 24 hours of the 38 hours, which is about 63 percent over prime time will be different from region to region.
839 COMMISSIONER SIMARD: Thank you.
840 Could you please confirm for the record if it is your intention that the conditions of licence applicable to your proposed service would attach to each proposed feed taken separately or if they are meant to apply to the three feeds taken as a whole?
841 MS. MEJIA: As it relates to the specific local and regional news, we are ready to accept a condition of licence per regional feed.
842 COMMISSIONER SIMARD: Thank you.
843 You have proposed 40 hours of local and regional news programming overall, but elsewhere in the application -- I’m sorry, but elsewhere in the application have also stated that you intend to broadcast 16 hours and 38 hours for a total of 54 hours.
844 Could you please explain this discrepancy in the amount of regional and local news programming hours?
845 MS. MEJIA: So local will be part of our regional newscast again as I had mentioned. They are highlighted dark blue in the programming grid, and if you count those hours it amounts 16. When you take a look at The Desk which is in primetime and it’s shaded in dark blue, these half-hour programs will also include local stories that are relevant to each of the three regions that we serve, so that once you combine those hours across all three feeds, we have quite a substantial commitment to local and regional news.
846 COMMISSIONER SIMARD: Thank you.
847 On the record of this proceeding you have indicated that you do not believe that it would be difficult to maintain high levels of first-run programming given the high level of news programming you intend to provide on your proposed service and, as such, you propose a commitment to 50 percent of first-run programming. I would need some clarification, actually two clarification.
848 The first one, would your original, first-run programming only consist of news programming?
849 MS. MEJIA: To answer your question, the simple answer’s “no”, but the bulk of our original, first Canadian programming would be news as we are proposing daily news seven days a week, but we will have other programming specifically on the weekends that will also be first original run.
850 COMMISSIONER SIMARD: Okay. So what would be the other types of original first-run programming?
851 MS. MEJIA: So we have contents on the weekends geared toward new immigrants. We have a show called “Welcome to Canada”. We have indigenous programming. We have a current affairs magazine program that runs Monday to Friday for one hour. This is an example of the type of original first-run Canadian programming that we would have that’s outside of the news.
852 COMMISSIONER SIMARD: Could you please tell me a bit more about this program “Welcome to Canada”?
853 MS. MEJIA: Yes. It is -- this is a half-an-hour show that will air on Saturday mornings. It is intended to guide newcomers into Canada on a lot of the different processes as many of us are familiar with people immigrating from different parts. Not all of the countries have such procedures as we do here in Canada and overall in North America, so we’re proposing to guide people into the Canadian system, teach them how to obtain their driver’s licence, how to get an OHIP card, how to get a bank account, and just help them into their settlement to their new life here in Canada. As we know, it can be very, very difficult when you’re first coming into Canada and anything that we can do to help new people settle is our objective of this program.
854 COMMISSIONER SIMARD: Thank you.
855 Did I hear you just mention that like this program “Welcome to Canada” and other types of programming, lifestyle, entertainment, children’s programming, I’ve seen all of this on the video you just, I guess, broadcast here.
856 Could you, please, clarify if this programming would be sourced from your other services or if it would contribute to the levels of original first-run programming as well?
857 MS. MEJIA: It is not our intention at the moment to have this programming be from other services that we already operate and broadcast in Canada. This is content that would be produced specifically for Voices Television whether it is produced by us in-house or sourced out independently. We will be producing it and it will contribute to our original first-run Canadian programs.
858 COMMISSIONER SIMARD: Thank you.
859 I think you have already provided us with this answer but just again for the record. In your application, you indicated a ramp-up in third language news programming. You also state that overall you will broadcast 10 languages in year 1, ramping up to 25 languages by the fourth year of operation. However, this was not committed to by proposed condition of license for the overall languages under service.
860 Could you please comment on the prospect of the Commission, the CRTC imposing conditions of license to require these proposed commitments?
861 MS. MEJIA: Yes, we would be ready to accept a commitment of license that our service ramp up from 20 languages in the first year to 25 languages in its fourth year of its license term.
862 MR. FORTUNE: Do you mind if I clarify that, Madam Vice-Chair? So we had proposed a condition of license. This is with respect to the simultaneous, multilingual programming. So we had proposed a condition of license to that effect. And we also proposed a condition of license that starting in year one the service would offer at least 25 different languages. So there's two types of programming involved here. One is the simultaneous multilingual programming, which starts at 10 and then goes to 25 languages over 4 years, and then there's languages overall, which is 25 from year one.
863 COMMISSIONER SIMARD: Thank you for the clarification.
864 ECG has indicated the intention to broadcast programming in up to 25 languages simultaneously for a single video channel. A number of BDUs have indicated that this is not feasible with their existing distribution systems. I know that in the presentation you went into the details, so I guess here we would appreciate if you could give us an example of this being feasible, technically feasible in an operating distribution system.
865 MR. ZIVANOVIC: Thank you for the question. I think just to preface my answer, Slav and I tend to do a little bit of back and forth on our explanations. I'm technical, so Slava will bring me down or vice versa.
866 So the simplistic example is if you look at some programming that exists on BDUs today, they include English, French and descriptive video and that's part of their license. So as I described in my presentation, three languages are technologically supported by every BDU in the country. Our initial application is right on point with we haven't changed it, but we're saying, "Here, this is an answer to saying it's not technically possible."
867 So what is our suggestion, how are we doing it? If you don't have the capacity or the capabilities to carry one video channel with 25 audio channels, it's up to the BDU's discretion to -- and they do it all the time, but they slice up the service as they choose.
868 So in our example we say take one video channel in SD with three channels in -- three audio channels. That is one fifth of one HD service, so if we look by the end of the chart that I supplied, by the end -- by the beginning of 2021 they would only need to have 10 megabits available to satisfy the requirement by the second year of the license -- of our 9(1)(h) license.
869 So we're not asking for any extra capacity. The technology already supports it. If they chose to enhance the service on their platform by making it easier for the user to select the language, that is the responsibility of the BDU, but technologically, all of the capabilities exist today and are broadcast standards. We are not asking out of the norm.
870 MR. LEVIN: That's the first time I didn't have to clarify him.
872 COMMISSIONER SIMARD: And it would work for the 25 languages year 5 I believe -- 4?
873 MR. ZIVANOVIC: In theory, if you remove capacity restraints and look at all the BDUs are moving to IPTV technology. It would actually work unlimited languages because we're not worried about the capacity constraints anymore. By the time 2021, 2022 roll around, all the major operators plan to be moving to IPTV, which won't have any capacity restraints.
874 So we would love to see potentially TSN as a 24-hour in a specific language. I come from Serbian descent. I would love to consume any one of the channels at, you know, full broadcast in my language.
875 So, no, there are no constraints. In fact, it's getting much easier as we progress with technology.
876 COMMISSIONER SIMARD: Thank you. Could you please explain how DTH providers would be able to provide such a service?
877 MR. LEVIN: Go ahead.
878 MR. ZIVANOVIC: So in our example -- there's two different types of DTH technology that exist today and I'll list them directly of Bell and Shaw that carry these two different types of technologies.
879 Bell operates under a DVB type of infrastructure, which would automatically support -- and if you look at our initial application, is fundamentally based around that principle. They have the ability to carry one video channel and map them to virtual channels inside their transponder and not have to worry about having a lower bit rate feed or have channel mapping -- additional channel mapping as I suggested in my presentation.
880 So Bell can -- Bell satellite can support this today.
881 For Shaw, because from our investigations we found that they were lagging a little bit in their deployment of IPTV and their infrastructure growth, they would have a little bit harder time and the solution that's proposed in our presentation says that we suggest that they use an SD version of our service with multiple audio. So that satisfies the different technical environment between Bell and Shaw on that -- on DTH specifically.
882 MR. LEVIN: We've come -- what we've done is when we did the analysis we've come to a common denominator. And that common denominator today across all BDUs from Canada is one video, three audios. So that's kind of the standard out there. So no one can say it cannot be done.
883 As Sasha pointed out, on the Bell side it's a little different, particularly Bell satellite, because they are able to map one video with multiple audios, each to a virtual channel, essentially creating 25 separate channels by utilizing one video and one bandwidth.
884 COMMISSIONER SIMARD: And just to be sure that I understand, so in page 9 when you refer to all the option, one video and 25 audios or 5 audios and -- so would it be the customer that would make this choice and ---
885 MR. LEVIN: Go ahead.
886 MR. ZIVANOVIC: So depending on the BDUs adaptation of our technology would determine the user's experience. So ideally from a Voices' perspective, we would love to have 25 separate virtual channels using the capacity of 1 and making it very easy for the user to tune into one channel all the time. For other operators that would use a different style of mapping as we have found a solution, then it would be slightly more cumbersome. They would have to tune to the French language on their set-top box and remember the channel 905 would be German, for example, even though they've selected French on their box. That's just proving that the technology is there.
887 MR. LEVIN: It's about creativity.
888 COMMISSIONER SIMARD: Okay.
889 MR. LEVIN: What we're proposing is everybody has the option to do it. It's how they curate it within their own system.
890 COMMISSIONER SIMARD: Thank you. Another question that is a bit different and not related to technology. So where does EGC intend to find news anchors to read the news in each individual language?
891 MS. MEJIA: Can you just repeat the question for me, please?
892 COMMISSIONER SIMARD: Yes, so the new [sic] anchor. So where does EGC intend to find them, the news anchor to read the news in each individual language?
893 MS. MEJIA: Just to clarify again, you're asking the third language content known as the desk or are you talking about who will voice over the news when it is available in multiple languages?
894 COMMISSIONER SIMARD: I guess that I'm referring to like the news in general, maybe we could clarify later on with staff, but my understanding is that we want to know where you are going to find these people, like, with the skills to provide the news.
895 MS. MEJIA: I'm clear on your question now. Thank you.
896 We've actually engaged with a third party company who has been in market over 16 years, is quite reputable, and they've -- will be willing to provide their site translation services, employing professional site translators in multiple languages. They already have people on their roster. They have over 200 people who speak multiple different languages who we could tap into to ensure professional translation and voice-over services are done for our news service.
897 COMMISSIONER SIMARD: So how is it going to work? Like, the same news will be kind of translated in all these languages by these -- like, the staff of this companies; right?
898 MS. MEJIA: So there's a couple of steps.
899 The first step is that the newscast will be written in original -- in English language, so the original broadcast of it would be, I guess, considered English. This will then get sent out to the versioning -- the different talent that we have hired and are working with us for each specific language. They will be putting the English script into a software-translating system that will, you know, provide the script in their language. They will then -- because we can’t completely rely on technology at this point for translation services, they will put their eyes on it, vet the script, re-tweak it before they record the actual audio file that is required for broadcast.
900 COMMISSIONER SIMARD: Good. I’m just curious to know, how do you deal with the accents for each language? I guess that these people can have international accents for each of these languages?
901 MS. MEJIA: Well, we would be working with people who not only speak English but who also have a dominance of a third language so that we’re comfortable with their knowledge of the language to ensure that we’re adequately representing that language on air.
902 COMMISSIONER SIMARD: But for example, French, is it going to be -- like, which accent or which ---
903 MS. MEJIA: We would be -- with regards to the French language, we would be looking for Canadian French because we are in Canada, and it is one of Canada’s official languages, so we would definitely be looking at the Canadian French accent.
904 COMMISSIONER SIMARD: Thank you.
905 In your supplementary brief, you indicate your intention to hire members of the communities that voices would serve, which would afford them a deep understanding of the ethnic experience and relevant topics to the community. Sorry, this would be to allow ECG to be aware of the changing netscape -- landscape, sorry, of Canada’s ethno-cultural demographic.
906 So we would need some, I guess, additional information. How would you adapt your programming to a changing ethno-cultural landscape over time?
907 MR. SRINIVAS: So what we do as a company -- and, you know, we are the largest broadcast for multicultural television in Canada, and the company started in 2004. So over the years, what we have done is we have adapted to the needs of the market, whenever we decide which particular service to bring into the country. So we’ll essentially adapt the same or similar kind of approach.
908 So for example, if you look at immigration levels today -- and allow me to elaborate a little bit more in detail. So if you look at the immigration patterns today or you look at the last wave of immigration that came in, you have a lot of people who have come in from the Philippines. And if you actually break down the immigrants, they’re basically coming in mostly as under the economic class, which is basically skilled workers, family class or refugees. So we have to -- we do a little bit more of a deep dive into how to adapt our programming. So we look at all these aspects. And we’ve been doing that on a regular basis for our own business, and we do the same approach for our channel as well.
909 COMMISSIONER SIMARD: Okay. And how would you determine which program languages to broadcast and the ethnic groups to be served?
910 MR. SRINIVAS: So what we did, when we decided on the grid, we actually ran with the language most spoken at home, but what we were also seeing, in our experience as a large multicultural broadcaster, is sometimes numbers can mean different things.
911 So for example, you might have, let’s say, the South Asian population is one of the largest populations here, Punjabi being one of the largest spoken languages, but we might actually have, you know, demand from a much smaller community. So this is actually keeping your eyes and ears on the ground, basically trying to figure out who actually wants to tune in and watch TV, and this would be a continuous problem. We’ll basically use data from Census, but we would also do our own research.
912 COMMISSIONER SIMARD: Based on your experience, I’m curious to know what have you noticed in terms of landscape changing in the last 12 years?
913 MR. SRINIVAS: So specifically, if you look at immigration primarily in the last 12 years, it has basically come -- it’s coming from certain countries. And if you actually break it down -- and some of the Census data is also not accurate because basically they said that there’s a lot of immigration from Africa, but they’ll include Egypt and Morocco in that list. And Egypt and Morocco, although geographically are from North Africa, they are actually Arabic speaking.
914 So in terms of sure immigration patterns, you do see a lot of immigration coming in now largely from the Philippines, largely from India, whereas 12 years ago it was also largely the same, but it had more of Europe in it, which has sort of diminished to a large extent now.
915 MR. LICHTMAN: So if you look at today’s immigration patterns, and they can change with legislation, currently there’s about 320,000 PRs that are coming to the country. That has increased over time and there’s debates as to whether it should stay the same, go a little lower or go higher. It’s not going to go away because it’s really not about just Canada’s multiculturalism. It’s an economic imperative because of the macro demographics in society.
916 One of the other changes is the international students. So about four years ago, the trend for increased international students came into effect. There’s now 495,000 international students, and the government is looking at legislation to not make that go down but to make that go up in terms of what happens after you graduate.
917 We know exactly where they’re coming from. We know what province and city they’re going to. We know the level of education that they’re coming in at. There’s actually a high school contingency that’s coming in the last year of high school. Even in terms of the new immigrants to the country, the number one community today -- and that’s changed over time; we’re talking about macro-trending -- is actually South Asian. So it used to be Philippino was number one, and that trend over the past three or four years has changed. So you’re looking at South Asians, Philippinos and Chinese. But again, you have to look at anomalies and you have to look at other trends.
918 So when the Syrian Refugee Program challenge came into effect, so of course during those particular years you’ve got a Syrian population.
919 The Arab population is starting to move here. It will change over time as well because of what’s happening in the States. We’re sort of welcoming the immigrants; the Americans, not so much. But we’re hearing from an international immigration perspective. People are actually more likely to choose Canada than the United States, and that’s always been the competitor alternative.
920 So the information is readily available and trackable and very important that feeds the decision. So it’s all databased.
921 COMMISSIONER SIMARD: Because of those changes, are there some adjustments that you had to do during the last -- you know, in your experience and, you know, in the current services that you provide?
922 MR. LEVIN: So we’ve been fortunate that we’ve kind of seen the trends a little bit ahead of time. Just to give an example, we’re the largest Arabic broadcaster in Canada today. I think we operate 20 plus television channels for the Arabic community. The change is really -- it doesn’t matter where you come from or how many of you are here. What matters is that content is available for you and you have easy access to it. That’s probably the most important part.
923 COMMISSIONER SIMARD: And are there some lessons that you have learned from this that you could apply, you know, if you were granted with a ---
924 MR. SRINIVAS: So one of the most important lessons that we have learned and I think that we could apply to Voices TV is how we could actually benefit the broadcasting industry by actually bringing more ethnic subscribers to subscribe for the basic package and take Voices TV.
925 So the biggest strength we bring on the table, because all of our services are subscription services that we operate today, so we know what works with a subscriber from a purchase standpoint. So that’s the most important lesson. And I think that is the biggest strength that we bring on the table, which is our ability to actually bring more subscribers, which will actually benefit the business.
926 MR. LICHTMAN: If I refer to the data again -- and this is Stats Canada data and it’s also backed up by the primary market research that we did -- one of the key pivotal differences in the ECG application versus the others is the emphasis on the importance of language. So the numbers are really clear. Twenty-two (22) percent of Canadians have a mother tongue that’s not English or French. So it’s not that English or French are not important; it’s just that that’s not their mother tongue.
927 Our primary research actually suggests that when you go to newcomers, as opposed to looking at Canada in general, where we’ve got multiple generations, 78 percent speak a language other than English or -- have a mother tongue other than English or French. And 60 percent of them use a language other than English or French at home. Stats Canada itself, in terms of language of comfort and preference, and it varies by ethnicity.
928 So preference in language at home, according to Stats Canada for Chinese is 55 percent. What they will also tell you is that 19 percent of Chinese really don’t have a command at all of the English language or French language, which means it’s a barrier to access to the Canadian culture, hence the importance of language for that community.
929 But even south Asians who are, I’ll call it bilingual in terms of, you know, English and whatever their native tongue is, depending on where they’re coming from, the south Asian area of the world, 39 percent are still speaking their mother tongue at home. Philippinos, it’s 27 percent. Arabs it goes up to 43 percent. Phillipinos 59 percent.
930 So all of this data is almost really crucial to the fundamental ECG application of saying, one of the most important things that the government can do is offer content in more languages, and not sort of filed away at 3:00 in the morning, because that’s not how the world works. They want to have the information now.
931 That’s the world that we live in and they’ve come up with a technological solution to solve that challenge. And they’re using existing technology and I’ll just point to ECG’s history and these guys will correct me if I get the years wrong. But when they first were founded in 2006, 2008, they took existing technology and had the ability to broadcast 30 channels at a time simultaneously. At the time, the bigger guys, the Bells and the Rogers of the world were broadcasting two at a time, three at a time. The concept of creating an economic version that could broadcast 30, today they’re up to 100 simultaneously. In terms of technology, it was unheard of.
932 We’ve talked about how this becomes a no-brainer with IPTV. You’ve got Bell that launched IPTV three or four years ago. You’ve got Rogers that regionally launched it on Ignite. The guys at ECG, correct me if I’m wrong, Slava, had that technology in 2006, 11 years ago.
933 MR. LEVIN: You’re not wrong.
934 MR. LICHTMAN: Am I right on my year?
935 MR. LEVIN: Yeah. You’re correct.
936 MR. LICHTMAN: Okay. So you’re looking at a company that’s utilized innovation and technology to provide what the customers always wanted historically. So this is not, all of a sudden they’re doing something. You’ve got a track record of history of doing it based on facts.
937 MR. LEVIN: Just to kind of touch on what Howard’s saying, we realized early on that servicing four to six of the big communities in any country is not what it’s at. It’s about servicing every community. And by us launching our IPTV product, really what it came down to is the BDUs were not perceptive to launching a Serbian channel, or a Croatian channel, or a Russian channel, or any of the smaller communities for one simple reason. They at that time, they said, well, how many subscribers is it going to bring me? What else can I monetize those subscribers as?
938 So when you’re looking at smaller communities, such as the Serbian as an example, it would be a small community on cable. And for them it was an economical approach. Do we spent the time to launch Serbian or do we launch some English service where we can monetize it more through advertising? Capacity was a slight issue back in the day. But it still -- in my eyes it’s always been a discriminatory factor because you always launch to bigger communities.
939 So when we built our IPTV product back in 2006, the goal was to deliver to everyone, so everybody has an option. And that’s what this company was built on. That’s why we are 100 channels strong, or 80 channels strong. That’s why we do operate channels from Arabic to Vietnamese and all the languages in between. We don’t just focus on the top tier of language groups.
940 COMMISSIONER SIMARD: I have a follow up question on what Mr. Lichtman talked about, like, innovation, and the fact that people no longer want to watch the specific program at a certain time. What’s your digital strategy, like, in link with this proposal?
941 MR. LEVIN: I’m going to turn over to Hari.
942 MR. SRINIVAS: So as we mentioned, that we are basically innovators. And you know, before I answer your question, I also want to mention about how we innovated in the broadcast space with Nextologies, which is one of our sister companies, which basically delivers signals around the world to more than 2,000 broadcasters.
943 So we’re basically an innovative company and we have actually factored digital into a strategy. Because if you really look at consumption today, consumption of content today has become device-agnostic. So basically you -- basically consuming content, but you don’t care which device you consume it on. And most of news content, most of content is on the mobile.
944 So we will have apps, we will have the ability for a viewer to actually view the content in multiple devices, with the only caveat being that we will link this to authenticated subscribers so we don’t -- we actually help the BDUs as well. But it will be an exhaustive digital strategy.
945 We have actually done this before for another worldwide broadcaster. This was about three, four years ago when they came to us. They were facing the same challenge and they said, “Look, we want to monetize our content better and we are right not distributed across the world on cable and satellite. How do you think you can help us with our digital strategy?”
946 And basically, when you look at digital strategy itself, and you look at it being even applied to newspaper industry. For example, if you look at the Times, you look at Financial Times, they all went to the subscription model because essentially what digital does is you get a global audience immediately. So you do have an exhaustive digital strategy, we have done it before. For us to be able to, you know, to launch Voices TV on multiple devices can be done very easily.
947 COMMISSIONER SIMARD: But just to be clear, it is your intention to do so, right?
948 MR. SRINIVAS: Yes.
949 COMMISSIONER SIMARD: Switching gears completely, we are going to talk about governance structure. So could you explain how your proposed service would operate under a diverse governance structure?
950 MR. SRINIVAS: So as mentioned in our application, we plan to have an advisory council for all the three regional feeds, only one advisory council. It’ll have about eight to 12 members and with a two-year term, and basically, plan to go after individuals and invite individuals who are basically community leaders who can give us a perspective into each community. Because as we mentioned before, the demographics is constantly changing.
951 And also, what we want to do in addition to them being community leaders with expertise in a certain community, we also want to look at functional experience, or what kind of functional value they can bring on the table, and I’ll explain this a little bit. If you look at that immigrant community in general, a lot of them are entrepreneurs. A lot of them are into small businesses. So they bring a lot of different skills on the table.
952 Plus, one of the other things that, you know, Immigrants who have from the community, bring on the table, is also that international experience. So we’d be very judicious in terms of the selection process. But essentially, if you’re looking at about an eight to 12-member advisory panel for all the three regional feeds.
953 COMMISSIONER SIMARD: Thank you. That leads us to talk about advertising, local advertising.
954 MR. LICHTMAN: By the way, over 50 percent of all small businesses are owned by people that are foreign born. Just as another stat.
955 COMMISSIONER SIMARD: Yeah. Thanks.
956 In the standard conditions of licence for discretionary service, condition of licence 18 specifies that the licensee shall not broadcast any paid advertising material other than paid national advertising. As you may know, previously licenced ethnic specialty services which had 98 percent third language programing received a condition of licence allowing six minutes of local advertising. We talked about it a bit, like, earlier with the other applicants.
957 Are you seeking an exception to condition of licence 18, in order to be permitted to broadcast local ads?
958 MR. SRINIVAS: Yes, we are seeking an exemption to that.
959 COMMISSIONER SIMARD: Thank you. So we -- in like, we have noted many non-compliance in the past for ECG. Could you tell us how you intend to comply with the regs and if you were granted with the licence?
960 MR. LEVIN: So just -- could you just repeat that question again? I’m just trying to understand what you’re actually asking.
961 COMMISSIONER SIMARD: So it has been brought to our attention that in the past, you have had -- you have been in non-compliance situation, like, and it is documented. Like, many times, and we would like to know, you know, how do you approach compliance, I guess, and how would you comply if you were granted with the licence?
962 MR. LEVIN: Okay. I understand your question. Thank you.
963 So we take our conditions of licence very seriously. I think the time you’re talking about, it was brought to our attention. It was an oversight on our side. Just simply, we had too many channels and one slipped through the cracks, one, and we brought it up to compliance right away. In fact, I believe the Commission was looking after us for almost two years to be compliant, and we submitted all of the paperwork to be compliant and made sure that everything is compliant moving forward.
964 And by the way, we actually put a team in place to make sure that this does not happen again. So it wasn’t a non-compliance issue from a sake of doing it intentionally, and it was strictly an oversight, and the moment we were notified, the moment we took action to verify and clarify.
965 COMMISSIONER SIMARD: Like, the cases that have been brought to my attention refer to the filing of annual returns, not providing closed captioning and the lack of Canadian content. So ---
966 MR. ZIVANOVIC: So on the specific issue of providing the closed captioning, last year, the CRTC implemented new logging elements that we had to add in our digital system. That came to us -- it slipped through -- I wouldn’t say slipped through our cracks, but our system was designed -- our logging system was designed in a way, and the new requirement came late to that team, so we were filing logs that it seemed that we didn’t have captioning, but we did actually captioning, and I believe if we haven’t submitted our form back, it should have ---
967 MS. MEJIA: We have a deadline of November 30th to respond to the CRTC that we are in compliance, which we will be doing so by the deadline.
968 MR. ZIVANOVIC: Right. And just specifically to that, we were in compliance that entire time. It was a digital thing, and I’m sure from the CRTC’s experience with its own digital platform having issues updating, that just takes time for us to -- before we recognize it and before we correct it.
969 COMMISSIONER SIMARD: And non-compliance for the annual return and Canadian content, does this ring a bell for you?
970 MR. MASLIY: So the issue I had with annual reports was that not all reports are published online. Then the junior accountant from our accounting department did notify the Commission that they would be submitting all the reports on a later date without any follow-up of what that late date shall be. So basically, we do assume that our responsibility was to make sure what the deadline is, which wasn’t done.
971 So moving forward, it will be the case, and if you’re talking about this year’s returns, they will be submitted by November 30th.
972 COMMISSIONER SIMARD: Thank you.
973 MR. LEVIN: Just to add to the content side of it, when we ran into that issue in 2014, we actually put a team in place, and we have weekly meetings to make sure that all our channels are compliant with all of its CANCON requirements. So we’ve actually put things in place to make sure that does not happen again. So there won’t be an oversight.
974 COMMISSIONER SIMARD: And who is responsible for compliance in your company? Is there a chief -- I don’t know -- officer, like responsible for compliance? How does it work?
975 MR. LEVIN: So from a technical perspective, we have Sasha’s team that does the actual loggings that are submitted to the Commission, and then we have Sharon’s team that actually makes sure that all the content that we have will ---
976 MS. MEJIA: I work with a team. We meet on a weekly basis and we ensure that all of the content is actually properly scheduled and played out as per the conditions by the CRTC.
977 We have weekly reports. We have monthly reports and we have an annual report that we are constantly putting in the hours and making sure that all of our services remain in compliance.
978 COMMISSIONER SIMARD: Thank you.
979 I guess that leads us to the last series of questions, the financial questions. Other applicants project advertising revenue beginning in the first year of operation. ECG’s revenues begin in Year 3. I guess additionally, with one exception, ECG projects the lowest advertising revenues. So I guess that’s the situation. And based on that, I have many questions.
980 Could you please tell us ECG’s experience in the ethnic advertising market, the assumptions that have led it to make a conservative approach?
981 MR. LEVIN: Hari is the President of the company and actually looks after our Advertising Department Division, and I believe he will be able to articulate exactly why we are where we are.
982 COMMISSIONER SIMARD: Thank you.
983 MR. SRINIVAS: So when we did our projections, you know, we actually do advertising for more than 60 channels today that we operate. So our assumptions are pretty solid and based totally on analytics.
984 So if you look at the industry itself and what the industry is experiencing, and specifically the ethnic industry, a lot of -- so advertisers are two kinds basically. We have a corporate and national advertisers and then you have the retail advertisers. So what has happened with the national advertisers is a lot of them have moved their budgets to digital.
985 So essentially, there is a less pool of money that goes around today for national advertising than what it was before. And even retail advertising is starting to decline, and I will tell you why that is happening, and we have seen that happen with a lot of our retail advertisers.
986 The reason there is a decline in retail advertising is a lot of -- sometime before, retail advertisers were not so savvy about regional advertising. Now they’ve figured out that the best way to target the customer in a cheap way is to go to digital.
987 So when we did our projections, our projections were based on what the market is going to be, because we look at our projections that are actually into the future. So when you’re projecting into the future for an industry that is facing so many challenges that we are seeing every day in our own business on a day-to-day basis, that’s the basis of our projection.
988 So our projection -- so if you really look at the entire ethnic market today for television advertising and look at the CRTC financial summaries, you’re talking of a market of about 30 to a maximum of maybe $40 million for television, and that is declining a lot, especially if you look at national advertisers. They’re pretty much gone. There are very few categories that are still active.
989 So when we did our projections, our projections were not based on if the mainstream market is declining by 5 percent, we should decline by 5 percent. No, we went -- we did a deep dive, and it’s all about data and analytics. We looked at each individual advertiser. We looked at -- and I’ll give you an example without naming the advertiser. So there’s a very big advertiser who has a total budget, total budget. This is a national client of roughly about $1.3 million, but this is the total budget that they have available for the agency. Out of that, they have to allocate -- there’s a percentage that the agency is going to take as account management. You’re talking about maybe 20-25 percent. And Howard can probably answer that in more detail.
990 You have production costs for the video. So once you direct all that, you’re left with a pool of money that is strictly for media, and out of that, what has happened in the recent past is up to 30 to 40 percent with some clients, even up to 50 percent straight of it going to digital.
991 And when I say digital, digital also includes video. So it’s not that they are not doing video, but they’re moving it from TV into digital.
992 With a balanced budget, you have multiple media that they have to address, and advertisers are very specific. They’re looking for two things. They’re looking for either awareness or they’re looking for conversions.
993 In digital, the biggest advantage is you can actually convert a customer. So you look at the whole AIDA model, which is attention, interest, decision, action. Digital is able to do that. So basically they can complete a complete transaction.
994 So these are the challenges that we’re facing. And I looked at the other applicants and their projections.
995 I want also to draw attention to our grid, because the way our grid is designed is very different because, as we mentioned sometime back, we are not focusing on just the top five or six ethnicities during primetime. So if you look at our desk, we have 12 newscasts, and they’re not catered just to the top ethnicities. So we factor that grid into our projections. We have looked at the national advertising and the advertisers and where they are going. We looked at categories by advertising, because not all categories are active in the ethnic market. We looked at retail advertising to come with our numbers.
996 So our numbers actually have a lot of analysis behind it. It’s not just a number that’s taken off from the mass market.
997 MR. LICHTMAN: Some more information for you. So as Hari mentioned, I run a multicultural marketing agency. We actually are probably one of the largest in the country. Our clients are CIBC, Telus, Canada Dry, Kreuger, Dyson, CAA, Metro Foods. The list goes on. It’s your A-level clients that we deal with, so we’re pretty plugged into the advertising world because we’re the one that’s placing the advertising on their behalf.
998 And what Hari is saying is accurate. There’s a macro trend outside of ethnic with a shift to digital away from television.
999 If you read the actual statistics the pendulum has probably moved too far. I was reading something earlier today before I came here. So everybody has shifted almost too much to digital and will ultimately shift back to television.
1000 But you can’t fight that macro trend currently, so you’ve got to give it a little bit of time to go back to more of a normalcy. TV advertising is not going to disappear.
1001 Also, from a practical perspective, I can tell you –- and there are exceptions and yes, we have clients that are exceptions, but primarily the vast majority of advertisers in Canada, the larger ones, are only interested in Chinese, South-Asian and Filipino, because that’s where their ROI is from a size of the population in Canada.
1002 Those that are interested in the Filipinos are the actual categories that are interested in newcomers. Otherwise the decision that we always have to make with our clients is they say, “We only have this budget so, you know, how much is going to Chinese and how much is going to South-Asian”. That’s the practical reality.
1003 The other thing that requires a little bit of time - because I know Hari’s numbers talk about a couple of yours - is in order to engage the advertisers and to bring them back, you’ve got to do product integrations and do more than just place an ad.
1004 The ad that Rogers was talking about this morning in terms of Hockey Night in Canada Punjabi with Canada Dry, that was our agency that actually created that whole program, but it was a product integration. It wasn’t just placing an ad. And getting advertisers to see that you can do that is not going to happen tomorrow, so their numbers are realistic with that kind of lens on the marketplace.
1005 COMMISSIONER SIMARD: In your view, what are the main differences in the advertising revenue potential of your proposed service and the existing -- your existing services?
1006 MR. SRINIVAS: The big difference is in terms of reach. So essentially the services that we operate - the multi-cultural services - they have a very low reach because they’re subscription services, but when you’re looking at the service offered in the digital basic, you definitely have more reach.
1007 But this does not necessarily, you know, translate into viewership, because that’s the data that we don’t know. We don’t know for example how many viewers are going to be tuning into Voices TV’s -- polish desk newscast three years down the line.
1008 Because –- and I just want to quickly also highlight the future is all -- or even today it’s all about data and analysis. It’s not about a guessing game anymore. It’s about clear, precise numbers. If you go to an advertiser on digital today, you can guarantee impressions, because they get –- they’re whole cost structure is based on the number of impressions.
1009 So that’s the difference between –- that I see from our application for the future on digital basic versus the services that we operate today.
1010 MR. LICHTMAN: Advertisers at the end of the day are purchasing eyeballs, because they want to reach potential customers. If you look at ECG’s financials in the first couple of years, they’re actually spending money advertising to consumers across ethnicities to tell them about, you know, the opportunity to watch programming and watch content in their languages, so they’re actually trying to build subscribers to the channel, which is a fundamental difference in their approach or everybody else’s.
1011 They’re saying, “Hey, we’re bringing new content. We’re bringing these new languages. Come visit. Come take a look”. That again will take a little bit of time. And when the numbers come then you get the sales.
1012 I launched –- I used to be the CMO for Cineplex. I launched screen advertising in Canada. I remember, you know, the ramp-up. Stuff doesn’t happen in a single day.
1013 COMMISSIONER SIMARD: Thank you. It is my understanding that you have already answered the following question, but just for the record if you want to add something else, can you comment on Rogers assertion that the ethnic advertising market is increasingly migrating to digital ethnic services?
1014 MR. SRINIVAS: It’s a trend that we are seeing, so what they are saying is correct in the sense -– in terms of digital -- ad dollars moving to digital.
1015 And the reason -– I mean, I mentioned this before, there’s a big difference between when you advertise on television versus ads on digital.
1016 So today if you look at how even mainstream television, they follow the numerous ratings. So the numerous ratings itself, the sample size relative to the overall audience is really small and they’re simply extrapolating the data.
1017 So fundamentally until you get set top box data, which we will be getting in Canada in the near future, which is available today in the U.S., where today advertisers could get data off 30 million boxes.
1018 So the shift to digital will only change once we are able to go to the advertiser and guarantee him eyeballs, saying that look this is the exact number of people who tuned in and this is real data. This is not extrapolated data. So I think their assertion is correct.
1019 MR. LICHTMAN: They’re also following the macro trend, so over time they -- they’re making their decisions on the basis of the macro trend and I think for multi-cultural consumers it’s somewhat different, so they’re absolutely is an over-indexing of interest both from newcomers and existing multi-cultural consumers for news and culture information from at home.
1020 And many of the paid for services or those channels from home people have on 24 hours a day. They don’t shut them off, so there is that appetite amongst the ethnic consumer for television. The question becomes you now have to educate the advertisers that it’s there and you have to have the eyeballs, so it’s really more of an approach in timing.
1021 COMMISSIONER SIMARD: Again, for the record, what are the assumptions leading to advertising revenues only beginning in year three of the prospective license term?
1022 MR. SRINIVAS: So, essentially, I’ll tell you how we have arrived at those numbers. There are only two known things that I have today. I don’t have any data on viewership, because the channel doesn’t exist.
1023 So basically, the only two variables that I could –- or factors that I could take into account, one is the inventory available and what spot rate that I could sell it at.
1024 So what I did basically was we took a total inventory consumption, so basically across our prime-time feed which is where we –- where the bulk of the advertising is going in year three, we took the inventory available and we also looked at what are the segments we are serving.
1025 So for example, you know, there will be more advertisers on the South-Asian News versus the Polish News and I’ll also be able to command a higher spot rate.
1026 So the two metrics we took into account was the spot trend and the inventory available and for year three we basically are doing all the sales during prime time because I think that’s what the advertisers would want if they want to reach the ethnic consumers and then we’re projecting a three percent growth.
1027 And the three percent growth is basically going to come because we’re going to also add in year four our non-prime feeds for sales. Although they’re not specifically targeted at a particular ethnicity, we think the three percent is achievable.
1028 And we also have seen in the recent past a big boost to the infomercials market, which is basically 30 seconds to 1 minute of infomercials, so we have added that as well.
1029 So if you actually look at our overall growth, just the infomercials itself is almost about a 10 percent jump in year 4, along with the three percent for the advertising on the non-prime feeds and then the revenue actually increases by three percent.
1030 So while we have taken a pessimistic view on the overall size of the market, but our metrics are pretty accurate in terms of the projected growth that we have put into our numbers.
1031 COMMISSIONER SIMARD: Thank you. Given that the proposed service would be nationally distributed if licensed, what is the rational behind a higher proportion of local advertising revenues compared to national advertising revenues?
1032 MR. SRIVINAS: So if I understand your question correctly, why is the local advertising more than national advertising?
1033 COMMISSIONER SIMARD: Yes.
1034 MR. SRIVINAS: Okay, so again we’ve got to go back to the trend. So when you’re looking at my inventory, okay, I have national advertisers who are primarily targeting right now only the three top ethnicities which is basically the South Asian, the Chinese and the Filipino.
1035 So if I went to a national advertiser and said I want to sell my polish news he will not be interested, but on the retail level each of those shows we could approach the local advertisers.
1036 So for example, I could go to a dentist who is living in Markham who is of polish origin but wants to target all the ethnic groups living there simply because, you know, if I’m a dentist I don’t want to just cater to just polish. I want to cater to everybody.
1037 So we have –- that’s the reason why we have projected higher sales for retail and also the adoption of digital by corporates is at a much faster day than the retail advertisers.
1038 So retail advertisers, even if some of them are migrating to digital, we do find that they’re being replaced but the corporates are not being.
1039 COMMISSIONNER SIMARD: Thank you. We have already asked this question to the other applicants, so what would be your position on the possibility that the Commission would impose a condition of license limiting local advertising sales. And I would be interested in knowing if such a limit would affect your proposed commitments and/or proposed wholesale rates -- rate.
1040 MR. SRINIVAS: So if I understand you correctly, the limit is six minutes? Are we talking six minutes?
1041 COMMISSIONER SIMARD: Yes.
1042 MR. SRINIVAS: We are fine with that.
1043 COMMISSIONER SIMARD: Okay. And it wouldn't have an impact on the proposed wholesale rate?
1044 MR. SRINIVAS: No.
1045 COMMISSIONER SIMARD: And if the Commission were to prohibit the broadcast of local advertising, would this impact your commitments or proposed wholesale rate?
1046 MR. SRINIVAS: If we cannot accept local advertising, it would have a small impact on the overall numbers. On the wholesale fee, I will have to just do a little bit of analysis, but if you look at our overall subscription revenues, compare it with our advertising revenues, specifically local, it's not a big impact, but there will be some impact, but I have to run some numbers and report back on that.
1047 COMMISSIONER SIMARD: So your projected technical expenses show some discrepancies with the proposed business plan as well as considerable differences when compared to the technical expenses projected by other applicants. So I have a series of questions based on this. So the first one, could you please provide a breakdown of ECG's technical expenses for a five-year term? I don't know if you have this information with you. If not, it could be done by an undertaking.
1048 MR. FORTUNE: Yeah, we would take an undertaking on that.
1049 COMMISSIONER SIMARD: Yes?
1050 MR. FORTUNE: Yeah.
1051 COMMISSIONER SIMARD: Okay. Good. December 6th? Yeah. Thank you.
1052 UNDERTAKING / ENGAGEMENT
1053 COMMISSIONER SIMARD: Please -- could you please provide a rational [sic] explaining the year over year rate of decrease in technical expenses of minus 9.2 per cent, noting that most other applicants project a yearly increase in technical expenses?
1054 MR. SRINIVAS: I think the decline is only from year one to two, because after year two the technical costs actually go up. So the discrepancy's only in the first year because we have some additional costs in terms of manpower because of the technical solution that we plan to implement. But year two onwards such with the technical costs go up.
1055 COMMISSIONER SIMARD: Thank you.
1056 We have already discussed this, but maybe for, like, have a -- in order to get more information about the -- like, in order to get more financial I guess information, so you propose to begin with 10 language feeds original video feed in year 1 that increases to 25 language feeds broadcasted simultaneously by year 4. Describe how these costs are reflected in your projected technical expenses?
1057 MR. SRINIVAS: So the cost -- and, you know, Sharon can add more details, but the cost for the increase in the languages, they are actually accounted for in the production budget, you know, in the technical budget.
1058 MS. MEJIA: And just to add to that, that is the actual language that is going to be broadcast on air, so those costs are part of our overall production costs.
1059 COMMISSIONER SIMARD: What are the implications and costs for BDUs of providing 25 language fees? Could you please provide us with a breakdown of these costs? So, again, if you don't have the info ---
1060 MR. LEVIN: So it'll be very difficult for us to provide you a breakdown of what the BDUs have to invest in this. From our perspective, what we've put out there, this is no different than launching any channel that they launch today. And we've launched quite a few channels with the BDUs over the course of our 14 years, 15 years. We have our own costs and they have their own costs. Our costs are delivering a signal to them, processing a signal on our end. What they do, how they do it once they get it is their cost. So we don't have insight as to what they need to do. They already do it.
1061 COMMISSIONER SIMARD: Good. Earlier we talked about the DTH providers. So what would be the implications and costs specific to those providers, so same question, but -- so I don't know if it's the same answer.
1062 MR. ZIVANOVIC: The answer will be ---
1063 MR. LEVIN: It's the same.
1064 COMMISSIONER SIMARD: Good.
1065 MR. LEVIN: Just give us one second.
1066 MR. ZIVANOVIC: So just to touch a little bit on the clarity for the technology portion about what we're trying to -- or the solution that we've added -- we added -- I'll call it a layer to our initial approach. The solution is to provide -- that the BDU has the ability to replace our channel -- sorry, put our channel as a single SD feed and that single SD feed with the three additional audio feeds would be -- again, on capacity restraints, one-tenth within -- by the second year of one channel.
1067 So when we look at costs, the costs would be no different, as Slava articulated, for almost every operator in that model. But we looked at -- and we touched earlier on, using the lowest common denominator. Is it the ideal approach for DTH operators? We believe that any solution that satisfies the -- their statements of being technologically impossible, well, we've proven that it's possible and there's not -- there's no major cost implications whatsoever to facilitate providing the Voices TV service on their platform.
1068 MR. LEVIN: Just to reiterate, this is not anything out of the ordinary that they currently do today.
1069 COMMISSIONER SIMARD: Thank you.
1070 ECG projects the second lowest depreciation cost over the prospects of license term relative to the other proposals. Please provide a detailed breakdown of your projected capital expenditures for the prospective license term. So, again, if you don't have ---
1071 MR. MASLIY: Yeah, we'll provide that in confidence and ---
1072 COMMISSIONER SIMARD: Good.
1073 MR. MASILY: Yeah.
1074 COMMISSIONER SIMARD: So an undertaking would be -- so it will be provided via an undertaking and the date is December 6th. I guess the deadline for you to provide you with this information.
1075 UNDERTAKING / ENGAGEMENT
1076 COMMISSIONER SIMARD: I would like to ask you a more general question, which is based on your experience, are there any success stories that you would like to share with us in order to I guess kind of tell us, you know, what could be I guess, like, a success story that could help us to better understand I guess how you -- or bonify your proposal? That's probably the best way to say it.
1077 MR. SRINIVAS: So our essential difference in our proposal and what we bring is, you know, one, we basically thought through our proposal from a viewer perspective. Two, the challenge that we and all the other applicants face is how do you program one single channel in multiple languages and still ensure viewership. So, for example, if a viewer is tuning into a certain show in a certain language, will he tune out as soon as that show is over because he can't understand the show in the next language? So that's what we proposed with our technical solution, which is we are going to have multiple audio. So basically you could watch any show on the -- most of the -- our programming on the station in a language of your choice.
1078 And in terms of a success story, and I'll narrate a very recent success story, this was -- this from India where I'm originally from. And India, as you know, has about 26 or more official languages. And the challenge in India or Indians face is -- within India is only 17 and a half per cent of the population speak English. And a lot of them speak Hindi, about maybe 30, 40 per cent, but if you go down south to India, none of them speak the national language, which is Hindi; okay?
1079 So when they had the FIFA World Cup in India, the broadcaster was Sony. They wanted to monetize the FIFA World Cup to advertising, which is the main source of revenue for broadcasters in India. So they settled for half only the official commentary, which is basically in English or in Hindi, which is the national language. The bulk of the audience -- so when you look at the English-speaking, I mean, you’re only talking 17 percent who can speak and comprehend fluent English. So 83 percent of the population will not be able to watch it in English at all. They can watch the game, but they can’t follow the commentary.
1080 And then you have the Hindi, which is spoken in the bulk of the country, but not going south. So they decided -- and they’re a DTH platform, and it’s great that you ask the DTH question and how would we do it, because they did all this on the DTH platform because cable is not that developed in India yet.
1081 So what they did was they offered the FIFA World Cup in 13 languages, and there’s actually -- I mean, it’s so simple. They actually -- somebody posted a video on YouTube showing how easy it is. So basically, the gentleman who posted the video, he’s actually from the southern part of India, where I come from. So he actually said, “Guys, if you want to…” -- and soccer is very popular in that particular state. So he said, “If you want to watch in your language, you can actually go on TASKAVI, which is one of the large DTH platforms there, and you can watch it in your language.”
1082 So this is actually being done. It’s already being done. And look, I mean, we’re in Canada, one of the most technologically advanced countries in the world, and we look at India, which is still a developing country, but the DTH platforms there have simply adapted to the market.
1083 You know, if you look at Darwin, Charles Darwin, what he said was not the fittest will survive but the ones that are most able to adapt. So the broadcasters and the BDUs in India looked at a market solution. They adapted. So why can’t the BDUs here adapt? Because this has been done. This has already been done.
1084 MR. LEVIN: Just to follow up a little bit on Hari’s answer. Euro News is another example of it. They started a similar project like this. I believe it was 2006-2007 and successfully were doing up to 13 languages. It seems to me that’s just a coincidence there’s 13 languages.
1085 We live in a modern system. All of our BDU infrastructure is being upgraded to IPTV. We’re looking at 2020 as a launch date. Some of the BDUs have already been operating IPTV for a few years. Some have been operating for a few months.
1086 The goal for them is to migrate to the new world, IPTV. There shouldn’t be any challenges for them. There can’t be any challenges. Really what it comes down to is a want. And what we’ve seen is there hasn’t been a lot.
1087 There’s always been a need. Everybody says it’s needed, but the want to accomplish it has never been. I believe this is the opportunity. If we are the fortunate ones to be granted, you will create that want and they will do as needed to make sure that they service the customers.
1088 COMMISSIONER SIMARD: Maybe my last question is that in addition to, I guess, your business plan, what makes your application the best one, I guess?
1089 MR. LEVIN: Well, just to start off with, we’re, as a company, the only one that operates languages from Arabic to Vietnamese and everything in between. So we know the customer.
1090 Two, our application is different from everybody else. On just a fundamental point, the old model does not work. It’s been proven that it doesn’t work. It works for three or four to six communities. Everybody else is kind of left as a secondary or third-tier language group.
1091 And we believe that we’re going to provide equality to everybody. It doesn’t matter how big or small your community here is. If we could, we’d offer 100 languages, because the idea is for everybody to be able to watch it, not just our 25. And hopefully over the course of our licence, we will have the opportunity to expand, you know, in the next generation, next time.
1092 But right now, I think we’re the -- at least in my humble eyes and our team’s humble eyes, we have the best application because it’s different. It’s not your standard approach, which is kind of the model that we lived on since the inception of our company. We couldn’t do anything traditional because no one accepted multicultural as traditional. So this is the first floor laid to give everybody an opportunity to be equal. As our thing says, every voice counts, and we truly believe that every voice should count, not just the three or four largest communities.
1093 COMMISSIONER SIMARD: Thank you. Those were my questions.
1094 LE PRÉSIDENT: Merci, Madame Simard.
1095 Madame Laizner.
1096 COMMISSIONER LAIZNER: Thank you, Mr. Chair.
1097 So you’ve indicated that you have quite a number of ethnic channels right now. Do you have advisory councils with respect to any of those?
1098 MR. LEVIN: No, we don’t, not for those.
1099 COMMISSIONER LAIZNER: Okay. So what do you think about advisory councils? Is there any value added to you for them?
1100 MR. LEVIN: I think for a national 9(1)(h) service, I think it should be in place. For our current services, with the limited distribution or limited number of subscribers, it would just be not necessary, in my eyes.
1101 COMMISSIONER LAIZNER: So what is the value added that you want to get from advisory councils? Like, what would be the purpose for you, aside from any concerns that the Commission may have on governance, what do you see as the need for them and what will they do for you?
1102 MR. SRINIVAS: So I will answer that question with an example. As a company, we look for complementary skills. So just to give an example, Slava is a visionary. He’s the tech guy and the numbers guy. So we believe that, you know, that you have to have people who can complement your skills. While we have an understanding of the ethnic community, we don’t have an understanding of every single ethnic community in absolute detail across the country.
1103 So I think when you bring experts in -- and I was referring to something called functional experience, so not really looking at just people who are community leaders. You’re also looking at functional experience. Tell us how we can do this better. So we always find that sometimes ideas come from the most unexpected places, and as a company, we believe in complementary skills. And, you know, that’s sitting right here on the table. Every single person on the table here is bringing complementary skills, and I think that’s a value that an advisory board would bring to us.
1104 MR. LEVIN: Just to add, even though I’m the CEO of this company, I’ve actually sat quiet here for a majority of it, the reason being is one person cannot make decisions for all. It’s always been my motto that I should know a little bit about everything, but the experts are the experts, and that’s why we’ve had Sharon, Sasha, Hari, Oleg, Bettyann and everybody behind me here sitting, because they are our advisory council, my advisory council. It’s something that is needed. I can’t make every decision and every decision correctly.
1105 COMMISSIONER LAIZNER: Have you set up terms of reference for these advisory councils?
1106 MR. SRINIVAS: We’re working on some terms of reference right now because it’s still in consultation with different people, but once we actually select the Board, I think they will make the terms of reference themselves.
1107 Joel, if you want to add something?
1108 MR. FORTUNE: Thanks, Hari.
1109 So the key areas where the Advisory Council would have input, we identified them specifically in our supplementary brief. They were on the programming strategy for underrepresented groups, to help us identify the ethnic and linguistic communities to be served, to identify particular issues of importance to different communities, level of community outreach, to ensure ethic communities across Canada have access to and are involved with the service. I mean, those are the principals that would be set out in the terms of reference, and the idea is you would take those principals to the committee and work with them to actually develop the specific terms of reference. The first item of business for that committee will be to adopt their own terms of reference.
1110 COMMISSIONER LAIZNER: And do you think that the numbers that you proposed are sufficient? So I think you said eight to ten members, one group or per group?
1111 MR. SRINIVAS: Yes, eight to twelve in total.
1112 COMMISSIONER LAIZNER: Eight to twelve in total.
1113 MR. SRINIVAS: And we wanted to -- you know, we wanted to keep this at manageable levels, and I think 12 for any board or advisory council is sufficient because you add more and more individuals, you also tend to not achieve your objectives. So we think that between eight to a maximum of twelve members is sufficient.
1114 COMMISSIONER LAIZNER: And when do you plan to put this in place?
1115 MR. SRINIVAS: So we are -- as I mentioned, we are in dialogue with a number of different individuals, but I think before first quarter of next year, they should be in place.
1116 COMMISSIONER LAIZNER: Okay. I have another question relating to digital strategy. I think you said that you thought that that would be an easy thing to implement. Do you have any more concrete plans about a digital strategy in terms of rollout, timing?
1117 MR. ZIVANOVIC: I interpret that question in two ways, one from the technical perspective, and being the technical operations for Ethnic Channels Group, we’ve also -- and the sister company, Nextologies, we’ve built digital platforms for the -- call them CBCs of their respective countries for NHK, TV Japan, SPS Korea. So we've built their digital deployment, let's say, and their -- on the technical side their strategy. And on the business side, and Hari can speak to the actual fundamentals on the business side.
1118 MR. SRINIVAS: So in terms of the rollout itself, we are, you know, planning to at least launch the service at least two months from the time that the channel that -- the service on cable is launched, cable and satellite is launched. So that's our timeline.
1119 And, you know, just going back to what Sasha mentioned, we have actually -- as I mentioned before, we have actually done this already for a broadcaster. One of India's largest broadcasters who is today distributed in over 180 countries around the world, we actually rolled out their entire digital strategy and launched the service in all 50 countries worldwide in multiple currencies.
1120 So this is not -- this is something we already do in-house and Sasha, you know, they do this pretty much every day. So for us, in terms of timing or in terms of actually executing it, I don't think that'll be a problem.
1121 COMMISSIONER LAIZNER: Okay. And then my last question relates to news programming. And leaving aside the desk, your daily newscast, I'm just not quite clear on how much of that is produced in-house or obtained through other newsfeeds and then voiced over in other languages.
1122 MS. MEJIA: Thank you for your question. I think the best person to answer that on our panel is our news director, Betty Ann.
1123 MS. TUTCHING: Yes, thanks for the question. Everything will be produced in-house. We will be putting together our newscast in our broadcast centre in Toronto. We will be gathering news from different news feeds like CP, AP, Reuters, and also we are going to have full crews and studios in the regions that we are serving. So they will be pitching stories, we'll be assigning stories for them to go out and cover, as well as this company, ECG, has many relationships with companies that we would tap into, specifically FTV, which is the Filipino channel here that is wholly owned and run by ECG. We would use some of their cameramen and contacts to help us get material in places we aren't located.
1124 But pretty much everything -- a few items will be produced, edited and sent complete from our bureaus, but pretty much footage will be sent, the information will be sent, and everything will be put together in our news room.
1125 COMMISSIONER LAIZNER: Okay. Thank you.
1126 Those are all my questions, Mr. Chairman.
1127 THE CHAIRMAN: Thank you. I have a few. I think to use a sports analogy, I'm batting clean-up.
1129 THE CHAIRMAN: Commissioner Laizner just touched on one area I was going to ask about on the advisory group, so I think we've taken care of that. Maybe just quickly following on the issue of local newscasts, earlier you described the process where the newscast would be written in the first language, typically English. And then you described the process for sending it out, having it translated and so on. How long does that take?
1130 MS. TUTCHING: We will have different timing. As far as news goes, we will produce the morning news the evening before because of the versioning. It will be sent out in the evening and it will be returned to be replaced into the morning newscasts for the morning. However, if any stories break overnight, we would also be updating it. We have a 4 o'clock, 4:00 a.m. team that comes in and it would be sent to the translators.
1131 For the news in quick turnaround we would use site translation and also AI translation, where they would put the script in, AI would spit it out and then they would vet it and correct it, record it and send it back.
1132 For our pre-produced programming there'll be much more time. They will have time to -- the production that we do on the weekend would be for the following weekend. So they would have the whole week to receive it, record it and get it put back in.
1133 THE CHAIRMAN: But on -- as you called it, "breaking news", I mean, typically what would be the time change? You talked about evening being ready -- evening newscasts being ready the following morning, so is that a typical timeframe for how long it will take to have ---
1134 MS. TUTCHING: Yeah, but then in the morning ---
1135 THE CHAIRMAN: --- the news translated?
1136 MS. TUTCHING: --- we could probably turn something around in 20 minutes, half an hour. Because if something's breaking through a whole newscast, we do the three newscasts, which is three hours of news. Typically one story or maybe a couple of stories would need to be updated. So we would just update those segments. That script would go to the translator and they could probably turn around, have it back to us within an hour.
1137 THE CHAIRMAN: Okay. Thank you.
1138 MS. TUTCHING: Thank you.
1139 THE CHAIRMAN: Test my math skills for a second.
1140 So, maybe a bit of a somewhat semi-technical question somewhat. If I listened carefully, and I hope I did, when you were talking about for a payload with 1 video, 3 audio in MPEG2, you said it took about 16 megabytes per second? Sorry, it took 31.3 megabytes per second?
1141 MR. ZIVANOVIC: So ---
1142 THE CHAIRMAN: That was your ---
1143 MR. ZIVANOVIC: --- I don't recall referring that. If you're talking specifically in our diagram, the supplementals?
1144 THE CHAIRMAN: Actually, I mean, that -- yes. No, no, in your supplementals, but in your presentation today you mentioned ---
1145 MR. ZIVANOVIC: I referred to ---
1146 THE CHAIRMAN: --- you mentioned that one HD channel is about 16 megabytes per second.
1147 MR. ZIVANOVIC: Megabits, yes.
1148 THE CHAIRMAN: Megabits. Pardon me. Yes.
1149 MR. ZIVANOVIC: Sorry.
1150 THE CHAIRMAN: Thank you. So that means that it would take two HD channels ---
1151 MR. ZIVANOVIC: Depending on ---
1152 THE CHAIRMAN: --- in the case of ---
1153 MR. ZIVANOVIC: By the end of year 5 -- by the beginning of year 5 when we achieve all 25 languages, yes, it could take up to, depending on the architecture the BDU chose to deploy the service, up to 2 ---
1154 THE CHAIRMAN: Two HD channels.
1155 MR. ZIVANOVIC: --- channel slots, which would be in line of -- if we were to be the winning or the -- granted the 9(1)(h) license, we would be replacing 2 HD slots anyways.
1156 THE CHAIRMAN: And what do you think would be the financial impact on BDUs if they have to?
1157 MR. ZIVANOVIC: None. It's -- if they were to take base band into their infrastructure, they already have the transcoders or the incoders in place to facilitate the actual insertion of the service. It's not buying new hardware on their side to get a new channel. And they would just be replacing the source signal into that feed.
1158 THE CHAIRMAN: Okay. And for satellite where capacity is more limited?
1159 MR. ZIVANOVIC: The model still stays the same, either on satellite or on cable plants. The -- if we look at the two specific platforms, like, Shaw -- let's take Shaw, for example, that operates a older type system, originally digital site for Arris, Motorola, they're not employing -- or from our discoveries, they don't have the capabilities to remap video, as per out initial application, as Bell can. So we suggested for them, for their solution, to use SD channel spots to facilitate putting the multiple audio mapping. So in SD channel spot, the capacity and the mapping still stays the same, on the assumption that the bit rate that they're using is five megabit HD for the feed that we're replacing.
1160 THE CHAIRMAN: And I have a few questions going back to proposed conditions of license. Earlier you indicated with respect to a condition of license 18D -- that you confirmed rather that you did want an exception. What would be the impact on your plans of not receiving such an exception?
1161 MR. SRINIVAS: I believe you're referring to the local advertising sales.
1162 THE CHAIRMAN: Yes.
1163 MR. SRINIVAS: There would be some impact because essentially you're looking at about somewhere close to a million dollars a year from year three with a three per cent increase. So you're probably looking at about $4 million in total going off the top line.
1164 There would be some impact. And as I mentioned earlier, that I shall need to run the numbers through the specific impact, but it would be -- there's an impact, but it's not that large.
1165 THE CHAIRMAN: So that's on a -- well, you indicated earlier when we were talking about a prohibition on local advertising you would run the numbers.
1166 MR. SRINIVAS: Yeah.
1167 THE CHAIRMAN: So that's fine. If you can articulate that in an undertaking?
1168 MR. SRINIVAS: Yes.
1169 THE CHAIRMAN: Perfect. That's fine. Thank you.
1170 UNDERTAKING / ENGAGEMENT
1171 THE CHAIRMAN: Similarly, on condition of license eight with respect to daily, national, regional and local news, how long would be each of the individual newscasts?
1172 MS. MEJIA: So with respect to the newscasts in the morning and -- well, in the early morning and again at 11:00 a.m. for regional news, these are one hour, so that would account -- across the week, it would be 12 hours of original content, regional news that’s produced for each specific feed, and then we would have 12 hours of the Desk, which would be specific to each of the regions that we serve.
1173 THE CHAIRPERSON: And how frequently would they be rebroadcasted, or is that ---
1174 MS. MEJIA: Because they are daily news, they would not be rebroadcasted.
1175 THE CHAIRPERSON: So that’s the only…
1176 And would you accept a condition of licence in relation to those?
1177 MS. MEJIA: Just to be clear, you’re asking if we would accept a condition of licence of ---
1178 THE CHAIRPERSON: To those levels.
1179 MS. MEJIA: For each feed?
1180 THE CHAIRPERSON: Yes.
1181 MS. MEJIA: Yes, we would.
1182 THE CHAIRPERSON: Also, on proposed Conditions of Licence 6 and 7, they establish requirements across all proposed feeds as well. I just want to know if you are willing to commit to relevant requirements, to similar requirements on a per feed basis?
1183 MS. MEJIA: If I could just have a moment to confirm?
1184 THE CHAIRPERSON: Sure. If it helps, I can refer you to the COL we’re talking about?
1185 MS. MEJIA: Yes, thank you. I’ve understood your question and we would agree to a condition of licence per feed.
1186 THE CHAIRPERSON: Okay. Thank you.
1187 And those are all of the questions.
1188 Counsel, do you have any further questions?
1189 MR. BOWLES: Yes, Mr. Chair. I’m mindful of the time and I’ll try to keep this very brief.
1190 Just to follow up on the Chair’s last question with respect to COL 6 and 7, are you committing to the -- that the Reference 25 be applied on a per-feed basis or is it a different number that you would be committing to on a per-feed basis?
1191 MS. MEJIA: Per feed, 25 languages per feed.
1192 MR. BOWLES: I just want to stick on this topic a little longer. It is quite possible that it is just I, but I’m a little bit confused here. There was a lot of talk about ramp-up of feeds in different languages forming part of that ramp-up. When I look at the proposed COLs, that only seems to apply to the newscasts and COL 6 and 7 don’t appear to reflect this notion of a linguistic ramp-up over the years. Can you sort of clarify this? Will there be 25 feeds in year 1, but newscasts will follow a different trend?
1193 MS. MEJIA: Let me see if I can try to simplify it and clarify it. I don’t know if you have a copy of our programming schedule with you? If you look at it, the dark purple, which again is titled the Desk, and is broadcasting from 6:00 to midnight and again four hours on Saturday and four hours on Sunday, this is where we would meet in year one, 25 different languages because of the language groups that we are serving.
1194 However, in year one, our dark blue content would be made available in the 10 audio feeds, ramping up to 25 by year four, but the content -- the primetime content remains at 25 languages from year one.
1195 MR. BOWLES: So the number of feeds would ramp up, but there would be some programming even in year 1 that would cover 25 different languages?
1196 MS. MEJIA: With the broadcast of the Desk, that is correct.
1197 MR. BOWLES: Just quickly on the topic of advisory councils, I was getting the impression -- and once again, I may be mistaken -- that you were contemplating a single advisory council, and if that’s correct, the language of proposed COL 13 seems to imply otherwise, that it would be one council per feed. Can you ---
1198 MR. FORTUNE: No, I don’t think that was the intention. It’s an advisory council with representation from all regions.
1199 MR. BOWLES: Served by “the feed” though. That’s the language that was tripping me over a little bit.
1200 MR. FORTUNE: I guess it should be “feeds”.
1201 MR. BOWLES: Okay. All right.
1202 MR. FORTUNE: All right. You’re correct.
1203 MR. BOWLES: That’s all.
1204 MR. FORTUNE: That’s one council with representation from all feeds.
1205 MR. BOWLES: Okay. That’s all for me.
1206 MS. DIONNE: Just one last question. In your written response dated March 15th, you stated a number of financing sources for your proposed service. Could you please file financial statements for these sources and any financial agreements in support of this financing?
1207 MR. MASLIY: Yes, I will.
1208 MS. DIONNE: Thank you.
1209 UNDERTAKING / ENGAGEMENT
1210 THE CHAIRPERSON: Then that concludes our time with you today. Thank you very much for your presentation and your responding to our questions.
1211 We will take a 15-minute break, resuming at 3:30. Thank you.
--- Upon recessing at 3:16 p.m./
--- Upon resuming at 3:31 p.m./
1212 THE SECRETARY: Order, please.
1213 Mr. Chairman, we will now proceed with Item 4 on the agenda, which is an application by Amber Broadcasting Inc. for a broadcasting licence to operate a national multi-ethnic multicultural discretionary service to be known as Amber News Network.
1214 Please introduce yourselves first for the record, and you have 20 minutes. Go ahead.
1215 MS. KAUR MANN: Good afternoon, Mr. Chair, Madam Vice-Chairs and CRTC staff. I am Herkiranjeet Kaur Mann, President of Amber Broadcasting. I am a business owner, entrepreneur, an immigrant, and a proud Canadian. It is my great pleasure to be here today with my colleagues from Amber Broadcasting and our associates.
1216 I would like to introduce the members of our team:
1217 To my right, Andrew Forsyth, our Regulatory Consultant and Strategic Advisor. Mr. Forsyth has performed, programmed, managed and consulted a variety of broadcast groups across the country. He is a co-founder of the Canadian Home Shopping Network - now The Shopping Channel. Andrew is an Amber Broadcasting board member.
1218 To Andrew's right, Malcolm Dunlop, who is also a board member and was instrumental in developing our programming plans and sales projections. Malcolm had been with OMNI TV from 1985 to 2013, where he held various positions, including National Language Sales specializing in third-language advertising and was promoted to Executive Vice-President of Programming and Operations.
1219 Seated to my left, Tejinder Singh Saini, General Manager of Akash and Amber Broadcasting. Mr. Saini is a well-known broadcaster, performing artist, teacher and volunteer. He has produced a daily television news program, Punjab Time, for nine years, and has hosted the magazine-style show Punjabi Lokrang for the last 13 years.
1220 And to Tejinder's left, Madeline Ziniak. Her many accomplishments are included in our Supplementary Brief, but most notably, Madeline is a renowned and sought-after expert in diversity inclusion and integration and is a celebrated broadcaster who is recognized internationally as an industry pioneer.
1221 Madeline enjoyed a 36-year career with Rogers and was the National Vice-President of OMNI Television. We welcome her as our advisor and board member.
1222 Seated to her left, Melanie Farrell, Amber Broadcasting's Community Liaison Officer. Melanie started her career at OMNI TV in 1986 in sales. She then moved through to Director of Sales in 2001 and in 2004 she took on the role of Community Liaison until 2014.
1223 Seated in the row behind us, Rahul Chopra, our Vice-President of Finance for Akash and Amber Broadcasting.
1224 Seated to his right, Kelly Colasanti, our technical advisor and operations manager. Kelly spent 37 years with OMNI, where he was the Vice-President of Operations and Engineering, where he was responsible for assembling and executing all capital and operating budgets and leading the team to build technical facilities, literally from the ground up.
1225 Seated to Kelly's right is Rita Cugini, media consultant, Amber Broadcasting board member, former CRTC Commissioner and during her private sector career, Rita worked for TLN, OMNI and Alliance Atlantis.
1226 Finally, Stephen Zolf, our regulatory lawyer and partner at Aird and Berlis, LLP.
1227 Welcome to Amber Broadcasting - pronounced um-ber - meaning sky in Punjabi and Hindi.
1228 We come here today knowing that this is a tremendous opportunity. We know that the granting of as licence under the provision of Section 9(1)(h) of the Broadcasting Act is an honour and privilege afforded to a very few in this industry.
1229 We know that the criteria set by the Commission is not to be taken lightly and meeting that bar is paramount.
1230 We will throughout this presentation give you the highlights of why we believe we have met the criteria for a national multilingual, multicultural television service to be accorded 9(1)(h) status.
1231 But, first, I would like to take some time to talk a little bit more about this group in front of you this afternoon.
1232 My role here today, in addition to being the President of Amber Broadcasting, is to represent the ownership group that is behind this enterprise.
1233 This is an ownership group that is diversified and experienced both in customer facing and B to B undertakings. Our experience includes real estate, hotels, industrial service such as lighting and HVAC systems.
1234 This has given us insight into the need and preference of our communities. As with all other businesses, we have had downturns and upswings and have to be nimble, innovative and resourceful to weather the storms. It is after all what all entrepreneurs who want to be successful have to do and we are proud to call ourselves well-financed, savvy entrepreneurs.
1235 We brought this business acumen, drive and spirit and entrepreneurship to our affiliated company, Akash Broadcasting, and we are successful in being granting the licence for the radio station Connect FM, a multicultural, multilingual radio station that will soon launch in Surrey, B.C.
1236 And now, we are ready to dedicate that same passion, enthusiasm, commitment and experience to the Amber News Network. The Mann family, together with Tejinder Singh Saini and his work with Shaw multicultural service, came together to bring Connect FM to Surrey. We are working together again to bring our vision for ANN to Canadian audiences.
1237 MR. SINGH SAINI: But we knew that as passionate and enthusiastic as we are, this alone would not be enough to create the kind of news and information-based service that Canada's ethnic communities so richly deserve. It is for this reason that we engaged the professionals who are sitting here with us.
1238 Collectively, this group has decades and decades of experience not only in broadcasting but, more importantly, in ethnic television -- from programming and sales, to marketing and promotion, to technical operations and design, to community relations and advisory councils, to advocacy and regulation. This group brings a depth and breadth of experience and expertise that is second to none. Moreover, members of this team have dedicated their life's work to the design and promotion of ethnic media. And some have, literally, written a book on ethnic media in Canada.
1240 MS. ZINIAK: As Kiran has stated, ANN is a national, multilingual, multicultural television discretionary service that is devoted primarily to news and information programming. The service will broadcast in 25 languages serving 25 distinct ethnocultural groups.
1241 We believe, however, that it will play a much bigger role within the Canadian broadcasting sector. You will have seen that we included in the application an essay I wrote in 2017, Ethnic Media in Canada: The Power of Reflection: A Link to Nation Building and Identity, and in that I maintain that the impact of ethnic media is revealed in the following key streams.
1242 For recent and new immigrants, it is a necessary and desired lifeline that is not only a conduit to Canadian life-shaping information but also a lens for the interpretation of Canadian standards, values and quality of life.
1243 Engaging in this very real connection with multilingual communities using the comfort of mother tongue significantly increases authenticity and cultural relevance for audiences. For subsequent generations, continuity provided by comprehension of the mother tongue and cultural traditions leads to reaffirmation of ethnic identity. We designed ANN bearing in mind the strong impact and robust contribution it will make to media in general and ethnic media specifically.
1244 This is a crucial and pivotal time to finally seize a proven much-needed opportunity to properly, respectfully and equitably serve growing Canadian multilingual audiences.
1245 This sector of the broadcasting system is the first to be sacrificed among the competing priorities of broadcasters who own multiple services with differing business models. These models have not kept pace with the growing need and evolution of ethnocultural community communication and information needs.
1246 It is time to exhibit the needed commitment and investment in a 9(1)(h) news service that is commensurate with the dynamism of Canada's growing multilingual audiences. That is why Amber News Network and its leadership team is the one to lead this charge.
1247 MR. SINGH SAINI: Amber News Network meets the criteria for mandatory distribution service on digital basics.
1248 ANN will be 100 percent ethnic; 100 percent Canadian content in prime time; 90 percent Canadian content overall; 90 percent news, current affairs and documentaries; 60 percent of revenues spent on Canadian programming; headquartered in Western Canada; 8 Bureaus across the country.
1249 All newscasts subtitled in English and French; $1 million annual documentary fund; $500,000 annual digital fund.
1250 Over 70 percent of the schedule is original. Over 200 new jobs, not to mention increased opportunity for independent producers.
1251 All of these exceptional commitments are delivered under the strength of diversity, diversity in all of its key elements:
1252 Diversity of ownership. We are not affiliated or controlled by any other broadcaster or distributor.
1253 Diversity of voices. Of all of our news programming is original, first-run, and produced from a corporately unfettered point-of-view. Diversity is not just limited to newscasts but also with our commitment to independent producers from across the country.
1254 Diversity of programming. Amber Broadcasting will not be relying on "repurposing" content or talent from any other associated programming entity. We will not mirror any existing service nor piggy-back on any other broadcaster. ANN will stand on its own and provide new and original ideas and programming to Canadians.
1255 Diversity of experience. This ownership group has lived and continues to live the immigrant experience in Canada by building in its adopted homeland a venture with broad global insight gained by interaction with businesses around the world.
1256 MR. FORSYTH: Last year, Statistics Canada released results from the 2016 Census which provide a new national statistical portrait of immigration and ethnocultural diversity in Canada.
1257 The results clearly demonstrate the "exceptional need" under the CRTC's criteria for a 9(1)(h) service. Based on these findings and projections, the demand for a service that reflects the national multicultural and multiracial nature of Canadian society will continue to grow with the influx of immigrants to Canada whose mother tongue is neither of the Official Languages.
1258 The statistics speak for themselves. More than 1 in 5, 21 percent, of the Canadian population is made up of visible minorities. The proportion of Canadian foreign-born population could reach between 25 to 30 percent by 2036. By 2036, nearly 50 percent of Canadians could be an immigrant or the child of an immigrant.
1259 Stats Can confirms the continuing growth of the immigrant population and with it the need for a service that speaks to bridge-building, conservation, preservation of culture and customs, and a point of view that reflects the immigrant experience with our country.
1260 To determine the demand for such a service, Amber Broadcasting engaged Manu/Matchbox Research to gauge the target audience attitudes, needs and sensibilities. The topline results encouraged and assisted in the design of the ANN proposal.
1261 Willingness to have the channel funded by all Canadians is seen to be an opportunity to help Canadians integrate into Canada and to see the world from a Canadian perspective. Support for a multi-language channel is strong and remains so when positioned as necessary on basic cable.
1262 Local, national and international news appeals to all groups. This is a crucial offering for Amber to provide. Striking the right balance between offering a broader perspective while also offering a unique Canadian perspective will be a mandate for Amber. Mandarin, Cantonese and South Asian show the most interest in a new channel and current usage of existing channels.
1263 MS. FARRELL: So how does all this research, demographic analysis and regulatory criteria merge to form a truly outstanding point of communication for Canadians? What's in it and how will it sustain itself? This is really a reiteration of the success we have had designing, building, adapting and nurturing this type of service from the ground up.
1264 This experience, paired with the enthusiasm of the principals, is backed up by the data.
1265 We will produce and broadcast 6 national, 30-minute newscasts, 7 days per week, in each of Mandarin, Punjabi, Tagalog, Arabic, Hindi and Cantonese. Our total commitment to news is 59.5 hours weekly or 47 per cent of our overall programming schedule.
1266 We anticipate spending over 22 million in year one of operations on Canadian programs.
1267 Amber News Network's commitment to independent production is second to none. Forty-three (43) per cent of our schedule is devoted to current affairs programming to be produced by professional independent producers across the country. This ensures regional representation and reflection. We are committed to spending 12 per cent of gross revenues on programs from independent producers.
1268 Moreover, we are the only applicant who will pay a license fee to independent producers and give them the opportunity to generate fully retained revenues with four minutes of local sales per hour.
1269 We are the only applicant that will create unprecedented opportunities for independent producers with commitments to providing two Amber Broadcasting Initiatives. As you have already heard, we proposed over a 7-year licence term, a $7 million Documentary Fund and a $3.5 million Digital Fund. Producers will be able to draw a license fee from these funds and produce original content for Amber Broadcasting.
1270 Our commitment to professional independent producers, in fact, generated the greatest number of positive interventions. We heard from many individuals and national organizations representing groups of producers. It gives us the confidence to say that we are definitely on the right track
1271 MR. DUNLOP: Our team has witnessed the ever-changing consumption patterns for ethnic television. Initially, the early days of programming and sales targeted European-based immigrants. Later, the system accommodated the significant influx of Asian communities. And the last two decades have seen an even broader range of audiences. This evolution has only added to the diversity of our country.
1272 Amber Broadcasting firmly believes that this evolution in the ethnic audience landscape presents a huge opportunity to grow the ethnic television revenue. We believe we will not just create additional revenue for Amber Broadcasting but we will also grow the advertising pie as a whole.
1273 In her supporting letter, Naaz Jiwa a well-respected Media buyer/planning specialist stated:
1274 "Advertisers are focusing more and more on the growing ethnic markets. Amber Broadcasting offers a fresh perspective with an innovative schedule to over 25 different language groups with reporters in all major Canadian cities. The service will provide a great opportunity for advertisers." (As read)
1275 While traditional television remains challenged, focused ethnic television offers advertisers an opportunity to reach new audiences not presently being served. As ethnic populations continue to grow, we see advertisers committing more and more of their advertising budget towards these groups.
1276 MR. SINGH SAINI: And now, to give the Commission a brief snapshot of one of the most important elements of our proposal, news. We would now like show you a 3-minute presentation that capsulizes the languages, the look and the official subtitling of our newscast.
1277 (VIDEO PRESENTATION/PRÉSENTATION VIDÉO)
1278 MR. SINGH SAINI: You will have noticed that we have taken the unprecedented step in every newscast to create lower third of the screen subtitled in English and French. This will allow all users to connect with these ethnocultural stories and point of view no matter presenters' language.
1279 Finally, Amber Broadcasting will provide split feeds, one for the Eastern time zone and one for the Pacific time zone. And thus, all our audiences will have access to newscasts in prime time for audiences across the country.
1280 MS. KAUR MANN: Mr. Chair, mesdames Vice Chairs, we are very excited to seize this opportunity and realize our vision to the benefits of all Canadians.
1281 It was John F. Kennedy who said, "to those who much is given, much is expected." We recognize and look forward to taking on this responsibility.
1282 We are ready to move on to your questions. Tejinder will be our quarter-back.
1283 THE CHAIRMAN: Thank you. Thank you for your presentation.
1284 I'll begin, if I may. Maybe something to start with you indicate in your remarks and in your submissions that you'll provide split feeds, one for the eastern time zone and one for the west, but my understanding is those two feeds would be identical with a two-hour delay. That obviously means that people in Atlantic Canada, for example, would be receiving the same local news as those in British Columbia. Can you help me understand how that will provide relevant local news, for example, in those two markets?
1285 MR. SINGH SAINI: Yes, you're correct. There will be two identical feeds. I'll have Kelly answer about the details and the technicals.
1286 MR. COLSANTI: Thank you, Tejinder.
1287 Yes, the plan is to broadcast the national feed, eastern feed would go off first. The pacific feed will be a three-hour delay that same, allowing our audience to get the newscast in the prime time in the east and the west.
1288 THE CHAIRMAN: I guess the point of my question is, is the same content in those two feeds ---
1289 MR. COLSANTI: Yes.
1290 THE CHAIRMAN: --- relevant for those two, for example, fairly distinct communities in terms of reflecting the interests of an ethnic audience say in Halifax versus say in Vancouver?
1291 MR. FORSYTH: If I may interject. Mr. Chairman, we did mention that we'll have eight bureaus, so local stories will come from Halifax, they'll come from Montreal, they'll come from the different eight bureaus, and they will be centralised on the one feed. However, we think that the stories that are going to be there from Halifax, for example, if it's from the Punjabi community in Halifax may still be of interest to the Punjabi community in Calgary or in Victoria. It's more a question of their experience with what's going on. And that's sort of the look we have for the local elements.
1292 So in each newscast there are going to be these local drops from these various areas specifically targeting those cultural groups.
1293 THE CHAIRMAN: Okay.
1294 MS. ZINIAK: I may also add, if you don't mind.
1295 THE CHAIRMAN: Sure. Please.
1296 MS. ZINIAK: And still when you take a look at ethnicity and what local is, I think what's very important for ethno-cultural communities is to have that connectivity within their own communities, their own ethno-specific communities. And this really almost redefines what local means. This is a national service. And it's there to really invigorate and connect with the ethno-cultural communities across this country.
1297 So local is relevant. I mean, if you take a look at let's say a certain fundraising event or a story that deals with defamation of one community in Halifax, this is going to be quite relevant and important for a community also in Winnipeg or in British Columbia. So this is why I think local is important, but it's also on a national scale where it really inspires and develops and evolves ethno-cultural communities and glues them together in this country and gives them more impact as a community.
1298 THE CHAIRMAN: Thank you.
1299 So in your supplemental brief you state that 47 per cent of your schedule is devoted to news of which 64.7 per cent will be original. Again, challenging my basic math skills, that implies that something in the order of 35 per cent of the news programming would be repeated.
1300 So can you explain how high levels of repeated news programming best serves the interests of Canadians?
1301 MR. SINGH SAINI: I'll have Malcolm answer it, but I definitely like to point out that it's not repeated. It's refreshed, but Malcolm can fill you up on that.
1302 THE CHAIRMAN: Thank you.
1303 MR. DUNLOP: Thank you, Tejinder.
1304 Our original newscast on a weekly basis says 38.5 hours. And what that is is an original and then a refresh of the newscast for the second airing.
1305 So that's 38.5 hours of original newscasts on a weekly basis.
1306 THE CHAIRMAN: And what does "refresh" mean in that context?
1307 MR. DUNLOP: Refresh means there will be new stories added to every newscast.
1308 THE CHAIRMAN: Thank you.
1309 Switching slightly to ethnic and third language programming, again, the application -- and I thank you for pointing out at the beginning that it's properly pronounced Amber. If I make a mistake during my questioning, please forgive me. I've been saying Amber for several months to myself, so I appreciated you pointing it out in your oral remarks at the outset.
1310 Amber's application says that it would have programming directed to at least 25 distinct language groups and ethnicities on a monthly basis, but I noted that in the programming that was provided there were less than 10 languages listed. So can you explain or elaborate how Amber would fulfil its commitment to provide 25 discreet ethnic and language groups?
1311 MR. SINGH SAINI: Sir, I'll again have Malcolm answer that question for you.
1312 MR. DUNLOP: Thanks, Tejinder.
1313 If you look at the schedule, you will see that the news is all in prime time, other than DLS Tonight program, which is at 6 o'clock. The news runs right through until midnight.
1314 What you see on the schedule is independent programming, which is going to run 9:00 a.m. to 6:00 p.m., Monday to Friday, also on -- from 9:00 a.m. to noon on Saturday and 9:00 a.m. to 11:00 a.m. on Sunday. Those will be different languages. Those are going to be independent productions in various languages.
1315 And if you'd like, I can certainly go through the languages that we have suggested.
1316 THE CHAIRMAN: Perhaps you can just accept an undertaking to provide us with a list of those languages?
1317 MR. DUNLOP: Certainly.
1318 UNDERTAKING / ENGAGEMENT
1319 THE CHAIRMAN: Thank you.
1320 You also state that 10 per cent of the programming will be targeted towards Canadians of African and of Caribbean descent, but that I didn't note on the broadcasting schedule. Is that programming still part of the plan?
1321 MR. DUNLOP: I'll answer that. I believe it's one hour a week, not 10 per cent.
1322 THE CHAIRMAN: Thank you.
1323 And you state that a hundred per cent of the programming would be in third language, but 10 per cent of the program for the black community is in English or French, given this is their -- does that really mean 90 per cent or can you just elaborate?
1324 MR. DUNLOP: It's one hour out of the 126 hours.
1325 THE CHAIRMAN: Okay. Thank you.
1326 Programs of national interest. Sounds like jeopardy questions for 200. So I'll give you the answer and you can tell me the question.
1327 MR. DUNLOP: That works.
1328 THE CHAIRMAN: So on the proposed conditions of license on programs of national interest, you indicate or you repeat existing conditions of license pertaining to over and under spending on programs of national interest. And I also noted that you propose a documentary fund, but Amber hasn't made any proposal for how much, if anything, it intends on spending on PNI each year.
1329 MR. SINGH SAINI: I'll again have Malcolm and Andrew to answer that question.
1330 THE CHAIRMAN: Thank you.
1331 MR. FORSYTH: Yes, the indication that we have, in fact, the PNI we're looking at is the documentary fund we spoke of, which was $1 million per year. And included with that is somebody to coordinate that funding and distribution of those funds. So the funding is in year one would be $1,090,000, which is 2.9 per cent of revenue.
1332 THE CHAIRMAN: Okay. So that's the PNI commitment is the funding of the documentary plan.
1333 MR. FORSYTH: That is correct.
1334 THE CHAIRMAN: Okay. That wasn't clear to me from the submission, so thank you for that.
1335 And with respect to those funds, you've proposed two different funds for independent producers, one for a digital stream and one for documentaries that we were just discussing. So who would own the rights to the programming created from those funds?
1336 MR. DUNLOP: Producers.
1337 THE CHAIRMAN: The producers would? And can you -- maybe it's me who's getting confused. What's the difference between the fund and license fees?
1338 MR. DUNLOP: It is a license fee.
1339 THE CHAIRMAN: Okay. Why -- or maybe rephrase this in my own head. Again, outside of the documentary fund maybe this is the answer. I was going to ask you why none of the programming acquired from independent producers will consist of programs of national interest, or is that the same answer that ---
1340 MR. DUNLOP: I'll start the answer and probably Madeline would want to speak about this as well. The programming from the independent producers is really current affair programming. So we don't expect that to be programming of national interest.
1341 THE CHAIRMAN: Okay. Sorry, I thought ---
1342 MS. ZINIAK: So as defined ---
1343 THE CHAIRMAN: --- you were saying you're adding something. Pardon me.
1344 MS. ZINIAK: Yes, sorry.
1345 THE CHAIRMAN: Please go ahead.
1346 MS. ZINIAK: So the independent producers that will be providing these programs across the country, as defined may not be identified as national interest, but certainly we know for the content of current affairs and really focussing in on their own communities, the issues that evolve around their communities, as well as bringing forward relevant points of interest, from an audience point of view, for the community and for the multilingual audiences can be seen as national interest. Again, I refer back to my original statement “What is local for ethnic communities?”
1347 THE CHAIRPERSON: Okay. And with respect to the documentary aspect, you indicate that the funding will encourage producers from across the country to bring their perspective to the genre in their own language. Would the producers benefiting from the fund be predominantly independent producers then? Is that my understanding?
1348 MS. ZINIAK: Yes.
1349 THE CHAIRPERSON: And again, I’m a little confused, but you state that none of the programming coming from independent producers would be considered programs of national interest. Is that just, again, the definitional issue around current affairs? Is that the reason for that?
1350 MS. ZINIAK: Yes, that is correct.
1351 THE CHAIRPERSON: Okay. Thank you. I understand better now.
1352 In its supporting intervention, the Canadian Ethnic Media Association submitted that Amber would provide a licence fee of $2,500 per hour in addition to the opportunity to sell four minutes of local advertising per hour. And again, you referenced the latter point in your opening remarks.
1353 How did you come to the determination that $2,500 was an appropriate licence fee for an hour of programming?
1354 MR. SINGH SAINI: I will let Malcolm answer it.
1355 MR. DUNLOP: Thank you.
1356 We consulted as a group. We talked a lot to Tejinder about that as well. Right now, there’s a couple models in Canada of how independent ethnic producers get shows on air. I think the Rogers group today explained it quite well. So there’s two models. One is the ethnic producer buys airtime. So they go out and buy an hour on a station, and they pay a certain amount of money. Then they sell the airtime. The model that I believe Rogers has that they talked about was more of barguer where they have, say, an hour of programming and half goes to their producer and half goes to the station.
1357 Since we’re building this station really from the ground up, we thought the ethnic producers deserve to have a licence fee, and we thought “What’s a fair licence fee?” And we came to $2,500 an hour. The additional four minutes of local advertising, we think, is an extra opportunity for these producers to create additional revenue. So that’s basically how we came up with the plan.
1358 We really want the independent producers to be able to make some money from their shows. We also think by providing a licence fee and the opportunity to sell the four minutes of advertising, that the quality of the programming will be better. We also believe that there won’t be so many embedded infomercials in there and such. So we feel that by offering this, we’re really giving a great opportunity to independent producers.
1359 MR. SINGH SAINI: Sir, if I may add? For us, it is quite a unique opportunity with Malcom and Madeline working with -- various independent producers across the country have a very macro-level view, and I, as an independent producer, working with Shaw Multicultural Service back in Vancouver, have a micro view, because those are my own personal experiences, where we have to go out and buy time.
1360 The preference or the first idea is how to recoup the money that we have actually spent buying the airtime. Or the other way around is where you have getting a half off the local advertisement sales.
1361 The challenge I have personally experienced is where I have actually worked on both sides, and if I got three minutes to sell in the local market, I have seen the same television station is also selling on the local market. So before I actually went to sell it to someone, it’s already sold and it’s not sold just for my program, but for 10 other programs that are of ethnic origin.
1362 The advertiser will get a better ate out of it. So we looked at it and we saw, like, if we can actually give this opportunity of at least $2,500 an hour to the local producer, plus they don’t have to buy the airtime and they have an opportunity to go out and sell in the local market, where the station itself is not selling, and that revenue coming to them, they will be more focused on producing a quality content rather than just recouping their investment upfront and kind of like working hard to keep their passion on.
1363 MS. ZINIAK: If I may also add, if you don’t mind ---
1364 THE CHAIRPERSON: Sure.
1365 MS. ZINIAK: --- that this is our attempt to create a level playing field. The Canadian Ethnic Media Association, for years, has been speaking to the prospective industry departments like Heritage, et cetera, both federally and provincially, that there is a frustration with independent producers that there is lack of support in the industry in the different funds precisely going directly to the independent producer. This licensing fee of $2,500 is unprecedented. A producer who is producing a weekly show for 52 weeks does not get paid for his show, and they’re only living off of garnering the advertising that they’re capable to garner.
1366 So I think when we take a look at this third pillar of communication, ethnic media in Canada that’s existed since the 1800, it’s time for us to really create a level playing field. And we certainly depend on industry to do that, but this is our humble attempt at trying to emancipate the opportunity for independent producers to actually be able to have a licensing fee and a weekly show.
1367 And when we consulted in the last five years with over, I would say, 30 independent producers from coast to coast, this was something that was quite remarkable for them, because right now, they are not getting this for their weekly programs as independent producers.
1368 We voiced -- at the Canadian Ethnic Media Association, voiced this opinion to various levels of government. This is not a new phenomenon, but I think this is our attempt to really bring this to another level and to really bring the quality and give back to the producers some time so they can really invest in the content and the quality rather than just spending a lot of time, you know, trying to have a hand-to-mouth existence.
1369 MR. SINGH SAINI: Sir, I also want to point out, like, since 2005, I started a daily news service on Shawl Multicultural Channel, and for nine years I continued on. The only way I was able to continue on for nine years was because the airtime was free to me. But the limitation was, because it’s a community channel, there was just sponsorships that we can run. And for over nine years, as an independent producer, it was to a point where my family, my friends, were coming back to me and saying “Being passionate about your work is something good, but at the end of the day, you have to bring bread on the table.”
1370 And that was the point where I really had to rethink and request Shaw to shut down the service because I just can’t afford it and I have to look for other ventures where I can really produce that money.
1371 But if there is something -- not for news, but definitely for something that is out there for local producers that is financially helping them and have them focus better on the content they are creating rather than how to bring the bread on the table for them. Their passion will be there, but the level of community engagement will also happen because now they know they have something in their hand which takes their focus off money but onto getting to the precise content they want to deliver.
1372 THE CHAIRPERSON: Okay. Thank you.
1373 So at the beginning of the response to the last question, you talked about building the service from ground up, and in your opening remarks you made that reference to some intervenors. PIAC, for example, have raised a concern or suggested that there may be a concern as to whether or not Amber has the partnerships that it needs to effectively deliver news.
1374 The Commission, in its Notice of Consultation, advised that applicants must demonstrate how they would operate under a diverse governance structure that involves a committed group of broadcasters.
1375 So in that sense, one, could you comment on the concerns, for example, that PIAC expressed?
1376 MR. SINGH SAINI: Definitely, sir. I will let you know that we have a board of directors that will be overall steering and guiding the service, but on a day-to-day basis we will have a management team that will be making those decisions and achieving the vision that will be going out there and delivering the product or the content that we have actually committed to.
1377 Aside from the management and the board, we will also have advisory committees, and we have a community liaison officer in place, and those are the ones that will actually be giving us feedback and we'll be very proactive in working on and giving advice to the station.
1378 THE CHAIRMAN: So I'm interested in learning a little more about the advisory committee or council in a moment, but I don't think that's -- that's not really a substitute for a structure to demonstrate diverse governance. Can you elaborate a little more? So you clearly have significant expertise on the board of directors. What authority will they have over the management team and the activities of Amber?
1379 MR. FORSYTH: It's not the intent to have an advisory council to help run the service as much as it is to provide information, feedback and direction to the concepts.
1380 So as Tejinder was explaining, the advisory council would report and be connected to the community liaison person who would be Ms. Farrell. And through her office they would provide background information and perhaps both Madeline and Melanie can give you more on it, because a lot of -- the model for this I think was developed through Madeline in her previous experience with OMNI.
1381 THE CHAIRMAN: I think you're up.
1382 MS. ZINIAK: But I'm just wondering if you wanted further answers to the board or would you like to now delve into the advisory council?
1383 THE CHAIRMAN: You can do them as you please. You can answer them. I'm looking for answers on both, but I haven't really asked the questions about the advisory group, but you can start. You may answer my question in advance.
1384 MS. ZINIAK: Okay. Thank you very much.
1385 The advisory committee is really -- we take a look at national engagement. We've already -- actually, as we prepared this application, we've already been speaking and looking at proposed partners, if you will. The advisory individuals would be more than advisors. We see them also as being individuals who engage nationally, either through organisations -- because since this is a national 9(1)(h), we believe that not only local and regional, but there should be a national purview.
1386 We have identified 20 advisors on this advisory committee. And we are not suggesting that there is one advisor per language, but we're looking at perhaps one per language, but also we're looking at those who are multiculturalists, who really look at nation building through the work they have done, both professionally and also what their vision is for a national news network such as an Amber network.
1387 They are going to be an organic, if you will, entity. We have suggested from the ground up to have two information sessions in order to educate them as to what the objectives of Amber news network is, the way it operates, to -- I may say bring them into the kimono to really see what kind of an operation this is. Then we look to the advisory committee of 20 individuals to really identify how many times in the beginning they would like to have meetings, be it quarterly and be it more.
1388 They will be given an honorarium. We know too often in the ethnic milieu it's expected for people to just volunteer. We know that these are both professionals, dedicated people, and we see that this is something that we would expect them to guide us, to bring an entity such as Amber to the third tier of communication, a third pillar of communication in Canada, to be more than just a national news service.
1389 Ethnic media is a movement, is a national movement. It has been here since, as I said, since the 1800s. And it is so timely now as Canada continues to change immigration policy, to evolve internationally, to have a meaningful conduit of reflection and communication.
1390 We are independent. We are focussed and we are committed. And we would certainly expect this also from the proposed individuals on the advisory committee.
1391 So, in a sense, the yolk is heavy for the advisory in that the expectation would be that not only are you going to be advising, but also to see how best we can move forward as a serious and important national news network.
1392 That is the vision, but now I'll -- I think I'll ask Melanie Farrell to maybe fill in other areas that I have not.
1393 THE CHAIRMAN: She's saying you did all -- answered all her stuff.
1394 MS. FARRELL: I think she did.
1395 THE CHAIRMAN: But just a little point of clarification, that's your intention. Have you established terms of reference? Have you done preliminary work in terms of establishing the advisory group?
1396 MS. ZINIAK: Yes, we have. Yes, we have. And, yeah.
1397 So the number one, certainly, we're looking -- we've already took a look at several national organisations as well as individuals and have spoken to them to see if this would fly as far as the time commitment and the dedication.
1398 Inherently we will maintain -- the advisory committee members will, of course, have contact with their multicultural association, government ministries and agencies, both federal, provincial and municipal. Our intent though is for them to have a national overview. They will be reflective of either an ethno-specific community or as professionals engaged in immigration settlement, refugee settlement, or media or business. So there are different categories of professionals that we are looking at.
1399 Their functions will be to provide ethno-specific communities with the objective of increasing the awareness of A&N as a national news network. They will also create and we will work with them to create in tandem the priorities that we have in the beginning as a national news network. And, of course, we will help -- they will work with us to build advisor policy that would be comfortable for them, as well as the timing of that.
1400 They will also participate as members of our advisory committee in response to special needs, be it -- if we take a look at any kind of special national endeavours in reaction to national disasters or different needs that communities have come forward to them with. So they will also be the eyes and ears on the ground, both nationally, regionally and locally.
1401 But they also will be our partners in that they will be able to harness national organisations to work with us in the kind of endeavours that a station or a network such as ours would like to attain.
1402 MR. ZOLF: And, Mr. Chairman, if I could just point you to Attachment D to our supplement brief, which set out the preliminary elements of the advisory committee. And it was further supplemented in the September 20th response to the Commission, response to question 12, which had the preliminary understanding of how the advisory committee would be set up. But we do anticipate that its governance be one struck, that the committee would start to formulate its own terms of reference, as you will, and be masters of its own process.
1403 THE CHAIRMAN: Thank you.
1404 MR. SINGH SAINI: Sorry.
1405 THE CHAIRMAN: It has been noted.
1406 MR. SINGH SAINI: Sir, I just want to add on to your initial question on governance because there was an overlap ---
1407 THE CHAIRMAN: I was going to come back to that.
1408 MR. SINGH SAINI: Yes. Yeah. If you look at our presentation, like, we already have a board in place. In our opening introduction Herkiranjeet Kaur has pointed out Andrew Forsyth, Malcolm Dunlop, Madeline Ziniak and Rita Cugini are board members there.
1409 We also have other members that will be part of the team that will be in place to build up the service and they are already sitting here. So we have that capacity to govern and build this thing up ground.
1410 MR. DUNLOP: If I can just add and I'll probably throw to Kelly Colasanti, but this group sitting at the table has built numerous stations over the years and Kelly may be the best person to give you confidence that we can achieve what we've set out to do.
1411 MR. COLASANTI: Yeah, throughout my career anyway, we've -- I started with CFMT in 1979 with one channel. And with the senior management that we had with Rogers purchasing that channel in '86 I think it was we were able to grow it to the 5 or 6 OMNI channels that are there now, as well as incorporate the City TVs, which are in existence, but we still built those service from scratch with uplinks to satellite and distribution and so on and so forth. So those were all things that we did over the years.
1412 So, you know, rest assured, we do have the skill and knowledge to do that.
1413 MR. FORSYTH: And if I might just also add, I think there are members of this panel that are being very modest. Kelly's giving you an idea of what he's contributed to OMNI and to City for the Rogers' group, but there are other people here who have done the same thing. They've helped build that service to what it is today from basically scratch when it really wasn't a very supported type of service or looked upon favourably.
1414 So there's a lot of experience at this table at doing what it's committed to do.
1415 MR. SINGH SAINI: And, sir, based on this collective experience, we actually sat down and with this hope that Commission will actually have the confidence in us to operate this service. We even have put together a timeline by each quarter as to what things need to be done.
1416 And not just from that perspective, Kelly has also talked with the suppliers and equipment manufacturers and we are already in touch with the independent producers so as to say that it won't be that things will start once the decision comes. The things are already in process.
1417 MS. ZINIAK: One thing we said about independent producers, and the reason we feel so strongly and passionately and adamantly about this, the Canadian Ethnic Media Association just on November the 9th celebrated its 40th anniversary of awards of journalistic excellence that had been chosen by a juried panel. For 40 years we have been taking a look at the categories of internet, print, television, documentary, radio, podcasting, the lifetime achievement award. For 40 years we have sourced and judged the contributions of ethnic media across this country.
1418 Some of us in this room aren't even 40 and we've been doing this for that long. And so ---
1419 THE CHAIRMAN: Not up here, but anyways.
1420 MS. ZINIAK: Well, maybe not on the first row either, but -- so this is how we know. We're not working in a vacuum and we know -- and this is why we so fervently believe in independent producer expression, as well as having in-house quality news that will be supplied by eight bureaus, by professional journalists and broadcasting professionals who are out there and who want jobs and who want to belong to a broadcaster who is focussed, who believes in them, and really wants to take this medium to another level.
1421 So we, as an independent company, are willing to do that and we look to the support of both private and public sector to assist, not only this company, but all of those professionals that -- whose language is not English or French, to be able to attain this goal. And this really contributes to good citizenry and it really contributes to making Canada an important and safe place to live. Because with language of comfort, expression in your own language of comfort, we are building democracy and we are building -- we're building trust in communication in a time when now we know that clusters of groups -- I mean, this whole fake news propaganda, where is quality journalism and where is the kind of expression where communities need to reflect themselves and need to speak in a diverse voice. And this is what we are bringing to the table.
1422 For example, we know that there are service that already exist in Cantonese and Mandarin, perhaps Arabic, but why is it that only English and French are the ones that have diverse voices? Ethnicity needs more than one voice. To say that there is just one program, one conduit and one language is not -- it should not be enough, because these communities are dynamic and they're sophisticated. And it's really time now to be able to harness that and be able to bring forward these attributes that contribute to building.
1423 And this is why we feel that being unfettered and focussed and having the connectivity and, you know, we -- before we got into sort of corporate broadcasting, we've been doing this before and after. It's not just a job. It's really a way of life so.
1424 THE CHAIRMAN: Thank you.
1425 MS. ZINIAK: I'm not going to sing Oh Canada now. I'm not going to ---
1427 THE CHAIRMAN: We're almost there, but you can wait until the end.
1428 MS. ZINIAK: Okay.
1430 THE CHAIRMAN: We'll join you.
1431 You did several times in answering the question say "we" or "the team". So I just want to understand, when you say "the team", are you referring to the board of directors?
1432 MR. SINGH SAINI: Sir, it's board of the directors and the other members that are not on the board of director, but sitting on this table.
1433 THE CHAIRMAN: Okay. Thank you.
1434 So, moving to a slightly different subject and you gave us a bit of a flavour in the video you presented at the beginning. I wanted to ask you a few things about your contextualised script.
1435 So if I understand correctly what it is -- I was going to ask you, can you say what it is exactly, but I think that was what we observed during your video; is that correct? When you saw the French and English language subscript corresponding to the ethnic language being spoken?
1436 MR. SINGH SAINI: Yes, sir, that is.
1437 THE CHAIRMAN: And I don't know some of these you may want to answer in confidence, how much will contextualise captioning cost?
1438 MR. SINGH SAINI: Andrew?
1439 MR. FORSYTH: We do have that allocated in our budget and if you can give me a moment I'll try to give you a ballpark figure. If you wish we can provide ---
1440 THE CHAIRMAN: While you're searching for that maybe -- or you can certainly provide it by undertaking if you prefer, but while you're searching or deciding, just maybe a general question. How can Amber be sure that it'll be successful if it hasn't been undertaken commercially? If I understand correctly this is a new technology, a new element?
1441 MR. FORSYTH: I'm going to ---
1442 THE CHAIRMAN: Is that right?
1443 MR. FORSYTH: Yeah, I'm going to ask Kelly to answer to the technology end of it because he is the technical person. I'm trying to answer your question relative to how this would be facilitated more from a PNL point of view.
1444 THE CHAIRMAN: M'hm.
1445 MR. FORSYTH: So in the budget there's an allocation for translators who would be attached to the newsroom, the main newsroom, master control newsroom in Vancouver. So when the feeds came in and the scripts were written for the various newscasts, they would be translating from those languages into English and French.
1446 So this would not be instantaneous and we're not necessarily talking about ---
1447 THE CHAIRMAN: So it's simultaneous translation I understand.
1448 MR. FORSYTH: That's correct. And this would be done in -- as a pre-production and Kelly can perhaps talk to the timeframes on this, but this would be done approximately two hours prior to broadcast so.
1449 MR. ZOLF: And, Mr. Chairman, we'll file the costing of that as an undertaking.
1450 THE CHAIRMAN: Thank you.
1451 UNDERTAKING / ENGAGEMENT
1452 THE CHAIRMAN: Is ---
1453 MR. COLASANTI: If I could just add to it, the process ---
1454 THE CHAIRMAN: Yes.
1455 MR. COLASANTI: --- the process of adding the subtitling, it's quite straightforward and simple. If there's technology that allows you to do the conversion from the English to French, then obviously we explore that opportunity. I've tried it before. It's not a hundred per cent, so it's not ready yet, so we'd need translators that would do it. But as the story's being written, they're being translated.
1456 So at the same time we'd have operators that would load this information up. So in production when it gets to the control room, prior to air, then it would be already loaded up and ready to go. And the -- again, the control room operators would read and follow the script.
1457 So they would actually speak the language of broadcast as well as follow it with the subtitling.
1458 THE CHAIRMAN: Okay. And is the technology actually different than what's used for closed captioning?
1459 MR. COLASANTI: Closed captioning is really a vertical integral thing that comes out, but this is really open caption I guess I could call it or subtitling that it sort of pops up more.
1460 THE CHAIRMAN: And from a -- I guess a regulatory perspective, and again, you may have to think about this, the implementation of your proposal require that the standard condition of license for closed captioning be replaced?
1461 MR. COLASANTI: No.
1462 MR. ZOLF: Well, Mr. Chairman, I -- no, it would not.
1463 THE CHAIRMAN: Okay. Thank you.
1464 So a number of interveners -- again, going back to my comment before you emphasised how groundbreaking is your service and that you're building it from the ground up, I guess the other side of that equation is that as a result some interveners have raised questions about your lack of experience. South Asian Broadcasting, for example, talked about how -- I’ll paraphrase -- it would be better to licence an existing player. Obviously, or not surprisingly, I should say, in your reply you disagreed with that approach, with that response or comment.
1465 But what risks do you see for us, for the Commission, in granting mandatory carriage to a licensee that doesn’t have any previous national television experience?
1466 MR. SINGH SAINI: Sir, Amber Broadcasting doesn’t have a national previous licence for running a national service, but if you can see, we are able to build up a team that has decades and decades of experience in building up the service. They have already done this thing previously with that insight.
1467 So I think if the opposing intervenors were talking about experience, they may be talking about my or Kerkiranjeet’s experience. But if you look at the team that we have put together, that team has -- it answers for itself. From sales and marketing to operations, to community liaison, all the major components are actually in place. It’s just that we need your permission to actually get that thing.
1468 So we really don’t see that thing as a hindrance from an experience point of view.
1469 MR. FORSYTH: If I may add to that -- and I spoke to the experience at the table previously, but relative to the intervention, this group obviously represents a new independent operator. It adds diversity to the Canadian Broadcast system, and perhaps at this point in time it is a good time to look at adding diversity to that as opposed to the consolidation that we may have seen, and perhaps the fact that the focus of this group would be solely on this project would be of a benefit to the Canadian broadcast industry.
1470 MS. ZINIAK: If I may add, there’s over 200 years of experience. I don’t want to do age again, but there’s over 200 years of experience.
1471 THE CHAIRPERSON: Not up here.
1472 MS. ZINIAK: No. When we take a look at experience at this table. And I think it’s important to note that it’s time for a fresh start. It’s time for fresh entrepreneurial eyes. It’s time for a focus.
1473 And this is where, you know, there’s a frustration, where there needs to be a broadcaster who is committed and with ideas that are commensurate to the growing population of Canada.
1474 And this is why we continue to say we need a level playing field, and I think that with what we are contributing both in the different funds, the documentary fund, the licensing fees to weekly producers, to digital, et cetera, and a focus and a confidence in being able to sell ethnic advertising in a focused way, that maybe it’s time to have a fresh start.
1475 MR. SINGH SAINI: Sir, I would also like to add, when we presented ourselves before the Commission on the Vancouver radio hearings, it was again at that point that South Asian broadcasting came over the same thing, that these guys don’t have experience.
1476 But based on our business case and based on what we are really trying to do and the story that we are trying to build for Canadians.
1477 The Commission was grateful enough to show that confidence in us and actually awarded us that licence.
1478 So I think it’s more important for the Commission to really not look at us as isolated to individuals who don’t have experience on national TV but see us as a team who can really actually deliver this thing and fulfil the Commission’s mandate of what they really want to actually give to the Canadians as a new 9(1)(h) service.
1479 THE CHAIRPERSON: Okay. Thank you.
1480 That’s a good segue maybe into some questions more of a detailed nature on the financial side. And we’ll come back, actually, maybe to the licensing of the radio station.
1481 But to start, so in your submissions you project to generate no local advertising revenue for Amber, with 100 percent of its advertising revenues to be drawn from national sales, stating that four minutes per each hour will be set aside for the producers’ exclusive use.
1482 Can you discuss for me your sales strategy, particularly as it relates to expected yearly growth in advertising revenues?
1483 MR. SINGH SAINI: Yes, sir, definitely. I will let Malcom actually answer that question.
1484 MR. DUNLOP: Thank you very much.
1485 I kind of thought this question might come.
1486 THE CHAIRPERSON: You mean you didn’t expect the other ones?
1488 MR. DUNLOP: Those ones shocked me.
1489 So firstly, when it comes to sales, the most important thing about selling ethnic television is it has to be your sole focus. If you have other things to sell, ethnic is a very difficult thing to sell. And if there’s easier things to sell, if you’re a sales guy, you’re going to sell the easier thing. That’s just the way sales guys work.
1490 So when we put this together, we started thinking “How are we going to do this?” And we are going to focus strictly -- everybody who works for Amber we think is going to be a salesperson. When we -- when I used to run the Sales Department at OMNI, I used to often take Madeline out on sales calls, and you can see why, because nobody had more passion. And she was able to do a lot of selling for us, never knew when to stop selling, but that’s the sort of thing that we did, because you have to come up with unique ways to sell when you’re selling something that’s difficult to sell.
1491 The model I put together is a real simple model. In Year one, we expect an average rate of about $100 a spot and a 10 percent sellout level. I would say if any station can’t do that, there’s an issue.
1492 In Year seven, we’re projecting an average rate of $150 a spot at a 42 percent sellout level. These are not outrageous numbers at all, and I think they are extremely doable.
1493 THE CHAIRPERSON: So you will have probably, if you’re in the room, noted the question we’ve asked to a couple of parties. What would be then your position on the possibility that the Commission would impose a condition of licence limiting local advertising sales? And if so, would such a limitation affect your proposed commitments and/or proposed wholesale rate?
1494 MR. DUNLOP: We are not selling local sales. Only the independent producers are selling it in their own shows. That’s it. We’ll not have a retail sales team.
1495 THE CHAIRPERSON: So no impact?
1496 MR. DUNLOP: No impact.
1497 THE CHAIRPERSON: No impact. So the answer to the question, if we were to prohibit it, would be similar?
1498 MR. DUNLOP: Yes, it would.
1499 THE CHAIRPERSON: Thank you.
1500 You also project a lower percentage of programming while stating that a four-minutes per hour of current affairs programming will be set aside for producers’ exclusive use. I think you’re proposing $500,000 a year fund for online content. Is that correct?
1501 MR. DUNLOP: Yes.
1502 THE CHAIRPERSON: So is that current affairs programming considered part of that brokered bartering programming?
1503 MR. DUNLOP: Sorry, could you just -- I’m just lost.
1504 THE CHAIRPERSON: Is the current affairs program, you talked about brokered or bartered programming for producers?
1505 MR. DUNLOP: The one we’re paying $2,500?
1506 THE CHAIRPERSON: Yes. Is the $500,000 that you talk about the fund ---
1507 MR. DUNLOP: That’s a separate fund. So we have a $500,000 digital fund per year, 3.5 over seven years. That’s separate from the weekly independent producers. We have a $7 million documentary fund. That’s different than the weekly independent producers.
1508 THE CHAIRPERSON: And how are the expense to revenues associated with the programming for online content allocated in your financial projections? And you can answer that by undertaking if it makes more sense.
1509 MR. DUNLOP: We’d like to.
1510 MR. FORSYTH: Well, the straightforward answer is that the expenditures for the digital undertaking, the $500,000 per year is not reflected in any of the revenue. This is off air, so it’s not broadcast. The idea with the digital fund was to see if we could go forward and, number 1, create, if you like, a farm team for the independent producers. We would look to see if we could provide extra coverage for certain communities at any point in time. They would apply for the funding. Both Madeline and Malcom have spoken to various people who have shown some interest in participating, and perhaps you want to add to that, Malcom?
1511 MR. DUNLOP: Sure. We’ve spoken to a couple of post-secondary educational institutions that feel that they could certainly use some of the half a million dollars.
1512 Both Madeline and I participate in teaching and doing some lecturing at different schools and one of the things we found is that these students in their last year of film and television, all these students produce documentaries or films at the end and it’s impossible for them to get any sort of exposure.
1513 And we thought wouldn’t it be great if there were stories that sort of were ethnic sensitive to be able to put on our website and to be able to offer a small license fee for these students which, you know, in talking to the people I’ve talked to was just such a, you know, they were so excited about it.
1514 The other thing we see our website in this digital dollars being able to do, is short form. There’s producers out there who have stories to tell and maybe not in a half hour or an hour. They have short stories to tell and we feel that we can offer this fund as well for that.
1515 And lastly, Andrew sort of mentioned it, when we were at Omni, we always said the community channel was sort of our farm system in terms of getting the next producers to be on air. And we feel that this digital fund will have -- maybe provide an opportunity for smaller language groups to be able to start producing online instead of on air and hopefully someday work into getting a show on the station.
1516 MR. ZOLF: And, Mr. Chairman, just to confirm that the $500,000 a year is over and above the CPE commitment in the application.
1517 THE CHAIRMAN: Understood, thank you. I’ll come back to the digital service in a second, but on local advertising blocks, just to come back to that, what are your plans if producers are unable or unwilling to sell those blocks and how will that impact your anticipated expenses and ---
1518 MR. DUNLOP: It’s at their option. There’s no revenue in our model. The producer keeps all four minutes, so it’s not reflected at all in any of our financials. So it’s the four minutes is optional for each producer to sell.
1519 THE CHAIRMAN: Okay, thank you. Then back to digital. Maybe you can just give us a bit more information about your plan for the digital service. A little more flavour. For the digital fund.
1520 MR. ZOLF: Would that be something that’s appropriate for an undertaking?
1521 THE CHAIRMAN: It could be. Certainly, yes.
1523 MR. ZOLF: Quite happy to do that.
1524 UNDERTAKING / ENGAGEMENT
1525 THE CHAIRMAN: These might be too as well, but we’ll go through them quickly. You have the second lowest total amount for technical expenses in your proposal.
1526 Can you help me understand how you intend to keep your technical expenses lower than essentially all of the other applicants and what changes you would make if technical expenses are more than you anticipate?
1527 MR. FORSYTH: I believe Kelly would be the best person to speak to that.
1528 THE CHAIRMAN: Or again it can be responded to by undertaking if you prefer.
1529 MR. COLOSANTI: Sorry, can you repeat that?
1530 THE CHAIRMAN: You -- in your proposals you have the second lowest total amount for technical expenses, so I’m just asking you how you intend to keep your expenses effectively lower than virtually any other applicant and what changes you think would be required if the technical expenses are more than you anticipate.
1531 MR. COLOSANTI: Are you referring to -- you’re just referring to operating expenses or capital?
1532 THE CHAIRMAN: Well your technical expenses. Predominantly capital.
1533 MR. COLOSANTI: In total?
1534 THE CHAIRMAN: But some operating as well. I can ask staff to come back and add at the end if further clarification is required.
1535 MR. COLOSANTI: Well we can certainly add more, but I can give you some overview. The overall capital is just over the $20 million mark. That’s a one-time cost to get all our eight bureaus and our master control and distribution and everything going. And we would amortize that obviously, I think, over the eight years. So that’s a one-time cost we do.
1536 Then we get into the operating costs and operating costs would be on an annual basis, so we don’t expect those to change with anything and no surprises on any of that. But we can file this after and have a look more in-depth for you.
1537 THE CHAIRMAN: Okay. I’ll see if any further clarification is required in a moment. You also –- actually, before you leave that, you just mentioned –- we’ve mentioned now a couple of times “seven years” and the funds that you proposed obviously are also based on a request for a seven-year license term.
1538 Could you again probably by undertaking but I’m happy to hear any response you have at this time, can you clarify what the impact would be on your plans if the Commission were to grant a five-year term. How would that affect those initiatives and are you prepared to accept a condition of license for this?
1539 MR. SINGH SAINI: I’ll have Andrew answer that question.
1540 MR. FORSYTH: In response to deficiency earlier in the process, Mr. Chairman, we did supply the Commission with five-year and seven-year plans. And I think it was the belief of the ownership group that when they vetted those numbers they were fine to file them as either five or seven. The company would accept either term.
1541 THE CHAIRMAN: I think the question here is does it impact the funds that you’ve proposed?
1542 MR. FORSYTH: No, it would not impact the funds in any way. The documentary fund would remain at $1 million per year, the digital at $500,000 and the expenditures for the independent producers would remain the same on an annual basis.
1543 MR. ZOLF: Yes, they’re annual commitments and so those would stay as minimum annual commitments, even over a five-year license term, Mr. Chairman.
1544 THE CHAIRMAN: As an annual commitment?
1545 MR. ZOLF: Correct.
1546 THE CHAIRMAN: Correct. Understood.
1547 You also have proposed the second highest wholesale rate among applicants and you project the most profitable first license term among all the applicants. So, I guess, you probably have anticipated this question too. Maybe you can discuss your willingness to maintain or increase spending on programming if revenue projections don’t materialize.
1548 MR. SINGH SAINI: I’ll have Andrew answer the question. Thank you.
1549 MR. FORSYTH: There’s a short and a long answer. I’ll try to give you the medium answer.
1550 The medium answer is that we did look seriously at that number and we didn’t just sort of pull it out of the sky. We looked at what the service was going to accomplish.
1551 And Tejinder has sort of very eloquently given you in the presentation, here are all the key things that we think are number one - certainly 91H qualifiers - but they’re also things that we’ve built this service on and there are things such as the documentary fund, there is the Canadian content, there is the 100 percent Canadian content in prime-time 90 percent, there is a language commitment.
1552 All of those commitments and the ability to build the eight bureaus across the country add up and when we added it all up -- but, as Madeline so eloquently, I think, said, you know, we were trying to raise the level of quality for this type of programming.
1553 So to put that together in a quality way without cutting corners but looking at how we could afford to do this, we came up with this rate and you’ve seen the projections we’ve put here.
1554 One of the things I want to come to on the rate itself is, that when we look at this and we look at our projections, the interesting thing you had asked earlier and, you know, I believe Malcolm would never be a salesperson who would allow a bad sale not to go through, and I know he would run a marvelous sales team, but if we were to take out all of the advertising, on our advertising, the company would still be able to be profitable and run a quality service. Nothing would be affected for five years. It gives us that form of cushion to be able to build toward something.
1555 So we would not sacrifice anything on air, we would not sacrifice any of the staff, so that is one of the things we looked at when we were building the financial models is, how do we build this thing so that we’re guaranteeing you and we’re guaranteeing the public a quality service that would be able to sustain itself over that period of time.
1556 THE CHAIRMAN: And what about the converse then, if the service were to be more profitable than expected what would you do?
1557 MR. FORSYTH: Well there are several things with that as well. The first on that is that this would be a great opportunity for the company to put that money back into the company and to put it back into programming and to do more things with it.
1558 I think this is an interesting aspect where we look at 9(1)(h) and we understand the value and how important this service is and we also look at the dollars that are required to finance this and put this together. And it's a great way of serving the country from a profitable point of view. 9(1)(h) does not necessarily not have to be profitable.
1559 But the profit we think is fair and equitable to the investors, but at the same point in time, I think the investors are proving just by being here that what they are willing to do is take some of that and put it back into the company.
1560 And the other thing, when we did the modelling for this was we looked at the P.B.I.T. for discretionary services. This is half the P.B.I.T. of the discretionary services and is lower than other 9(1)(h) -- several other 9(1)(h) services.
1561 So we felt comfortable coming in based on the quality of what we're doing. And that's not to by any way -- any way shape or form say that the other 9(1)(h) services are not high quality. They're doing some very high quality -- doing very different things than what we're proposing to do.
1562 So, on that basis we looked at it and thought this is a fair business model to put forward.
1563 THE CHAIRMAN: Thank you.
1564 I have one more question and I'm sure this is going to get answered by undertaking and then I'll ask my colleagues if they have any other questions.
1565 So you have the second highest proposed depreciation costs over the prospective license term. And you have commitments to launch all of the news bureaus and assets at launch. So I would like you, if you agree, to provide us with a detailed breakdown of your projected cap X over the prospective license term for the proposed service and to provide a detailed breakdown of the cap X that Amber -- see, I knew I'd get it wrong once -- expects to incur in the pre-launch phase.
1566 So if you could accept that as an undertaking?
1567 MR. SINGH SAINI: Yes, sir, we accept that.
1568 THE CHAIRMAN: Thank you.
1569 UNDERTAKING / ENGAGEMENT
1570 THE CHAIRMAN: Colleagues, Madam Simard? Avez-vous des questions?
1571 COMMISSIONER SIMARD: Thank you, Mr. Chairman.
1572 I have, I guess, three brief questions. The first one refers to the feeds, the number of feeds. I'm sure that you have considered, I guess, I assume, when you design your proposal, I guess adding more feeds, but in your proposal, like, in your -- yeah, in your proposal you I guess decided to move forward with two, so why is that? So I'm curious to know how you made this decision.
1573 MR. SINGH SAINI: Thank you, Madam Commissioner.
1574 The idea is to have all of our audience's access to news in the prime time. And that's where we actually talked about this as a one feed and another feed and we also looked at the technical feasibility is that if this is what our goal is, is it technically achievable or not and that's where Kelly's input came in.
1575 And, yes, we would like to have the news, that is quite important and integral part of this whole service, to be available to our viewers in prime time.
1576 MR. FORSYTH: If I may just add to that. I'm sorry ---
1577 COMMISSIONER SIMARD: Yes.
1578 MR. FORSYTH: --- Commissioner. The BDUs, -- however, there will be the two feeds, but the BDUs will have the opportunity to chose whichever they feel meets their market best, so it'd be either the east or the west or potentially both.
1579 COMMISSIONER SIMARD: Okay. So but in your opinion, do you think that it's technically difficult or to I guess work with more than two feeds?
1580 MR. SINGH SAINI: I'll actually ask Kelly to answer that question if it's technically difficult for more than two feeds.
1581 MR. COLASANTI: So if I understand correctly, you're asking should we have three feeds? Is that what -- is that sort of where you're going?
1582 COMMISSIONER SIMARD: Yeah.
1583 MR. COLASANTI: Okay.
1584 COMMISSIONER SIMARD: If I compare, like, the proposal you ---
1585 MR. COLASANTI: No, I mean, you know, technology is available to delay the feeds as you feel accordingly. So the technology we've selected already is -- allows us to do the eastern feed, record it at the same time and then play it out three hour or four-hour delay, whatever we choose to. And it -- I think at this point's it's three-hour delay, but we could add more channels. And it's just additional cost for a satellite distribution that you're going to incur.
1586 And all the BDUs would have access I guess to all three or all four, depending on the number of feeds you put up.
1587 COMMISSIONER SIMARD: Thank you. My ---
1588 MR. FORSYTH: I'm sorry, just to add to it again.
1589 COMMISSIONER SIMARD: Yes.
1590 MR. FORSYTH: This would be similar to the feeds that somebody's done with Showcase, as an example. They do two feeds that way.
1591 The other thing that I think wasn't mentioned, but it is very apparent when you look at the schedule, the way it's set up is -- and I think, you know, ethnic programming has all been this way and broadcasting in general has way -- become way more of this. It's appointment-driven. You know, we have on-demand and we have appointment-driven.
1592 The digital fund, by the way, you know, sort of reaches some of that because one of the things that we would be doing with that besides the good works that Malcolm was speaking of was obviously running programming that we thought was appropriate back on demand in the digital -- on the digital platform.
1593 But the other part of this too is that on air we're now allowing people to be able to go, oh, they've got -- you know, they've got a newscast at 6:30. If we don't catch the 6:30 one, it's going to be back there at 9:00. You know, so there's set times there and there's also -- which is the refresh, but it's going to have the same principles and the same body of it. And then early in the morning there's going to be a repeat of that series of programs as well.
1594 So there are really three opportunities to see that programming. So it just gives the audience more of a chance to see it than they would if it was a separate feed.
1595 COMMISSIONER SIMARD: Thank you.
1596 In your proposal you propose eight bureaus across the country. So I would be interested in knowing why you I guess you propose that many offices?
1597 MR. SINGH SAINI: I'll have Andrew and Madeline answer that question with me, but definitely I'll quickly go through first where the eight bureaus are actually located. It's in Toronto, Montreal, Ottawa, Calgary, Edmonton, Halifax, Winnipeg and Victoria.
1598 So when we actually looked at it overall, the growth of ethnic communities and where they're actually coming in, that was one of the fundamental things of us actually establishing those bureaus because we wanted to be relevant to the communities where they're actually located. And then the other thing that we looked at was availability of journalists in that particular area; right?
1599 And -- sorry.
1600 MS. ZINIAK: Yes.
1601 MR. SINGH SAINI: Right. And then the other thing that we actually looked at was bringing those stories from those particular communities. They are something which are centres in each of the provinces. And that's where the spread of those eight bureaus were actually decided.
1602 COMMISSIONER SIMARD: Earlier in your presentation you explain what is local for you. So I assume that those bureaus would kind of be connected in order to ensure that you achieve what we -- what you describe as being local; right?
1603 MR. SINGH SAINI: Madam Commissioner, yes, they will be connected because the headquarter is in Surrey, so we'll have upper hand on those. We have APs and all the viewers will be actually reporting to APs and then we have a collective story that will be going out of interest to communities, whether they are actually in eastern Canada or in western Canada.
1604 MR. COLASANTI: If I could just add to that as well. I mean, you know, growing up Italian and moving to -- immigrating to Canada, I mean, you know, over the years you find that language does become your local, so local is language. I mean, you understand -- you know, you really -- communities, ethnic communities would relate to each other with things that are impacting the community no matter where they are across Canada.
1605 COMMISSIONER SIMARD: If we take this example, I understand -- and that's a point of clarification, I understand that because of the subtitles in both languages that's the way I guess to connect, for example, the Italian communities in Montreal and in Toronto. Sometimes they -- you know, they don't -- some don't speak English and others don't speak the French.
1606 MR. SINGH SAINI: Yes, Madam Commissioner. I think the idea is not just for those ethnocultural groups but also for like all Canadians because as -- around if there -- our communities are living, say, in South Asian community in Surrey, B.C. but they don’t understand the language, but they definitely need to know what’s happening in there because it’s actually impacting other communities too. So English or French subtitles is something that is not just relevant for communities in -- like a community in Montreal or Toronto, but also for like other communities.
1607 MS. ZINIAK: I can also give an example, is for example Metropolis, one of our partners, is the Association of Canadian Studies which is academic and on the ground immigration and refugee settlement conference. It’s the largest in North America. Their next upcoming conference is coming up in Halifax. This is something that not -- this is something that would be covered by our bureau, for example, and this would be a national point of interest. The last conference, for example, you know, was out West. This also would be covered. So it’s not only the news that is important, but also special events such as Pier 21 events in Halifax.
1608 So this really gives us an opportunity to bring together the country with ethno-specific issues but also those of national interest like immigration and refugee settlement, like new initiatives in academia, new studies, new resesarch that continues to support the need of expression in a language of that -- comfort. So this is also what the bureaus will be doing. And also bridging all Canadians so that that kind of information that traditional media may not have increasingly the space or the time to cover.
1609 MR. COLASANTI: If I could just -- just for the bureaus again. Even though we list the cities that doesn’t restrict the reporters or the operators’ cameras and so on and so forth to travel anywhere else. That affects those communities, so they will have that flexibility. And there’s VJs as well that will do that.
1610 COMMISSIONER SIMARD: Thank you. Those were my questions.
1611 THE CHAIRPERSON: Thank you.
1612 Commissioner Laizner?
1613 COMMISSIONER LAIZNER: Thank you.
1614 So you did provide a survey about acceptance of the wholesale rate that you propose, and as I understand it, you’ve got two-thirds of third-language respondents that would accept that wholesale rate and that number across the general population is 42 percent. So it’s not really overwhelming support for the wholesale rate.
1615 Are you prepared to lower that wholesale rate and what would you lower it to and how would that affect the programming because, as you’ve said, there are a number of applications for the Commission and your rate is quite high?
1616 MR. SINGH SAINI: Thank you, Madam Commissioner, I’ll have Andrew answer that question.
1617 MR. FORSYTH: Well, the research brought up a very interesting point and that was that, as the research indicates here, the tipping point for the people who would use the service -- and, by the way, when we did this research we did not indicate to the respondents that we would have the English-French subtitling et cetera, et cetera, it was strictly from their viewpoint, their experience with ethnic programming on television as they knew it and you see in the research there are a lot of people who watch Fairchild and OMNI, et cetera, et cetera.
1618 So in that we didn’t talk about a lot of the features, we just wanted to get a general sense of what the appetite was for the service, what they felt the strength of a service would be to Canada in whole and, yeah, what would be the price point.
1619 And the price point was between 25 and 30 cents, and particularly amongst the other mother-tongue respondents where it was, in fact, 64 percent.
1620 So we felt that was a reasonable number based on, as I already explained previously, based on the quality of programming we were going to be putting together. And I think it is a case of this was set up too as -- and over and above when you really read the small print of what the questions were, it was in addition to your cable bill. But, of course, this would be inclusive to your cable bill; understanding that’s another point here. But the reality is this is not going to be over and above it would be inclusive. So 30 cents to 65 percent or 64 percent of the people that would -- who would be targeted by this service thought this was a reasonable price -- price point.
1621 You know, if you go down to the top end, which was 40 cents, that was 60 percent if you would have --the lower end which was 15 cents, it was 68 percent. So that, 60 to 68, 64, we felt comfortable that this was a median for the people that were going to be using the service.
1622 COMMISSIONER LAIZNER: So it’s 30 cents that you want for this service and you’re not prepared to lower the price?
1623 MR. FORSYTH: I don’t -- I can’t speak to whether we wouldn’t lower the price, that’s not the point. The point was that we felt that these were the funds that would be required to support a service as we’ve outlined. We, as I said earlier, when you look at the combination of the subscription fee and -- subscriber fee if you like -- and the over-the-air advertising, if there was a shortfall on the overall -- on the -- over-the-air advertising, we would still be able to provide the same quality product for a long period of time until the advertising picked up to cover that off.
1624 So we felt that this was a number that was there because this was a quality service that meets and exceeds, with think, the 9(1)(h) expectations, and nobody’s done a service like this previously. So we felt that is -- was our going-in price, it wasn’t necessarily one that we thought when we did this that this was going to be too high or too low. When we saw these numbers, we felt comfortable with that range.
1625 COMMISSIONER LAIZNER: Okay. I think you’ve answered by question.
1626 THE CHAIRPERSON: Commission counsel, do you have any further questions?
1627 MS. DIONNE: Yes, just one.
1628 I want to clarify the discussion earlier about technical expenses. Is that part of your operating expenses -- you have technical and you have the second-lowest technical expenses from all the applicants.
1629 So we were wondering about that. So if you can elaborate in an Undertaking why so, and if -- if those expenses were higher than what you projected, what changes to the programming or to the service would you have to make?
1630 MR. SINGH SAINI: We’ll definitely provide the answer by an Undertaking.
1631 MS. DIONNE: Thank you. That’s all, Mr. Chair.
1632 UNDERTAKING / ENGAGEMENT
1633 THE CHAIRPERSON: Then given it’s after five o’clock, I won’t ask you to sing Oh Canada despite your earlier offer.
1634 We’ll recess now and resume tomorrow morning at 9:00 a.m.
1635 Thank you very much for your presentation.
1636 Thank you, everyone. Good evening. Thank you, sir.
--- Upon adjourning at 5:13 p.m.
- Date modified: